Influence: The Value Proposition of Steem Power
During the Renaissance period, an incredible amount of beautiful artwork was created by artists who were sponsored by monarchies, aristocrats, and the Catholic Church. Money flowed from patron to artist, and artists created masterpieces that are still appreciated today. These masterpieces often catered to their patron’s taste, as well as a desire to build something in the world that would outlast their lives. These legacies of art continue to be revered today.
Imagine if something you supported on steem became as lasting and famous as Michaelangelo’s The Last Judgment, commissioned by Pope Clement VII.
In the 20th century, art grants started to fall under the domain of committees, and the result has been a lot of art that people don’t enjoy. In many countries, patriotic art celebrated (and still celebrates) totalitarian governments. Many artists were no longer attached to their patrons, who were abstracted away in massive crowds or faceless committees.
There has been an increase in direct patronage over the past 20 years. The internet has reduced barriers between creatives and consumers. Websites like Patreon allow audiences the opportunity to directly give monthly salaries to creatives, while Kickstarter allows creatives the opportunity to pitch a product directly to their fans . Giving creatives a living wage in return for access to their content is becoming more common in projects. Patreon and Kickstarter use internet technology to facilitate traditional payment models, while steem works in a completely new way.
Let’s examine the traditional system first.
Thirty years ago, if I wanted to hear a song, I had two options: one, I could buy the album on cassette tape with a dozen other songs for about $10. Two, I could wait until the song came on the radio. This cost no immediate money, but I needed to listen to advertisements while I waited. TV and radio are “free” because advertising firms are paid huge amounts of money by companies that know the value of a large audience. Facebook is worth over $500 billion because advertising works.
Fifteen years ago, if I wanted to hear a song, I could download it from the internet…legally, for 99 cents, or illegally. iTunes made legal downloads mainstream, and the music business was drastically changed.
The streaming model today, Spotify, is an unimaginable bounty of riches for the music lover. For the same $10 that obtained a cassette tape 30 years ago, I can listen to as much music as I want from a huge selection of musicians. Consumers have never had it better.
Unfortunately, the Spotify model is unsustainable for artists, who see very little in royalties from the platform. Spotify is a good way to discover smaller artists, but there is no organic engagement on the platform, and artists need to connect with the fans elsewhere (such as Patreon or Kickstarter).
These models work, but are limited.
Let’s take a look at how the steem blockchain enables its users to exert influence and patronize content creators.
The steem blockchain is a social media platform with organic value transfer. There are a few ways to do this: direct transfer of steem, direct transfer of SBDs, and by utilizing steem power and upvoting. The third way is steem’s killer app; it’s raison d’être. Building your steem power gives you the ability to be a patron on the steem blockchain.
The Blockchain Patronage Model
Upvoting content is a way to say, “I want a portion of the rewards pool to go to this post’s creator”. Holding a greater amount of steem power will make one’s vote more powerful, giving more of the reward pool to that particular post. The steem blockchain is the only one that allows for this sort of interaction. Whales-those with massive amounts of steem power-can become music producers, by upvoting and supporting artists on a regular basis.
Creatives will want to learn how to use steem power to better promote their blogs, while visionaries and patrons who wish to use steem power to promote content they like can earn (or buy) their influence by loading up on steem power. Steem power gives its holders the right to vote on how rewards are distributed. If you hold a lot of steem power, your votes will be worth a lot of money. You get to determine who gets that money.
A number of multimedia apps have been built by third parties have been built on top of steem, such as Dsound.
Dsound on the steem blockchain allows fans to listen to music, and support their favorite steem artists by upvoting them. In this model, no money is charged to listen; there are no ads to hear; the artist uploads and the fan listens, upvoting what he likes and who he wants to support.
And there are many others, like Dtube, that offer alternatives to popular sites like YouTube.
Let’s dig deeper into steem power and what users need to know about it:
It determines how much you can do on the steem blockchain.
