Its 6am and I’m sitting on the couch thinking about Steem.
In Prison, we had to be awake at 5:30am, fully dressed and cube cleaned for 7am inspection and standing count. I became a morning person and realized my most creative time is in the morning when everyone is sleeping and I’m not rushed for time.
So I’m thinking about Steem.
Yes, I know it’s crazy but hear me out. As I am working out early stages of my stealth startup I need to constantly be assessing the risk of my own crypto and fiat assets.
Right now in my wallet I have 11,872 Steem Power, about $11,000 at the current rate. A tidy sum that I have been awarded from writing content here in the past 2 weeks. I’ve also been awarded Steem Dollars, that I have been selling for Bitcoin, buying Steem, and playing around with other crypto tokens. Steemit has empowered me because I can focus on building my stealth startup and not have to worry about work immediately following my prison release. Thank you!
So the question I have been mulling over is, do I Power Down and take $100 a week for the next 2 years or do I keep my Steem Power, even buying more, effectively reinvesting in Steems future?
I could keep my Steem Power, make interest from it, curate and vote on other content, comment and be apart of the community. By doing this, I am participating in the network and increasing my holdings indirectly.
On the other end, I could power down and take weekly installments. $100 a week could cover a small mortgage, or health insurance for 2 years, a very real passive income. I still draw interest from Steem Power while powering down but not as much over time.
@blakemiles84 made a comment on a recent post of mine:
That powering down thing is the one flaw that I personally see in the system. There doesn't appear to be an incentive to remain powered up at the moment. Game Theory that scenario out and everyone is racing to power down and sell off their Steem due to the opportunity costs and the fact that all the whales are doing it.
Many of you will comment and tell me that my answer lies in wether I think Steem has a future or not, however that’s not the whole story.
Many early adopters are powering down, whales, and some of the founders. Does this mean they don’t believe in Steem? Absolutely not. Steem as a company and its founders purposely staked a large amount of Steem so they could power down to fund development costs and grow the company to build out the network. They are rapidly hiring.
What about whales? Im speaking to one right now who holds more than $100,000 worth of Steem Power. He is starting a development company to build out apps for the Steem network. If he were to power down, the funds would be reinvested in Steems future. Whales need to eat too, so even powering down to live is important. Using SteemStats.com watch some of the accounts of Whales, they are curating 30-50 posts a day, a time investment in the future of Steem.
Take a look at the list of top 10 accounts currently powering down from SteemDown.com:
Go through that list and randomly pick one out, a majority of those accounts are still authoring/curating. The assumption is that the whales sit back and power down without contributing to the platform.
Another point to remember is that, one of the largest accounts @steemit is selling large amount of Steem above market to support the price of Steem Dollars. This creates a lot of selling pressure, but at the same time Steem is distributed to new users at a decentralized rate.
@Dantheman has commented on this:
All orders are placed at or above price on coin market cap. These orders are helping to maintain the Steem dollar peg. Proceeds of these sales are kept as Steem dollars which keeps value in the platform while helping to distribute Steem.
Ned and Dan are constantly upgrading and building out the network while making sure Steem is distributed. They have the largest incentive to grow the project long term. In fact, they are probably reading this post and its comments.
Look at the distribution of Steem in accounts, this needs to get more diversified but all accounts are given free Steem.
Another user @officialfuzzy67 said:
Many just want developers to go without anything to build their platform for them so they can later cash out. There are multiple people who knew what they were doing who are not on Dan and Ned's team who got a lot of tokens as well (because it was open for anyone to get into--if they were really interested in learning to do so). Satoshi had the first movers advantage, but now that the cat is out of the bag. Dan and Ned burned the bag so it can never go back in. Yeh I think we want them to have resources to keep the platform strong instead of giving it to people too early on who only look at this as a get rich quick scheme and want to cash out asap.
My take is that Steem is very new, not even a year old. As far as risk and hedging goes, the smart move is to bet on the platform on stay powered up. If you can spare the funds, even powering up your Steem is a good idea. After my intro post on Steemit, I started powering down but immediately cancelled it once I rationally thought about that decision.
I'm still new to Steemit so there are probably facts I'm missing, angles I'm not seeing. Please educated me! Should we power down? What do you think? What are the incentives for powering down or staying up? I could always power down for a few weeks if I need the funds and cancel it.
Let me know what you think in the comments.
-Charlie