How to “HODL” STEEM • The Safest Way to “HODL” Inflationary Tokens

So, you ask “When Moon, When Lambo?” but there are some things to consider first.

Let’s start off assuming we are all aware of the “HODL” definition. Also, let’s start by understanding that STEEM, the token not the platform we know as STEEMIT, is inflationary. The supply of STEEM increases over time at a set rate. It can be very confusing for new & experienced users to comprehend so I will include some references for those of you who wish to dive down the rabbit hole.

I have been on Steemit, creating original content, for nearly 1 year. This information was shared originally on my Steemit blog, but since joining TRYBE (today!) I thought this community might also be interested in the piece that I am sharing below.

Helping to see the road ahead

To offer some clarity (hopefully, anyhow…) and some things to consider for everyone who holds STEEM – whether it is on an exchange, on Steemit, or both. There are more than a few people that I have spoken with who do not seem to understand how the system works. I hope to offer some thoughts that will initiate more discussion below in the comments. Now for the necessary evil: the disclaimer.

I will include my thoughts which are not to be confused with or mistaken for financial, legal, or professional investment advice of any kind. I am sharing this information for educational and entertainment purposes and I am not offering any investment advice here.

Always do your own due diligence before making investment decisions and consult with licensed professionals before risking your hard-earned money. Always invest at your own risk and also realize what those risks are.

STEEM is Inflationary

This means that the supply will increase over a set period, in the case of STEEM – that over the next 20 years. Now, here is where it gets interesting…

Most Investors Would Not Invest Without This Information Beforehand

So, here is where I am mindboggled: Everyone participating on Steemit, with an account balance above $0 IS invested! One would think that more people would see it this way, but oddly enough I do not believe most people do. If you are voting, commenting, posting on this platform, then you are an investor of STEEM & SBD. You are exchanging time for tokens when you participate on the platform.

Earning is based on user action.

The more time that we exchange, the more potential to earn we will have. Effort and skill are great factors in any success and is no different on Steemit. Persistent effort applied over time = investment in your future. If we are all investors, maybe we should all do our homework on how this platform works and what the future might hold.

the RAW inflation-data for STEEM. This data is often requested by investors and should be easily accessible. Big thanks to @abit for providing the following yearly supply-table so laymen can understand it! via post by @fyrstikken

please see link below table for reference.

year current supply inflation New supply
1 250,000,000.00 0.095 23,750,000.00
2 273,750,000.00 0.090 24,637,500.00
3 298,387,500.00 0.085 25,362,937.50
4 323,750,437.50 0.080 25,900,035.00
5 349,650,472.50 0.075 26,223,785.44
6 375,874,257.94 0.070 26,311,198.06
7 402,185,455.99 0.065 26,142,054.64
8 428,327,510.63 0.060 25,699,650.64
9 454,027,161.27 0.055 24,971,493.87
10 478,998,655.14 0.050 23,949,932.76
11 502,948,587.90 0.045 22,632,686.46
12 525,581,274.35 0.040 21,023,250.97
13 546,604,525.33 0.035 19,131,158.39
14 565,735,683.71 0.030 16,972,070.51
15 582,707,754.22 0.025 14,567,693.86
16 597,275,448.08 0.020 11,945,508.96
17 609,220,957.04 0.015 9,138,314.36
18 618,359,271.40 0.010 6,183,592.71
19 624,542,864.11 0.010 6,245,428.64
20 630,788,292.75 0.010 6,307,882.93

What is the inflation rate of STEEM? Here is the Supply-Table for the next 20 years!

STEEMIT 2 years, 2 mo. old
CURRENT SUPPLY: 268,855,181.25 STEEM
VIRTUAL SUPPLY: 273,693,560.381 STEEM

Here are a few things to remember when you are participating on Steemit:

• STEEM & STEEM POWER are not equal: STEEM POWER or SP is essentially STEEM that is “vested” in the platform and requires 13 weeks to power down once STEEM is converted into SP/STEEM POWER. SP is what determines your voting weight – it is based on the stake that you hold aka STEEM POWER. Powering up STEEM raises your voting weight and increases your ability to earn. The more power you use, the more you can earn. This is pretty important with inflationary tokens that have a supply that increases. STEEM is the liquid form of the two, just like SBD; both are easily exchanged and can be used immediately. Holding STEEM and SBD affords the holder the ability to speculate on price, however, that was not the original intent of the tokens. They are a means of exchange for a variety of services, products, attention, and other use cases like fundraising, etc.

