(Photo Credit : Pankaj Patel)
After being hacked recently, I've made a commitment to educating myself about all of the different components that make up Steemit. I don't profess to be knowledgable or have all the answers, but I'm on this neverending quest to learn all that I can and feel that I am a sponge, rabid for information.
I am a visual learner. The best way for me to truly embrace things digitally is to create spreadsheets with analytics and notes. In the real world, I would physically alphabetize every compact disc in the record store, which helped me memorize what I had in stock at any given time.
I need to touch things or retype info into precise cells to truly comprehend.
This article has a theme song :
Awolnation / Sail (Blame it On My OCD, Bayyyby)
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The purpose of this article is to give a basic breakdown of what each section of your wallet means, based on what I’ve learned. I am no expert, so you may take this with a grain (pound) of salt.
(Photo Credit : Zingali)
The first thing to do is click on your profile image and bring up your Wallet. As you scan it, you will see several sections. Below is my description of each :
(Photo Credit : John Jason)
1) STEEM - This is the actual cryptocurrency you buy on the open market. If the number in this category is > 0, it means they are actively buying in or cashing out STEEM, which is used to fund the #steemit platform. No STEEM = No blogging action.
Just like trading on the New York Stock Exchange (NYSE), the best time to cash in your STEEM is when the value is high. If you hang onto your STEEM too long, you might have a situation where the price continues to drop and you are left with the scraps. STEEM is to be bought and sold shrewdly, like Apple stock or any other financial instrument. We tend to trivialize or not take seriously the true value of STEEM because it is a cryptocurrency. I’m as guilty as the next person and this article series is a way to hold myself accountable and not fall into those traps.
(Photo Credit : American Public Power Association)
2) STEEM POWER- For me, this is a very important metric. If you have a high Steem Power (SP) number, your vote is worth more when helping other minnows or writers. The stronger your number, the more weight it is given and the more you can reward worthy authors. Think of Steem Power as clout.
Based on the few articles I have read, you would take your hard-earned money (for me this is the US Dollar) and setup an account with Coinbase, Bitrex or one of the other exchanges. In this case, my USD would buy up STEEM. Once I have STEEM, my real money becomes “magic” digital currency and I would then use it to purchase Steem Power.
The downside to converting your STEEM into Steem Power is that you can't cash it out for 24 months. STEEM can be bought and sold on the open markets like any other stock, but once you transfer that STEEM action into Steem Power, you won’t be able to liquidate that asset for 2 years.
By doing this, they are bringing stability to the currency (and our platform) and decreasing the volatility. The last thing we need is for there to be a random money grab that causes everyone to pull their money or cause the platform to collapse. Steady as she goes is the name of the game and freezing your buy/sell action for 2 years (aka buying STEEM) sends a signal to me that you are in this for the long haul.
This metric is very telling because the number can mean that they are very loyal to steemit growth or they are just pulling the money and not putting anything back in to the long-term future.
I’m not here to judge one strategy over the other. Both have pros and cons. I’m more interested in what the numbers mean and educating myself (and anyone brave enough to read this)
On a daily basis, 90% of the currency generated from the platform goes to people that already possess units of Steem Power. The remaining 10% goes to writers and curators. If you are writing with any regularity, you will notice that you occasionally get rewards to your wallet.
About half of what you earn in rewards is paid to you in Steem Power. If you keep re-investing your rewards into SP, your effectiveness will grow. You will be able to help create hope and inspiration for other new minnows.
(Photo Credit : Pepi Stojanovski)
3) STEEM DOLLARS- 50% of your rewards is in Steem Power (previously said) and the remaining 50% is paid to you in Steem Dollars. These Steem Dollars never shrink or lose their value and are designed to increase stability and can be old at any time. If you create popular content, half will be in SD.
What I like about Steem Dollars is that this is more like owning a bond or having a savings account. If you don’t touch the Steem Dollar, you will accrue a 10% interest (ie. dividend). It won’t give you stroke like having a high Steem Power number, but it’s equally important, in my opinion because the money will grow in SD form.
My strategy will be to have 70% of my STEEM go towards Steem Power and the remaining 30% be plugged into Steem Dollars, so that they grow and work for me in a year or two from now. I want more than half of my money to work for me now because I want to help other writers with rewards and heavy upvoting, but I also want to cover my own ass and sock away a little bit towards an investment vehicle that grows over time. Steem Dollars are no different than owning a stock, bond, annuity or 401K. They are equally as important.
SAVINGS- I will admit that I am still fuzzy on the savings account component. I know that the initial purpose of these accounts is to lock your funds into an encrypted, air tight place for 72 hours. This extra layer of security comes in handy when your account has been hacked.
If you are astute, this will give you enough time to nix any garbage transactions and put you on the path to recovering those funds. If you have been on this platform for a long period of time, this could have bigger rammifications than someone like me that’s only been online for about a month now.
THE STEEMIT NEWBIE COMPREHENSIVE GUIDE TO UNDERSTANDING YOUR WALLET
MY POSTS ABOUT HACKING : Part 1