Steem Backed Dollars(SBD)
There are three cryptocurrencies that are used in Steemit namely Steem, Steem Power, and Steem Dollar.
When Content creators receive rewards in Steemit, the rewards are recieved in 50% Steem Power, which can be redeemed continuously over a period of 3 Months and 13 Payments, and 50% Steem Dollar (SBD) which can be fully redeemed for fiat(USD) in a 7 day period. SBD can also be transfered within Steemit and can be exchanged outside of the Platform.
The Steem Dollar or Steem Backed Dollar(SBD) is the Steemit Cryptocurrency that is pegged to the US Dollar(USD). This means that at every point in time, the Steem Dollars (SBD) is supposed to be worth 1 USD(one US Dollar).
Due to volatility in the market cause by demand and supply, the price of SBD can be higher or lower than 1USD.
At the time of writing this post, the Steem Dollar is exactly one Dollar. This is what actually inspired me to write about this. Since I have been 'steeming', this is the first time that I am seeing the price at such a 'perfect equilibrium'.
The price has been waltzing from $0.9 to $1.4. I have never noticed it at $1.
Why is this Important to Keep the Price of SBD Close to 1 USD?
*Cryptocurrencies are very volatile.
Can you imagine earning $100 in SBD only to discover that the value of your SBD has gone down by 40% when you need to spend it? Volatility is quite normal in the crypto-world. One minute the price of bitcoin is sane and the next minute you are viewing the price with a telescope (lol).
1SBD is supposed to be 1USD but this is not always the case because the market value of SBD is still dictated by demand and supply.
So, to preserve the value of your earnings, the price of Steem Dollars is keep at One Dollar.
Who Ensures that the Price of SBD is Kept in Check?
Steem Witnesses.
Steem Witnesses are responsible for regulating the price of the SBD to ensure that it stays as very close to the 1USD.
Can I Earn Interest by Saving in SBD?
Yes and No.
Steemit's Witnesses can change the interest rate paid (quarterly) for holding Steem Dollar in your wallet.
I don't know what the current interest rate for holding Steem Dollar is. Somebody please help me in the comment section.
Being an intellectual creates a lot of questions and no answers.
Janis Joplin
However, I know that if the price of SBD is too high then the interest rate will be 0% and the interest rate will increase as the price of SBD goes near or under the value of 1 USD.
I hope you had a great time reading this. Please leave a comment if you have any questions, criticisms or adulations.
Thank you.
Reference
*https://steemit.com/faq.html#Will_1_Steem_Dollar_always_be_worth__1_00_USD
*https://steem.io/getinvolved/steem-backed-dollars/
*https://www.steem.center/index.php?title=Steem_Dollar_(SBD)
Sundayselfies contest is my way of showing love and giving back to the community.
It's a weekly selfie contest that opens on Sunday and closes on Saturday.
I'm giving away $15 to some "selfielicious" people.
Click on the link below for more details.
https://steemit.com/photography/@tojukaka/sundayayselfies-contest-1-the-debut
Nice post dear. U are one from whose post I learn daily. Well done dear
So is the Steem Power to upvote and the SBD is actual earned "money"? And both can be used to help other poster right? thanks for the post, its very helpful. Cheers
Yeah
Thanks bro
Im glad I could be of help
Nice, I hope it stabilizes within 1-$2
How do I get more steem power.. and how do I convert sbd to usd
well done tojukaka, once again!