Vlog 224: The results of a high SBD price. A personal view.
The SBD has been trading on the exchanges for more than it's intended for a while now.
The SBD is an IOU for $1 worth of STEEM. But it's currently trading for $5 on the exchanges.
Now to put this in more familiar terms think of it in strawberries.
Let's say 1 SBD is worth $1 worth of strawberries in the shop, why would you pay $5 for this SBD? When you could just go to the shop with your $5 and buy $1 of strawberries and keep the $4.
But this is crypto and I'm sure that on the exchanges not everyone knows about what a SBD is worth.
Now, the high SBD has a lot of benefits. I highlight them all the time.
More rewards for content creators and it pays for development on the steem blockchain. For @blockbrothers, the witness I'm part of, the higher price is a blessing. It currently pays for our servers and an external dev we hired.
But a high SBD also incentives self voting because the Return on Investment for doing so is very high. Especially for those those who do not blog much.
This only makes sense.
Any steempower holder normally would benefit the most from a STEEM price that goes up. If you have 50k steempower it means that a $1 increase in STEEM price increases your investment with $50,000.
So, with an SBD worth $1 doing whatever you can to add value to the STEEM blockchain and make it go up in value makes the most sense.
But with a high SBD price self voting becomes an interesting option.
With 50k steempower ($200,000) you can upvote yourself 10 times a day for a total of around $300 dollars a day. That's $100,000 in a year.
That's simply just a very good ROI.
Now if the SBD was worth $1 then the total would be $75 a day or $27,000 in a year. A little over 10%, still ok but less worth it. Adding value to the blockchain and raising the STEEM price would become more interesting again.
This post is not intended to say wether all this is bad or good. I'm just always looking for reasons why things are happening.
Personally I think in the future the SBD price will come down all by itself as more and more of it is printed over time. (total supply right now = 9 million SBD vs 3 million SBD, 3 months ago).
I talk about it more in my vlog.
I am a witness with our developer group @blockbrothers for the Steem blockchain. If you want to support us I would appreciate your vote here.
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Steem sits with all steemians. If you are an HODLER you can see that you have to protect it.
Lately the price is steady around $4+, it shows the correlation with the demand of steem and everyone is confortable with steem valuation.
A lot of work ahead of us to get steem worlwide. At first they do not understand it, but slowly it will go widespread.
Keep on steemin'
I am not interested in knowing what the real reason is behind SBD price rise, i know for sure that this platform is generating good traffic and new users from the moment SBD prices moves above $1 , forcing many authors and curators to remain active on this great platform and making it more and more profitable... God bless those who are pumping SBD prices, wish them to push it even harder!
Yep, I love everyone who keeps SBD high. Best greetings to all of them, you're great!
i love sbd than steem
I agree @hms818. The current SBD price keeps new comers motivated and gives them a moral and a momentum boost. There's a lot of climbing to do on the platform to reach your target audience so why change the rewards that encourage that? Its one of the reasons why we have seen some big youtubers join in the last 4-5 weeks. Take SBD to the moon.
this literally made my day 😂
I was just thinking that someone should do a video on this... Awesome! You should consider making a step by step vlog on this for people to be able to follow along with the steps as well as additional ideas you might have. I wish people would think #Steemit through on something you mentioned in this video. We should all help each other be successful. Doing this not only reciprocates the support, but everyone becomes successful together. And even further, #Steemit then becomes more popular.
Amen to that :)
youtube is dead
thank you so much for this exyle! i'm new on steemit and invested up front in steem then powered up. not planning on powering down anytime soon. i love curating and voting on others posts. my own will come very soon, i'm a vlogger on youtube for about 9 years now. i've picked up on a "shame vibe" or perception if one up votes their own comment, it's frowned upon, so i've been uncertain to do so. i've noticed that bloggers upvote their own posts though. this article made me feel much more comfortable with spreading it around....to even me. i love spreading the steem around!!!!!! i love STEEMIT!
