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Abstract

)</h1>Reputable stablecoin operators such as Tether Holdings and USD Coin (USDC) creator Circle publish auditors’ reports listing their cash assets.For example, Independent Auditors at BDO report Tether Holdings Limited had $55.810 billion in US Treasury Bills,$ 90.812 million in cash and bank deposits, $8.893 billion in overnight reserve purchase agreements,$ 8.134 billion in money market funds, $577.232 million in Term Reverse Purchase Agreements, and$ 62.927 million in non-US Treasury bills on 30 June 2023.<figure id="8511"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/1*C5ue7lJVmavNwX7jzfIMqw.png"><figcaption></figcaption></figure>Thus, Tether Holdings had $75.568 billion in US Dollar assets on 30 June 2023. Tether also had$ 114.496 million in corporate bonds, $3.27 billion in precious metals,$ 1.676 billion in Bitcoin (BTC), $2.365 billion in other investments, and$ 5.04 billion in secured loans.Consequently, Tether Holdings had $86.499 billion in total assets on 30 June 2023. Therefore, Tether can cover most of the Tether’s 2 October 2023 83.6 billion USDT Circulating Supply with cash assets. Furthermore, Tether can easily borrow funds to cover the full$ 86.499 billion Circulating Supply by using its cash assets at collateral.In contrast, there is evidence anything backs Steem Dollars. Hence, nobody will loan Steem money to cover Steem Dollar payments. Thus, I consider Steem Dollars worthless.<h1 id="8cc8">Steem is enormous. Its stablecoins are worthless</h1>Steem Dollars are supposedly a debt instrument. Yet there is nothing backing the debt. This is sad because the Steem blockchain could be an enormous market for stablecoins.They claim the Steem Blockchain processed over <a href="https://steem.com/">1.169 trillion transactions</a> in the 24 hours ending on 28 October 2023. In contrast, Steem estimates Ethereum (ETH) had processed 545,224 transactions in that period. They claim paid $59.596 million in rewards to social media users between June and October 2023.<figure id="1217"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/1*rwAI-lVNfY6D5KNJkdo5RQ.jpeg"><figcaption></figcaption></figure>Steem is a blockchain built to monetize social media. Theoretically, Steem pays users in the Steem (STEEM) cryptocurrency.<h1 id="7436">Steem (STEEM) is unstable</h1>Mr. Market gives Steem a little value. For example, CoinMarketCap gave Steem (STEEM) a 17.53₵ Coin Price a$ 78.024 million Market Cap, a $71.717 million Fully Diluted Market Cap, and a$ 2.14 million 24-Hour Market Volume on 28 October 2023. They base those numbers

