Okay, lately there has been some confusion as to the payout structure here in Steemit, and despite having several explanations from fellow Steemians such as 
Default 50%/50% vs Power Up 100%
In this article, I'm further giving some clarification and visual calculation as an illustration. Hopefully, this will provide more clarity regarding the "issue". Also, I'm leaving out the "Decline Payout", since there are no confusion when it comes to this option. This leaves us with [1] Default (50%/50%) and [2] Power Up 100%
The difference is not as little as you think
Now, it's a common misnomer to think that the only difference between the two payout structures is that Option 2 (Power Up 100%) just instantly converts the "same" amount of rewards as STEEM Power. However, this is not true. In fact, the difference may go as high as 222%. To further elaborate, let's use an illustration.
Suppose you have $100 as a pending reward for your post. You can find this number written below your post (see image below).
This number is referred to as the Steem/Standard Token Unit (STU). Now, if this is your first time reading about STU, feel free to read the explanation below. Otherwise, you may skip to the next part.
Standard Token Unit (STU) briefly explained
Although the number below the post is expressed in dollar ($), you need to know that this is not the actual dollar equivalent of your post. In fact, this is just a temporary number which serves as the basis for your reward. Hence, to avoid confusion, the devs refer to this as the STU. The next section explains how STU are converted to actual rewards.
Converting the STU to actual rewards
The STU on your content is divided respectively between involved parties namely: [a] the author, [b] the curators, and [c] the third-parties. Third parties include Dtube, Dsound and other platforms built on top of the blockchain. For simplicity, let's assume first that there are no third-parties involved, leaving us with a and b.
What happens next is that the STU is divided among the author and the curators, in a 3:1 ratio respectively. This means that the author gets 75% of the STU while the curators receive 25%. Using our example, the author shall get 75 STU while the curators get the remaining 25 STU.
The part gets tricky after this, since the next calculation depends on the chosen reward/payout structure. Let's begin with a Default 50%/50%.
Case 1 - Default 50%/50%
The STU allocated for the author together with the reward/payout structure determines the final reward.
From our example, the 75 STU will be divided in two halves. Hence, the first half amounting to 37.50 STU will be converted to SBD (yes, that's a 1:1 ratio). The other half of similar amount gets converted to STEEM Power. The ratio however is not 1:1. Rather, the 37.50 STU will be converted using the most recent STEEM:USD ratio. What happens is that 37.50 STU is divided by 4.90, which is approximately 7.653 STEEM.
Since the market value of SBD is $5.44, we are getting a reward equivalent to $241.50 under Default 50%/50%. Now, let's see what happens if we chose Power up 100% instead.
Case 2 - Power Up 100%
Now, if you chose Power Up 100%, you are forfeiting a huge percentage of your rewards. What happens is that the entire 75 STU allocated to the author is converted to STEEM Power using the most recent STEEM:USD ratio. The computation would be 75 divided by 4.90 which will give us approximately 15.306.
The market value of the converted STEEM is equivalent to the STU allocated to the author. Hence, the equivalent reward is $75 under Power Up 100%. When we compare the two, the difference is $166.50 which is sitting at 222%.
Conclusion + a friendly tip
Given the current market prices, it is ALWAYS better to choose Default 50%/50% rather than powering up at 100%. The only time this will not hold true is when the value of an SBD goes below $1 (which is far from the current price of $5+). Hence, I highly suggest that you choose Option 1 - Default 50%/50% for all your content. That's unless, you are feeling generous to forfeit some of your rewards in exchange for a small STEEM logo beside the title of your post.
Now, if you have questions, feel free to drop some comments. You can also share your experience and/or reaction after learning the HUGE difference between the two payout structures.
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