You are viewing a single comment's thread from:
RE: STEEM Dollars (SBD): Strong Demand for SBD Could Bring In Triple Digits!
I heard a lot of talk about SBD being pegged to the dollar. That's hard to shallow of you purchased a good amount of SBD at 3-4 dollars per coin. Is it a good idea to cash out or move the SBD would you say? The whole concept is very confusing.
SBD is bottom-pegged from underneath to $1. This is because the blockchain allows you to trade 1 SBD for $1 worth of STEEM. This is essentially the peg that is currently on the blockchain. SBDs are essentially IOUs for $1 worth of STEEM. They have no real purpose otherwise, but can be used as a speculative asset which is why it is more than $1 now.
The production of SBD is tied to the STEEM token. For every STEEM token created (under the 50/50 option), SBDs are created with relationship to STEEM's price. If STEEM is $1, then 1 SBD is created for every STEEM awarded. If STEEM is $10, then 10 SBD are created for each STEEM. If STEEM is $100, then 100 SBD are created for each STEEM. As the price of STEEM goes up, the number of SBDs produced goes up.
This means the total supply of SBDs will blow up if the price of STEEM blows up. Thus, if you believe in $100 STEEM, you should have little faith in a high SBD as the inflation rate of SBD will increase as STEEM increases. The supply of SBDs will increase as long as the price is above $1, since no one will trade them in because they can only be traded in to blockchain for $1. That's in the code.
The reason SBDs are above $1 is that no one really understands SBDs and they speculate on them. The probability of SBDs rising to triple digits is so small that it is irresponsible to make such statements as it confuses new users and demonstrates a lack of understanding in the fundamentals.
That being said, STEEM might never go above $10 and SBD might never return to $1 because of its general scarcity and irrational speculation. But there is a "free market" downward pressure that is build into the token that most people never really understand because they don't research the tokens, but look at charts instead.
So, I try to keep my exposure to SBDs lower and trade them during spikes in the prize. But I wouldn't hold a bunch hoping for $100 SBD because it is probabilistically not going to happen. Even borderline bullish delusion will have trouble pushing the SBD past $20. Because the token's only utility is that it can be traded in the future for $1.
SBD already was pumped and dumped, but that helped the STEEM price to rise. I'm ok with that. 🙌
Thank you for the detailed response. I use it more for utility but I'll probably put it into Steem Power which has even more ultility for the community.
nice summary
I am already following you friend greetings blessings and success
@sjmstem -- Just came to say thanks for the vote today!!!!!
Sir
Please upvote me
Come to think of it I might wait till the price comes up a bit sell all my SBD, and quit Steem altogether until the price goes down to a dollar. I'd hate to lose 2/3 of my investment.
Excellent work. This should be its own post.
It look like that SBD being pegged to the dollar. 💵 ☺
I do not see this chart as a good news. It appears a dowtrend and will be necessary a big force to leave these low pivots behind.
hey there
click on my link to earn 2000 per month free
https://steemit.com/money/@wolf92/easy-job-from-home-earn-at-least-2000-dollers-per-month
vote and tell me if you like it
@pinesresumhelp Let help each other please followback upvote and comment, i will do the same job
hey there
click on my link to earn 2000 per month free
https://steemit.com/money/@wolf92/easy-job-from-home-earn-at-least-2000-dollers-per-month
vote and tell me if you like it