This an important topic, and people need to watch this! I was going to do a post about it, but I'll just resteem yours instead.
You said you were unsure where the STEEM comes from when converting SBD to STEEM. To the best of my knowledge, that STEEM is created by the blockchain and it doesn't come from anybody.
Yeah, it's created as inflation, not extracted from the Vesting fund.
The reason it doesn't come from the vesting fund is so that liquid holders are also included in the "collateral". Otherwise there could be a "run on Steem Power" in a sharp price downturn. It is preferable that the risk is held by everyone.
So I've read different opinions about this... this comment by @sigmajin led me to believe otherwise... Obviously there is a right answer, I'm just not sure who's answer is right. So is this comment incorrect:
@sigmajin is wrong. Otherwise there would be no difference between the Steem virtual supply (which includes the Steem that would be created if Steem Dollar contracts were all filled instantly) and the total supply.
Just to clarify then... of the 70% of STEEM's inflation that flows in through the rewards pool... roughly half of that remains virtual supply until the newly minted SBDs are are converted into STEEM. Is this correct?
ps. I had to write this comment twice cause the first time is disappeared... do you see it twice or only once? This has happen to me a couple times recently. Right now it shows up twice on my desktop but only once on my phone.
This is why people talk about Steem Dollars posing a 'systemic risk'. In a bad enough downturn, the existence of Steem dollars could result in hyperinflation of Steem. It is a very unlikely scenario but possible, and some want rid of SBD simply to close that possibility.
Edit: I only saw your comment once. It's just a guess but Steemit.com nodes might be failing to propagate transactions to the network under heavy load. If that's the case, Steemit Inc simply need to spin up more instances, and maybe handle the error better.
Correct, although I am not sure that the inflation is actually tuned to account for the STEEM value on exchanges. So if I understand right: the STEEM you get from changing SBD is created by inflation, say that STEEM value goes really down and there are large hodlers of SBD, I don't see why there should be enough inflation to produce enough STEEM for them. So if you hodl SBD, STEEM price goes down, you are setting up the system for default, please let me know if I understood correctly. SBD are not a bad idea per se, but they should be emitted keeping in account how many of them are circulating (like government bonds)
a very nice explanation...I have been converting SBD to steem basically to power up...but after watching your video I think I should trade it till the price settles around 1 US$.
Yes, exactly! Just use the internal market... and you'll get a lot more STEEM, plus you'll be able to power it up right away instead of waiting 3.5 days!
Very well put - I guess trading it, then "buying steem" with the BTC you traded for, would end up making you quite a bit more! Thank you for the information
It is interesting to me that Steem Dollars continue to sell so much higher on the open market. I haven't quite figured that one out or if it is best to hold on to them or sell them right now. They are tough to get - perhaps there is a bit of supply and demand pushing up the price.
Thanks for the video, Dan, it made it a lot clearer to me :) I am wondering whether the prices of STEEM and STEEM dollar would go up or down tomorrow with the new HF 19.
right! Given your prediction, the best move is to trade your Steem Dollars for STEEM on the internal exchange. I agree that this is probably the best move
Very beginner question. I'm assuming it is nothing wrong if you wait? I'm my case it will probably take few weeks or more, before I will earn my first few dollars anyway :-)
Howdy @dan-atstarlite, good share! I am a quite new blogger and only just joined the platform. It would be awesome if you would take a minute to look at my profile page and hit the follow button if you enjoy reading my stuff. Thanks!
Thank you for this video @dan-atstarlite! i could only understand a little bit of what you said but you have explained quite well! Will follow you and learn more. I didn't even know there was a difference between SBD and Steem! oh by the way, it's pretty cool how you just parked your car at the side of the road and started making this video. Awesome!
This an important topic, and people need to watch this! I was going to do a post about it, but I'll just resteem yours instead.
You said you were unsure where the STEEM comes from when converting SBD to STEEM. To the best of my knowledge, that STEEM is created by the blockchain and it doesn't come from anybody.
If anyone is curious about why Steem Dollars are trading for over a dollar, I think I know why. You can read this post to find out: https://steemit.com/crypto/@shenanigator/why-it-makes-sense-to-pay-a-premium-for-steem-dollars
Yeah, it's created as inflation, not extracted from the Vesting fund.
The reason it doesn't come from the vesting fund is so that liquid holders are also included in the "collateral". Otherwise there could be a "run on Steem Power" in a sharp price downturn. It is preferable that the risk is held by everyone.
So I've read different opinions about this... this comment by @sigmajin led me to believe otherwise... Obviously there is a right answer, I'm just not sure who's answer is right. So is this comment incorrect:
Full post
https://steemit.com/steem/@modprobe/how-the-steem-dollar-peg-works
@sigmajin is wrong. Otherwise there would be no difference between the Steem virtual supply (which includes the Steem that would be created if Steem Dollar contracts were all filled instantly) and the total supply.
Just to clarify then... of the 70% of STEEM's inflation that flows in through the rewards pool... roughly half of that remains virtual supply until the newly minted SBDs are are converted into STEEM. Is this correct?
ps. I had to write this comment twice cause the first time is disappeared... do you see it twice or only once? This has happen to me a couple times recently. Right now it shows up twice on my desktop but only once on my phone.
