RE: Never Hold on to SBD! They Are Being Devalued At 583.8% Annually (48.65% Per Month).
You bring up a nice perspective. I never even tried calculating the inflation levels. So thanks for doing that work. SBD has a price floor of 1 USD. If it goes below that you can redeem it for 1 USD worth STEEM. So SBD is really a smart contract based debt instrument. The hard cap for debt limit is 5%
So the cap for SBD supply is 5% of the USD value of the marketcap of STEEM. When the debt level hits 2% the rate of SBD printing goes down until it reach zero at 5% debt level.
Despite inflation SBD has high demand and very little supply and marketcap. Due to the low supply and low volume, the volatility can be high. This goes in both ways. STEEM ecosystem use SBD more than it does STEEM. That alone is important.
@ew-and-patterns thinks SBD could be worth 2-4 times STEEM and @haejin is calling for at lest 6 or in an extreme case 12 times the price of STEEM. Such huge prices won't be sustainable for more than few hours at best. It's bound to be sort of a pump and dump. But even after a dump SBD should remain close to STEEM for some time.
So actually I'm bullish at the moment.
@vimukthi
The affect of inflation on SBD is not that forthcoming in the short term but consider buying SBD in December last year and holding on till now.
Inflation on your coins would have been 200% if we consider a market cap of 40mil (lets assume the market cap does not change for the sake of simplicity). You would only be getting about $3 for your SBD after paying $10 for it. This is a considerable loss of value.
Maybe you can limit your risk by buying in when it is closer to $1 but is it really worth it buying in hoping that it will increase 6 fold if inflation is so steep?
What I actually look for is STEEM: SBD ratio. It's hard for me to thik that SBD would reach $1 for a long time. Buying a low volume coin while it's going to the moon isn't a good idea. If SBD is significantly below STEEM price and if both coins show signs of a bottom in price charts, it's a good time to buy. personally I don't think SBD would worth 6 STEEM and be stable. I'm looking for something in the 2.5 - 4 range. Let's see how things would turn out to be.
But if they really want to drop the price of sbd , why doesn't doesn't entire ecosystem of steemit run of steem ,every curation reward will be payed in steem.Basically take all the utility this coin has.Steem will the only currency here then,that will drop the price of sbd signfactly but I think sbd won't go down without a fight . I will enjoy the ride that sbd will delivery sooner or later
SP is actually the value of VESTS given in STEEM. There really is no SP. You get VESTS. You can power down VESTS into STEEM (Basically sell your VESTS for STEEM) It was assumed that SBD would be mostly be around 1 USD and ecosystem was designed to use SBD just like how it is being used today. STEEM is just for trading and powering up. That was the original intention.
Hi @vimukthi
It sounds like you are really informed when it comes to the Steemit platform. Where can I read up on it some more?
Also, you mention:
Do you think SBD will fall away? Is there really that much SBD offer which we cannot do with Steem?
https://steemit.com/faq.html is a great place to start. I picked up most of my knowledge reading posts written by developers/witnesses. It all happened organically and my knowledge about the blockchain is only "Above Average".
Here are few more cool tools to check out: https://helloacm.com/tools/steemit/
A little old post of mine: https://steemit.com/steemit/@vimukthi/sharing-some-of-my-steemit-wisdom-after-228-days-and-1000-followers-a-collection-of-tips-useful-sites-apps-built-on-steem-and
Great place to learn and observe stuff created by @drakos: https://steemian.info
The difference between SBD and STEEM is that SBD has a price floor of 1 USD. In any case SBD price go below 1 USD, you can buy some in the market and convert each SBD into 1 USD worth STEEM. That's how it was designed to be. You can't buy VESTS with SBD you need STEEM to power up. Other than that they are mostly similar things.
What does bullish mean?
Bull Market = Prices go up
Bear Market = Prices go down
It's a phase that every coin goes through ,it that phase it's preparing to launch to greater hights .
So it's better to hold onto it....not that what I have amounts to a hill of beans, still it's all a learning curve to try and understand.
Hi @sunlit7
I would suggest you follow people that does a lot of research on the subject. @vimukthi and @xsid and @jetblake gives some good information.
I don't hold on to SBD anymore and convert it all to Steem or Steem Power. I am not sure whether in the future it would be better to hold on to SBD but the inflation on SBD at the moment is incredibly high. On a weekly basis it is more than 10%. If the market capitalization stays the same and circulation supply is increased at the same rate as in the past months your SBDs will devalue at a rate of 11.2% a week.
But it is like @vimukthi says. There is not a lot of SBD coins in circulation and a small influx into the Steemit market may lead to a considerable increase in the value of SBD. It is however a decision you have to make because you are gambling on the possibility of the Steemit platform exploding whilst your SBDs are devaluing at a very high rate.
Thanks for recommending @xsid and @jetblake They have some really good posts.
Indeed @vimukthi, as do yourself. If you have more people we can follow for good advice on crypto currency please let us know. You have been here a while longer than us and seem to know your way around.
I get my crypto news from all over the place. @haejin @ew-and-patterns @freeforever Are pretty much exclusively posting Technical Analysis mainly on cryptos. Personally I see TA as a form of advanced pattern recognition. Different people have different interpretations. Follow them for a while and make up your own mind.
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