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     8 years ago (edited)

    SBD is also dictated by the free market.Did witnesses chose to pump SBD recently? Nope, it's the free market that did it.I don't see the point of the price feed

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       8 years ago 

      The HF 18 conditions of reduced rewards are not a natural market condition.

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         8 years ago 

        The HF 18 conditions of reduced rewards

        What do you mean?

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           8 years ago 

          Because of HF 18, the payouts are all artificially low right now because the 30 day rewards pool is being 'filled'.

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             8 years ago (edited)

            I don't see how this is relevant to witnesses setting price feed...

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               8 years ago (edited)

              When witnesses artificially inflate the price of STEEM via their price feed, it causes the amount of SBD rewards that are available for post rewards to go up.

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                 8 years ago (edited)

                Because of this, witnesses often use a small 'price discount' to artificially lower the price of STEEM internal to the Steem blockchain

                Do you mean that the price of steem on the internal market is based on witnesses price feed? If yes, then the price of STEEM is not dictated by the free market.

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                   8 years ago 

                  No, the price on the internal market is based on whatever market participants are willing to buy/sell at.

                  The blockchain has it's own internal price, which is different than the internal market price. The blockchain price is used to determine the amount of STEEM that SBD conversions produce, as well as how much SBD to pay out for author rewards. This price is set by the witness price feeds.

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                   8 years ago (edited)

                  The blockchain price is used to determine the amount of STEEM that SBD conversions produce

                  The conversions between STEEM and SBD happen on the internal market and are based on the price of STEEM which would mean that the price of STEEM on internal market is set by witnesses. Are there other internal conversions that I'm not aware of?

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                     8 years ago 

                    I think you are confused. There are two completely separate prices:

                    Price 1: The internal market price, set by the buying and selling of STEEM/SBD.
                    Price 2: The internal blockchain price, set by the witnesses price feeds.

                    There is also a difference between "converting" SBD to STEEM (done through the wallet, and takes 3.5 days), and "trading/exchanging" SBD for STEEM (done through the internal market, or through an external exchange).

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                     8 years ago (edited)

                    Thanks for clearing this up for me. Just to make sure I understood properly, the STEEM price set by witnesses has no influence on STEEM market price, it is just an internal price to do conversions correct?