Vlog 198: Enforce the SBD peg or not?
There is a discussion going on at the moment whether the SBD (Steem blockchain dollar) should always be worth $1 worth of STEEM or not. here
Currently, with a STEEM price of $4, it's way more. Around 1.5 STEEM (or $6 USD).
If the peg would be enforced an SBD would be worth 0.25 STEEM. (or $1 USD).
The reason the price has gone up so much is that there is no upper limit to what an SBD can be worth. There is only an under limit.
To enforce the peg a reverse conversion is suggested.
Currently, you can convert SBD to STEEM (takes 3.5 days) but not the other way around!
4000 SBD will turn into 1000 STEEM (at current prices) for example. And clearly, this is a very bad deal!
With a reverse conversion, the peg can be enforced.
With a STEEM price of $4, you can then turn 1000 STEEM into 4000 SBD.
Basically, you can turn $4000 worth of STEEM into $24000 worth of SBD.
This will surely bring down the price of SBD until it's 1 dollar worth of STEEM.
But to do it now will be very disruptive in my opinion.
It's great for people that know, like you and me, but for the people on exchanges, it will be devastating. Basically, they would feel fucked by the STEEM blockchain when the price tanks.
Not great.
Don't get me wrong, in the long run, I am in favor of a stable SBD.
But currently, the high SBD is helping grow this platform with more content creation but more important, development.
I notice this myself now that my witness @blockbrothers can afford to pay an external Android dev with SBD (converted to euro) and also pay for 5 servers. Our Steemify server being one them.
To enforce this peg now would be a mistake. I would wait until STEEM price goes up and more SBD's are created automatically bringing down the price of SBD closer to the peg.
That would be the moment to implement this change.
Nondisruptive.
I talk about it more in my vlog
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I agree with all you said. Steemit knows an massive growth because of this, it would be very bad to take this away right now! all vote for the right witnesses!
How about this: You stay the fuck away from SBD and you create your own USD-pegged crypto currency? =)
Never change a running system
A high SBD price is totally healthy in my opinion.
Enforcing it back to 1 SBD would make a lot of people pretty angry. Me included.
Why should it be enforced? Just for the reason that it was supposed to be pegged to 1$?
Well. As you said @exyle - a high SBD price gives you a lot of oportunities (especially looking at blockbrothers) and I feel the same. So why should there be a limit to giving active steem-user more possibilites?
So I'm totally against forcing the peg. At least right now. We can see again in half a year or year, but until then ... let's have some fun.
Edit:
On the other hand - a 1$ peg gives many usecases where a stable currency is needed. Difficult ...
Yes. "I wrote in my diary 5 years ago that my goal was to make $1 Million Dollars. But now I have made $100 Million dollars. I wasn't supposed to make so much money... Let's throw the other $99 Million in the river - It solves the problem."
nice analogy, where is all that value going to go if it gets pegged. just seems like a burning of resources.
It's going to be destroyed, which was the point of my comment.
Its a mischaracterization of the problem though if SBD was pegged at $1 the value (or at least a lot of it) would shift over to the steem token so it's not like throwing away money, more like shifting to a new bank account
I bought a goose because I wanted eggs for breakfast. It laid a golden egg. I am returning the goose and egg to the farmer as it did not do what it was supposed to.
hello... i upvoted your blog and kindly upvote my blog as well...
Everyday this steem seems to be more and more run by some anarcho socialists! This is supposed to be decentraliced platform to avoid control, but yet they just try to act like some socialist-goverment deciding how much this must be worth. Stop with the fucking number crunching! why the hell someone must always decide what is the excact value of this or that. But I guess after all this place was made from just hate to goverment, other vice devs would have realized how this steem power thing eventually just turns this into another "elite" (whalesters = banksters) run economy. That day may not be yet, but it will come.
Thank you for saying this! It's exactly like you say: Fucking socialists wanting to control shit. Just lay off and let the free market run its course. Destroy the value of SBD? Why don't they throw their money in the river while they're at it? Fucking insanity...
Perhaps we can get the best of both worlds by waiting until SBD naturally returns to a valuation around $1 (if that ever happens) and then making an adjustment like this, so it has (in theory) no immediate impact.
On the other hand maybe Steem doesn't need an official internal pegged currency - an SMT, or even non steem token, might be a better way to cover that use case.
