Conversion Does Dot Follow The SBD Design
steem·@droida·
0.000 HBDConversion Does Dot Follow The SBD Design
# SBD will never be worth $1 USD I tried the conversion with a small value. To try the process, I changed some STEEM to SBD using the internal market and converted it, waiting 3.5 days. Here is some information about SBD and a report of the experience. ## What is a conversion? Conversion is a way to change SBD to STEEM. ## What is Steem Dollar? By design, Steem Backed Dollar (SBD) is a token that is meant to be worth $1 USD. Its value is more stable compared to STEEM. *A Steem Dollar is a promise to pay one USD dollar worth of STEEM when it's redeemed.* ### Creation of SBD The unique way to create more SBD is through the content creation. ### Destruction of SBD There are 2 ways to destroy SBD - burn it - convert it #### Burning SBD Burning is sending SBD to @null. You can put an @author/permlink in memo to promote a post. #### Converting SBD Conversion is a process during 3.5 days that destroys the SBD and creates new STEEM worth $1 USD.  > The rate of conversion is calculated using the price in the market. 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. In this order its price tries to be stable and pegged to 1 USD. > ***A Steem Dollar is a promise to pay one dollars worth of Steem when it's redeemed.*** > If the price of SBD is less than 1 USD, the people can redeem it for Steem worth in 1 USD. In this order, its price will rise. [Source: steem.center](https://www.steem.center/index.php?title=Steem_Dollar_(SBD)) ### The price of SBD The price is published by the witnesses. The price redeemed by conversion is normally different from SBD price on the market due to speculation. In August 2017 it lowered to $0.8 USD, in December 2017 it raised to $12 USD. Now it is very low at $0.69 USD. ## The experiment I tried the conversion to make the price rise. Additionally, I should make a profit if the price of STEEM or SBD do not change significantly during these 3.5 days. I sold 0.123 STEEM for 0.024 SBD on the internal market and converted it.  3.5 days later, I received only 0.117 STEEM, **loosing 4.8%**.  ### I was paid $0.68 USD worth of STEEM instead of $1 USD The prices on Coinmarketcap the 17th October at 01:29: 1 SBD $0.687120 1 STEEM $0.141205 0.117 STEEM at $0.141205 is worth $0.016521. I received **$0.016521 for 0.024 SBD**. ## False promise *A Steem Dollar is a promise to pay one USD dollar worth of STEEM when it's redeemed.* The promise to pay one USD worth of Steem when it's redeemed is false. **What is the point here? Why wasn't I be paid at the rate of $1 USD per SBD?** # This way SBD will never be worth $1 USD
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