SBD Is For STEEM What Bitcoin Is For Alts

in steem •  11 months ago

We're officially in a correcting downtrend for STEEM / SBD and please don't tell me you didn't expect this. The growth - as pleasant and deserved as it felt, for all of us - was spiky and way too sudden. So, for the sake of the ecosystem health, I'm enjoying this correction.

But, if you know where to look, even during the strongest correction, there's some upside.

Let me explain myself :)

You know the Bitcoin "dance" with the alts? Every time there is an increase in the price of Bitcoin, alts go down. Or, equally true: when alts appreciate, Bitcoin gets cheaper. The rationale behind this swing is that Bitcoin is perceived as a safe haven, as a safe store of value. So, when some type of liquid, but not so stable currency depreciates, value flows into Bitcoin, increasing its value. Then if some alt gets interesting and creates demand, value flows out of Bitcoin and into that alt. It happened like this with paper notes and gold for years.

Now, if you have a little bit of knowledge about how the Steem ecosystem works, you'll see some surprising similarities.

Only in this case, SBD plays the role of Bitcoin, and STEEM the role of alts.

It may not be obvious from the first look, so let's try an example. Using the same example for calculating rewards, suppose your post display a potential payout of $100. We already know that the "$" sign is irrelevant, and I replaced it with STU (Steem Token Units). Out of this 100 STU, you give 25 STU to curators.

The rest is split 50 / 50, like that:

  • half of it in SBD, as exact numbers (e.g. 37.5 SBD)
  • half of it as the worth of SP in USD, at the market STEEM price (e.g. if STEEM price is $6, you get 37.5 / 6 = 6.25 Steem Power).

Let's look at this example on two scenarios:

  • SBD = $13, STEEM = $7 (it was like this until no long ago)
  • SBD = $5.5, STEEM = $4 (like it is now)

First Scenario

37.5 SBD * $13 = $487.5
37.5 / $7 = 5.35 Steem Power

SP to SBD fiat percentage: 1.09%

Second Scenario

37.5 SBD * $5,5 = $206.25
37.5 / $4 = 9.375 Steem Power

SP to SBD fiat percentage: 4.54%

It's obvious that when the price goes down, in fiat, your absolute value in rewards will be down too.

But the interesting part is that when the SBD price goes down, you get more Steem Power.

In the example above, SBD price halved, and STEEM price went down with almost 43%, but the rewards in SP tripled as SP to SBD percentage and almost doubled as absolute numbers!

I know it's a bit mind boggling and there's a lot more to talk about this, but I just wanted to note that there is this very interesting correlation between SBD and STEEM which will always create some sort of a "dance" between the two currencies, and the result will be the growth of the entire ecosystem, just like the Bitcoin dance with the alts made the entire crypto market close to 1 trillion.

Also, as far as I know, this SBD / STEEM dance is unique amongst all cryptocurrencies.

I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.

Dragos Roua

You can also vote for me as witness here:

If you're new to Steemit, you may find these articles relevant (that's also part of my witness activity to support new members of the platform):

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It is actually a genius system, and very unique as you mention. I believe that the market should decided the SBD price. The peg is not important.

Yes I've been watching the decline of SBD over the last few days.
I finally got some good payouts of SBD and it seems as much as my store of SBD goes up, the value goes down.

So the value of my SBD is about the same as it was over a week ago, even though I have more than double the amount. Doh! hehe

I'm not overly bothered by that. I think it is entertaining.

But it does mean that the next time it spikes I should have a good amount stored away to profit from ;-)

I think the spike was a good thing - it showed the possibility. It got people excited. So now they are beavering away writing content knowing that it is possible for the SBD and STEEM price to go up.

They'll be doing what I'm doing, working hard to produce good content to earn as much as I can, and then waiting for the rise. And it will rise again ;-)

But the interesting part is that when the SBD price goes down, you get more Steem Power.

While I keep telling my husband my worries of SBD price going down, he keeps telling me it's better that way because it will be cheaper to invest. I kept missing his point until I read this post.

I'd rather see Steem grow based on real changes here in features and number of users. That should be more sustainable. Folk are in too much of a rush to get rich. A stable SBD will be more useful for trade


A stable SBD will be more useful for trade

that's why it was created in the first place


The market will always decide for itself (excluding manipulation) we still do not and cannot guess what SBD could be used for so it hard for it to be stable at this point in the lifetime of the platform.

