When I think about investing in an asset, I don't project possible profits in fiat money. Keeping my savings in fiat is a losing investment in the long term for sure.
When I think about investing in an asset, I compare its possible profits to a benchmark asset. For example, in the stock market, that is SPY, an S&P 500 index fund. When it comes to cryptocurrencies, my benchmark asset is Bitcoin.
Bitcoin vs. Steem / Steem Power
Bitcoin has an annual inflation rate of 4.33% at the moment. That rate will be halved every four years. It has a very high adoption rate, at least with the investors.
When I look at Steem, I see a 9% inflation rate. That inflation rate is scheduled to decrease 0.5% every year.
If I power up, I receive 15% of the inflation rate as a yearly "dividend," but then I don't have the liquidity of Steem. I'm partially stuck with my investment for three months. In the crypto-world, even a day makes a huge difference in prices.
Pro Side of Steem
On the pro side of Steem, there is the Steemit website. Sure, there are some brilliant authors and posts on this platform, if you take your time and dig deeper. But the average user sees a bunch of weird posts on the trending and hot tabs, which are rewarded hundreds of dollars.
If the user wants to interact with the platform, it takes a week to register. The UI is not intuitive. Quickly posting something via your mobile phone is not easy.
Your Turn
- Now, please let me know why would an investor sell their Bitcoins to invest in Steem or Steem Power?
- Why would you do it now?
- What am I missing in this picture?
Disclosure and Disclaimer
At the moment of writing this post, I owned some Steem Power and Bitcoin. This post is for information purposes only and not intended to be investment advice.