With the high SBD prices, now is a great chance for users to stock up on discounted STEEM. For every 1 SBD, users are able to currently get $10-12 USD worth of STEEM!
Unfortunately, many users do not understand all of the intricacies of crypto-trading, and lots of users see the "Convert to Steem" option in their wallet, and think this is the way to get STEEM for their SBD. It is a way, but it is not the way. In fact, under the current market conditions - it is probably the worst way!
The "Convert to Steem" option in the user's wallet uses the blockchain conversion process to create new STEEM tokens from the SBD. The process takes 3.5 days, and after the 3.5 days are up - it destroys the SBD tokens and replaces with them with "approximately one USD worth of STEEM per SBD" (based on the median price from the witnesses).
"Approximately 1 USD worth of STEEM" is a LOT less than $10-12 USD worth of STEEM!
USERS SHOULD NOT BE CONVERTING SBD TO STEEM VIA THEIR WALLETS RIGHT NOW!
Everyone will get a lot more STEEM if they trade SBD for STEEM either via the internal market, via BlockTrades, or via an external exchange. Pretty much every other option is better than using the conversion at this point!
I submitted a pull request to the condenser GitHub repository to change the language on the SBD->STEEM conversion page.
Here is what it looks like (before/after):
The change has not been accepted by Steemit yet, but I am hopeful that they will approve the change. I will work with them to make any changes necessary to get it accepted. Hopefully we will see it live on the site soon!
The pull request can be viewed here:
https://github.com/steemit/condenser/pull/2137
Some final reminders for users on how to take best advantage of the current market conditions:
- Do not use the "Convert to Steem" option via your wallet. Use the internal market, BlockTrades, or an external exchange. I hope after reading this post, you understand why.
- Do not use 100% power up for the rewards option. Use 50/50 to get the maximum amount of SBD. If you want SP, you can sell the SBD for STEEM, then power it up. You will get 10x as much!
- Do not transfer any tokens to the Poloniex exchange. Their STEEM and SBD trading has been down for maintenance, so any tokens you send there will get stuck and be untradable.
- Be careful of any goods and services that accept payment in SBD. If you pay 10 SBD for a $10 shirt - you are paying 10x too much!
- If you are comfortable using different trading options (internal market, BlockTrades, external exchanges) - explore around to see where you can get the best price.
Paying SBD to vote bots is not a good idea either.
Yes! I hope they adopt this soon.. Steem is getting a lot of new attention and users, we don't want people to have a shitty experience with conversions off the bat! 👍🏽 Good work!
I am wondering if this can be configurable or read some status that knows status of poloniex and blocktrade and give more meaning message at point in time. I've never use poloniex after reading the various issues people had. For the few times I have used blocktrade, I have no complain
I've never heard of any issues with blocktrades either. Some sort of status check for exchanges like poloniex may be a good idea though. We'd need to find a community dev willing to take it on. Assuming we could get that, the next step would be to check with Steemit and see if they are OK with the idea.
One possibility I suggested yesterday was to have a script that monitors the state of the "known exchanges" steem accounts and alert someone who manages the front ends like steemit if there's no outgoing transfers on one of those account for an hour or so. Then there could just be admin switch they could flip to enable the warning for the exchange without any outgoing transfers. The script could then keep track of the fact that that exchange is probably not functional, and also alert the admins if the exchange does do an outgoing transfer, so that they could re-enable.
Yes, something along the line of what I'm thinking but you got more into the details already. cool.
@timcliff , you might want to add (in red):
Do not use this option when SBD are trading above 1.00 USD!
Good suggestion. I was trying not to provide any specific trading advise, as it can be bad in certain circumstances. More the general warning that they should understand the markets and know what they are doing should cover that (and the many other things they need to be considering as well).
Correct, but when this is add, they will at least do research into this topic!
Unfortunately it is not that simple. Without getting into the complexities of the SBD conversion process, there may be scenarios when you would want to convert SBD->STEEM even if the price is trading above $1. This is not the type of thing an 'average user' is going to want to think about though.
Interesting, where can I read about this scenario, be cause I havnt read about that before!?
