lowering bit rate causes moving objects to get grainy/pixelated

Iv been having quality issues with youtube lately, I finally discovered that my videos when converted to anything 10mbs or lower it created a kinda of a grainy pixelated texture around the edges of moving objects. My videos are recorded at 30mbps using elgato, youtube then re encodes my videos to about 7mbps which causes my problem. This problem is independent from youtube as I was able to replicate the problem by re encoding using adobe media encoder to 5mbps(all settings left exactly the same). my question is iv seen other ppls videos on youtube who im sure have recorded at higher bit rates, thier quality is flawless... How can I achieve these same results without the re encoding butchering my videos?
 
You can choose different file types with the Elgato when you click on the "edit" tab next to capture. What file type is it encoding it as? Also, do you edit it using another software afterwards, because if you don't render it correctly it will reduce the video image. I use mine with 1080p and it encodes it as a mp4 automatically, then I render it as 1080HD on my video software.
 
I use the Elgato at 720p, and then when I am done I right click the video and choose 'reveal in Finder' (I am on a Mac, the command may be different on PC), and then open the video in Screenflow where I edit, then export it from there. A 10 minute video is then approx 700MB and practically perfect quality.

I wouldn't recommend simply rendering in Screenflow because the file size will be too high.
 
I use the Elgato at 720p, and then when I am done I right click the video and choose 'reveal in Finder' (I am on a Mac, the command may be different on PC), and then open the video in Screenflow where I edit, then export it from there. A 10 minute video is then approx 700MB and practically perfect quality.

I wouldn't recommend simply rendering in Screenflow because the file size will be too high.
Screenflow is such an underrated tool!
 
I export from elgato using the mp4 original option, usually results in a file 720p60 with a bit rate of about 26.6 mbps.

i load the file on sony vegas, make a few edits, then render it to mainconcept/mp4 file. it renders with a the exact same settings 720p60 except i lower the bit rate to 25mbps. then i upload to youtube. once uploaded to youtube, everything becomes grainy (yes i have waited for the video to process, and yes i am playing it on 720HD setting)

this is an independent problem for youtube, when u re encoded the 25 mbps file(with the same settings) to a 8 mbps file the same grainyness occurs.... im not sure what exactly is causing this problem....iv tried uploading directly to youtube from elgato and the same results occur....
 
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