You should already know by now that I am a big advocate of interaction and engagement here on the blockchain!
I also keep on telling that if you are here the long term and don't depend on the steem income that the value of steem is irrelevant at the moment!
In this post I will try to explain why that is! At least I will give it a shot and this is my understanding how things work under the hood of Steem. If you do see any incorrect assumption or still have question, don't hesitate and drop a comment!
The reward pool
You probably all know that there is a daily reward pool, which is used to pay the posts!
But how is this reward pool created?
Well simple, each 3 second a new block is generated and within each block there is a pre-defined number of Steem available. The biggest chunk of steem is for the reward pool. A small, really small chunk is rewarded to the witnesses!
So each 3 second the reward pool is filled up! At the moment we are at block #23,312,796.
What is also important to know is that each 250K blocks the inflation is decreased.
If you want to read more about inflation, there is a great article available by @fatboyjames
https://steemit.com/steemit/@fatboyjames/how-much-new-steem-is-created-everyday
The reward pool is constantly moving. So each 3 section it is re-filled but every upvote drains the reward pool!
Distributing the reward pool
We know now how the reward pool is filled, so how is it distributed!
Well 75% of the reward pool is used for the content creators and 25% is used for the content curators.
It is that simple!
Under the hood: VESTS
Now you are interested to see, how the vote value is calculated. Because this is what you do extract from the reward pool when you do upvote this post :). And like written above 75% of the vote will be for me and 25% of the votes will be for the curators (depending on which time you do upvote)!
You don't need to look at the vote value in USD or SBD yet because under the hood everything is calculated in VESTS!
Well the best way I can explain this, is that all steem power combined is gathered in a fund and the number of vests does express how many shares you have in this fund!
Vote calculation
The first thing you have to do it to calculate the number of vests you have at your possession.
With possession I do mean that you also have to incorporate a delegation you have received.
Lucky for us there are some great tool available where you can see, this easily!
Maybe the best tool to use for this is http://steemd.com/ created by @roadscape
If you do want to know how many vests you have just goto http://steemd.com/@username
where you do have to replace the username with your Steemit name.
So for me this would become:
http://steemd.com/@fullcoverbetting
We are interested in the following part at the left side of the screen!
As you can see my total amount of vest are:
733.647,832331 (own) + 407.642,471851 (received delegation) = 1.141290,304182
This last number is the total vests I do have available! If you do have an outgoing delegation, you will need to distract this from this!
For some reason, I don't understand we need to multiply this by 1 million!
So 1.141290,304182 * 1.000.000 = 1.141.290.304.182
Sounds a lot, doesn't it?
voting power
We are not there yet! The need to incorporate the voting power we are going to use in the calculation.
Once you reach 500SP you will have a slider available with which you can choose the desired voting power. If you are using busy.org, you can use the slider also below 500 SP.
One 100% vote does decrease the voting power you have with around 2%.
So in my case a 100% upvote would represent:
1.141.290.304.182 *0,02 = 22.825.806.083,64
So if I do upvote your post with 100%, I am pulling 22.825.806.083,64 vest from the reward pool!
Reward pool and upvotes
Almost there.
If we take a look at another Steem blockexplorer http://steemdb.com created by @jesta
We can see how much is in the reward pool.
At the moment of writing this post, the reward pool was:
Here we are interested in the recent claims which are 467.563.228.304.150.000,00
We need to divide our upvote by this. So
22.825.806.083,64 / 467.563.228.304.150.000,00 = 0,0000000488186510
Really peanuts, isn't. But luckily we also need to see how many steem is available in the reward pool, which is 739.653,007. So almost 740K.
Now we need to multiply our part from the share from the recent claims with the available steem in the reward pool.
0,0000000488186510 * 739.653,007 = 0,036109 STEEM
This 0.036109 is actually my 100% upvote!
As you can see, the value of steem doesn't matter when you are here for the long term. It is steem where we should be interested in!
It is this Steem where we should be interested in! Not the SBD value of Steem value.
