Steem Dollars are the price-stable tokens found and used within the Steemit ecosystem. The Steem Dollar whose ticker symbol is SBD represents a value of around $1. On the other hand, Steem is a liquid-cryptocurrency which is also used within the Steemit ecosystem. When it comes to Steem Dollars, one can use them for a number of things such as buying stuff within the virtual economy which is yet to be established. You can also opt to hodl the dollars and hence earn a 10% annual return. The other option you have when you own SBD is to transfer them into Steem, Ethereum, Bitcoin or any other digital currency. The Steem Dollars serve as the bridge between raw power of Steemit and real-world apps because it commands a relatively stable price.
How Steem Dollars work
Say, you want to give away 50 SBDs. In short, you are simply giving away 50 USD worth of Steem. The Steem Dollar currency is designed to work as an IOU or a promise. When you decide to cash out of your Steem Dollars, you will get as many Steem tokens which are worth the SBDs in your wallet. Remember 1SBD is equivalent to 1USD.