My Thoughts On 100% Power Up Posts? Don't Do It, There Is A Better Way!

Introduction

I have been on this platform for roughly two weeks and have done fairly well, you can see my stats here https://steemworld.org/@entrepreneur916, and I have discovered something that I thought should be shared (especially for new users that are trying to grasp the concept of Steem, Steem Power (SP), and Steem Dollars (SBD)). I have labeled all regards to Steem, Steem Power, and Steem Dollar with their respective acronyms(Steem, SP, and SBD respectively) throughout the article for new users to identify them to avoid confusion and help retain it in memory. Cryptocurrency has confused all of us a time or two.

My Stance On The Platform As An Investment

Upon calculating payouts and experimenting with the "Default 50%/50%" and the "Power Up 100%" I noticed something interesting. First off, I would like to say I am in a "long" position" for Steemit, meaning that I will be investing heavily in the platform via Steem Power to earn influence and earn appreciation on the Steem Power. Steem Power in "vested" in the ecosystem and if I chose to withdraw, I will receive my investment in 13 equal payments per week that is subject to the exchange rates of Steem. I believe investing in Steem Power is an excellent opportunity and strengthens the Steemit ecosystem creating a better platform for all, so in no way am I condoning not reinvesting in the platform.

However I do believe that you should be smart with your money, especially when you are putting your time, passion, intelligence, or experience into the blockchain.

Evidence Of Skewed Rewards

Take my post on Cryptokitties. https://steemit.com/cryptokitties/@entrepreneur916/cryptokitties-a-short-starters-guide-plus-free-kitty-giveaway

Yes, you read that right. I did an article on digital "kitties", they're cute and profitable. It is what it is and I'm not ashamed.

Now this is a "Powered Up 100%" post, as indicated with the Steemit logo following the title of the article. Scroll down to the end of the article to view the whopping payout, click on the arrow and it will display past payout of $3.34 SBD. It will also indicate what went to the author and what went to curators.

Now, looking at my SteemWorld account, we can see what that Steem Dollar SBD amount was converted to Steem Power (SP). The $2.63 Steem Dollar (SBD) was converted for a mere $0.497 Steem Power (SP).

So this would indicate that $1.00 of Steem Power (SP) would be roughly $5.26 worth of Steem Dollars (SBD) correct? Not quite. Let's look at how these "currencies" were being traded roughly that time.

Steem (Steem Power/SP)

Steem Power was roughly trading at $6.41 USD or 0.00048283 BTC. While these conversions are irrelevant to this conversation, we do need benchmarks.

Steem Dollars (SBD)

Steem Dollars (SBD) was roughly trading at $5.71 or 0.00044551 BTC.

So this shows us that the market currently favors Steem (Steem Power/SP) over Steem Dollars (SBD), so we can expect that the blockchain will reward us in Steem that is not at a 1:1 ratio, since the market determines that Steem (Steem Power/SP) is more valuable, and therefore will not award the same. However, this does not explain the huge discrepency between my Steem Dollar (SBD) and my Steem Power (SP) reward from the aforementioned Cryptokitty post.

So lets look at the exchange at blockchain for Steemit at http://www.blocktrades.us

Note : These conversions were done with Steem Price of $5.70 USD and Steem Dollar (SBD) at $5.84. This applies to this topic due to the sheer difference in payout of Steem Power (SP) in relation to Steem Dollard (SBD).

At "Default 50%/50%" payout of $1.31 Steem Dollars (SBD), the conversion if I were to just buy Steem and "Power Up" would be:

Would have been much better to "Power Up' to just buy my Steem with my Steem Dollars (SBD) than to choose the 100% "Powered Up" option. Lets see what the equivalent of Steem Dollars (SBD) is to the 0.497 Steem Power (SP) we received:

So If we were just to make a total of $1.31 Steem Dollars (SBD) on this post, take away 25% for curators and divide by 2, we would reach our $0.51 Steem Dollars (SBD) net profit, in which we could convert into Steem Power (SP)

$1.31(.75)/2 = $0.51 SBD

Post To "Default" 50%/50% And Convert Your Steem Dollars (SBD) Into Steem Power (SP) To Maximize Your Rewards

With my experience, research, reward distribution and math, it is far more efficient to increase your Steem Power (SP) with your Steem Dollars (SBD) in the current environment. This may change, it may be a glitch, or it may be the direction the platform is heading with it's explosive growth.

Conclusion

Why is the reward system like this? I have a few ideas. First, there must be measures in the block-chain trying to compensate for the new members entering the site and trying to distribute the Steem Power (SP) accordingly, since it's distribution or power is controlled. Secondly, this might indicate that Steemit is wanting people to buy in more to obtain power, instead of earning and pulling out of the ecosystem.

If there is anyone out there that is more familiar of this subject, or sees something that I do not or has another take on this, please let me know. The last thing I want to do is to spread false information or degrade this amazing platform. @jerrybanfield, @boxmining, @brandonfrye, @reseller, @jamesc, you guys have been huge inspirations and mentors to me thus far, do you have any input on the subject or is there something I'm not seeing?

Respectfully yours,
Jacob A. Billett, M.B.A
CEO Billett Enterprises, Inc.

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