Steemit - The Billion Dollar Social Media Giant Replacing Reddit & Facebook(PART-II)

The network based on an algorithm is rewarded for it. So, the bigger the Steem Network becomes, the better the contributors will get paid. Obviously, if people like me are getting paid to provide information on this network, especially if it's not with not needed, especially, if I'm not relying on advertising revenue and other people aren't realized. We're relying on advertising revenue. Now, they're just focusing on making the best content. So, this covers the steem platform, anytime you wanted to for example trade. You're going to do that on steem and then if you're trading in steem, you can go over to the markets here and you can see that it's on bit tracks Polonia X and all the major players. Now, what's interesting is, there's a fundamental problem with steem and that it's an inflationary currency and that might work for some people but it might not work for others. So, in addition to steem, they have Steem dollars and steem dollars is supposed to work in a way that provides a stay cryptocurrency and it's sort of funny for me because when I'm looking through all the original white papers, when I'm looking through all the original documentation and the design, the price of state. A steem dollar is supposed to always equal one USD and here we are looking at it and at six dollars and sixty one. So, I've read a lot of different conflicting reports on what this is and to explain how a same dollar works. I think it's easier just for you to read this article, right now a bit share is worth about zero point four cents each and similarly the bitshares can be prone to earthquakes the bitshares price might go, all the way up to one dollar per bit share. It could go all the way down to zero point one cents per bit share and that's not a limit either. It could go way higher than that or it could go way lower than that, so, bitshares is still at the mercy of the market because its value is determined by its direct relationship with the US dollar and nothing in economics ever has a singular value. It only has value in relation to whatever is you're exchanging it for. So, if I've got a one dollar bill, I can either exchange that for a big pile of jellybeans and it looks like I've got a lot of value or if I try and exchange that one dollar bill for a car. Well I'll only get a fraction of a car. If you don't I mean whereas I might be able to exchange one single barrel of gold for a car. So, it depends what you're exchanging it for the bit asset that we all know and love is the bit USD and we always want is to be worth a dollar. This is the land that I'm going to build my bit USD on and I need my slinky to insulate it against the fluctuations in price or the earthquakes. Now, a bit USD is just a collection of bit shares underneath. So, what we need to do is work out what a bit share is worth and right now a single bit share is worth zero point four cents. So, we would need 250 bit shares and put them all in a pile and then that pile will be worth $1. So, we take there's 250 bitshares that are each worth 0.4 cents each and we put them in this big box. There they all are 250 bitshares, 0.4 cents each and then we close the box and we say the contents of that box is worth $1 and then we call that box a bit USD. So, we just say to the market. I'll guarantee you that the contents of that box is worth $1 and at any time you can open up the box count 250 bitshares each one of them is worth zero point four cents each and you'll be happy that the contents of the box is in fact worth $1 but instead of carrying around 250 bitshares. You just carry around one bit USD.

Now, let's say a later date there's our bit USD and there's our box and there's this linky. Let's say we want to make sure that this bit USD is still worth $1 well same process. We find out what the value of a bit share is a single bit share and let's say in this example that a bit share has gone up in value by say 50%. So, instead of being worth 0.4 cents each is now worth 0.6 cents each that means we only need a pile of a hundred and sixty-seven bit shares in order for that pile to be worth a dollar so we take those 167 bit shares each of them worth 0.6 cents each and we put them in the box. So, there we go 167 bit shares each worth 0.6 cents each that box is worth $1. We close the box up when we call it a bit USD and we say I can guarantee you that contents of that box is worth $1 and any time you can open it up. You say okay there's a 167 bit chairs in there and I know each bit share is worth zero point six cents. So, I'm happy, that box is worth a bit USD that explains what a bit USD is because bit shares and bitusd work on a very similar concept to steem and steem dollar. So, once you read these informations, you understand that basically, the reason steemed increases because we've just seen such an exponential increase in the value of steem and so even though one steem dollar should always equal one US dollar just because of the exponential growth and because the fact that there's a limited supply of new steem coming on the market. It's driven this price up so it's funny in the world of cryptocurrency. (Continue...)

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