• If you participate in this platform – it pays to pay attention! Read, read, read the whitepaper. When you are done reading the WHITEPAPER, read it again. Next, read the Whitepaper.

https://steem.io/steem-whitepaper.pdf

If you have an account balance beyond $0, then you are invested. No matter if you put in your own hard-earned money OR you haven’t spent a cent – you’re still an investor. You are still spending time. If you plan to spend more time here on Steemit – you are investing. Which leads us back to read the WHITEPAPER.

• DYNAMIC WINS THE RACE AND STATIC STAYS STAGNANT: Don’t be stagnant. This includes complacency too! Don’t get too comfortable and stuck in one groove for too long. Be dynamic. Be ready for a move in both directions. STEEM sitting in an exchange account is only allowing for speculation of price movement, but if you were to power up that STEEM into an account and become an active participant – you could earn much more. 

It also is nice to not worry about the price fluctuations so much because you can actively engage with the Steemit community while earning rewards for that activity. Just powering it up isn’t much help, so you must engage. Be active and the more activity you generate by voting, leaving genuine comments, and writing the more potential to earn you will have.

Many people simply do not have time to be online all day, every day. So… There are plenty of other ways to put your SP to work for you while you are unable to be online. I am sure many of you are aware of bots that provide a variety of functions here on Steemit. It is a great community debate and one that I find to be a tired one. Two sides who argue over who should and should not invest in themselves and the community – yeah, that sort of silliness. Like there isn’t enough STEEM to go around all of a sudden. Don’t be fooled by “the pool is empty” crowd.

Know what you are holding, – more importantly WHY you hold it – AND… What your desired results are! Not knowing these key details can be a failure in the making. Always know as much about whatever it is that you invest in – preferably prior to investing. Know why you wish to invest and what you intend or reasonably anticipate in return, Have an exit strategy and expect the unexpected – always.

Steemit has no transaction fees for the internal exchange.

Free transactions on the Steemit blockchain. There’s an internal market that allows the exchange of STEEM & SBD on Steemit. Use it because that is what it’s there for and it’s free – how much more incentive do you need?

Here’s a bit more incentive:

SBD was intended to be pegged to $1 USD, however, has broken that peg and surpassed that exponentially over the past few months. I have been on Steemit for roughly 332 days and since I started here, the supply of SBD has inflated by double (at least) current SBD supply: 14,234,511.405 SBD

The Blowback

This is an unintended consequence of the broken dollar peg. Because SBD was intended to be exchanged for STEEM in the internal market and is not getting exchanged internally but rather external exchanges (sold on the market) – the supply of SBD is inflating quickly.

One Solution

If more people exchange their SBD via the free internal market, that would in effect burn some of that supply. If this is incorrect, please ‘adjust’ my understanding below in the comments! I am not an oracle but learning just as many others are here. It is my understanding that when SBD is exchanged for STEEM via the internal market, that in turn burns the SBD token / reduces supply when that STEEM is powered up.

HELPFUL RESOURCES FOR THE AVERAGE STEEM HODLER

https://steem.io/steem-whitepaper.pdf – STEEM WHITEPAPER

• What is the inflation rate of STEEM? Here is the Supply-Table for the next 20 years!

https://steemblockexplorer.com – STEEM BLOCK EXPLORER

• Introduction to Steem – A Blockchain Designed to Tokenize the Content Web on Crytposlate.com

https://onchainfx.com/asset/steem – Cryptoasset Ranking & metrics

Friendly Reminders For Fellow HODLERS:

Mind the BTC

STEEM is a tradable pair of BTC, so it is wise to pay attention to the price action of both. They converge and diverge over time and that allows for opportunity. These prices vary from one exchange to the other, so that also allows for further arbitrage opporunities. Just remember I said “it pays to pay attention” – Be Safe, Not Stupid!

Don’t ‘Just HODL it’ – Remember: making the most of your crypto requires action!