The math can be confusing at times, but you nailed the explaining !! Also the best part of steemit is we can earn tokens with quality content. (No fancy GPUs/CPUs Unless someone wants to be a witness.)


(No fancy GPUs/CPUs Unless someone wants to be a witness.)

Lol, you don't need that type of equipment as a Steem witness, only loads of RAM and SSD.


SSD/RAM ain't cheap either :P



only loads of RAM and SSD

Could you explain that further? Even better, publish a post on that if you feel there is no posts about this them. And if there are would you please, share links?

I am sitting back and just watching this roller coaster while Hodl...
Thank You @dragosroua for keeping us all updated on this journey!


Enjoy the vote and reward!

I was wondering why the payouts seemed so weird. I wish there was a possibilty to earn 100% SBD on posts.

really good stuf!you clearly undestand the steem power and steem process!really happy to see these like article !your are creative mind who always do something special

um, yeah i guess so... i think i'd still rather have a lot of SBD (-:

everything is reasonable about the correction thus far

Yeah it was nice for us while it lasted and fun, but we just gotta be happy with the correction values.

Indeed, it's so SBD / STEEM dance is so unique! No other cryptos have what we have here.

SBD is kinda supposed to be $1 worth, so it's hard to call it safe haven at this moment...
also anything you can do with SBD, you can also do with steem, it's even easier to trade on smaller exchanges...
BTC dropped, so I finally sold some BRO (Bitradio) and EUC (Eurocoin), still got some smaller coins to get rid off

Thanks for sharing! I am a new Steemian, so putting it in the perspective of BTC and other alts was a correlation I can wrap my brain around!

This is purposedly built in the system by rewarding on a dollar basis and to help lower the amount of SP and SBD that is paid out in the future correct? That way inflation can be held in control while still being able to keep the function of Steem by preventing the depletion of the reward pool?

I don't know if what I'm asking is understandable, but in my head I know what I'm asking lol.


The relationship between SBD and STEEM is not coupled with inflation. The inflation is calculated in STEEM and its projected to diminish 0.5% / year, until flattening at 0.5% (from 9.5% as it is now) in 20 years.

SBD is a debt instrument, it started from representing "$1 worth of STEEM". As such, is not backed by real dollars, or any other collateral, it's debt denominated in STEEM.

If SBD is for STEEM, what Bitcoin is for Alts..
What is STEEM to Bitcoin?

Thanks for the great explanation. I'm still rather new so it's very confusing to navigate. I just learned about witnesses yesterday and am happy to vote for you. Keep up the great work educating us Newbs!

lets see how the prices goes up after this correction phase

Interesting, Steem and SPD still baffle me a bit. but i'm learning, learning and earning. Thanks for your post

Thanks @dragosroua I'm still tying to understand the concepts, being new here. Are there actually two altcoins/tokens - namely Steem and SBD? I see Steem for sale on the list at, but on one can buy both. Why two I'm wondering? I will reread your post and also the other links you mentioned.


Yes excellent, I'm studying it now, thanks for your quick reply sir.


You only can learn by practicing the Theory. I am open to Basic questions, but first read all my posts related to my learning, success & failures as a Minnow:

The way I would suggest you to do, is post a question. You will get answer and money too, in the form of SBD and STEEM. That Strategy is the one I am going to implement at the level of Job Seekers in my Business: I am for free if you are on Block Chain, otherwise if people want to be private, they must paid in real cash or Steemit coins.

Interesting post @dragosroua. I am new to crypto currencies, but I also thought of the Bitcoin "dance" with the alts. And I agree with you that a correction is good for the system.
What I never thought about is the SP - SBD comparison and relationship in this whole correction process. Great line of thought@dragosroua. You are wise. Thanks for sharing your wisdom with the steemit community. Posts like yours keeps people calm and takes care of the trust in the steemit concept.

Really mind boggling. Trying to wrap my head around this.

Very nice analogy between sbd and bitcoin.
And example given is so easy to understand even for minnows.

hope everything will go back to normal soon :)

interesting pair they form in the cryptocurrencies

Hey @dragosroua, I think you're missing something in your calculations here. The post rewards shown, or STU as you call them, are calculated based on the current price of STEEM.

