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RE: 5 Reasons Why You Should Power Up Your SteemDollars (SMD) to SteemPower (SP)

in #steemit8 years ago (edited)

SMD = Steemdollars. The confusing thing is, that they are not fix, because they are the representation of Steem in US-Dollar. In the Whitepaper p. 10 is stated: "Steem Dollars are created by a mechanism similar to convertible notes, which are often used to fund startups. In the startup world, convertible notes are short-term debt instruments that can be converted to ownership at a rate determined in the future, typically during a future funding round. A blockchain based token can be viewed as ownership in the community whereas a convertible note can be viewed as a debt denominated in any other commodity or currency. The terms of the convertible note allow the holder to convert to the backing token with a minimum notice at the fair market price of the token. Creating token-convertible-dollars enables blockchains to grow their network effect while maximizing the return for token holders." So when the Steem currency is getting weake against the US Dollar, then your SteemDollar decrease as well. Thats why your SteemDollar at a post sometime fall despite nobody has downvoted you. Its complicated, but really smart.

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