New accounts have 14 steem power delegated to them. This allows the account to post, or comment, but only a small amount. Uploading pictures and video costs bandwidth, which increases as steem power increases. To utilize the steem blockchain fully, you’ll need to keep some of your early rewards and power up into steem, or else buy steem and power it up. It is similar to holding a small balance in your savings account if you’re a member of a credit union; you don’t need to have much to participate, but you do have to hold a little.
Again, steemit.com costs nothing to join, and that 14 steem power that is delegated when an account is set up is sufficient to use the platform casually. Bandwidth recharges over time, and can be checked using steemd.com.
You can upvote your own posts.
This can be a controversial topic, but it has to be addressed. Upvoting one’s own posts can be considered bad form, but it isn’t always the case. Users who are putting obvious effort into their posts don’t get griefed, but don’t plagiarise! Uploading others’ content without attribution and self upvoting-especially if it is above $10 or $20-may catch some flak from steemit users. The @cheetah account seeks out duplicated content. @steemcleaners does an excellent job reporting abusers, and you can read their guide for more information on what to avoid.
There is a growing industry of users who are exposing self upvoters. It’s a real test of community policing itself, and I have supported at least one steemian doing this.
It can be leased and delegated.
This is one of the most interesting aspects of steem power-you can lease it, and take advantage of a short term boost in influence, or you can delegate it, earning passive income in return for less influence.
Steem power delegation is facilitated by the Minnowbooster.net site, where lease requests include amount requested, length of time, price, and the APR. Most lease requests go for 20-30% annualized rate.
As of writing, it takes about 60 steem power for a one cent upvote. A very rough estimate calculates that around $150 for one cent. This means that buying steem power for influence is out of reach for most, but leasing is much more affordable for short term boosts.
Medici for a Day
Leasing steem power can be an incredible boon for those who know how to use it. Holding a contest? Trying to encourage audience participation? Want to become a whale for a short amount of time? You can do all of these, and more, by leasing steem power. A small amount of money can be leveraged to get a lot of influence.
Leasing also helps spread influence on the platform beyond a handful of whales and their particular tastes.
You do not need to be a whale to delegate steem power, however. There are often small requests for under 100 steem power, which can be filled by smaller accounts.
I have delegated steem power since September 2017, and the longer it continues, the more bullish I am of the steem platform. There is no market like it in either cryptocurrency or traditional finance.
A Deeper Look Into Leasing SP
Let’s look at the cost of leasing steem power. Currently, buying 60 steem power, at $2.50 per steem, would be $150. That gives the buyer very little influence in upvoting. However, if the buyer instead leased steem power, she could see her influence rise greatly for a period of time. For $150 at 25%, she could lease:
~5800 steem power for one week ($0.95 upvotes)
~1450 steem power for four weeks ($0.24 upvotes)
As you can see, the person holding 5800 steem power can make $150 by delegating their steem power-with all the voting rights that go with it-to another account.
When steem power is delegated, the lessor signs a message giving the lessee access to the steem power. If they are using Minnowbooster, daily payments from Minnowbooster will go to the lessor (the lessee pays up front to Minnowbooster). When the agreed upon lease ends, the lessee is given the option to renew the lease without interruption. If the lessee wants, they can pay more steem to Minnowbooster and continue uninterrupted.
Hot Tip: This works out best for both parties, as the lessee has no interruption in service, and the lessor has no interruption in payment, and doesn’t need to wait the 7 days to access the steem power again. Lessees who continue their lease are a huge boon to steem power lessors.
There is no easier way I know of to earn passive income than by delegating steem power, and it makes steem a valuable and unique resource.
You Can Directly Incentivize People
The past two months, my diet has been directly affected by the steem blockchain. An app called Steepshot, which works like Instagram, but on the steem blockchain, makes it easy to snap photos and make money.
Steepshot works just like any other social media app, but because it connects to steem, users get paid from upvotes!
I got paid some nice sums of money while uploading pictures of my food, so I did the logical thing and started buying my lunch at work instead of taking a sandwich and chips. I was getting paid more in cryptocurrency than I paid for my meal! A stranger with a great deal of steem power encouraged me to eat out more.
