I'm still new here as a Steemian, collecting my first Steemit rewards just yesterday. I was excited during the first week to see rewards growing each day. Then all of a sudden, they dropped. At first I thought I must have gotten some down votes or that someone had un-voted for my posts. But that didn't seem to be the case, and when I looked around, I realized that everyone's rewards were going down.
After reading through numerous posts and reading comments, I've realized that the drops in rewards are actually a positive part of Steemit.
The rewards are based on the pool of monetary value the company has at the moment. So it's heavily affected by the price of Steem. Today, one Steem is selling for approximately $5.06, up 5.64% from its $4+ price yesterday. Still, substantially lower than the $6+ price it was going for around the end of last week. So the company is taking the current pool of return and distributing it proportionately among all the Steemians. That's why if more votes are given on a given day, there is less $ to be distributed. But also, if the price of Steem has fallen, just like with a corporation's stocks, there is less $ to be distributed among shareholders.
No one took our rewards and even if we don't get anymore votes on a post, we still may have higher rewards for that post when the voting period closes than we do today. The rewards we receive will be based on the pool of $ available on the date that post closes.
This can be at times frustrating, but at other times exciting. I remember when I bought my first piece of Bitcoin through Coinbase. I paid the price that the currency was selling for that day, and when the Bitcoin arrived in my Coinbase account a week later, my Bitcoin wallet balance was worth more than what I had paid. How fun! We may experience the same here on Steemit. A post with 4 votes that have generated a total of $0.0 may a week from now show .25 or whatever number they're worth at the time.
Why I believe these changes in vote worth are a positive policy? Because it's a protective factor for the company. They've built in a system that protects all of us "shareholders". Since the company payouts adjust with the company's needs, they will never owe us more in rewards than what the profits of the company are worth. If the price of Steem goes to zero and our vote worth stays stable, we all run the risk of the platform going bankrupt. But with the system they have in place, we know that Steemit is designed to stay around.
There are a lot of protective factors built into this platform and its system of distribution. I believe the developers of Steem have stayed a step ahead. These kinds of protections give me faith in the system here at Steemit, that they have a business model that's sustainable.
What can we do to help out during the low times? Since this is a community effort, we may benefit each other by voting and commenting a little less while the currency is lower... Then again, we may just acknowledge that market highs and falls are just a part of the process and keep voting and commenting for each other like normal, knowing that when the market again rises, our friends who we've voted for will suddenly be rewarded.
It's important to note that the drop in the price of Steem right now is consistent with the drop in cryptocurrencies right now across the board, and to a lot of people, this is an opportunity to buy more alt coins. For others, this is likely a great time to HODL! What goes up will have a market correction as people sell profits, and what goes down becomes a buying opportunity and usually rises again.
(image from Bing, licensed free to share and use)
The image of the candlestick chart is generic and is not representative of Steem.
Here's a post with some helpful thoughts about the decrease of rewards in the comments:
Well, you are partially right. Actually the reward pool doesn't have anything to do with the price of steem. The same amount is added to the pool every day. So, the exact number of coins goes out, whether the price is at $4 or $14. BUT, the amount you see in the payout box is DIRECTLY connected to the average price over the last seven days. AND the SBD portion is delivered as if each unit were $1, whether the price of SBD is $1 ( as it was originally Planned) or $10. So, when the price of SBD is up, the SBD half of the reward is worth considerably more than the SP half, which is dependent on the price. Hope that helps. We are NOT, however, receiving any kind of profit sharing, or dividend from the company having done well. The coins are created, and the mining process is a proof of mind process, which culminates in the creation of content and the voting of rewards for said content. The rewards you received are given in SP and SBD that did not exist 7 days prior.
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Thank you for your remarks. I will have to look back through the white paper. I read it thoroughly and thought I read that we receive a dividend. This company's model is complex, but I do believe that's a positive thing that benefits the company and us alike. I appreciate all insights as I continue to unravel the intricacies of Steemit.
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We receive interest on the SP we hold. That is separate from the rewards pool.
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Go to the blue paper instead, BTW, it's been updated considerably and about a third of what's in the whitepaper has changed.
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Ah! Thank you!
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Sure, I look forward to seeing more of your work.
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