It's a funny thing this crypto economy, and with the dropping of the price of Steem it's creating all sorts of real world headaches.
Liquid Steem
One of those headaches is caused by a lack of liquid Steem. Most people did the right thing and powered up most of their Steem, which is excellent. However, it's meant that if you want to sell Steem, you have to either earn a whole lot more or power down the amount you want. That's a 13 week wait, and no one wants to reduce their stake on the platform at these prices.
Currency Exchanges
These are a great way to buy and sell Steem, however they come with hefty associated costs and also the prying eyes of the government and captial gains tax.
Meeting Steemians Offline
If you're lucky, you might know some Steemians locally and can meet them offline and pay for Steem with FIAT 'under the counter' so to speak, avoiding all sorts of fees but also any protections you may have. Where's the evidence of the trade though? (With trades on the block-chain, there is a digital trail so people can lose their reputations if they are not trustworthy). This requires a lot of trust, and isn't recommended with strangers.
Demand and Supply
So, you've got a situation where there is a demand for cheap Steem, the supply is there but it's locked away as SP, or yet to be earned, because there is a psychological barrier of the idea of selling below US$0.50. Many businesses have to cut their prices in lean times when they need liquid cash. If the power down time was faster, this is what a business would do.
However, Steem Power is your stake on the platform and your future earning potential.
It's the FOMO, or the fear of missing out or possibly the guilt of knowing that you powered down at a time when Steem has the potential to boom again. It's like pawning your wedding ring and that is never recommended. There was even a song about it.
NELS
Non Exchange Liquid Steem or NELS for short is just a phrase I coined to refer to Steem transactions outside of the exchanges. If you hear anyone using the term, you heard it here first.
Disclaimer: I am not a financial advisor. I am not suggesting or recommending any particular method. Trade Steem at your own risk and please seek legit financial advice where possible.
Congratulations! This post has been upvoted from the communal account, @minnowsupport, by Xrotarebil from the Minnow Support Project. It's a witness project run by aggroed, ausbitbank, teamsteem, someguy123, neoxian, followbtcnews, and netuoso. The goal is to help Steemit grow by supporting Minnows. Please find us at the Peace, Abundance, and Liberty Network (PALnet) Discord Channel. It's a completely public and open space to all members of the Steemit community who voluntarily choose to be there.
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I'm going to have to read this when I'm more awake OR you could make a video explaining this to me like you would a 5 year old.
for me, that would be very helpful. I have powered up all my everything to steem so I got that part. the rest I would like to learn but words, like above, while easy to read are hard to understand for me.
Maybe I'm not the only one?
or I'm really tired but think it's the first.......cuz I'm always tired LOLL
But will read again tomorrow.
Thank you for trying to explain things in a simple way.
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Thank you for the reply. No, it's not you. I was aiming for a niche market rather than making it as easy to read as possible.
The term 'liquid' in regards to currency refers to how easy it is to exchange for goods and services.
Cash is very liquid as you can go to the shops and buy what you need.
Gold bullion bricks aren't very liquid because it's harder to exchange.
Steem and SBD are considered liquid as they are crypto cash, but not as liquid as FIAT yet.
The majority of Steem is bought on an exchange. Sometimes this attracts the attention of the tax department. Some people want to avoid this and offer the chance to buy Steem for cash at Steem meetings.
In order to sell Steem, it has to be readily available or in 'liquid' form.
My wallet has 231.886 Steem that I haven't powered up, for this purpose.
So, I jokingly coined the term "non exchange liquid steem" or N.E.L.S.
Powering up Steem is great, however, it takes 13 weeks to power down again.
That means that it's not as liquid. (Never power down).
Because no one wanted to power down, there wasn't enough supply to meet the demand.
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you should make a post out of your reply to me. This I understand :D Thank YOU for taking the time to come back and explain it to me.
so really I should not power up everything I have?
or what would you suggest? yes, I know I have the final decision on what I do but would like to hear your point of view please.
and if I would, I would think lots of others would, if you do it in the easy to understand manner you replied to me in.
we are not all investors and learn slowly as we go what we need to know. some of us......got talked into being here by their son's and when asking them about stuff don't really understand what they are saying loll and then think.....well I will learn that later :D
and then a year goes by and you still have no idea :D
Hope your day is going great!
Oh, and what the hell is FIAT? please.
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Thanks for the reply. I am considering doing something like this again, possibly a DTube video.
As for powering up, it depends on what your purpose here is. If you are just going to upload videos and not purchase anything then power up the whole lot. This increases the value of your upvotes, author rewards and curation.
There is not much to buy with Steem except for maybe Steem Monsters cards, etc.
But maybe you want to send Steem or SBD to your son or buy something?
I just paid 50 SBD for tickets to a Christmas party. So, in that sense having 'liquid' SBD or Steem is important.
Your wallet says you have 8.409 Steem. This is liquid Steem you can use.
Your 1619.536 Steem Power is locked away and isn't liquid.
You can always earn more Steem the more you power up and interact here.
But if you want some set aside for emergencies, then do that.
Also, adding SBD or Steem to 'Savings' locks it away and it can take 3 days to get it out again. Not liquid at all. :)
Posted using Partiko Android
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