Dollar (SMD) is that it is created as a stable value unit in the Steemit Platform. Steem Dollar (SMD) created from blockchain Steemitketika blog post diupvote by readers. Steemit then calculates the value of each blog post based on the number of votes and the quality of Steem Power (SP) contained in each of these votes. The value of the post results will be split 50:50 to Steem Dollar (SMD) and Steem Power (SP). This concept of understanding creates the formation of Steem Dollar (SMD).
The main thing you should know is, there is no USD (US Dollar) who really membacking the value of Steem Dollar (SMD). The value of the Steem Dollar (SMD) unit is pegged to USD (US Dollar) due to Steemit blockchain capability to create unlimitedsupply STEEM units. Steem Dollar can be claimed in the form of STEEM unit value, which then STEEM can be sold to buyers with USD (US Dollar) or Cryptocurrency Assets such as BitCoin. When 1 Steem Dollar (SMD) is created then the $ 19 STEEM is also created and then converted to Steem Power (SP).
Well ... based on the above points ... it is very important we realize that ... if one day later if the price of the STEEM unit collapsed and there is no recovery back then the benchmark price Steem Dollar (SMD) to USD (US Dollar) will break.
So the second important information is the system Steemit chooses a set of people to provide value for the STEEM to USD (US dollars) to be honest. The person chosen by the holder of STEEM is compensated / rewarded in the STEEM unit for the services they pour out. If these people do not provide accurate data, they can be fired from the system and new people will be selected to replace them. The purpose of all this is to ensure that the Steem Dollar (SMD) can still be exchanged fairly to the STEEM unit equivalent to $ 1 USD (US Dollar).
One other unique fact that can ensure the value of the unit Steem Dollar (SMD) pegged to the value of USD (US Dollar) is the interest rate system in the economy Steemit. Holders of Steemit Dollar (SMD) will earn 10% interest annually (annually) which continues to be accumulated automatically per second. What is the interest rate system for? The point is if the Steem Dollar (SMD) falls below the USD (US Dollar) price then this rate can be increased to trigger an increase in demand for Steem Dollar (SMD).
We must think of the Steem Dollar (SMD) as it seems to be a USD denominated debt in which the Steemit community has to pay it with interest rates in the value of the STEEM unit. If the Steem Dollar is traded above $ 1 then this indicates that the market is willing to lend more credit than the person who wants to owe.