As BTC (Bitcoin) price is going higher, SBD (STEEM backed dollar) seems going higher too.
Below is the price of SBD against BTC as traded in exchange HitBTC per December 15th, 2017.
1 SBD = 0.00051 BTC
Figure 1. SBD/BTC in HitBTC, 1 SBD = 0.00051 BTC
And below is the price of BTC against USD in CoinDesk price index in the same time.
1 BTC = 17,848.35 USD
Figure 2. BTC/USD in CoinDesk, 1 BTC = 17,848.35 USD
Therefore, we have the calculation
1 SBD = 9.1 USD!
Much higher than the price peg of SBD to USD at around
1 SBD ~ 1 USD
So, is this a good thing or a bad thing for Steemit economy?
The Cause
Since SBD is traded freely in markets, then it follows:
- Law of supply, the supply of SBD rises as the price rises, and falls as the price falls.
- Law of demand, the demand of SBD falls as the price rises, and rises as the price falls.
Therefore, current rise in SBD price means: the demand of SBD rises while the supply could not fulfil it. The rise of SBD demand is a good sign that Steemit platform started to be recognized by a wider society and eventually aim to mass adoption.
However, the lack of SBD supply maybe need to be concerned more. Why SBD supply could not fulfil its demand?
In the beginning, by pegging SBD price to USD we should be ready to:
- Supply more SBD if the demand is high, such that the price does not rise.
- Hold more SBD if the demand is low, such that the price does not fall.
The question is, who is supposed to do the job? And the answer is, all of us the steemians. And Steemit is already equipped with the tools to do the job.
Convert SBD To STEEM
In Steemit there is a wallet feature called "Convert SBD to STEEM". When SBD demand is low, steemians could use this feature to convert more SBD to STEEM to keep the price from falling.
However, now we are experiencing the opposite. There is high SBD demand in the market, while the supply is low. Hence the price is rising.
Convert STEEM To SBD
It is obvious that we may need the opposite feature to convert STEEM to SBD. Using the feature, we can supply more SBD to market as its demand rises, such that the price is not rising. Unfortunately, Steemit has no such feature.
Therefore, we need another way to supply more SBD to the market. But how?
- Let's be more productive! By writing and curating more articles, we create more SBD.
- Steemit revision to allow more SBD as author reward. Needs ratio to STEEM Power higher than 50:50 as of now.
- Steemit revision to add new wallet feature "Convert STEEM To SBD" as above.
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