It's not written down. You'd have to think through how the conversion process works, and think of ways to end up with more than you started. As it says in the new 'warning' - it is a feature primarly intended for advanced users who understand the dynamics of the price feed and markets.
Damn, I wish I would have read this before I converted my SBD on steemit. Damn. Thanks, resteemed.
Yes yes yes! Get the word out! Thank you for this post! Is there any advantage in using the convert STEEM feature? @ironshield
Yes. The short answer would be if the market was doing the opposite of what it is today. For more advanced users, there are a lot of variables to consider - but it is possible to make a profit under the right conditions.
Opposite like STEEM jumping up to $6 - $7 while SBD remains around $1.00 (like it's supposed to)? Or if SBD drops down significantly below $1.00? @ironshield
If SBD drops down significantly below $1.00, that would probably be a good time to buy and convert.
This is such a great pull request, @timcliff! I've read about several users who have pressed the wrong button and converted their SBD instead of selling it, and lost hundreds of dollars in the process. So this change would absolutely be great to have! I hope Steemit accepts it as soon as possible before anyone else makes the mistake.
I wish I read your post two days back. It might save me from converting steem
We tried to inform minnows here:
https://steemit.com/sbd/@minnowsupport/warning-do-not-use-convert-to-steem-option-for-your-sbd-s
@timcliff this is a great action to help newer people on steemit, and also steemians that are not paying attention to the market as often as other people.
Hope steemit approves this fast, so you are able to help more people faster.
Upvoted, and I am reesteeming this one to help reach a bit of more users.
Regards, @gold84
PS: How do I make you know when I post a new idea for the improvement of steemit? Perhaps, sometimes the idea helps you think on other ideas, that can finally take you to a great solution you have been thinking for sometime.
If you have a well thought out idea that seems to have support, send me a link in Steemit chat. Include some context, so I don’t think you are just spamming me with a link :)
@timcliff thanks for the follow up on this! I am not sure how to use the steemit chat or how to find you there.
By the way, what are your thoughts on adding a link for recent minnow signups or new visitors to learn about how the steem wallet and all the functionalities work, and also what is the steem wallet.
When you are not in crypto you see wallet and you know nothing about it, there is a possibility you actually not trust it either.
Here is the idea developed. Your thoughts are very welcomed, as always; https://steemit.com/utopian-io/@gold84/we-need-a-how-steem-wallet-works-link-for-the-steemit-wallet-page-make-it-easier-for-new-visitors-and-people-just-signup-to
Regards, @gold84
Are you able to put together a guide?
@timcliff sure! I am now preparing a huge guide of 11 Chapters and one of the chapters is about the wallet specifically. Once this is ready I will let you know!
Regards, @gold84
There is a link to Steemit chat in the main menu. Just create an account and message me. My username is timcliff :)
@timcliff so glad I came across this. A bit late..but I now know not to do that. So 50/50 is the way to go..?
Quick question have you heard of the new 7 wonders of the world? I just came back from one :)
Yes. 50/50 is the way to go. If you want SP, you can still use 50/50, then after you receive payment, trade the SBD for STEEM on the internal market, then power it up.
@timcliff Ok! Really loving my Steemit journey! Things are getting brighter every day 😁 Best wishes to you. - @splendorhub
Great job @timcliff I have seen many people this past week make this unfortunate mistake. It's really great to see you make the actual pull request to get this changed.. Thanks so much!!
Wonderful update news @timcliff. Thank you for giving us.
Right with ya. Been preaching it around the discords, and thankfully, it's encouraging to see that so are many others of us out here. Enough momentum is happening in the area of people who understand it, that the understanding itself can begin to go viral.
Or you know, hey. look. a squirrel.
This is the second post on this subject today.
I wish they would have been posted 4 days ago ,and that I had read them...
I just converted 15 sbd to 8.741 steem.
:-(
And yeah I was expecting at least 30 steem.
ohh well
Live and learn how to do it right..
And thanks for helping more people from making this mistake.
Namaste
Yeah I got hit by this. It really does not make it plain what you’re going to be getting at the other end. By the time I’d found out the “best” way of doing things, I couldn’t cancel.
