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RE: Why Steem Dollars (SBD) are Better than Tether, and Even US Dollars
I'm still wrestling with SBD's price action. It does not reconcile with the expectations set forth in the white paper.
On page 12 of 32 of the Steem White Paper, it's stated that, "We fully expect there to be a narrow trading range between $0.95 and $1.05 for SBD under normal market conditions." See: https://steem.io/SteemWhitePaper.pdf
So what has driven the meteoric rise of SBD? Is the $1 USD that it is pegged to simply a floor value which it shouldn't drop under? How does the steem blockchain ensure this? Given the price action over the past month or so, I assume that there is no ceiling on how high it can go based on market forces and its limited supply.
Agreed, however, it should be noted that 100% gain for STEEM isn't "normal" market conditions.
South Korean speculation on Steemit has pushed SBD to ridiculous heights after a recent Korean exchange added it for trading; but SBD only has 1 use, to be converted to $1 of Steem, therefore SBD will return to its designed price region, eventually.
Steemit's SBD to STEEM conversion ensures SBD will return to $1 eventually as 1 SBD will always be directly convertable to $1 of STEEM over several days via your Steemit wallet.