RE: Another Breakthrough: STEEM About To Be Accepted Everywhere: STEEM Payment System (On The Bitshares Blockchain)
Can't wait to see this go international!! Although one part I don't understand :
One of the major obstacles for retailers taking cryptocurrencies is the volatility. How can one price an item when the price is apt to move in 10% in either direction in a matter of minutes? Smartcoins are pegged to their underlying asset meaning they can instantly convert from a cryptocurrency to the Smartcoin eliminating the volatility.
I don't get how this gets rid of the volatility. I thought the price of smart tokens are equally volatile.....or is it not? Need to learn more about this. If you happen to know any great articles explaining this topic that would be great.
Also, how does this link the seller to fiat exchange? Because that's what the seller are eventually gonna be looking for. Can they convert the smart tokens to fiat instantaneously and what kind of fees should they be expecting to pay for that?
The volatility is removed because the token on Bitshares is pegged (closely) to $1.
For example, if someone used BTC to make a payment, that BTC is instantly converted to bitUSD. Now the shop is holding bitUSD. Throughout the day this could occur until day's end when all the bitUSD are accumulated. At that point, the shop could convert to USD through openledger.
Ah okay.....so for example, someone pays in Steem for example. At the time of payment steem was priced at $5 and a payment of 1 steem was made. So regardless of where the price of steem is at the end of the day, the shop will still be getting around $5....did I get it correct?
Yes although it is not at the end of the day, it is instantly.
The STEEM would be converted to bitSTEEM which is pegged at $1. So one STEEM would be converted to 5 bitSTEEM....which is worth $5 at the moment of the change and at the end of the day and three days later.
Awesome....thanks so much for the clarification. My concept of the bitBTC and those things was bit hazy, now I get it perfectly.
Cheers!!