Great informative blog post @timcliff. As I told your last post via comment I choose wrong way. I lose some profits coz I USED "Convert to Steem" option. But after your advice i don't use this function. Now I know what the beneficiary way.
I appreciated you giving via finally terrific 05 instructions giving to new comers of trade market. If we accept and will do will be successes of market.
You are a formidable person dear friend @timcliff, always attentive to what happens to alrrededor nustro to alvertirnos of some and rregualridades or convenience, excellent post, thank you very much for sharing this valuable information
I wish you a beautiful Sunday.
Thanks @jlufer! You too :)
Thank you sooooo much for this advice! As a relative newbie i am still learning about the ins and outs of these instruments. Upped and Resteemed!
Not that I ever did it that way...But, I had no idea that was how it was set up. Pull request should say,
please remove this tabHad the discussion with the dev team, and they want it there. They want users to be able to take advantage of the blockchain feature if/when it is in their advantage (example - if we ever had the reverse of what we have today). With it in place, I think educating users on it is going to be the best path forward.
I noticed they removed it. I am glad.
I see their point here. Let's say, if one day Sbd drops far below, maybe this converting function could make some correction here on the blockchain (I don't know that much about either economy or the mechanism out there). But if this function exists, there should also be one opposite one in case today's case happens.
Still, I totally agree with you. Adding some tutorials on each function out there would be the best idea.
No, the conversion is actually very important for some uses! If the value of the SBD falls below $1, we can always use this to get 1 USD worth of Steem per SBD token. This means that this is the entire thing that prevents the SBD from falling below $1, so it's extremely useful at times!
this should be done before....but its ok...it is much needed improvement ...evryone can't read those warning blogs...thanx for the information
I bought just under 25 Steem for about 4.4 SBD and that is a lot for me i will be purchasing more soon, though i feel that SBD will pullback but hopefully not.
Thanks friends for giving you so much detail & good work friend ............... @timcliff
To the very point, my friend! Your view and all the arguments that you listed in your article are completely justified by the passing events with the SBD and if we want to get the maximum benefit from what is happening, we must take your advice! Thank you @timcliff
wish i have those hands & keep upvoting such as this creative funny post!!
Thanks for sharing this..
This is some powerful Intel....Was thinking of sharing it... Thanks for this...you are amazing
Good post again,timcliff.Everytime I am waiting your post.Very good information.
very good information .Thanks to share us.Recently i am giving you a upvote.
Why on earth the convert to steem button even exist? To make people lose their money??? Why!! I haveconverted something like 40 SBD into steem through the convert to steem button exactly 3.5 days ago and now I can't go back. Why steemit didn't worn us? I am so ANGRY.
It works the way it is described in the FAQ... They did recently make a change to take it off the site.
Thanks @timcliff- just a real shame I didn’t know this 3.5 days ago. I just am really confused about how exactly steemit converted my sbd to steem with the conversion rate I wasn’t given- is there any way that I can find out? $0.58 cents is just such a preposterous and unfair trade and I feel cheated
They are covered here:
https://steemit.com/faq.html#How_do_Steem_Dollar_to_STEEM_conversions_work
Even before the SBD and Steem ramp up I never understood why there was a conversion in the wallet when they had the current market exchange. The 3.5 days wait is what deterred me from using it.
The reason behind it is explained in the whitepaper.
Hi Tim, do witnesses have the power to change a memo on a transfer? I sent steem to poloniex with my SBD memo before checking their wallet status. can it be changed before their wallet is working again.
Thanks
https://steemd.com/tx/20069a2146ab4286f76cc7078cec846bb3848e0a
The correct memo is: cb0c82a51078e73d
I'm thinking with their current state of affairs, they may never get around to answering my support ticket on this matter. LOL
Cheers
No. No power to do that. You will have to contact Poloniex support.
Just a shot in the dark, Thanks for the speedy reply. Guess I'll wait in line. LOL
Great advice Tim! Heard from a friend who just converted to Steem and lost a lot according to SBD’s current price. I support this request, add a warning to that.
