Hard fork 25 happened practically without a serious glitch, as far as I know. I wouldn't call the curation reset thing a serious glitch. Although I'm sure some will jump to profit from it, while others will try to make it hard for them. But regardless of what happens in a short time frame, it will go away on its own in a few days, so it needs no fixing.
One of the new features introduced by HF25 is to be able to convert Hive to HBD. Previously, only the reverse action was possible, to convert HBD to Hive. But with the new addition, conversion becomes a two-way street.
Now, for those new or not really interested in the inner-workings of the Hive blockchain, conversion is not the same as exchanging or swapping.
Conversion is a process that takes time. 3.5 days to be exact. It also doesn't take the current price of HBD, but an average (median) price. For the Hive -> HBD conversion, the formula is actually
min(3 day price average, worst case price in last hour) + a 5% fee
The 5% fee on this operation is to encourage the use of normal HBD market trading. Normal market trading is in fact needed by this mechanism, in order to have the price discovery it requires. So there needs to be an inherent bias towards use of the internal exchange built into Hive (or Hive markets on external exchanges) versus using the conversion operation.
So, let's make it a simple decision process, if you'd like to choose between the two options: trading or converting.
1. Do you want to keep it simple? Trade Hive for HBD, if/when you like the price and there is enough liquidity to fill in your order. You can use the internal market or one of the exchanges where HBD is listed (Hive should also be listed).
2. Do you need to exchange a small amount of Hive for HBD immediately? Trade it! Conversion takes time and you don't know the price when you initiate the conversion.
3. Do you want to turn a large amount of Hive into HBD without wanting to worry about existing liquidity or creating volatility in the market? Converting Hive to HBD is a solution, if you don't mind waiting for a few days until it's completed, and the 5% fee that is applied on top of the determined average price.
4. Is HBD valued significantly above 1.05$ (preferably still on a rising trend)? That may be an opportunity to arbitrage, and convert Hive to HBD, then sell HBD on the market.
As the final words, a piece of advice. It is best to only use conversion (in both directions), if you understand it. It's not very complicated, but the fact it takes time to complete and that the price is determined at the end of the interval as a median or average, makes it an operation less likely to usually need than the regular trading.
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Great explanation of the options that are out there and when to use them.
Hopefully more will discuss this.
It is also good to mention, though outside the scope of this article, that HBD saving now earns 7% interest (and perhaps moving a bit higher). This is not offered on HBD held outside of savings.
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Thanks! You are right, the interest for keeping HBD in savings should provide an incentive for people to have some HBD and move it to savings. That is in addition to the stable-ish nature of it, which in troubled times can offer more protection against volatility.
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There's a lot going on under the hood. I'm just listening to 24-ish Episode of CryptoManiacs Podcast. !invest_vote !ENGAGE 15
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Well that 5% fee and 3.5 days conversion time may make it hard to arbitrage. But if HBD is pumped to like $2 then yes it might be a good chance to convert things out on the open market.
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Yeah, could be. Especially since there is also the HBD stabilizer which always plays to bring the HBD back to peg, so you can't count on a serious uptrend for HBD going forward.
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is this 5% fee also applied for the other direction, HBD to HIVE?
Nope, only Hive to HBD.
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thanks!
This conversation thing seems pointless to me when there is an internal market. I use that to exchange hbd to hive or vice versa.
Conversion has its points where its useful. But for regular trades where you need a little bit of Hive exchanged for HBD or the vice versa, the internal market is just fine. I use it too.
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Great! That's a question I had for a long time. Answer found through reblog by @taskmaster4450le @tipu curate !invest_vote !ENGAGE 5
Upvoted 👌 (Mana: 11/22) Liquid rewards.
I'm glad you found the answer to your question. And because Task helped intermediate it. :)
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Thanks for sharing this process is actually helpful, though i still find it a bit difficult to understand the whole change.
The actual change is this: after HF25 you can also convert Hive to HBD. Before HF25 you could only convert HBD to Hive.
The rest is about when you actually need it and when it's good to use instead of trading, depending on your situation.
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Congratulations @gadrian!
You raised your level and are now a Minnow!
Check out the last post from @hivebuzz:
You are welcome!
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