Hi steemians,
Have you ever wondered why the rewards on your posts change over time, even when no one upvotes or downvotes them? Did you notice that the strength of your upvotes is different and changes all the time?
Maybe you've heard of voting power, but do you know what are the other parameters that influence the power of your upvote?
Well then, this guide is for you!
What really determines the strength of an upvote on steemit
To answer these questions, one must understand fully how steem determines how much an upvote is worth. There are five main factors that will influence your upvote. They are: Total Steem Power, Consensus Price of Steem, Voting Power, Vote Weight, and reward pool status. Every time one of those parameters changes, the strength of the upvote changes. We will go into detail about all those 5 factors here. Note that for most cases, it's the second point (consensus price of Steem) that is responsible for the fluctuations in the rewards. Well, let's get into it!
1. Total Steem Power
Total Steem Power (SP) is simply the sum of both owned steem power, and delegated steem power. You can see how much you have of these in your wallet tab. You can also check out your Total Steem Power over there: https://steemnow.com. The amount of Steem Power you have represents the influence you have on steemit, similar to the amount of influence a shareholder has on a company. The more SP you have, the more powerful is your upvote. As of right now, the relationship between the two is linear : leaving the other 4 parameters untouched, if you double your amount of SP, then your upvote strength will double as well. This was not the case when steemit first started (if curious, check out part 2 of this guide!).
2. Consensus Steem Price
This is not the current Steem Price, but the median Steem Price over 3.5 days. The more the consensus steem price is worth, the higher is your upvote worth. Note that we are talking about Steem price here only, not SBD. However, since you get paid in both SBD and steem power, SBD price indirectly affects how much money you get in the end, but it doesn't influence the value that you see on the pending rewards balance of your posts and comments. We will talk a bit more about SBD price in part 2, since this is probably the most complicated and confusing thing there is about the reward system. For now, just remember that only the steem price influences the value you see as the rewards on your posts and comments.
3. Voting Power
Your voting power decreases when you upvote, and replenishes over time. You can also see how much your voting power is worth on https://steemnow.com/. It is because of this mechanism that it is recommended to only make around 10 full upvotes per day.
4. Vote weight:
If you have less than 500 SP, all your upvotes are full upvotes (100% upvotes). When you get 500+ SP, you get the option to only allocate a percentage of your upvote. Obviously the rewards will be lower, but it won't decrease your voting power as much and you'll be able to make more than 10 upvotes per day, since they are not full upvotes.
sidenote: this 500SP limit is only true on steemit.com, not on the steem blockchain as a whole. If you interact directly with the blockchain, or if you use a different website based on the steem blockchain, you will be able to modify your vote weight no matter how much SP you have
5. Reward balance status
There is a limited amount of rewards every day; if everyone started upvoting more, then to accomodate everyone, the value of each individual vote should decrease; on the contrary, should people start dowvoting more, or upvoting less, then the amount of rewards per upvote would increase. Currently things are pretty stable, but it definitely can have a HUGE influence when this equilibrium changes. By the way, do you really know where the rewards actually come from? Maybe part 2 will help you understand that :)
Conclusion
These 5 factors are the only things that influence how much pending rewards your upvote is worth. Now that you know what they are, I recommend you go here https://steemnow.com/upvotecalc.html and play around with the 3 factors that you can change. Remember that SP and rewards have a linear relationship, so if you have very little SP, you can just multiply it by 100 and then divide the reward value by 100 to get more accurate results!
If you joined in december 2017 or jan 2018, try finding out how much SP is required to have your full upvote be worth $42.00 (at 100% weight and voting power), and tell me in the comments below: if you get it right, I will upvote you!
source: steemit.com
