Steem Dollars (SBD) are liquid stable-value cyprtocurrency tokens pegged to USD A currency peg is a method in which a national government fixes the exchange rate of its currency with a foreign currency. SBDs are part of the parent Steem blockchain. Steem is a social blockchain that builds community while also providing users with direct revenue sources. The users are rewarded with STEEM tokens for sharing content on Steemit. Steem Dollars can be exchanged into STEEM and transferred to other accounts for use in commerce or exchange.
According to its whitepaper, social media network shareholders gathered huge profits from user-generated content. The content creators don't make any income. Steem reverses the model, giving the highest value to those who contribute the most. Users become platform stakeholders, keeping control of their data, and earning rewards for each creation. However, these rewards are inconsistent if the token price is volatile. It is noteworthy that successful global economies have a high level of stability and individuals worldwide are unable to engage in commerce and savings if there is no stability. Steem Dollars were created to bring stability to the world of cryptocurrencies and to the individuals who utilize the Steem network.
Steem Dollars aims to shield traders from price volatility and manipulation. The Steem protocol safeguards the community from manipulation by enabling people to only convert from SBD to STEEM and not the other way around. The blockchain determines how and when SBD is created and who receives it, stabilizing the pace of SBD formation and eliminating most of the potential for misuse.
To earn SBD, users need to mine them. Contributing to the platform is considered as the Proof-of-Work for mining. On Steemit, users earn income by publishing blogs, commenting, and upvoting. The concept is that those who publish helpful blogs would receive more up-votes. Users will not vote up stuff that is not helpful. When bloggers gain upvotes, they are rewarded with SBD.
The first block of Steem blockchain was launched on March 24, 2016, following which the whitepaper was released in August of 2017.
