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SBD

SBD (Steem Blockchain Dollar) is basically a smart contract on the Steemit blockchain that defines the 1 SBD currency is equivalent to STEEM for 1 USD. This is similar to the smart contract on the Ethereum blockchain. This smart contract will maintain the value of 1 SBD so that it is always equal to 1 USD. The aim is that the Steemit platform has a stable currency and its value is not volatile up and down.

SBD is generated through the conversion of STEEM during printing in the mining process, and the amount is adjusted to the STEEM price level against the USD at that time. If the STEEM price is low, the amount of STEEM needed to make 1 SBD become more, so that only a small amount of SBD is produced. Conversely, when STEEM prices are high, the amount of STEEM needed to make 1 SBD decrease, so that it can print more SBD. With this mechanism, the price of 1 SBD is expected to be stable at around 1 USD.

Because the price of 1 SBD is always maintained at less than 1 USD, the market cap and STEEM inflation rates do not affect the value of SBD. The SBD value will always remain at any time, regardless of the market cap amount and regardless of the STEEM inflation rate.

STEEM

STEEM is the most basic currency used in the Steemit blockchain, like Bitcoin on the Bitcoin blockchain. All that is printed by the network at any time through the mining process is STEEM. The STEEM currency is always set to increase by 9% a year through the mining process, and it is said that the STEEM inflation rate is 9% per year. Furthermore, each year the inflation rate will be reduced by 0.5% until later stagnant at 0.95%. And blockchain Steemit does not limit the maximum supply of STEEM such as limited Bitcoin to a maximum of 21 million BTC. So the amount of STEEM will continue to increase over time.

With this inflation rate, it needs to be balanced with an increase in the market cap in the exchanges, so that the value of each STEEM is not reduced. If the market cap is fixed then the STEEM value will be reduced according to the inflation rate of 9% per year. So if today we have 100 STEEM then a year later the value will be reduced to only equivalent to 91 STEEM only.

STEEM POWER

STEEM POWER is often abbreviated as SP, In general it can be said that SP is STEEM that is locked on the Steemit platform, similar to a deposit that is locked in a bank. We cannot transact with SP before being disbursed first into STEEM. And this disbursement requires a certain period of time that has been agreed upon.

As the name implies STEEM POWER is the power that drives our activities on the Steemit platform. The bigger the SP we have, the greater our pay when writing, that is, the upvote we receive generates more money and our weight when we upgrade, that is, the posts we upvote receive more.

The role of SP is very important in the Steemit platform. SP will guarantee the availability of sufficient backup funds in Steemit. With the SP mechanism there will be no rush where everyone withdraws STEEM at once together. This is achieved by requiring payment in the form of SP of at least 50% or 100% may also be selected accordingly, pending for 13 weeks in Power Down time to withdraw SP into STEEM, providing incentives so that people like to save STEEM in SP, for example make it as power, compensate STEEM's inflation rate, so the SP inflation rate becomes very small, facilitating the Power Up process, where STEEM can be converted to SP in an instant.

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