The Things I am Afraid of with the Price Hike of SBD | An Important Topic to New Users
The price hike of SBD is generally beneficial to Steemit users. People earned more than 8 times than what they are supposed to earn on their SBDs. This is more than a Christmas and New Year's gift Steemit has given to us. We are thankful, almost all enjoyed this sudden phenomena. It was extremely helpful to me too, it helped me increase my financial stake in the real world.
Just a Quick Information to those New Users about SBD
Steem Backed Dollars, a.k.a SBD is a US - Pegged token only created when posts gets its payout. Since it is a US - Pegged token, its value should normally be worth approximately $1.00 each. Though its market value is playing around $9.00 now, Steemit always look SBD as a US Pegged Token = 1 dollar.
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So when our post gets its payout, knowing the user chose the 50 / 50 option *(50% is earned in SBD & 50% earned in STEEM), The 50% option for SBD will always be having $1.00 = 1 SBD. Only STEEM follows its market value.
For example, I have a exact $10 value post. Approximating Curation rewards as 25% of the total payout (75% is for Authors), author gets $7.50 for the payout. Since 50 / 50 was chosen, it means 50% of $7.50 will be paid in SBD and 50% of $7.50 will be paid via STEEM in a form of STEEM POWER. Since SBD is a US-Pegged token, 50% of $7.50 is equivalent to $3.75 right?
3.75 SBD will be received by the user and the remaining $3.75 (SP determined by its market value) via Steem Power. Knowing 1 SBD = approx. $8.00 each, that 3.75 SBD is actually a $30 in value, too far from the normal $3.75 right? This is the reason why Steemit users are earning huge now than they were. (Plus Post values are rising because of the rise of Steem's value)
Amazing to See right?
But this came on my thought
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I am afraid new users might have a wrong interpretation on reward distribution. I have a big feeling that SBD's price will not stay longer from its current value (at approx $9 each) and will go back to $1.00 each. This thing will generally be a big problem to those who do not understand the concept of rewards. There is a big probability that we will lose them, creating a false expectation to new users.
As a result, we might miss quality writers, aspiring travellers, great musicians, and most probably - STEEM INVESTOR. I find it scary, do you?
So this should be mentioned to people
As an older users, educating them, redirecting them to read the whitepaper, or giving them Steemit articles that explains the basic principle and terms of Steemit. I believe they should be aware regarding this matter.
Hope this helps
Any additional information are welcome and much appreciated for the benefit of all users. Thank you in advance!
Best regards
i am a noobie and didn't know much about these stuffs about steemit, thank you so much for sharing this post..... :)
Amazing! I just joined Steemit last December 31 with only a little knowledge about the earning process. Now i understand at least one of the basic things here in Steemit.
Please do some one on one coaching or group discussion in the future, we'll truly appreciate it! :)
Thank you for explaining this I have been on steemit for almost 2 weeks and everything is new to me.
I have a question though. Your picture showed that SBD has the maximum stability, but you also worry that SBD might not stay long at $9. So, is that means SBD is suppose to be priced at $1?
FYI I am a newbie who aren't really understand. Thank you for sharing useful information
I agree new comers will have a learning curve
i like your article. if you have time come my bog. i already folow you
The re-evaluation of the Steem Dollar beyond one dollar in value is an odd phenomena that theoretically should not have occurred. The original design of the Steem system was that Steem would provide an outlet for volatility, whilst the Steem Dollar would be managed to provide a minimum value of one dollar. The original design assumed maintaining a floor value would be the problem, unexpectedly the problem as become one of maintaining the value downwards. In theory we should now flood the markets with Steem Dollars forcing the price downwards, but that would of course have negative consequences on holders and reflect badly on Steem and the Steem community. The most likely course of action will to be to let the market manage itself, and seek to maintain a floor of one dollar. In general it is easier to change the design of a cryptocurrency than to change an irrational market.
We shouldnt. Sbd at high price creates a big benefit to us users. Wouldnt you want your earnings to be up by 8x, Even though it was originally designed by that, it still depends on how the people manage its demand. Especially the kr community (which I think was the reason of the pump)
I agree with you @jassennessaj! :)
Great read! I am not too worried. My wife and I joined Steemit as a way to share our life and perspective with others.....it just so happens we earn for it! In our life, Steem has replaced what we make selling firewood. I'll tell you what....cryptocurrency is WAY lighter than lifting wood haha 🙃
so what do you prefer? cashing out or keeping sbd in your wallet?
With SBD, I normally sell it once I have. I'm afraid it will go down. But I sold 50% on it, the remaining is hold until it reaches the target price (Set price)
I see... what is your Target price
Thank you for explaining me, although I've been hanging around here on steemit for one month or so, there is so much stuff not clear to me. Articles like this help me to understand the matter. Thank you!