Concluding Thoughts:

Before loading up on STEEM and heading to Twitter to ask WHEN MOON? remember what @grow-pro told ya

Always HODL with care! Please use two hands and your whole brain whenever you are making investments. Even posting on Reddit is an investment, whether that investment has a monetary return or not. Just use your head and the resources available and most times that is going to get you greater results.

Don’t chase! Let the FOMO and FUD fly and keep yourself out of that flock. Let the birds chirp on the fence, but always know which side you stand on.

Do not allow rumors to determine your strategy – get the facts. Understanding how Steemit was intended to be used AND how it is really being used is also another very deep topic of discussion, maybe for another day.

It is important, nonetheless, to acknowledge there is some variation and deviation from the intended path and the current one. This inevitably alters the future projections if we are only considering ‘on-paper’ theory and ignoring reality.

I am not saying that buying and holding STEEM is a poor investment and I am simply offering some reason to why so many people invested in this platform seek ways to enhance their ROI (hint, hint – inactivity is not how they do it).

So, before we all charge the bid bot owners and burn them at the stake, consider the fact that without this alternative means of generating ROI for investors there might be far less opportunity for all of us who use the platform. Everyone wants more, that’s a fact. It is all about how we go about getting it that determines our integrity.

Recommended2 recommendationsPublished in Blockchain & Cryptocurrencies, Cryptocurrencies, Other, Trading, Member Stories, Top Rated, Opinion, Steem, Crypto Social Networks
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Comments

    1. Brandon Holsey Post author

      I would say that Steemit and TRYBE are two different platforms of utility so they are not competing for the same user base. Steemit is a platform that runs on its own STEEM blockchain and is a social community geared toward blogging, vlogging, ulogging, etc. I see TRYBE.one as more of a user-created resource library of information geared toward Crypto-related subjects. Of course, both are in BETA so it is hard to say what pivots might come in the future for either.

      Steemit (the social platform, not the STEEM blockchain, is just one layer – the potential for various types of layers still exists. TRYBE is planning to run on the EOS chain later this year and that is essentially like Steemit running on the STEEM blockchain. There are so many use cases that suggest Steemit.com is not the only way to use the STEEM blockchain. EOS is still very early in the launch and we have yet to really see what it can do in comparison. That’s why I’d say the two are not competing (yet) and I am unsure if they will ever compete for the same user base. I personally have no issue using both and creating content for each of them as long as I don’t ever have to return to facebook

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      1. Tom Norwood (Trybe)

        Hey Brandon thanks so much for this well thought out response to that question. I also don’t think that Steemit and Trybe are competitors. Steemit, as you say, is more of a blogging platform, while Trybe aims to be more of an educational/training platform and a knowledge base. I think sites like Steemit, Medium and Trybe can all live in happy symbiosis – all with slightly different features – and not really tread on each other’s toes too much. And you’re right – the further we can get from Facebook the better 🙂

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        1. Brandon Holsey Post author

          My pleasure, Tom. With more censorship taking place around crypto-related content, even on Medium to some degree, I feel it is absolutely vital for the world to have information on various platforms so that this sort of censorship is not as effective. As with any new market, education consumers is key – which is hard to do when your social site of choice has algorithms to suppress the content meant to educate. I left Facebook a decade ago and jumped on the Google+ beta shortly after. Even that became weighed down by the heavy corporate hand and they veered off path never to return. That only makes my experiences here sweeter to have known the ‘alternatives’ to what we have now. TRYBE is a great opportunity for the world to share knowledge while sharing our collective passion for crytpo, freely! I really appreciate this outlet you’ve created and I wish to help in every way that I can to ensure it is an enjoyable platform. Steemit is a place where I am also talking about TRYBE – would love to have you there as well if you aren’t already! Keep up the great work & don’t hesitate to ask for help – I’d be happy to assist anytime. Thanks again for the creative outlet and a place to learn ✌️

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          1. Tom Norwood (Trybe)

            Thanks Brandon! I do have an account on Steemit but have never posted anything there. Apart from Trybe I use Medium. As soon as I get a chance though I’ll spend a bit more time on Steemit and start re-publishing some of my content there as well. What’s your username there?

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    1. Brandon Holsey Post author

      My pleasure, Mike. Thanks for your time and if you have any questions about Steemit – hit me! I have been creating on Steemit for one year (as of yesterday) so I’d be happy to help ✌️

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