What's the deal with SBD?
SBD?
The two currenccies used on and issued by the steem blockchain are steem and SBD, whilst the use of steem is fairly clear: you can “power up” and make more by curating, the usage and need for SBD still eludes me. What even is SBD?
According to the information on your wallet page SBD are “Tokens worth about $1.00 of STEEM”, but that is not true! I do not understand why that is still on there! SBD used to mean “Steem Backed Dollar” and was pegged to the US Dollar, but now SBD means “Steem Blockchain Dollar” and its price is determined by the free market. The current value is much higher than the US dollar and sometimes higher tham the price of steem! This is really confusing, especially if you thought, like I did when I started, that 1SBD is 1$. Because of the current higher than steem price, it is best to always get a 50/50 payout,instead of the the 100% in steem power. How much you will get with a certain vote you can calculate here:
As you can see from the calculations you can do, it can be a nice suporice how much your post will actually bring in! I used to convert my SBD immediately to steem to power up, but now I wait for a good exhange rate. Littlle bits will accumulatein the long run
So...
To be honest, I do not understand what drives the price of SBD. Not a clue, What I do know that there are constant fluctuations in the SBD/Steem exchanges. Since I am playing the long game here , meaning I am trying to accumulate steem for the long run and I am not planning on cashing out for a quick buck., the price fluctuations in fiat currency do not concern me one bit. Even more so, I actually plan on not selling any of my cryptos in the next 5 years! More than just hodling BTC or ETH, you can put steem to “work”; earning you curation rewards!
However, the SBD – steem exhange rate does intrest me! I try to sell SBD when it is high, and buy it again when it is low.This will slightly increase the steem I will have in a couple of years. That is what I am aiming for: a large sum of steem that will grow by curation and posting. I like the idea of cash flow: a steady supply of income opposed to wealth creation by mere value increase. At a certain moment I will start to spend the steem and SBD I will make and might even power down, but for now I just want to increase my steempower as much and as fast as I can.
TL;DR
So my advice and current practice: Sell SBD at adventagous rates, buy it when the price dops to or below the price of steem and power up steem when you exhanged it for SBD. I will probaly change this stategy, but for now it looks like the most sensible thing to do!
Steem on!
thank you for the info and your thoughts about - waiting for a comments to get more light on cos i also got lost in all these numbers
Yeah it's really complex. The more I look in to it the less I understand 😅
especially when there are 4 components and the prices are changing every day..