Yes.
This is why people talk about Steem Dollars posing a 'systemic risk'. In a bad enough downturn, the existence of Steem dollars could result in hyperinflation of Steem. It is a very unlikely scenario but possible, and some want rid of SBD simply to close that possibility.
Edit: I only saw your comment once. It's just a guess but Steemit.com nodes might be failing to propagate transactions to the network under heavy load. If that's the case, Steemit Inc simply need to spin up more instances, and maybe handle the error better.
Correct, although I am not sure that the inflation is actually tuned to account for the STEEM value on exchanges. So if I understand right: the STEEM you get from changing SBD is created by inflation, say that STEEM value goes really down and there are large hodlers of SBD, I don't see why there should be enough inflation to produce enough STEEM for them. So if you hodl SBD, STEEM price goes down, you are setting up the system for default, please let me know if I understood correctly. SBD are not a bad idea per se, but they should be emitted keeping in account how many of them are circulating (like government bonds)
a very nice explanation...I have been converting SBD to steem basically to power up...but after watching your video I think I should trade it till the price settles around 1 US$.
Yes, exactly! Just use the internal market... and you'll get a lot more STEEM, plus you'll be able to power it up right away instead of waiting 3.5 days!
Thanks I only realised this lately and good for new users to know.
This post received a 4.7% upvote from @randowhale thanks to @shenanigator! For more information, click here!
Very well put - I guess trading it, then "buying steem" with the BTC you traded for, would end up making you quite a bit more! Thank you for the information
yes but you could just trade Seem Dollars for STEEM directly on the internal market, that would be quicker and easier than going through bitcoin
Thank you so much @dan-atstarlite. You help me understand how it works! 😀
Thanks @dan-atstarlite for sharing expert advice on Steem Dollars, learnt alot from your video, will be doing SD transactions as mentioned.
Informative post, thank you....I just resteem this post
You always bringin that value... Appreshhh @dan-atstarlite :)
excellent now i know what do Thanx a lot :)
This is really useful.
I'd like to see future videos as you said about steem dollars.
Thank you Dan!
This is a good video! Thanks for sharing! I got a little scared when that truck pulled up towards the end!
yeah lol I was in a parking lot lol so no biggie
useful information! :)
It is interesting to me that Steem Dollars continue to sell so much higher on the open market. I haven't quite figured that one out or if it is best to hold on to them or sell them right now. They are tough to get - perhaps there is a bit of supply and demand pushing up the price.
Yeah, @shenanigator did a good post on it
https://steemit.com/crypto/@shenanigator/why-it-makes-sense-to-pay-a-premium-for-steem-dollars
Thanks for the information @dan-atstarlite. Very useful, just like all the videos you make.
Great explanation. Thank you for sharing. Better to trade SBD, than converting it, if the price is above 1$. Did not know that .
Thanks for the video, Dan, it made it a lot clearer to me :) I am wondering whether the prices of STEEM and STEEM dollar would go up or down tomorrow with the new HF 19.
STEEM price is much more likely to be affected by the fork than Steem Dollars IMO... but it will be an exciting day!
Yes, I am eager to see what's gonna happen today :) Thanks man!
Thank you so much for this clear explanation. Much Need!!
Very useful information and very well explained.
Thanks, my friend!. This is very informative for me, who knows literally nothing about cryptos. I still don't have a wallet yet! Haha!
upvoted followed and resteemed!
Thanks for this info!!!! I won't be doing this for a long time but now it helps to know more about this stuff.........
Thank you, clear and concise. So right now you can essentially double what you have by buying steem with steem dollars, awesome haha.
I wouldn't trade away the steem. You will be kicking yourself when they go over $5
right! Given your prediction, the best move is to trade your Steem Dollars for STEEM on the internal exchange. I agree that this is probably the best move
Great video Dan! It is certainly interesting how a person can play this economy to there advantage.
Trade for Steem when SBD is worth over a dollar.
Convert for Steem when SBD is under a dollar.
Hold SBD to gain interest when SBD is under a dollar.
It is all very interesting!
Excellent info dan-atstarlite - thanks for widening everybody's horizon about the contract/value exchange jungle ;-)
That makes sense and I am glad I learned it now before I converted and steem. lol
Very beginner question. I'm assuming it is nothing wrong if you wait? I'm my case it will probably take few weeks or more, before I will earn my first few dollars anyway :-)
Yeah, no harm in waiting! Take your time...
That's what I though. Thank you for confirming it!
Nice post ,
it is helpful for new steemians like me :)
tnx
Howdy @dan-atstarlite, good share! I am a quite new blogger and only just joined the platform. It would be awesome if you would take a minute to look at my profile page and hit the follow button if you enjoy reading my stuff. Thanks!
Thank you for this video @dan-atstarlite! i could only understand a little bit of what you said but you have explained quite well! Will follow you and learn more. I didn't even know there was a difference between SBD and Steem! oh by the way, it's pretty cool how you just parked your car at the side of the road and started making this video. Awesome!
Thank you for this, very helpful for us new kids :)
Gotta power up that steem...
Great Post !!! Thanks for the advice and helping me leverage my time.
Great tip, this has helped me to improve my understanding of how this platform works. Thank you