How to React in a Dip?
I've read several posts by people worrying about the drop in the price of steem. I got the chart below from CoinMarketCap.com which says the price of STEEM was $1.55.
My account has 11 STEEM. I still see Steem as video game tokens and not an investment.
As I read posts, I realized that some Steemians were making life decisions based on the estimated account value of their wallet. A person who started a DTube channel may have invested in a camera, a tripod or a trip to a location for a recording session. People spent based on the high value of steem and now are hurting.
Anyone who spends money based on the value of their wallet will find themselves in the classic margin call situation when the price of steem drops.
This adage is especially true for anyone who borrowed against their wallet.
I don't care a lick about speculators. I have zero compassion for day traders who receive margin calls.
Steem is different in that they actively invited the creative community into its ranks. I care about creators.
The question posted on several threads is what should Steemians do about the the price drop?
My suggestion is to upvote the posts of the creators that you care about.
Apparently the people who are speculating on Steem look at the total vesting pool at steem. The best way for people who don't intend to sell their steem is to power up. That is turn steem in to steem power.
I am interested in Steem as a tool for supporting creators. I look at the big price swings in Steem and fear that the price swings themselves hamper the use of Steem as a way of rewarding content creators. Creating good content entails expenses. Trying to make such investment decisions on a fickle investment tool is very difficult.
I still can’t figure out Steem Dollars. If you can’t power up with SBD, then how is it valuable and who is out there buying it?
The FAQ says that Steem Dollars are supposed to be pegged to the US Dollar. That way people can use Steem Dollars for commerce in the Marketplace. This old post talked about the mechanism that Steem used to peg to the dollar. Apparently, the demand for Steem Dollars outstripped their formula and it is worth more than a dollar. I guess the price of a steem dollar is $1.22 . This 22% difference between the Steem Dollar and dollar makes it a tad difficult to use steem dollars in place of us dollars.
Apparently, if the price of the steem dollar drops below a dollar; they will start adding interest to the steem dollars to prop up the price.
I kind of understand it. If I were negotiating a deal; I would not want to negotiate it in steem because the price is too volatile. I might be willing to negotiate it in Steem Dollars because there are internal features that peg the price to the USD.
I suspect that this feature was created so that people would start using Steem Dollars as an actual currency.