Converting to SBD
Because this figure above doesn't mean anything to most of us, it is written down in SBD, which is much more understandable!
Therefor we do need know the current feed price, which could be lookup on the steemd blockchain explorer or the steemdb blockchain explorer!
So, the last thing to do is to multiply our steem upvote with the current SBD feed:
0,036109 * 1.742 = 0.0629
Which is quit accurate in my case.
To verify I did 100% upvote a post 2 hours ago with around 83% voting power left.
So this would that this upvote should be worth:
0.0629 (vote value) * 100% (100% upvote) * 83% =$0.05
Final words
I do want to thank @paulag for answering the last question I did have!
So, if you are here for the long term. The value of the post is meaningless as long as the upvotes and the upvoting power is the same. You would earn the same when the value of steem is low or high.
When the steem price is high, the value of the upvotes are high, hence you have to pay more to get your Steem!
When the steem price is low, the value of the upvotes is low, hence you have to pay less to get your steem!
I do hope that you like this article and that not any mistakes are in here!
If you did like it, feel free to re-steem it or to upvote it with full force :) Bur for sure do leave a comment when you did read it and let me know what you think! Because interaction really matters!
If you still have a witness spot available, please consider @steemcommunity, because they really do find engagement and interaction utmost important here on the blockchain!
Their latest article can prove this:
https://busy.org/@paulag/developing-a-steem-contribution-score-table
Keep the faith,
Peter
Sports Bettors On Steemit Unite and Join the SBC !
@steemitbloggers
That was an awesome explaination of the reward pool and how it was computed.
Normally when I see numbers my mind shuts off but I am glad to have put the effort to keep reading.
I try my best to continue posting regardless if Steem is high or low. I am here for the long run.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
We both are Mave.
Hope that it become real big and if not I did enjoy myself and it did gave me some friends!
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Good explanation, it is very detailed.
I like this, I will continue in Steemit, I have not achieved as many, but little by little I will reach something much bigger.
Like this steem, I will continue and more now that I already have vacations, and I can invest much more time, to create a better quality post. As I go, it is enough for me even to maintain, without the need to work. Well, in Venezuela, because of the situation, it is more profitable to earn at least $ 3 than to work for 1 minimum monthly salary that equals $ 1.
One question, is it a good idea to invest SBD or Steem in Steem Power in a 90 day delegation?
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Hi--I'm following you. I remember your post about the cable car in Merida. I upvoted that post at the time. It was beautifully photographed and offered some interesting information about the tourist site. I found your coverage to be thorough and it told me about a place I will never get to visit. I look forward to reading more posts like that from you.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I am not delegating myself so no clue about it. It also depends to whom or what you are going to delegate!
Maybe @preparedwombat can give you some mire insight in it!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Great insight, it is not easy to understand all th e calculationss in steemit, ty.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
@aclarkuk82
I did try to put it down an easy as possible but also got lost a few times. Hope this helps a little bit.
If you still do have an questions. Just ask, maybe I do know the answer!
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
@fullcoverbetting you narrowed the information down so that everybody will understand .working for so is more important in this blockchain ,and that will will help you to take charge over events here and is very very beneficial .
Am planing on how to by sp at least (500) now that is down because I know it will raise tomorrow.
Thanks for the info it helped .
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
@egbujorvictor
Thanks! If you still do have any question, feel free to ask. Maybe I know the answers, or maybe somebody else of the commentors!
Bying steem could be a good decision, for sure if you do have plans to stay here.
Good luck with the decision.
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
You lost me in numbers, but not in faith. I am on the long run in both my crypto investments and Steemit, or at least that's what I think.
So, Steem on and have a great day!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Sorry about that. I did try to keep it as simple as possible, I guess I got carried away a little bit 😁
We both are in both for the long term 👊
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Great walk through of how rewards are calculated.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Thanks @nealmcspadden!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
You lost me half way in the numbers. However, I agree with you, my goal is long term. Hence the reason I keep writing. Though lately I have not been doing so.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Sorry @mutitum I did my best to write it down as under stable as possible.
