Crypto Academy Week 6 Homework Post for @yohan2on | Stable coins


Thank you @yohan2on for the inestimable lesson, your lesson provides sufficient information to attempt the homework task.

Homework Task:

Homework task: Write about any one of the following stable coins;

Tether(USDT)

Steem backed dollar(SBD)

DAI

For the sake of this write up I will be considering Steem backed dollar(SBD).

Introduction

Steem backed dollar popularly known as (SBD) is one of the stable coins in cryptocurrency world. The idea behind stable coins has already been discussed by Professor @yohan2on in his lesson. Therefore, before talking about steem backed dollars it is necessary I give little a short recap on the subject of stable coins for proper delivery. Stable coins are coins that are designed to help manage the volitility nature associated with cryptocurrencies in the market. These stable coins are usually regularised to keep them stabe irrespective of the volume traded per hour.

Steem Dollars(SBD) is an important coin not just limited to steemit platform but to the whole cryptocurrency global community. They are designed to bring stability to the cryto ecosystem. Lack of stability can result in low cognitive cost especially when an investor is engaging in savings and commerce. It most be noted that stability is an important factor of any stable and successful economy.

Steem Dollars(SBD) are similar to convertible notes which are often utilised to fund startups but they are usually liquid tokens viewed as a blockchain ownership while the normal paper currency is a short term debts instruments that can be converted to ownership in the future. The word "convertible" means that owners can convert the backing token within a short notice at a fair market price. The technology behind creating token-convertible-dollars is to allow blockchain developed their network while generating return for tokens holders. To create steem Dollars there is need to combine rules that will prevent abuse and reliable price feed. These reliable price feed involves maximizing the cost of producing incorrect feed, reducing the impact of an incorrect feed and reducing the significance of timing.

images 15.jpeg
Source

Steem Dollars(SBD) in focus using the steemit platform:

Steem Dollars(SBD) are liquid tokens which are part of the three form of rewards on the steemit platform. It can be converted to Bitcoin, STEEM and other digital currencies. It's usually constitute 50% of the rewards from comments and posts or content created and uploaded to the steemit platform. The SBD's is more stable when compared to steem and Bitcoin. Although each SBD is intended to be equal to 1 US dollar in worth, it is not always so. The current market price and exchanges as of today 15/3/21 can be gotten through this link provided: Current SBD Prices.

Steem Dollars(SBD) can be converted to steem or kept in the wallets as SBD. The conversion can either be done through the steemit internal market or by using the "convert to steem" option present in every user's wallet on the steemit platform. While the "convert to steem" might take three days or less, the internal steem market is usually instantaneous and the prices are almost the same with external exchange.

It is also necessary to note that Steem Dollars(SBD) can be transferred to other users using same process by which STEEM is transferred to other users. The STEEM gotten from SBDs can also be used to "power up" a term used on the steemit blockchain to mean increasing user voting power on the platform. This is not compulsory but it is advisable for beginners on the steemit platform to power to enable benefits from curation rewards.

Thank you for reading my write-up.

Cc: @steemcurator01
Cc: @steemcurator02

 


Comments 1


Hi @gboye1

Thanks for attending the 6th - Crypto course and for your effort in doing the given homework task

Feedback
This is good work. Well explained basing on a person experience with SBD on the steem blockchain.

The STEEM gotten from SBDs can also be used to "power up" a term used on the steemit blockchain to mean increasing user voting power on the platform.

That means when I earn my SBD, I can always convert it to steem and then power up to take advantage of the curation rewards on steemit!!. This is indeed another great aspect about SBD. It is easily convertable into other cryptocurrencies such as steem, Bitcoin, Ether, etc.

Homework task
7

16.03.2021 22:48
0