Yeah obviously. Just like any Company's share having face value as $1 but may have worth of $15 in exchange.
@exyle, I didn't understand one thing and I'll appreciate if you explain the reason behind it. On steemit platform we earn SBDs on our posts but why total amount of SBD's increase/decrease with the increase/decrease in it's worth in USD.
Like if my post earned 10 SBD and that time 1SBD=4$, if SBD falls to 3.5$, value shown on my post will decline to 9.5 SBD for example. What is the reason of this dual impact?
sbd shot to like 17 bucks last dec...
The payout is calculated with a 3.5 day average of the STEEM price. So when the STEEM price goes up you will see your payout increase and vice versa. The price of the SBD has nothing to do with it.
Oh. Like how our account value is shown in our wallets, on average.
Thanks for your response Bro :)
that'ts cool
You should check out Elliot Waves analysis SBD on tradingview. SBD to the moon! 🚀
@exyle do you think the creation of more SBD is related to the inflow of newbies to the platform?
Thanks for the explanation. I’ve been trying to find more info on how to best build my SP, support the platform, and create a nice passive income for myself. Any advice will help...
No, as he explains it's related to the average price of steem over a few days. The more steem is worth the more SBD's get created at time of payout.
The average price of steem has to be effected by the number of new people demanding steem... so that’s why I asked the question...
Well, as things are right now the majority of the demand for steem comes from traders on one exchange, and I have my own ideas on that as do others. Nothing wrong with asking questions, sorry if I sounded dismissive or insulting.
I do agree with you
In other words, as a long term crypto-investor. Keeping sbd on a long term would be very risky, preferably we can just convert to steem and keep instead.
Thank you very much for this info @exyle
You rock!!💪💪💪
Long-term I agree. Short time it's harder to predict.
Yes, we really can't predict what's in store for sbd in a short run.
For minnows like me, we're just going to enjoy it while it lasts and hopefully capitalise on it as much as possible
It's an epic time to be a content creator for sure, and part of the reason we are not 'working' any more I assume! :D
I'm impressed at the stability of SBDs in recent weeks, as I like many suspected it was on the way down to its 'home' of $1. To see it fall below STEEM and now be worth 20% more again is very interesting, but I'm certainly not going to complain!
It doesn't matter if you are cashing some out, buying STEEM, or throwing some at Bidbots, it's all good right now, and long may it continue!
Have a good day man!
I agree completely. At some point the supply of SBD is going to grow to the point where it has to collapse. Personally, I think those on the open market buying an asset that has a stated value of $1 for $5 is pretty foolish but then people do foolish stuff everyday.
When the peg broke, there were 3.5M SBD...I am not sure how many there are now but last I looked it was 6M or 7M. When does it get too much? 10M? 15M At some point people are going to dump it.
I hear many say that creating so many SBD is a problem since it is debt, a liability against the blockchain. The fortunate thing is that it is only $1 worth of debt. Plus, as the price of STEEM increases, the amount of that token it takes to retire the SBD is actually lessened.
To retire 8M SBD at $4 STEEM requires 2M STEEM...at $10 STEEM it only requires 800K STEEM.
As long as the price of STEEM is increasing, the debt is not a problem.
Let's talk.
So what do you conclusively advice? Save more steem or channel it to other crypto?
Sell your SBD long-term (short term I don't know what it will do) for something else.
Looking at the current trail sir.
Sbd is higher than steem, though steem looks promising.
I have not started saving steem or investing in other currency, but with this information, I'm sure gonna start.
Thanks so much for this insight
@exyle,
There are a lot of SBD prints day by day! But I think it's market supply is not yet enough to hold SBD at $1. I hope 8 - 20 times of current SBD market supply can hold SBD at $1 again! According to me it will take time! So we can enjoy this great reward at this moment! Great discussion you initiated today!
Cheers~