Over the months, I wrote on a number of occasions how STEEM provides people with compounded returns. In an age when the term "exponential" is used frequently with the pace of technology, it is good to be involved in a system that offers the opportunity to generate STEEM in different ways.
“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it." ― Albert Einstein
Interest is not exactly an appropriate term since people who are holding STEEM are not paid interest, at least not by the blockchain. Perhaps someone who rented STEEM out is collecting interest yet that is a private matter.
STEEM does have an inflation rate. As of December 2016, it was 9.5%. The rate decreases .01% every 250K blocks or roughly .5% per year. This will continue until the inflation rate reaches .95% in 20.5 years.
(This from the STEEM blue paper)
To protect those individuals who invest in the STEEM blockchain, those who hold their STEEM as SP will receive additional tokens to offset the new STEEM that is distributed.
From what I can figure, this is between 1.5%-2.0% a year.
While this will not set anyone's bank account on fire, it is a nice way to offset some of the loss due to the inflation of the token. Show me another token where that happens. Does ETH give extra tokens to offsets its inflation rate? BTC? BCH? NEO? ZCash? There might be one out there but I am not aware of it.
So when is this paid?
Every few seconds.
Each time a new block is completely verified, it appears tokens are granted to an account. Naturally, it is hard to tell in most accounts since we are not receiving a full token every few seconds.
Here is a handy tool to see the progress.
To pull up your account simply type your username after the "=" in this web address.
https://steembottracker.com/steemdash/?account=username
The neat part about this is that the extra SP earned is compounding on a daily basis. We are not seeing it distributed on a monthly or quarterly basis. Instead, since it is paid ongoing, the amount that goes in today is going to compound throughout the rest of the year.
Another great aspect to all this is that it will continue for the next 20 years. While the amount will decrease as the inflation rate goes down, as long as one is active and earning SP, there is a chance to offset this. (Actually, there will be some rate paid to SP holders since the inflation rate never goes to zero but is set at .95% once it reaches that mark..so it technically can go on forever)
Either way, it is like getting an airdrop every few seconds throughout the day.
STEEM literally just keeps on giving.
Another reason for being very optimistic about this blockchain.
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