The goal for steem dollars is to keep it close to the USD so that you don't have to use actual USD. At least that's what I figure. You can see another cryptocurrency example of this with Tether. It's a crypto, but it tracks the price of multiple different currencies.
The amount available is inflated or deflated to control the price.
The goal for steem dollars is to keep it close to the USD so that you don't have to use actual USD. At least that's what I figure. You can see another cryptocurrency example of this with Tether. It's a crypto, but it tracks the price of multiple different currencies.
Here is a post that goes into great detail about how it works. https://steemit.com/steem/@dantheman/introduction-to-steem-dollars-sbd
Basically what @randystiefer said.
the invisible hand ;)