Take into account that if dollars goes to hyper-inflation, then it could be pain in the ass trying to get all your sbd out before it is worthless.
Hell no... Are you kidding me or are you out of your mind? What you are saying is you want to make everyone on Steemit poorer. No! SBD is, as I've said before, being traded as a regular token as we speak, i.e. free market forces are deciding its price based on voluntary interaction. You wanna peg BTC? Maybe we should peg Litecoin? Or maybe find a peg for NEO?
Because of the FREE MARKET'S VOLUNTARY choice to trade SBD in an OPEN, FREE MARKET environment, EVERYONE (you, me and every small Steemit user) is not much wealthier, i.e. the incentives are HUGE to come here right now and make projects, write articles, curate and comment. You're saying you want to take that away. Not only that, but you want to make it SIX TIMES LESS profitable to join Steemit.
Just stop it... I get that you're really comfortable in your own little bubble somewhere in Europe, but just stop this crap and let the free market trade whatever they want however they see fit.
Did you even read the post (or watch the vlog) or are you just blurting out some random opinion?
I did. It seems he's in favor of it... Just not now. Let's make everyone poorer... later?
Or maybe you know something I don't? Can you explain?
Well, he is not in favour of changing it, so I'm confused about your comments here. He might have to adjust that opinion in the future, but who knows what will happen tomorrow?
Anyway, maybe you should read the Steem whitepaper, it explains why the SBD even exists and the mechanics behind it.
Oh, I see! I must have misunderstood. Well, I mean, antibiotics did not come into existence to cure disease, right? So what something was "meant to" be for is not an argument for destroying an entire market of investors, traders and content creators. Only a crazy person would be in favor of destroying 600% of something's value.
I am in favor of this high price cause the system come up with it and it pushes every authors to write and contribute to steem value.
There were another post yesterday on a similar reply.
If steem valuation is within $10B, it will make sense to make sure SBD is truly pegged to the dollar.
Now let the steem grows accordingly.
Now it is a good time to use our voting system to keep steem flourish and stay a contender in the months to come.
Keep on steemin’
There are two cases. Keep the thing the way it was designed or change it as it not hard and fast rule that whatever you have designed in the past is correct or not changeable.
If SBD was designed to be always worth of $1 and steem to fluctuate then they should be kept that way. Reason is you have one currency which can be used by others/investors to manipulate while SBD will be kept the standard unit for payment dealing. This has long term effects.In the long run we will benefit from it when all the stores offline and online has started using SBD for the payment.
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When it comes about the author and post rewards scanerio, think it as when SBD was $1 worth. Then we all survived and we were happy with that. Even that was the difficult time because you had very small community and not a very big market cap. So you might be earning less money now if this happens but it will give rise to the usage of steem blockchain resulting in the marketing of steemit and attracting new users. So then you would be able to earn more by having more followers and taking your content to bigger audience. So if you want more reward then work on your quality and reach.
I agree with you. Dont destroy a working system. The increasing price of SBD is working to grow the platform with both development and content creation. That is only a good thing.
Correct. It only works as a way into Steemit for new users. There is 7 times more value to be earned here. Removing X7 of the economic incentives? NO! Insanity! Leave it alone!
How is this possible? Previously it was instant.
The convert option has been removed from the wallet. I know when Bianca did it by accident a couple of months ago it took days to convert and she got way less steem (SBD --> $1 worth of STEEM) than when she would have used the internal markets.
I am talking about the internal market.
I think that makes sense to me. I'd agree it would be harsh on those investing in sbd away from steemit too. There must [as you say] be more organic ways for this to happen and it may just be a temporary problem that will iron out as steem gains value. It flipped last week sometime [steem overtook sbd by cents], so we can see it's not particularly stable anyhow. Wait and watch would be my idea of a good action for now.
Interesting post. I believe this is a good think that SBD is so high. It is great for people who are producing the content. Dan Larimer also said that it is the market viewing SBD as the independent currency. No need to enforce anything, let the market decide the price.
Yup. Dan said exactly what I have repeated before: It's traded as any alt-coin. Why shouldn't we let it be traded as such? Maybe we should stive to make everyone 6 times POORER?
Yes, I mention that in my vlog. Current SBD price is awesome for content creators and developers indeed.
Smart Man !