Why Steem Dollars (SBD) are Better than Tether, and Even US Dollars
As Steemit continues to grow and expand, Steem Dollars are finding a new home in crypto investor's portfolios as a stable, upwardly mobile, hedge currency. Interested how? Keep reading!
SBD is Designed to Profit from Bull Markets and Ride out Bear Markets:
Many of us who use the Steemit platform are aware of the two currencies in which payouts are made: STEEM and SBD. We are also aware that the function of STEEM is to power up in order to affect payouts via voting power, and we know that SBD are each convertible to $1 US Dollar worth of STEEM.
This backing gives SBD incredible stability against fluctuating Bitcoin prices for those wishing to keep their purchasing power within the crypto space rather than exiting to fiat via high fee gateway only to want to buy in again at a later date.
SBD is a Safer than Tether for Storing Value:
Though Tether is also a US Dollar pegged crypto, it is growing exponentially, with each Tether requiring equivalent fiat to be stored in a bank somewhere. That somewhere has become more and more shaky, with Wells Fargo freezing $40 million in fiat backing last year, severing Tether's only US bank ties.
An external audit of Tethers backing has not been performed, and it is suspected that the backing, if it exists, is being held in private account in Asia. If that's not enough, Tether currently has no method of redemption back to real US dollars, somewhat nullifying any reason to even have backing.
SBD is a Desirable Currency in Both the Crypto and Fiat Worlds:
The good news is that Steem Dollars safer than Tether and has an infinitely greater chance of making gains against US dollars than simply holding US dollars alone! We can conclude that SBD should certainly be labeled as a hedge due to its peg and convertibility. SBD's history shows that it rarely dips deep below $1 for long, and on several occasions SBD has surged well beyond $2, and even was valued up to $18 just last week.
By now, it's clear that SBD is a solid choice when looking to preserve buying power against the US dollar long term. SBD exhibits great qualities in the realm of money choices and should not be overlooked. Exchange adoption continues to help push the value of this fantastic cryptocurrency going forward.
Are you holding Steem Dollars as a hedge?
Are you holding Tether to stay in crypto during bear markets?
Leave your answers in the comments below.
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Thoughtful post and interesting information!
Recent growth is speculative and soon prices will go down
Of course, Steem Dollars are only worth a dollar of Steem, that's all they are for, which makes them perfect for a store of dollars which is what the article is about.
Thank you!
I guess SBD will rise more and find its perfect place on coinmarketcap.
Lets watch for it and wait.
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.