I heard that using an upvote bot when the market price of SBD is elevated will result in losing money. Well, that sounded interesting, so of course, I had to test out the theory.
Upvote bot profit could be an illusion
To test it out, I invested 1 SBD with an upvote bot and got 1.798 SBD back on this post. It may seem like an increase, but at the time of my test yesterday, SBD was being sold on Bittrex for about $12 each and Steem was at $1.80.
1 SBD turns into 1.798 SBD
Keep in mind, my post is testing out investing 1 SBD, so feel free to see what happens if you multiply it by 5 or 10.
Option 1 - Guaranteed Win
I could have sold my 1 SBD and bought 6.6 Steem with it... probably the smart thing to do. You really can't go wrong with this scenario. In this case, I sell my SBD, originally worth about $1 for $12.00.
Option 2 - Rolled the Dice by Using the Upvote Bot
Outcome A
In this case, I am hoping at best that the market price of SBD holds steady by the time my post pays out and the extra .798 SBD I received for using an upvote bot, will end up being a profitable endeavor. Let's assume SBD stays at $12, I would have ended up with 1.798 x $12 = $21.576 which is an increase in value of $9.576.
Outcome B
On the flip side, if the price of 1 SBD drops to say $3... then 1.798 x $3 = $5.394. In this case, I have a loss of $6.606 in profit. So, minnows beware! The probability of SBD price dropping by the time your post is paid out is likely since people will want to take their profit.
As my friend @beanz said, it would be great to share this so that minnows don't get screwed. It is something to consider! Normally, I'm an advocate of upvote bots because I have a marketing background and I believe in investing in what you believe in. I know that when things settle back down, it will make sense to use upvote bots again. Personally, I kept a little bit of SBD on hand so I could test things out, even if its a bit of a gamble... but at least I'm gambling with my eyes wide open.
What really matters
Participating on Steem does have a learning curve. Fortunately, Steem has an incredibly uplifting and supportive community. It will take some digging around to learn what you need on this platform to thrive but take baby steps. Learn from posts that will help you win. Connect with others on Discord. Don't be hard on yourself because no matter where you are in the learning curve, if you're posting great content and leaving meaningful comments, you're at least on the Steem rocketship to the moon!
A comment so good it deserves highlighting!
My friend @abh12345 mentioned in the comments below... What i'm doing is sending a bid to older posts, then i don't have to wait 6/7 days and watch SBDs fall.
In fact, he has recently written a post on bots so feel free to see his take on it! You'll learn a lot just from the comments section of his post.
Shoutouts!
The uptick in price happened so quickly, many of us, including me, were left wondering what to do... how do I even sell my SBD and buy Steem? Or even, how do I get my Steemit money into my bank account? So, here are a couple amazing posts that will help you!
- @beanz: How to Get My Steemit Money Into My Bank Account
- @bitcoinparadise: Guide: How to Deposit/Withdraw STEEM/SBD and Buy/Sell on Bittrex
Thank you @bitcoinparadise and @beanz for your incredible friendship and taking time out to answer all my goofy newbie questions the last few days! (I know... we're all learning.) Be sure to follow them both for more handy tips.
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You can also find me @karencarrens on Discord as well as Steemit.Chat.