Beware of converting SteemUSD to BTC right now

in blocktrades •  2 years ago

Introduction

Blocktrades has been with the #bitshares ecosystem for a long time. Since the underlying technology (#bitshares and #steemit) is pretty much the same, they were well positioned to get in on the steemit game early and service the community here.

Some days ago I wrote a simple howto on how to convert your SteemUSD to Bitcoin, using @blocktrades services.

To the best of my knowledge - someone correct me if I am wrong - at the moment this is the only way to do so directly (without going through STEEM, which is volatile).

As I wrote that article and made that recommendation, I was also careful to check that the spread was acceptable - and at that point, it was.

Warning

Today I would like to bring your attention that, as of right now, that is no longer the case.

The BTC/USD price is $650, and blocktrades will exchange 1 BTC for 843 SteemUSD.

That is a 30% spread!

Conclusion

You would be wise to not convert any SteemUSD to BTC right now, as you stand to lose 30% on this trade!

Hopefully, @blocktrades will be back to a more reasonable spread in the short term.

And always remember - Check how far off the offer is from the fair market price before converting between crypto-currencies (or anything, for that matter ..)

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I saw this today as well! Highway robbery. Poloniex and Bittrex seem to be a bit better at .85.

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Not "highway robbery" ... its a three-legged stool with constantly growing and shrinking legs trying to find balance.

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Actually a three-legged stool is always in balance. :-)
But I get what you mean.

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Not a stool with magical legs that grow and shrink based on baked in factors!

Important: You have to believe in magic for this analogy to work :P

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The pinocchio of stools

You can also go through Bittrex. I started off using Blocktrades, it is very easy for newbies. But now I use Bittrex and typically you should get a better return there than at Blocktrades.

Seems like a good time to go from BTC to SBD if that is the case :)

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Sshhhh..... ;)

I just got 220.692 SP for one BTC, thats 2,96 USD per SP, thats about 3,1 % spread, so buying SP via block trades is ok.

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SP != SBD.

Thanks for the article, I will be keep my patience intact

It's worth noting that bittrex and poloinex both have SBD/BTC markets. They're both trading SBD at a discount right now as well.

Yep! I went on blocktrades earlier today just see how much the "spread" was (which essentially is a fee) and at the time it was higher than 30%. While you can't go directly from SBD to BTC, the best route is to send your SBD to an exchange like Bittrex or Poloniex and sell it off there.

While STEEM is somewhat volatile, the volatility has slowed down quite a bit. I think since Tuesday's fork that reduced liquidity rewards for the internal market, the bots providing liquidity have stopped trading. All I see is @jl777's bot making many 7.77 and 77.7 trades. You could buy some STEEM on the internal market (http://steemit.com/market) and transfer the STEEM to Poloniex or Bittrex rather quickly for sale off.

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I think buying steem on internal and selling on Polo / Trex is probably the best option.

And, yes, most bots have stopped trading. Although, there is ample opportunity to run simple arbitrage bots.

Thanks for the heads up

You're literally saving people thousands with this post.

Thanks for keeping us up to date

Karnal! Your ability to create useful articles about interesting topics is really very high.
Next time I see the rainbow I will definitely seek for the pot. Who knows how many BitShares I might find :)

You have a very interesting view of "fair market price" and spread. If you think 650 SBD is worth one BTC currently, I would be happy to sell you some SBD for BTC. And I defy you to find the other end of that mythical 30% spread (unless it's you offering 1 BTC for 650, I don't see it anywhere on any market).

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As @steempower mentioned and I sneakily replied to above, going from BTC to SBD (the opposite direction) proportionately results in more SBD than one would expect.

But that was not the topic of this post, my guess is that most regular steemit users are going from SBD to BTC, and having recommended blocktrades a couple of days ago, coupled with knowing that this audience is not very well versed in finance and crypto in general, I had to leave the warning here, because the conversion is not working as they would expect.

I never implied there was anything dishonest about it.

Also, would you happen to know who @arsahk, @anastacia and @analisa are ? :) ..

All start with 'a', all have zero posts, all with wallets worth $500k+, all downvoted this post within minutes of each other, and then you come and reply to it. Hmm.

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I didn't mean to leave you in the dark there, ofc they are accounts I control, got during early days of mining. I didn't hit you with the "big hammer", just a few of my smaller ones. As you can probably guess, I could have easily voted into total oblivion. I downvoted for the omissions of key information from the article, that make it sound like there was something dishonest about our pricing (despite your assertion otherwise, I think this was a clear takeaway), when the truth is we're just pulling prices from the internal market, and the inaccurate report on our spread. If you're going to write an "expose", I think it makes sense to at least get and report the counterpoint view on the subject you're attacking. These kind of incomplete reports can be quite damaging to a business.

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If you read it again without bias, you will hopefully see there is no assertion or accusation, implicit or otherwise, of dishonesty on your part.

If there was, I would have finished by withdrawing my recommendation for your service in this post, which I did not.

Surely you agree that if 1 SBD is supposed to be pegged to right about 1 USD, then anything else than BTC/USD being equivalent or very nearly equivalent to BTC/SBD is expected behavior.

I understand that in practice it does not work like that, and again, go and re-read the article and you will see no accusation of dishonesty, I understand how blocktrades.us calculates the exchange rate (to a working extent, anyway).

And again I remind you, that if you look elsewhere in the comments for @steempower and my reply to him, I was well aware that it was likewise possible to profit from the reverse operation (at least if you believe the peg will go back to parity at some point).

So of course I took advantage of that (with other accounts). The reason I did not write an article on that was that I did not expect the situation to last for long.

To sum it up, days ago I recommended people to change SBD to BTC using blocktrades, the rate was good then, and it seems to me that a good assumption is that most of the community here is not very well versed in finance and crypto, and they might just blindly go and convert SBD to BTC, receiving in BTC about 30% less than what they would otherwise expect.

You know me from Bitshares for some time now and you know I have been a user of your service for a long time, frankly there is no reason to assume I was accusing you or your company of bad conduct.

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Interesting gossip: .

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&&-karnal--blocktrades--karnal-bewa-of-converting-steemusd-to-btc-right-now-20160728t090825088z

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I didn't hit you with the "big hammer", just a few of my smaller ones.

WTF is that?

@blocktrades , you risk damage to your reputation and it's not because of your pricing policy (you are free to offer whatever prices you want) but due to the aggressive style of your response. Tone down a little bit - @karnal 's post surely did not deserve a reaction like this.

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To answer your question: the "big hammer" is the blocktrades account, it has more weight than the downvote accounts I used.

I downvoted the article because it had false information about Blocktrades (specifically a claim of a 30% spread that didn't exist) and the use of the dog meme which to me communicated "you are trying to fool me, but I can see through your trick" (implying some form of deception). Maybe you see some other meaning to the meme, but maybe that's the danger of using memes to communicate meaning. I'm interested in hearing your interpretation, if you want to suggest another one.

Perhaps most importantly, as I indicated previously, I think it's important when writing an expose-type article like this to contact the subject and report their viewpoint. You could argue that the subject can post comments afterwards, but that doesn't help the viewers who never return to the article and never see the rebuttal.

It may be a good time to buy some SBD on the exchanges. and you may want to
Check out my latest experment HERE
https://steemit.com/steemit/@me-tarzan/lost-in-the-steemit-blog-sea

ME-TARZAN