So you’ve written some quality content. GREAT! You’re totally pumped and on a roll. But you fancy cashing out some Steem Dollars and taking yourself out for a nice meal to treat yourself. Who can blame you?! You go to your wallet and suddenly you realise you have no idea how to do that! Well no fear my friends. I’m going to walk you through what seems like an unnecessarily large number of options at your disposal!
Just remember that the end goal is Bitcoins!
Unfortunately there is currently no way I know of to convert your Steem Dollars (SBD) into USD directly. And until that changes, the way you maximise the number of Bitcoins you receive at the end is by always being aware of your implied SBD/XBT exchange rate over the series of possible transactions below. So let’s start with the easiest way to get you that meal!
Method 1:
For those of you who are not fuss about a few % in transaction costs here or there then this is definitely the route for you. I use Poloniex for my exchange, and they allow you to send your hard earned Steem Dollars to you Poloniex wallet and sell them on their exchange for Bitcoins directly.
- Find your own unique code from your Balances -> Deposits and Withdrawals page in Poloniex. Scroll to the SBD row and click deposit. Your code that you need to input will show up. Copy that code and head over to your Steemit wallet.
2. Go to transfer, and enter the code you just got into the "Memo box" and "poloniex" (or the address of your exchange) in the "To" box. Enter the amount you want to transfer and click transfer. (Obviously use your own code unless you want to send it to me!) Your SBD should arrive in your exchange wallet shortly after.
3. Go to your exchange and sell your SBD for Bitcoins. Then spend as bitcoins or sell them for USD and you are done. Great! And I hope you enjoy your little treat.
Method 2:
- Use your Steem Dollars to buy Steem directly through the Steemit exchange.
- In your Steemit wallet, next to your Steem Dollars balance, click the arrow and select “Buy or Sell”. This will take you to the internal exchange page and here you can enter the exchange rate you want to buy your STEEM and either the amount of Steem you want to purchase or the amount of SBD you want to use. Then click ‘Buy Steem’ to place your order.
- Below where you enter your order is the order book. The first row on the Sell Orders table is the price at which someone is willing to sell Steem to you in exchange for your Steem Dollars (and the minimum price you need to put your order in for to start transacting immediately).
2. Then, similar to method 1, you can transfer your newly purchased Steem to Poloniex (or whatever exchange you decide to use), and this time you can sell your Steem for Bitcoins, and happy days.
Method 3:
1. Allow the Steemit infrastructure to convert your Steem dollars into Steem by clicking “Convert to STEEM” rather than “Buy or Sell”. This will take 7 days for the conversion to happen, but once those 7 days are up you will have bought Steem at an exchange rate set by the average price reported by the witnesses in the price feed.
2. Finally, send your Steem to your exchange etc etc etc.
So which method is better?
I haven’t managed to find anyone writing about the pros and cons of these methods yet (apologies if I am wrong and please let me know in the comments so I can read what their views are). I’m now going to talk about what I think the different pros and cons are.
Method 1:
The easiest way to do it and for people that want minimum hassle, then this is the route for you. Unfortunately it may not be the cheapest way, as I will discuss below.
Method 2:
This gives the Steemer a bit more control over the eventual SBD/XBT exchange rate they have, possibly saving a few % in transaction costs along the way. Effectively, we need to decide if we want Poloniex (/other exchange) to convert the SBD into STEEM for us, which is what is implicitly happening in Method 1. OR do we want to exchange it outselves on the Steemit internal exchange.
So the rational way to make this decision is to compare exchange rates between the two and this is how (prices are at the time of writing):
- Currently I can buy 1 Steem at the Steemit internal exchange for 2.411365 Steem Dollars.
- On Poloniex I can buy 0.00155158 Bitcoins per Steem Dollar. I can also buy 0.00379989 Bitcoins per Steem.
- By dividing the STEEM/XBT price by the SDB/XBT rate we get an implied STEEM/SBD rate of 2.44904. Which means every Steem you buy on Poloniex is costing you 0.03768 more Steem Dollars (or 1.56% more).
- Therefore Method 2 would be the better method for you to get your XBT (you would end up with 1.56% more Bitcoins! YAY!)
But try Method 3 if you can, and here's why.
Method 3:
The final method then seems a bit redundant but I do think there is value in having this there. The Steem blockchain will adjust interest rates on Steem Dollars over time in order to try to influence the supply and demand of Steem Dollars. This is the mechanism by which we can maintain a stable SBD/USD exchange rate.
We all know that stability is crucial in the success of Steem, and we can all do our part by using method 3 when we can. Of course if you need the money urgently then that’s a different story, but by allowing the conversion to happen over 7 days, it allows the internal market to adjust and work the conversion slowly. Smoothing out any volatility and benefitting the longer term future of everyone here. This is especially true of anyone trying to sell large numbers of Steem Dollars in one go. Doing that is very often a terrible way of executing any trade and causing unnecessary volatility in a market we are all trying to nurture.
Don't forget also that you can also power up your Steem Power instead of selling your Steem! This will add to your influence and increase your stake in a community that is set to grow hugely into the future.
p.s. Please let me know your thoughts or anything you would like me to add to the above explanation. Ideally this post will be totally redundant soon, and hopefully we will be able to start spending Steem and Steem Dollars without ever leaving the ecosystem!