Steem Dollar (SBD)
The Steem Dollar (aka Steem Backed Dollar or SBD) is a token that is meant to be worth about $1 USD, making its value much more stable compared to STEEM (see STEEM_token. To be a bit more technical, a Steem Dollar is a promise to pay one dollars worth of Steem when it's redeemed.
The benefit of Steem Dollars is that business can accept them more comfortably since they have a more stable value. Can you imagine being a shop owner and trying to sell your $50 product for STEEM which a couple months ago would have been for 500 Steem compared to today being less than 50. Pricing their products are services are much easier when using a stable value, as well as knowing that what they've already been paid, won't loose value.
To try to keep the SD around the $1 mark, Steemit's Witnesses (see Steem_Witness) can change the interest rate paid (quarterly) for holding them in your wallet. Lately this interest rate has been 0% with the SBD price being higher than desired. When it gets near or under the value of $1 USD, we will start seeing the interest rate increase.
Contents
[hide]Examples:
If STEEM course is at 10 cents, one Steem Dollar could be redeemed for 10 STEEM. When STEEM is at 2 USD, a Steem Dollar would redeem for 0.5 STEEM.
Notes:
SBD course isn't fixed, in some times it has been closer to $2 USD.
Links:
- @sykochica : Answering Common Questions: Steem, Steem Power, Steem Dollars and What Should I do with them?
