FAQ: Why on earth are Steem dollars currently 30% more expensive on external exchanges?
Maybe you wonder ¨Why on earth are Steem dollars currently up to 30% more expensive on external exchanges?
The mathematics are simple: steemdollars are traded up to 30% more on external exchanges.
But also steem itself is traded 30% more on external exchanges.
**But why? Shouldn't be one steem dollar be worth one dollar? **
Its because the peg - internal conversion from steemdollars to steem takes one week average of the current steem to dollar price, which is 30% below the current steem price.
this is so mainly to don't make it easy to manipulate the peg though the price feed providers. See also the steem whitepaper.
So with just trading in and out steemdollars you cannot make a win.
the only win you can make is if the peg - internal steem conversion rate - is less then 30% below the current steem price.
in this case you could theoretically use your wallets convert function to convert your steem dollars to steem and then sell the new created steem on external exchanges to steem dollars. the steem dollars you can then convert again to steem and so on until you can make some win with it.*
why i said theoretically? because the internal conversion from steem dollars to steem takes one week!
But who knows what is the external steem price in one week :)
Good luck and have fun!
- UPDATE: Oh in this case it could also be the other way round, you have to convert internally steem to steemdollars and then sell them on an external exchange to for example bitcoins. then buy with the bitcoins steem on an external exchange so on and so on. sadly steem seems to miss an ability to internally convert steem to steem dollars, so we most likely just have to wait until the 100% steem inflation per year (currently even 5000%) brings downs the steem price to one steem dollar or below. so im sorry in this case, you cannot do anything to correct the steem dollar price, except waiting for the steem inflation to take place and bring the price down again :)
Thank you for your information. I know how important it is to read the whitepaper and often wonder how many do? They are a heavy read and it takes a long time, especially when your investing in a variety of cryptocurrency. It's difficult to read them all. This is why I love reading the tutorials on steemit. Maybe someone can exclusively read the whitepaper on the high-end alt-coins and break it down for people to understand. This would be a great category here on steemit. All the best to you @arcurus !