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on a 445.178 million STEEM Circulating Supply and a 409.191 million STEEM Total Supply.This seems unstable to me. Particularly, since the Circulating Supply exceeds the Total Supply. I think Steem has more tokens out than it can cover.<figure id="46ad"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/1*AckDLIfN0Y37Umi9KqgQfA.jpeg"><figcaption></figcaption></figure>Conversely, I think Steem could make enormous amounts of money. If they could circulate actual stablecoins that pay in real money, such as US dollars. More importantly, I think Steem could achieve enormous value if they back the Steem Dollars with a verifiable asset such as Tether (USDT) or USD Coin (USDC) or pay in USDT or USDC.Until then I think, Steem offers little value because actual people want strong fiat currencies, not tokens. To explain, real people want something they can take to the grocery store and purchase food with. You cannot take Steem (STEEM) or Bitcoin (BTC) to the grocery store and buy food. You can cash Tether or USDC out for dollars you can use at the grocery store (or the gas station) or to pay your electric bill and rent with.<h1 id="1d4d">Why Steem Dollars are dangerous</h1>CoinMarketCap’s numbers show why Steem Dollars are dangerous. CoinMarketCap gave Steem Dollars a $2.26 Coin Price, a$ 28.177 million Market Cap, a $28.180 million Fully Diluted Market Capitalization, and a$ 1.395 million 24-Hour Market Volume on 28 October 2023.CoinMarketCap gives Steem Dollars a 12.472 million SBD Circulating Supply. Thus, the Capitalization exceeds the Supply, which sounds good. But there is no evidence there are any assets backing the Dollars. Plus, there is no evidence Steem has a single dollar to make payment with.Therefore, I advise speculators to stay far away from Steem Dollars until they prove there are US dollars backing them. I think Steem shows why smart speculators need to stick to established coins with proven assets such as Tether and USD Coin.In the final analysis, Steemit Dollars could be one of the scariest cryptocurrencies because they promise to pay in dollars that might not exist. Cynics will say it is only a matter of time before some regulator bans Steemit Dollars.https://assets.ctfassets.net/vyse88cgwfbl/63oJePOHqIvrcnXWMPZ1M0/4cfaf2e7cdf80c30b17fdc70faaf741f/ESO.03.01_Std_ISAE_3000R_Opinion_30-06-2023_BDO_Tether_CRR.pdf<a href="https://learn.angellist.com/articles/convertible-note">https://learn.angellist.com/articles/convertible-note</a>*https://steem.com/wp-content/uploads/2018/10/steem-whitepaper.pdf</article></body>

Are Steem Dollars (SBD) the Scariest Cryptocurrency?

Steem Dollars (SBD) are one of the scariest cryptocurrencies in the market because we know nothing about them. Yet Steem Dollars were CoinMarketCap’s ninth-most trending cryptocurrency, with a $2.28 Coin Price on 2 October 2023.

Frighteningly, the only descriptions of Steem Dollars I could find online were Steem’s whitepaper, a six-year-old answer to a Steemit question and a five-year-old Medium post. There is no description of Steem Dollars at Steem’s website, and few articles about them.

So what are Steem Dollars? They intend Steem Blockchain Dollars (SBD) to be stablecoins. A stablecoin is a cryptocurrency that contains a smart contract that makes payment in a fiat currency. For example, the Steem Dollar smart contract is supposed to pay in US dollars.

Steem Dollars are an unstable Stablecoin

The hope behind stablecoins is that they will be more stable because they pay in historically stable currencies such as the US Dollar. Unfortunately, Steem Dollars are not stable.

If the Steem Dollar was a true stablecoin was stable, SBD would be worth $1 like Tether (USDT). Yet, the Steem Dollar (SBD) had a $2.26 Coin Price on 2 October 2023. Hence, Steem Dollars are worth over twice the cost of a dollar. In contrast, CoinMarketCap gave Tether (USDT) a $1 Coin Price on 28 October 2023.

Thus, the Steem Dollar is unstable. I consider Steem Dollars unstable because there is no evidence they pay in dollars. To explain, they envision Steem Dollars as convertible notes. A convertible note is a short-term debt instrument that converts to equity (shares) at a future point. For example, when a company is sold, or issues stock.

Therefore, there are no dollars backing Steem Blockchain Dollars. Instead, they promise to have dollars for payment in the future. Hence, a Steem Dollar is an IOU. There is no evidence Steem has the dollars and no guarantee Steem will make payment.

Steem Dollars (SBD) vs. Tether (USDT)

Reputable stablecoin operators such as Tether Holdings and USD Coin (USDC) creator Circle publish auditors’ reports listing their cash assets.

For example, Independent Auditors at BDO report Tether Holdings Limited had $55.810 billion in US Treasury Bills, $90.812 million in cash and bank deposits, $8.893 billion in overnight reserve purchase agreements, $8.134 billion in money market funds, $577.232 million in Term Reverse Purchase Agreements, and $62.927 million in non-US Treasury bills on 30 June 2023.

Thus, Tether Holdings had $75.568 billion in US Dollar assets on 30 June 2023. Tether also had $114.496 million in corporate bonds, $3.27 billion in precious metals, $1.676 billion in Bitcoin (BTC), $2.365 billion in other investments, and $5.04 billion in secured loans.

