In this edition of #minnowsbible i will look at how to get the best out of your reward if you decided to convert all, that is 100% to Steem power. Converting 100% of your reward to SP is a smart thing thing to do for yourself and your account, but getting the best SP out of your reward is the smartest.
And if you are very new users, we will look at how your reward is been calculated first so as not to get you confused. Mind you i don't like mathematics but get motivated by seeing some units like $, Steem, SBD etc alongside the numbers.
The confusion for most newbies is the '$' alongside their rewards as shown on steemit and other applications on the blockchain. That '$' is not US Dollars and also not Steem Dollars (SBD) but Steem Token Unit(STU), that is according to 
Let's make some calculations now (with those units you love to see alongside the numbers). For the sake of clarity, lets say your post has a reward of $100 (remember that is not real dollars but STU). Here is how the payout after 7 days will look like.
Calculation for a payout of $100 with the current value of Steem and SBD as $3.53 and $3.60 respectively (from coinmarketcap)
| $75 (STU) for author | $25 (STU) for curators |
|---|---|
| 37.5 SBD + 10.62 Steem Power(37.5 divided by value of steem) | |
| 135 USD + 37.5 USD | |
| Total USD = 172.5 USD |
That up there is how all your reward on steemit is calculated, that is the default (50% / 50%). You must have noticed that
- 75% of your post reward is for you, the author while 25% is the curators, those that 'discovered' your post.
- Your $75 (STU) was divided by 2 to get 37.5SBD and the other 37.5 was divided by the current value of steem to get 10.62 Steem Power ($35.7 (STU) worth of Steem Power)
- In case you are wondering...why wasn't 37.5 on the SBD side divided by the current value of SBD? SBD was supposed or designed to be $1, the current price is the effect of the market.
Let us see why Powering up 100 is such a bad idea right now.
The key here is
SBD was supposed and designed to be traded at $1.
In the second row of the table above 37.5 SBD was multiplied by the current value of SBD which is $3.60 to get 135 USD but when you powered up 100%, steemit will only award you with a steem power worth of 37.5 USD and not 135 USD according to the market. Remember, steemit calculate 1 SBD to be equal to 1 USD.
Lets convert all the reward of $100 (STU) to steem power on our own from 50% - 50% payout setting. The system has already rewarded you with 10.62 Steem Power from the payout, converting the other 37.5 SBD or 135 USD will give us 38.2 SP. Summimg up all the steem power from the post will give us 38.24 + 10.62 = 48.86 Steem Power. That means you will eventually get a steem power of approximately 48 from a payout of $100 (STU)
However, this is what you get from powering up 100%
| $75 (STU) for author | $25 (STU) for curators |
|---|---|
| 37.5 SBD + 10.62 Steem Power(37.5 divided by value of steem) | |
| 37.5 USD + 37.5 USD | |
| Total USD = 75 USD |
The table above shows you will get only 21.24 Steem Power from a payout of $100 (STU). Powering up 100% will only be worth it if SBD is back at $1 or below.
Thank you for reading
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