So if a post shows 100 STU payout at $7 STEEM, then at $4 STEEM it would be only about 57 STU, so that is really the value you should use for your $4 STEEM calculations.


The percentage still holds true, IMHO.


Yes, but some of the other things you said are incorrect, such as the amount of SP you receive "almost doubles in absolute numbers". This is not true - the amount of SP you receive for a post does not change at all due to changes in the prices of STEEM or SBD in the markets.


the amount of SP you receive for a post does not change at all due to changes in the prices of STEEM or SBD in the markets.

I beg to differ. Since you get your SP as its value in USD at STEEM market price it does fluctuate.


I beg to differ as well :-)

Say a post gets only one vote which is worth 1 STEEM from the reward fund. If the price of STEEM is $4 then the payout for the post will show $4. If the price of STEEM is $7 then the payout for the post will show $7, if the price of STEEM is $100 then the payout will show $100.

In either case the author will get 1 SP at payout (not including curation rewards or anything else here for simplicity).

So the amount of SP paid out for a post is not in any way influenced by the market price of STEEM.


:)) nope, it's not like that.

Can you please have a look at this article (the paragraph about payment algorithm) and point me any inconsistency? Feels like you believe that the "$" sign in front of Steemit rewards has a direct link with the USD, which it doesn't.


2 Inputs here: One related to the post, and the other a message to @yabapmatt
Regarding this topic, if you see my replies you will see @dragosroua calculations in terms of total USD

Total USD = $487.5 + 37.5 = $524.95 VS Total USD = $206.25 + 37.5 = $243.75

Now my message to @yabapmatt, sorry for the interruption, I was searching for a way to send you a note. But first let me give you my thanks on your excellent tool

With permission of our mutual friend @dragosroua for my input out of the scope of this conversation, let me tell you the problem I saw in your Bots. In one of the Alerts your system sends, I was invited to bid for an amount less than the minimal accepted. I feel you need to check your calculations to make sure your automated alerts do not recommend bids below mininal level. Otherwise one, end ups loosing SDB.


Thank you for the feedback @justinomora, in the future I would invite you to comment on one of my many posts about the steem bot tracker site if you want to get in touch with me about it rather than commenting on another unrelated post.


Yes, @yabapmatt, Count with me. I want to be invited to provide feedback on posts regarding In fact, I have some additional input. I had to use this way as the ultimate resource. I counted @dragosroua will forgive 🙏 me for the intrusion, but I did tried to balance in the first paragraph.

Count on me as beta testers.

My reason for reaching you was due to a small loose of SBD, after following one alert of your The recommendation was below minimal bid. Now I distrust the bot recommendations. I have to verify parameters first and that takes time ⌚.

sbd lays the foundation and steem grows on that :)

not so stable currency depreciates, value flows into Bitcoin, increasing its value.

Interestingly, in my novice awareness, I noticed this.

I'm watching the SBD decrease, and as I do, I am going to defy the odds of sell high/buy low, and buy more BTC/BTS.

Thanks for this post!


I am eagar for bit coin.......
i think it is best today isnt it?
thanks for sharing

True that, the spike was so enormous it was impossible not to assum that there will not be a bump along the way, i'm thinking it would go lower and lower till it stabilizes it self and go on to its steady increase till a spike and a bump happen again, just the same with any stock.

Beautifully explained. It is nice to get some extra Steem Power right now.

good post friends, please upvote my blog once friends ya

this SBD / STEEM dance is unique amongst all cryptocurrencies.

You have defined it in the best way!!!!!!!!

First Scenario
37.5 SBD * $13 = $487.5
37.5 / $7 = 5.35 Steem Power

Total USD = $487.5 + 37.5 = $524.95

Second Scenario
37.5 SBD * $5,5 = $206.25
37.5 / $4 = 9.375 Steem Power

Total USD = $206.25 + 37.5 = $243.75

@dragosroua: Final thought on your Post.

I will call your idea of value flow, The Theory of Value Flow in the Steemit World.


So what has been moving up the SBD?

  • Value Flowing
  • Fuel Rocket for Bots