Steem and SBD - The Natural Posting-Reward "See-Saw"

in #steem7 years ago

SBD Whale 1.png

At times of slower (human) activity on the blockchain, or during times of substantial price drops, it can sometimes be difficult to remain motivated as a content creator. Regardless of the nominal amount any creator is used to receiving for their work, it's normal to be disappointed when one's posting rewards drop by 50% or 75%, even if that still results in a substantial increase from months ago.

This is simply an unfortunate consequence of human nature. Our expectations tends to adjust upwards much more readily than they do downwards. An economist might, regretfully, call it the "upwardly elastic nature of the human demand curve."

One needs to stop back and take a long-term view at these times and remember that if one is posting at Steemit, they should also be doing so based on some degree of faith in the future of the blockchain and Steem itself. In other words, one should be at least speculatively bullish on Steem.

At such times, it is helpful to remember the naturally synergistic nature of the Steem/SBD posting-rewards split. Whether prices are high or low, your rewards will be magnified (either immediately or later,) assuming you are bullish on the Steem price medium-to-long-term. Here's what I mean.

Synergy 1.png

First, a reminder of the basics on payouts. Posts on Steem generally pay out 50% in SBD and 50% in Steem Power (already powered up Steem). 100% SP is also an option, but more infrequently used.

(Note that much of the forthcoming may not hold if Steem/SBD decouple, or SBD is repegged.)

For several months, when the Steem price has been high so has the Steem Backed Dollar. Normally, a high price for Steem means a lower payout denominated in Steem on your posts - at $1 Steem, a $10 SP share payout will be 10 SP, at $10 Steem is is only 1SP. So, a high price means less in nominal Steem per post payout (note: not cash value, nominal Steem payout.)

However, the high SBD has been acting as a counterweight for post payouts - making the other half of much larger than they would normally be. If your SBD payout is $10, it's currently worth closer to $36. It's also immediately liquid, which is a plus giving you the flexibility to either convert it to Steem via the internal (or external) market, or another currency if you wish.

Now, the converse situation is a low price for Steem, which we'll assume (for the sake of making the point less conditional) also comes with a low price for SBD. This renders your liquid payout of SBD rather "low", aka in-line with the displayed payout on Steemit.com.

Converse 1.jpg

Something like that.

Yet, this disadvantage comes with an advantage. The SP portion of your post will be priced at the low current price of Steem. So, if Steem is $1, your share of $10 in SP post rewards will produce 10 Steem Power. This is 10x as much Steem as you would have gotten if the price of Steem had been $10, in which case you would have only gotten 1 Steem (Power.) This means you will receive 10x the windfall when price increases than you would have previously, as you'll have received 10x as much Steem (Power.)

None of this stops the trend on Steemit from being one in which posting activity is highly correlated with posting payout...even in light of the fact that there is perhaps nowhere in existence small content creators/writers can be better rewarded. Try getting even $1 a post on your own Wordpress blog via advertising. You'll have to frame your first $1 bill for your office wall, the way diners do - that's how long it will take to turn a profit after expenses.

Sometimes persevering when the rest of the market gives up on a trade can be very lucrative.

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Hopefully we spring off the bottom soon I know it's coming :)

Me, too. Im very much hoping. Im so positive for the coming.

Ups and downs are part of life same is happening with steemit .

This is just nature.... Life is an equilibrium of so many factors. Same with steemit

Todo esfuerzo es premiado, ya verás que saldremos de esta.

Ok, I like your explanation and it makes sense. It's been a bit confusing to watch the prices but I feel better about it now. I'm looking long term.

Oh, and since you used a Chuck pic in your post I thought you may like this: steem chucks.jpg

Thanks, I was too lazy to shop that together myself.

I actually made these in real life. This is just a proof because mine are so dirty lol.

Hmm...pics or it didn't happen.

I love your style sir @lexiconical

..Your writing skills are really nice and thanks for writing these things about SBD, it has helped me understand something I have been trying to.

You are cordially invited to a meet up in Nigeria, it's gonna be really awesome.
The details could be easily seen on my blog.

Thank you for the invitation! I'm afraid I'm a half a world away.

Awwwnnn. That's okay, I believe your spirit will be with us.

Up until now nobody had been able to explain to me this payouts so clearly, thank you

very good post & info thank you

Truth. When steem was up I hardly made any sp. Now is totally the time to build it

If you're thinking long-haul, you are correct!

it's normal to be disappointed when one's posting rewards drop by 50% or 75%, even if that still results in a substantial increase from months ago.

sometimes you just feel discourage but still have to move on, i hope it rises back up soon.