Probably my best achievement as a blockchain enthusiast was getting my Mum @malenapechi and dad
@smartphoto completely hooked on Steemit!
Getting them on Steemit makes me think that Steem really is that “blockchain killer app” everyone was looking for, Steemit makes it easy for people to use Blockchain Tech without them really knowing what goes on behind scences.
However, bringing the “Regular Joe” to Steemit does have some risks (for them). Last week my Dad told me that he was really happy about the price of Steem… I thought: wait a minute, price of Steem is ok I guess, but he must be referring to the price of Steem Dollars. I took the time to explain the differences amongst the two but I am sure he is not the only one confusing Steem with Steem Dollars, so here is a quick break down:
Steem: The Blockchain database that Steemit.com and other apps use is called Steem, this blockchain produces a the Steem Token and its value depends entirely on the market (demand and supply).
Steem Dollars: Steem Dollars are tokens that are backed by a Steem collateral worth 1 USD. Witnesses provide reliable price feeds so that the collateral always remains 1 USD. Moreover, Witnesses can play around with interest rates to try to streghthen the 1-dollar peg. In other words, the whole purpose of SBD is that it SHOULD be worth 1 dollar!
Having a stable asset like Steem Dollars has plenty of benefits, for example bloggers always know what they are getting paid, it takes away the crazy volatility of the Crypto World. It is also great for traders who can take their profits hedging Bitcoin, Litecoin or any other currency against SBD.
Now, given the short supply of SBDs available (around 3million) and the humongous Bitcoin and Cryptocurrencies PUMP, the peg was broken. But, in essence SBDs should come down again to its “real” value and I believe this is a good thing.
So please follow my advice if you dont want to get Rekt, if you have SBDs laying around, don’t hold them!... go the internal market and buy Steem instead. Remember you could lose 1200% buying SBDs at today´s prices.