Jerry, thank you once again for such interesting content. While reading through the FAQ I came across this:
"Will 1 Steem Dollar always be worth $1.00 USD?
The market value of a Steem Dollar is dictated by the supply and demand of the token. Therefore it is possible for 1 SBD to be worth more or less than 1 USD depending on market conditions. However, the network's SBD conversion feature serves as a mechanism to hold Steem Dollars within a small margin of the value of USD."
What do you think of this quote and how is it possible for the price of steem to increase with such mechanisms in place?
Steem on!
Craig
HIi @craigemslie - the FAQ question is about "STEEM Backed Dollars" (SBD), which are technically different than the STEEM coins. The price of STEEM can go way up or way down, but the mechanisms of the blockchain are designed to try and hold the value of a "Steem Dollar" at approximately one USD.
It should also be noted that SBD has been trading for closer to $2 instead of $1 recently, so the mechanisms to hold it 'close to 1 dollar' haven't been perfect.
Thank you so much for the info!
That's such a great question I am not sure of the exact answer!