FIRST STEP - WRITE DOWN THE NUMBER OF STEEM YOU HAVE BEFORE CONVERSION
Here's what the conversion window will look like. All you need to do is hit the Convert Icon to get to the next window.
Here's the window after you click on the Convert icon. Now enter '1' Steem Dollar (SBD) and hit Convert!
Better sell your SBD on exchange and get 3x amount of dollars for them (at current prices). By doing the way you described above, you will get 1 dollar worth of Steem after 3.5 days. This is clearly not a good choice right now.
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That was the challenge. The following day was Challenge 2. Also, many disagree that SBD are burned on conversion. Anyway, trading can be very delicate. The best resolution in my opinion is to buy STEEM with $SBD and then trade the STEEM for whatever crypto you want. I just bout 473 Steem for $69 SBD. The Steem is trading now at $1.85 US. You do the math. I'm not advising. I'm not a professional financial advisor. Just relating to you an anomaly I uncovered re $SBD.
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Before I do that let me know whether I am angry after it as I have not done it vi the internal market :-)?
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Does the Convert option burn the SBD? Decreasing the supply might drive the price up. I really don't understand the economics.
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Yeah, it burns the SBD and creates STEEM. So it decreases the supply of SBD but increases the supply of STEEM which in large quantities could drive the price of SBD up and the price of STEEM down. But also @uwelang has a good point... right now converting a SBD will give you way less value than selling it on the internal market... conversion = $1 usd vs. selling = $3.35 usd 😎
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When you buy and sell these tokens (whether SBD or Steem) they continue to exist after the action. In other words, the SBD does not get burned and the supply of Steem does not go up. The only way to destroy the tokens, as far as I know, is to transfer them to the null account. The supply of Steem is constantly increasing at a rate of 9.5% a year (decreasing over time to .95%). Nothing affects that rate. When you look at the price of the Steem Dollar on sites like steemdollar.com what you are seeing is an aggregate of the external exchanges where the price of SBD can pump in relation to Bitcoin. What that means is that on those exchanges you can get a lot more bitcoin for your Steem Dollars than you could when it was only trading at $1.
If you would like to learn more about how the system works, the relevant portion of the whitepaper is titled "Sustainable Debt to Ownership Ratios."
The key takeaway is that the system is designed to always be driving the price of the Steem Dollar back to $1. You should only hold Steem Dollars if you want something that is highly unlikely to drop below $1 worth of value, and that is highly likely to be around $1 at some random point in the future. Occasionally it spikes, and the system is designed to reduce the height and duration of those spikes. The goal with the Steem Dollar was to give people a reward they were familiar with, it is not the ideal token for investing in the Steem ecosystem (that is Steem Power) and is not designed to be an asset that appreciates in value, even though it occasionally spikes on external markets.
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Hmm... of course I could be very wrong... but I was under the impression that SBDs get burned when converted and that approx. $1 usd worth of STEEM is created when that contract is executed. And that the current 9.5% inflation includes the virtual supply (SBDs) that are paid out of the rewards pool instead of STEEM. So if no SBDs were converted during a year than the actual inflation of STEEM (not including SBDs) is actually much less than 9.5%. And that the value paid out in SBDs only ever takes on the form of STEEM if converted.
Is there someway we can clarify for sure whether this is how it works or not?
If this isn't true, then I'm curious as to where the STEEM comes from upon SBD conversion and where the SBDs go when converted?
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Like just now?! $7 each, what's happening here then?!
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Exactly - I was struggling with the entry of the post a bit "FIRST STEP - WRITE DOWN THE NUMBER OF STEEM YOU HAVE BEFORE CONVERSION" - assume the authors wants us to compare in three point five days the change (given we have no movements in the Steem balance - but we will notified anyway). No worries on less value, I never tried the option and now found a reason to do so.
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Cool.
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Ha!! You beat me to the punch! Tsk Tsk!Tomorrow's vlog was 'selling' ! SBD! :)
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so you guys have a secret mission lol @dan-atstarlite @brian-rhodes - fair enough - I like such funny "testing" stuff - and hey it made me talking to the two of you finally, think we never had the honour to comment on each other.
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We've known each other for 10 years now!
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lol nor me - I think it burns yes - I did it!! More in 3.5 days.....hmm
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Not suggesting more! Just highlighting the difference between converting and selling. I did both last week and got some interesting results. Tomorrow's challenge was going to be selling 1 SBD. I'm no expert and I'm not giving investment advice. Just suggesting people look at this interesting anomaly with SBD.
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Not sure I understand the economics of why SBD is climbing. But the exercise is to be aware of the options. The best option will be to 'sell' not convert! That was to be the subject of tomorrow's vlog.
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Right now SBD are valued at $3.30 https://coinmarketcap.com/currencies/steem-dollars/
You think you have a SBD at $1.00US but in fact it is valued at $3.30 when converting to STEEM. No idea why SBD is on a roll! The rest you need to put together for your self. I'm not an investor advisor.
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all good points and I like the way you get some exercises started
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Trading can be very delicate. The best resolution in my opinion is to buy STEEM with $SBD and then trade the STEEM for whatever crypto you want. I just bout 473 Steem for $69 SBD. The Steem is trading now at $1.85 US. You do the math. I'm not advising. I'm not a professional financial advisor. Just relating to you an anomaly I uncovered re $SBD.
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yeah my first thing was i use the internal market i never use that. plus ever bit of sbd i've been just converting to steem and then steem power on the internal market. what am i missing here you got me intrigued ;)
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Yes. I'm just demonstrating there is ananomoly here that one may be able to take advantage of. Tomorrow I was going to do a 'market sale 'of 1 SBD so you can compare! But I think you get it! I';m not expert and not giving investment advice. Just helping you compare internal and market!
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i love the action. smart.
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Trading can be very delicate. The best resolution in my opinion is to buy STEEM with $SBD and then trade the STEEM for whatever crypto you want. I just bout 473 Steem for $69 SBD. The Steem is trading now at $1.85 US. You do the math. I'm not advising. I'm not a professional financial advisor. Just relating to you an anomaly I uncovered re $SBD.
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yep i've been doing exactly that thing since i saw the hike up, just wish i had more SBD in the reserves! :) cheers.
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Just did it again today... 473 steem for $66 SBD! :)
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it's pretty amazing right, get that steem up, i'm splitting my SBD earnings between powering up and taking out so i can upgrade my camera quality for 2018. loving life right now! :)
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And we all should... always!
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nice post but i don't even have one Steem dollar yet help me out and give me a upvote so i can try lol
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It's just a test to demonstrate options available. I doubt SBD will be at this value long.
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it should not - depends on Korea and its pumping crowd though
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For the future: Trading can be very delicate. The best resolution in my opinion is to buy STEEM with $SBD and then trade the STEEM for whatever crypto you want. I just bout 473 Steem for $69 SBD. The Steem is trading now at $1.85 US. You do the math. I'm not advising. I'm not a professional financial advisor. Just relating to you an anomaly I uncovered re $SBD.
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I've never tried the option of converting SBD to steem. But as others have said, the burning of the SBD and creation of steem should drive the price of SBD up and the price of steem down (in large quantities). Will post back in 3.5 days with an update 😊
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Some believe SBD's are not burned on CONVERSION. Trading can be very delicate. The best resolution in my opinion is to buy STEEM with $SBD and then trade the STEEM for whatever crypto you want. I just bout 473 Steem for $69 SBD. The Steem is trading now at $1.85 US. You do the math. I'm not advising. I'm not a professional financial advisor. Just relating to you an anomaly I uncovered re $SBD.
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Tomorrow I was going to do a 1 SBD 'market sale' challenge. I'm not advocating conversion. I wanted to point out the anomaly here with SBD. The damn thing keeps climbing an no one has come up with a good reason why that I've heard.
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Ah I see. So you're trying to demonstrate the difference between converting internally and selling via open market. The difference being that selling on the open market is more advantageous, correct?
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ok I did it - burning SBD - good move @brian-rhodes in view of increasing stability of the Steem / SBD relation I would say.
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ahhhhh
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It's just an exercise which is is why ONLY ONE conversion - to help understand the relationship between the two and the difference in an internal. Tomorrow's was to be selling 1 SBD on the market to compare the two.
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ah got it, crazy day, sbd at $5.53 wow.
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Ahh that's what happens.. I sell SBDs and the price goes up 132%!
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The story for most of us! Ha!
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I found a few more under the sofa, happy days!
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Ha!
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I think that as soon as the Steem Dollar is maintained at this price it will be favorable because maybe in some future, if God wants, it can surpass the ordinary dollar or the best market strategy to increase profits, investing as much as possible in all the Steem Power that can and then do other strategies to increase the percentage of profits as time progresses
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since 2 weeks I am selling every sbd I have for steem. even if it is 1 steem.. the current prices will not last so It's the best deal you can make on the internal market..
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Congratulations, your post received one of the top 10 most powerful upvotes in the last 12 hours. You received an upvote from @thejohalfiles valued at 84.70 SBD, based on the pending payout at the time the data was extracted.
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I appreciate all your posts/videos, Brian. Keep up the great work, you have great insights on Steem. You've reinforced my belief in it.
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Thanks,
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amazing post @brian-rhodes
if you can visit to my post
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Thanks!
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So here is the result after 3.5 days of converting :-) - sad - got tears in my eyes - thanks for the challenge though @brian-rhodes
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