Consequently, Tether Holdings had $86.499 billion in total assets on 30 June 2023. Therefore, Tether can cover most of the Tether’s 2 October 2023 83.6 billion USDT Circulating Supply with cash assets. Furthermore, Tether can easily borrow funds to cover the full $86.499 billion Circulating Supply by using its cash assets at collateral.

In contrast, there is evidence anything backs Steem Dollars. Hence, nobody will loan Steem money to cover Steem Dollar payments. Thus, I consider Steem Dollars worthless.

Steem is enormous. Its stablecoins are worthless

Steem Dollars are supposedly a debt instrument. Yet there is nothing backing the debt. This is sad because the Steem blockchain could be an enormous market for stablecoins.

They claim the Steem Blockchain processed over 1.169 trillion transactions in the 24 hours ending on 28 October 2023. In contrast, Steem estimates Ethereum (ETH) had processed 545,224 transactions in that period. They claim paid $59.596 million in rewards to social media users between June and October 2023.

Steem is a blockchain built to monetize social media. Theoretically, Steem pays users in the Steem (STEEM) cryptocurrency.

Steem (STEEM) is unstable

Mr. Market gives Steem a little value. For example, CoinMarketCap gave Steem (STEEM) a 17.53₵ Coin Price a $78.024 million Market Cap, a $71.717 million Fully Diluted Market Cap, and a $2.14 million 24-Hour Market Volume on 28 October 2023. They base those numbers on a 445.178 million STEEM Circulating Supply and a 409.191 million STEEM Total Supply.

This seems unstable to me. Particularly, since the Circulating Supply exceeds the Total Supply. I think Steem has more tokens out than it can cover.

Conversely, I think Steem could make enormous amounts of money. If they could circulate actual stablecoins that pay in real money, such as US dollars. More importantly, I think Steem could achieve enormous value if they back the Steem Dollars with a verifiable asset such as Tether (USDT) or USD Coin (USDC) or pay in USDT or USDC.

Until then I think, Steem offers little value because actual people want strong fiat currencies, not tokens. To explain, real people want something they can take to the grocery store and purchase food with. You cannot take Steem (STEEM) or Bitcoin (BTC) to the grocery store and buy food. You can cash Tether or USDC out for dollars you can use at the grocery store (or the gas station) or to pay your electric bill and rent with.

Why Steem Dollars are dangerous

CoinMarketCap’s numbers show why Steem Dollars are dangerous. CoinMarketCap gave Steem Dollars a $2.26 Coin Price, a $28.177 million Market Cap, a $28.180 million Fully Diluted Market Capitalization, and a $1.395 million 24-Hour Market Volume on 28 October 2023.

CoinMarketCap gives Steem Dollars a 12.472 million SBD Circulating Supply. Thus, the Capitalization exceeds the Supply, which sounds good. But there is no evidence there are any assets backing the Dollars. Plus, there is no evidence Steem has a single dollar to make payment with.

Therefore, I advise speculators to stay far away from Steem Dollars until they prove there are US dollars backing them. I think Steem shows why smart speculators need to stick to established coins with proven assets such as Tether and USD Coin.

In the final analysis, Steemit Dollars could be one of the scariest cryptocurrencies because they promise to pay in dollars that might not exist. Cynics will say it is only a matter of time before some regulator bans Steemit Dollars.

*https://assets.ctfassets.net/vyse88cgwfbl/63oJePOHqIvrcnXWMPZ1M0/4cfaf2e7cdf80c30b17fdc70faaf741f/ESO.03.01_Std_ISAE_3000R_Opinion_30-06-2023_BDO_Tether_CRR.pdf

*https://learn.angellist.com/articles/convertible-note

*https://steem.com/wp-content/uploads/2018/10/steem-whitepaper.pdf