If you have any more question, let me know, maybe I do know the answer!
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
True, when in it for the long run the price of steem does not really matter that much. The amount of steem you earn can probably be even higher when the price is low. Contest prizes used to be a lot higher also back when the price was below 1$. With the price being down it's a great time to gain a lot more steem.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Indeed it is. And the lower the price of steem is, the lower the gap with steem backed dollars is.
Meaning that we can buy more steem with our well earned Steem backed dollars!
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Really nice breakdown, helped me get a handle on some aspects I didn't really get before. It's also reflective of my own opinions on consistently working, bear or bull.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
@effofex
Interaction and engagement is the only real thing which will help your account forward.
It does not matter how high or low the steem price is. This only matters when you do want to cash out.
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Lots of numbers but I got your point. STEEM and SBD price is also just a number and if we have long term view and use all earned STEEM and SBD to build up our SP, we will have benefit. I have plan to raise my SP next two years regardless of the STEEM price...
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I know but it would be near to impossible to explain it without any figures!
It is always a goodidea to rake in as much steem as you could.
It is a life blockchain, it works! And yes it has some flaws but they do all!
It is also the blockchain we know best and regardless of the succes os SMTs the value will rise!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Very detailed explanation! At the end of the day, it is providing value to the community first - focusing too much on Vests, the value of curating will make a lot of people disappointed instead of motivated! Keep up the good content!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Thanks @rikstaker89.
It will try, but you should also. SP earned now, could be gold within a few years or just dust. We cannot predict it!
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Kudos for going down the full path, great write-up! Just a minor addition: The VESTS multiplied with the amount of voting power a vote consumes is also called
rshares, which is frequently shown in the voting details, e.g. on steemd.com.Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Hi @crokkon
Thanks for this addition. I did take a look at the vote break down on steemd. But didn't know it was also called rshares!
Will update the article this evening!
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Awesome post, I need to reread it to digest everything, but I have a better understanding of things under the hood.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Thanks for the kind words @rollandthomas
I am always telling people to keep being active also when the value of steem drops. I just wanted to make it clear why. Yes the calculation are not the easiest one. Bottom line is that you do get paid in vests and when the post reaches the payout date it id converted to steem and SBD.
Regardless of the price of steem, based in the number of vests you will always get the same ;)
If still have any questions after re-reading re-reading, let me know!
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Finally! An explanation I can understand :) Normally, my eyes start to glaze over where too many numbers are involved haha, but this one didn't do that. I don't pay that much attention to the numbers in general, because I'm here for the long haul, regardless, and continue to do my thing no matter what!
Thanks Peter :)
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
great piece of work @fullcoverbetting.
obviously upvoted. finding motivation when STEEM is low is hard. Not because it's not profitable to write but because most people are not even bothering to visit steemit. So this place is turning into ghost town. Dont you think?
Definetly it's easier to build exposure and whoever we meet now is most likely going to be here long term. So those are reasons good enough to be active
Yours,
Piotr
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I'm still phase out half way but I managed, thanks for making it plain to understand.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
The bottom line is that you need to be active regardless of the value of Steem. At least if you are here for the long term!
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Noted on that Peter! Thanks again!
Rose
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Great explanation on how the reward pool works.. I knew pretty much all of it but it was definitely a much needed brush up. Honestly, I wish I could've read this when I was newer to steemit because I had no clue on how it all worked until I read the white paper. You did a great job in breaking everything down for new users.. :)
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Thanks. It took some time that I did understand it myself!
Cheers,
Peter
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Thanks. It tool some time
That I did understand it
Myself! Cheers, Peter
- fullcoverbetting
I'm a bot. I detect haiku.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
The post is very informative. It gave me a little understanding about how the steemit ecosystem works. Can you please guide me to other authors who have expalined ecosystem and blockchain in more detail?
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit