UPFRONT WARNING: I could be totally confused about this ;-)
I have some Steem Dollars in my wallet that I'd like to convert to Steem so that I can power them up.
In light of the upcoming hard-fork on December 6th, and with the uncertainty of the Steem price in and around that timeframe, I'd like some clarification on exactly when the SBD → Steem currency exchange rate is locked in.
If I go to my Wallet, hit the drop-down next to my STEEM DOLLARS balance, and select Convert to STEEM, I get the following pop-up window:
Is the exchange rate set when I enact this transaction via my wallet, or one week later as implied in the pop-up window's description?
As a side note:
- The second sentence in the pop-up window spells the word immediately incorrectly, and should probably read as: These STEEM DOLLARs will immediately become unavailable.
- I'm also not sure that the last sentence in the pop-up window is worded properly: The one week day delay ..."
Here are the two scenarios I can think of:
SCENARIO #1: The exchange rate is set upon my request, but the actual exchange occurs one week later.
SCENARIO #2: My request is queued up and the actual exchange rate is not set until one week after the date of my request.
I'm hoping that Scenario #1 is what actually happens, because then I can decide to convert all of my STEEM DOLLARS when the price is to my liking. For example, as of right now, I see that coinmarketcap shows the price of Steem is $0.163506 USD. Under Scenario #1, it's roughly that exchange rate that I would be getting.
If it's Scenario #2, then it seems like it really leaves it up to chance, since we're about one week away from the hard-fork, with no telling what kind of ensuing price volatility there will be.
I just tried a test whereby I converted $1.00 SBD to Steem and I received no indication of the actual exchange rate, only this window:
Thanks, @cognoscere
you can use the exchange . (by using the Buy or Sell option which also pops up in your SBD drop down menu)
https://steemit.com/market
and sell your SBD at any time you want. (or rather sell SBD to BUY the Steem)
after this you could simply power up. (which means you convert your steem to vest)
[to answer your question]
if you convert your SBD to steem , you eliminate the impact of your orders on the markets.
so this is useful if you dont want to influence the price while selling alot of SBD at once.
the actual conversion rate is simply the average price of the upcoming 7 days.
Update:
after Hardfork on december 6th 2016 this conversion rate is changed to the average of 3.5 days.
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Thanks for the details reply @joshbreslauer. I guess the big unknown is how much volatility gets averaged in during the coming week's lead-up to the hard-fork?
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Those are great questions....sorry I don't know the answer but am waiting with bated breath......
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Well, hopefully the replies to this post will help to sort it out. Thanks @countrygirl.
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I'll just keep posting and blabbing along....and try to understand as I go. I think I need some hand holding. I'm not dumb when it comes to finances but this who crypto thing baffles me - maybe it's just a new language that I need to wrap my brain around. Those calculations make no sense, the charts make no sense. Heck, my camera makes no sense sometimes. lol
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From what I understand, you get an average of the SBD-STEEM ratio computed over the seven days. You get an averaged price, not one that's determined by the time you order the conversion. It was designed that way so as to prevent gaming the ratio.
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After taking a look at the SteemWhitePaper I do believe you are correct @nxtblg. Here's an excerpt from page 11:
Steem factors out short-term price fluctuations by using the median price over a period of
one week. The median published feed is sampled every hour on the hour.
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Thanks for looking it up, @cognoscere . I remember now: that's where I read it.
But I did forget the hour-on-the-hour part. :)
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No problem @nxtblg. I think maybe the wording of that pop-up window needs to be revised!
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Welcome to Steemit....
(Yeah, I'm kidding.)
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you raise some important questions for many who are not cryptocurrency traders- also, you're right about the wording in that pop up box and I find it surprising that it's ambiguous. I don't expect that when it comes to making a financial decision. Good work!
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Agree @johnjgeddes, and I don't think it would be too difficult to add another sentence or two to the pop-up window to clarify the 7-day median price calculation.
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I haven't got a clue the whole thing baffles me. :)
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Agree @karenb54, financial-related details can be (and are often purposefully made to be) confusing to the average person. I'm speaking in general and not implying that Steem/Steemit is intentionally trying to confuse us ;-)
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I find the whole thing mind blowing. Its not something you can get to grip with easily.
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