STEEM Power is your ticket to everlasting (at least theoretically) revenue stream.
Everlasting Gobstopper
Did you catch Willy Wonka talking about the Everlasting Gobstopper? They last forever.
For the past week I have been watching my STEEM Power account. Without doing anything my STEEM Power grew minute by minute. I decided to track it during the times I was not earning any rewards or adding to my STEEM Power. What I found is fascinating.
Compounding Interest
You may remember the days when banks actually paid a decent interest rate and you could see the compounding interest each month on your bank statement. If you did nothing (no withdraws and no deposits), your balance accumulated and the interest paid to you each month also increased because it was compounding.
The equation for compounding interest is:
Compounding Steem Power
A while back I went to my STEEMit wallet to view my STEEM Power. I just happened to hit refresh about five minutes later and noticed my STEEM Power balance increased. There were no new rewards and I had not transferred or purchased any additional STEEM Power. Being curious I decided to track my STEEM Power balance over time.
When my account had 259 STEEM Power (SP) units it earned about 0.060 SP units per hour.
Then through rewards and direct purchase of Steem Power my balanced increased.
When my account had 338 SP units it earned about 0.088 SP units per hour.
See the benefit of compounding SP units, I purchased a bit more SP units.
When my account had 427 SP units it earned about 0.111 SP units per hour.
In my observations it appears that the STEEM Power is increasing every minute.
Using the compound interest equation with a cycle time of every minute, I extrapolated out how much could be earned every day, 30 days (about a month), and year.
My observed interest rate per minute is roughly 0.00043%. That seems incredibly tiny but remember it is compounding every minute.
Let's assume this minute by minute interest rate stays the same over a year. What is the estimated potential?
| SP Power | Hourly Gain | Daily Gain | Weekly Gain | Weekly Interest | Monthly Gain | Yearly Gain |
|---|---|---|---|---|---|---|
| 259 | 0.060 | 1.500 | 11.006 | 4.24% | 50.584 | 2,030.034 |
| 338 | 0.088 | 2.135 | 15.234 | 4.50% | 70.284 | 3,023.956 |
| 427 | 0.111 | 2.662 | 18.984 | 4.50% | 88.965 | 3,840.826 |
All gains are in STEEM Power (SP) units
More on why the Weekly Interest is included in the above table a bit later.
How is this Possible
This is best explained by the STEEM White Paper:
Because Steem wants to encourage long-term growth, it is hardwired to allocate 9 STEEM to Steem Power (SP) stakeholders for every 1 STEEM it creates to fund growth through contribution incentives. Over time this drives the ratio of the total STEEM value of Steem Power balances to the total of STEEM balances toward 9:1 . (It seems likely that the ratio will be somewhat greater than 9:1 due to continued net Powering Up of the newly printed STEEM.) It also means that long-term holders are almost completely protected from the dilution used to fund growth.
Benefits of Accumulating STEEM Power
As you increase your STEEM Power the minute by minute compounding makes your Steem Power grow even faster. You gotta love the power of compounding!
The STEEM White Paper states that individuals are guaranteed to have more STEEM in the future than they have when they first convert from STEEM to STEEM Power.
The other benefit of increasing your STEEM Power is that it gives your votes more weight.
It is said that STEEM Power is the heart of the STEEM system. The benefits of accumulating Steem Power are truly powerful.
Ever Lasting STEEM Power
One day you may find yourself needing to power down. Powering down is accomplished in weekly payments over two years (104 equal payments). You can stop the power down at any time.
Here is a post about powering down, The Power of Powering Down-What I learned after Powering Down for Two Weeks.
Powering down is accomplished at the weekly rate of 0.9615% (100% divided by 104 payments). Note that this is much less than the weekly rate of gain (4.24% to 4.50%). If you do nothing and assuming the weekly rate remains the same, you will have an everlasting revenue stream from your STEEM Power.
We are at the early adopter phase of STEEMit. In my opinion the weekly rate of gain should be steady for a while (not sure how long), but I will be monitoring it.
My advice to anyone on STEEMit is to remain active in the STEEMit community and accumulate STEEM Power.
Sources:
Image sources found using Google.
The Power of Powering Down-What I learned after Powering Down for Two Weeks