Steemit Crypto Academy Contest Season 9 Week 4 - "Blockchain Steem: Debt Vs Ownership"

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Hi, esteemed members of steemitcryptoacademy hope you are doing great. I am also good. I am feeling very honored while taking part in another wonderful contest the topic is extraordinary Blockchain Steem: Debt Vs Ownership.

Explain borrowing and ownership on the Steem network. Explain this concept in the centralized fiat world.

On the steemit platform, we earned rewards in the form of steem which is a blockchain-based cryptocurrency. Earned steem can be useful for various purposes.

Now, I will explain what is debt, a state of being an aggregate of capital that is owed or unpaid. In more simple words the amount of loan we take from any person, company, etc.

While if I talk about ownership it can be defined as the condition of occupancy of something. It means that we have owners of particular things like land, house, or anything else.

The ratio between debt and ownership plays a significant role in the crypto World. Hence, the relationship between the debt ratio and ownership may affect the SBD, steem, and Sp, etc.

It should be well understood that the debt ratio may not exceed the ownership ratio. Now, questions come as to why it may not exceed. Because if the debt ratio will be people will not be inquisitive in business with a particular company or commodity.

Debt ratio = Total indebtedness (debts, loans) / (Ownership)Equity

Now, with the example, it would be easier to understand if I buy an item that cost 100 $. The price of an item is 25 $ and if I take a debt 75 $ then I can calculate it as follow.

I can explain it as the ownership value which is owned is very less than us only 25 percent while my debt ratio is much higher than 75%.

"Explain this concept in the centralized fiat world"

In a centralized Fiat World, To regulate the amount of money banks played a role in the demand and supply of debt. For example, I want to buy land and I do not have enough money to buy it. I will take a loan from the bank to pay the amount of land. Although I will become the honor of land but it's also owed by bank because they paid me loan.

If the ratio (SBD Debt/Steem ownership) is high, how does it affect the Steem price?.

In case if SBD/Steem ratio is high; the steem price would be low which predicts the bearish conditions of the market. The bearish condition in simple words can be explained by the debt-ownership ratio being high which means the steem price will be low.

SBD print rate = 100% * (10-debt ratio)

If the debt ratio of SBD/Steem is high or more than 10% then there will be no printout of SBD & also not be added in post reward. But if this ratio is less than 10% then SBD printout will start in the market and post-payouts as well. Now we calculate this through the given formula:

SBD print rate = 100% * (10-9.5)

SBD print rate = 100% * 0.5

SBD print rate = 50%

So, these calculations conclude that if the debt ratio is 9.5% then we will get 50%, 50% post payout as 50% SBD and 50% steem & same as steem power. So, a change in SBD/Steem ratio will affect the steem price in the market.

What mechanism does the Steem blockchain use to control the debt/ownership ratio?

In order to check the mechanism of Steem Blockchain used to control debt-ownership ratio we can calculatue it with the formulas, its as follow.

In order to find the value of steem market cap, we need two variables one is virtual supply and other is steem price through coin market. I added value in formula as given below.

Virtual supply = 482104246.731

Steem price through coinmarketcap.com = 0.1933$

Steem Market Cap = Virtual Supply * Steem Price

Steem Market Cap = 482104246.731 * 0.1933

Steem Market Cap = 93,190,750.893

In order to find the value of SBD market cap we need one constant and other variables values which are current SBD supply and 1 $ of SBD price which would be constant. I added the value as follows.

Current SBD supply = 12154109.938

SBD price = 1$ always (not affected by external market)

SBD Market Cap = Current SBD Supply * SBD Price

Steem Market Cap = 12154109.938 * 1

SBD Market Cap = 12154109.938

We find steem and SBD matket cap as given above, now we have to add these values in given below formula.

Current Debt to Ownership Ratio = SBD Market Cap / Steem Market Cap

Current Debt to Ownership Ratio =
12, 154, 109.938/ 93, 190, 750.893

Current Debt to Ownership Ratio = 0.13

If we see the calculated value it's 13% that is obvious high from 10 %. If we elaborate on it more it can be simply as follows if the debt ratio may exceed more than 10 % the SBD printout is almost 0.

If the SBD printout would be 0 it may not be available in the reward, so we will get paid out only steem power and Steems. Hence it can be concluded that SBD rewards will not be available in the reward if debt-ownership ratio will be more than 10%.

Show the step by step to convert SBD to Steem, using the Steemit wallet. Show screenshots.

Here i am going to share the steps which I used to convert SBD into steem. I used posting key to login my steemit wallet. I clicked to SBD icon and there appeared four more options. Clicked on market option.

As the icon of market icon, here two options were appeared buy and sell steem.On buy steem icon, here i entered the value of SBD which i have to changed in steems. My order was filled.

My steem converted into steems within seconds and appeared in my steemit wallet.

These were all steps which i used for conversion of SBD into steems.

Can you convert Steem to SBD? Explain.

Well!!! Its very easy to convert steem to SBD.
I have login my steemit wallet by posting key. Then i clicked on steem which is my wallet, here you can see the further options as its visible in the picture. Then i clicked on market option.

When i open market, it shows me rwo option one was buy steem while other sell steem. As i have to sell my steem to buy SBD, so i add 0.8 steem to buy SBD. Then i clicked on the sell steem and my order was done as it can be seen in picture.

My order was filled and amazing my SBD was in my wallet within seconds. As i shown in picture below.

These were all steps which i used to convert steem into SBD. Hopefully it would be easy to understand.

Never exceed debt ratio over ownership value, hence it can be concluded there is visible effect of debt ratio on steem, steem price and SBD print out.

Its all about my today's post, i appreciate your feedback. I would like to invite my dear friends @m-fdo, @shanza1 and @uzma4882 to take part in the contest.

kind regard

@drhira