Or why don’t simply remove that option. It doesn’t make much sense to me.
The option to remove it was discussed in another comment thread.
This is a great piece of information. I have been in Steemit for 3 months and got to know about this right now.
Thanks for the PR, I hope people will read carefully.
So if the convert tool is 1:1 does this mean SBD is ALWAYS more valuable than steem? It seems if steem is $2 and you can trade 1:1 then SBD is also $2 (or more), but at the same time the ideal conditions for using such a tool are likely to be increasingly rare. It should definitely have warnings to explain this kind of problem before too many new people go converting all their SBD at times like these.
I'm not sure if that is the right understanding. SBD is supposed to give you 'approximately one USD worth of STEEM'. How many STEEM tokens that is depends on the STEEM price.
ok I think I get it now, I missed a key point of info there, thanks for the clarification ^_^
Thanks for this important information.
I almost did this mistake lucky in the end i didn't do it!
thank you for sharing this information.upvoted and resteemed.
This is a great thing that you did. It is going to help a lot of people going in loss and educate them of Steemit.
interestingly written, I think many agree with me
Now is the time to post and comment and share, with the value of SBD fluctuating, its a good idea to powerup
You are awesome sir . Thank you
Thanks a lot for share this
Wouldn't the actual fix for this be to directly convert the STEEM/SBD without involving the USD value at all? I don't really understand why the USD value is used at all, given that the SBD value can fluctuate.
How would the blockchain know how much STEEM to produce per SBD converted?
So the question is, in essence, "how do we find out the conversion rate for STEEM/SBD?".
I'm going to assume that there's a problem with the solution I am going to suggest here because it's so obvious and that there must be a reason why you are asking that relates to something I am not considering. ;)
The conversion rate of Steem to SBD on the global market exists independently of the blockchain via exchanges, so isn't it acceptable to just get an average of the exchange rate for SBD to USD from exchanges in a similar way to how the price feed scripts currently get the STEEM/USD converstion rates? Or maybe just use the internal market's rate averaged over 3 days. I previously thought that's how it worked anyway.
Let's assume it is possible to get a SBD/USD price feed. How would the blockchain use it to determine how much STEEM to produce via conversions?
If you have a live conversion rate for STEEM/USD and also for SBD/USD (without assuming that 1 SBD = 1 USD) (or alternatively a BTC conversion rate rather than a USD conversion rate) - then you can calculate the appropriate amount of STEEM to create accurately and simply by:
Amount of Steem to Create = (Amount of SBD To Convert * SBD/USD Ratio) * STEEM/USD Ratio
So in other words, just work out how many USDs the SBDs are really worth (not assuming they are 1:1) and then work out the amount of STEEM needed to match the USD value. It would be possible to do this without involving USD at all since major exchanges also convert STEEM/SBD by BTC too.
As long as there's no assumption that 1 USD = 1 SBD then there's no problem. Or did i misinterpret the OP and there actually isn't an assumption made in the calculation that 1USD = 1SBD?
If this assumption goes away though, then what is the point in having SBD? If we are going down that route, then why not just get rid of SBD entirely, pay users 100% in STEEM (50% SP, 50% liquid) and skip the whole conversion process?
Well, yes - if SBD isn't actually fixed to USD then it has little function.. I think @ned was quoted as saying words to the effect that SBD isn't really so great for this reason. Personally, I would get rid of SBD - but as long as it exists, there's no need to have this conversion error in the system.
Thank you @timcliff for this new update. :)
Thank you @timcliff for taking the time to disseminate this information. Extremely helpful advice as always.
Thank you for the information.
What a good post and read a thousand congratulations for your delivery in creating good content successes and more than now the SBD has reached record figures of $ 16
great info dear @timcliff
No. Nobody profits. The tokens you converted get destroyed by the blockchain, and then the new STEEM is created out of thin air. If you were to use the BlockTrades interface to sell your SBD for STEEM, you would get a lot more.
NO, blocktrades has nothing to do with the Steemit wallet conversion you used. No one actually profits from it, as the SBD is burned that you converted.