App developers can utilize steem power to upvote those who use their app. Busy.org does this. Busy is another portal to the steem blockchain. It has a better UI/UX than steemit.com, and posts on busy (instead of steemit.com) will include the busy tag, which gives users the possibility of receiving a hefty upvote from the busy account. Posting on busy.org instead of steemit.com has no effect on your post’s presence on the steem blockchain. Both act merely as portals, or windows, to access the steem blockchain.
A 21st century blockchain publishing model could be created with a “newspaper” steemit account holding a large amount of steem power, that curates and pays select authors to write articles for it and pays for their efforts by upvoting the articles and promoting the authors. The capital required to start a newspaper is in the millions for traditional media, while a professionally designed blog can be started for nearly free. This would exist midway between the two; where $200,000 invested into steem power would create a whale account that could offer meaningful sized upvotes (around $15-$20 at today’s prices) for semi professional writers, with curation rewards being reinvested into steem power. Authors could also be upvoted for responding to comments by readers.
Who will create blockchain’s Huffington Post?
Steem Price and Steem Power
The most difficult aspect of using steem power is price instability. As of this writing, the price of steem is a little over $2, down from a high of $8 at the beginning of 2018. By the time this book is published, it’s impossible to know what the price will be.
I am not an investment advisor, and this book is not investment advice. I point that out because it is just as likely that steem ultimately doesn’t work as a platform and those who spent money to buy it end up with nothing. It is important to remember this technology, while exciting, is unproven. This is why I suggest to creatives interested in cryptocurrency to use the steem blockchain, because even if your investment goes to $0, you will still have the content you created. People developing their art will keep the hours of practice they put into it, and they’ll keep the material they created. Personally, I’ve written a book (two when this is done), and no matter what else I do in crypto, the effort I’ve put into writing has made me a more effective communicator.
However, with 252 million steem circulating, and a market cap of about $500 million, there is the potential for upside price movement. There are currently 800,000 accounts on the steem blockchain, with steemit.com listed in the top 1000 websites worldwide by Alexa. As steem continues to take on new users, there will be more demand for the limited amount of steem. At the same time, however, steem’s price tends to correlate with bitcoin and the cryptocurrency market in general, meaning holders are at the mercy of market forces beyond the app itself. This includes wild swings, such as the recent two month plunge from $8 to $2.
This is incredibly unstable, and is difficult to stomach when the value of one’s holdings drops by 75% in 60 days.
Nevertheless, when the price of steem rises, the value of upvotes rises, and when the price of steem lowers, the value of upvotes lowers. A higher steem price is good for those who hold steem power.
Philanthropy and Micro Loans
Steem has growing communities from South Korea and Nigeria, as well as a number of other countries. It is worldwide, open to all, and offers those in third world countries the opportunity to earn a significant income.
Consider: in the coastal regions of the United States, the daily income required for a family might be $150-$200. There are very few steemians making this sort of money from upvotes, but rural users may need less; say, $100/day. This is a lot of money. However, in other parts of the world, there are many who live on less than $10/day. Imagine a steem power holder upvoting content creators from these parts of the world, helping them support the development of their craft! You can directly contribute to the development of entrepreneurs in far away places using steem power, bypassing organizations with overhead costs and bureaucratic decisions that you may disagree with.
You can improve foreign relations at the grassroots level, one person at a time. Don’t worry about changing the world-just help one man, one woman, one family. Steem is a realistic, personal engine of change.
As you can see, steem power allows for a number of unique interactions on the steem blockchain, which creates opportunities for creators and patrons to directly interact. I’m excited to see how this evolves in the next few years, and what great art comes from the steem blockchain.
 I will use the term “creatives” for content creators. It covers anyone who is creating content that can be consumed on a smartphone/laptop, but is not limited to that.
 The rate even accounts for the seven day “cooldown” period when a delegation ends (you don’t immediately get your steem power back after ending a delegation).
Did I miss anything about steem power? Let me know in the comments below. This will be a chapter in my book, and I want it to be exhaustive on how steem power works.
Check out my book for more information on cryptocurrency trading. Free for Amazon Unlimited readers!