The STEEM algorithm has a 100% inflation embedded in it per year... Sounds scary, doesn't it? The good news is, you can protect yourself and actually see appreciation.
These are the two things you should do right now to protect yourself and benefit from the ever increasing popularity of STEEM.
Convert as much STEEM to Steem Power as you can. Do not keep money in STEEM. Every time new STEEM is issued, 90% of that STEEM gets distributed to people with existing Steem Power proportionately. Only 10% goes into actual STEEM tokens to fund growth. Thus, having Steem Power, gets you more Steem Power. And while the total money supply increases, the value of your steem power will go up if demand for steem goes up and if the platform attracts more demand than this newly minted supply for Steem (out of which 90% got distrubuted to holders of Steem Power as we discussed).
Do not convert your steem dollars to steem. You can convert steem dollars to steem but not the other way around. Steem dollars provide a stable value and pay interest. Steem, on the other hand, as we discussed, is highly inflationary with about 100% new steem tokens issued a year. Now, as we mentioned in (2), 90% of these tokens go to steem power holders (so they actually do not reach the market), but still there is this pressure. Steem dollars on the other hand are always worth one dollar in Steem tokens and on top of that pay interest.
I hope this was helpful. Would love to hear your thoughts on this topic? Converting as much Steem Power and Steem Dollars to Steem and then to another altcurrency could also be a potential solution, but Steem still seems better than fiat to many. What do you think?
