RE: The benefits of inaction: a defense of a high SBD.
a stable currency should be a long term goal but when the amount of coins is limited is that even realistic? Since steemit and steem are in the early stages, how do you peg that when we have millions of users and investors AND it's limited in amount? Forgive me if my economics are lackinghere..
I think the long term goal of two currencies should be to keep one stable so an economy can grow within the platform.
BUT that isn't much of a priority right now as that inner economy hasn't yet developed much and the current situation is GREAT for minnows like me, and for the platform as it's creating a healthy middle class.
So I vote "do nothing" for now and set up a kind of "gradual stabilization plan" if this is possible. Is it possible to "print more steem" or is that something we can't or really don't want to do?
Thanks @timcliff and @aggroed for trying to represent so many users concerns.
That would require a hardfork. No sane guy is going to do that to just peg SBD. Of course insane ideas like mine could promote something like it when I called for a hardfork when zeartul scammed people. Lol I was just making a point but we are not going to do anything likethat. Are we @timcliff ;)
So, we can't print more steem out of thin air. Daily about 20k SBD is printed. That's a very low amount to peg it now. It has gone so high that it will take at least a week to go back to its original price.
In fact, SBD might stay high for a much longer time if the pump kings keep on increasing the demand.
I think our views are pretty much in alignment. The proposal to allow users to create new SBD tokens by running the 'conversion' process in reverse is basically the way to address the supply-side problem.
I will start by pointing out that I am new here. But the conversion being only one direction has really confused me. It is not explained anywhere and with the rise of SBD in past week well it just muddied up the waters even further than they were for NEW people like me.
In the article, the author states that he does not want the conversion you are propossing because he feels the SBD gains should go to authors and not STEEM holders. I think this is quite a flawed argument because it is possible for someone to convert steem to btc then btc to SBD. So by making the transfers seamless by implementing bi-directional trading through steemit this would allow for the gains seen in SBD be be more evenly distributed across the two currencies.
The way I see it, Steem should somehow be attached to the SBD price. Not sure how we would implement this kind of mechanism but when Steem rises 10% so too should SBD (Vice Versa).
This environment is still new to me, so I could be completely wrong and not understanding the economics properly.
The point about it benefiting new users is that for most people, earning SBD through author rewards is easier than buying STEEM (or SBD) for real money. As long as the price of SBD is higher, users who get SBD rewards will be able to afford more STEEM for the same amount of SBD. Example - right now, SBD is trading for about $12. If you wanted STEEM, you can get $12 worth of STEEM for every 1 SBD that you earn.
No, your economics isn't lacking.I'm a PhD economist, and in light of Venezuela's announcement, I've been trying to figure out exactly how you could peg a crypto.
The only way that I can see is to would be to disallow trading on external markets. In other words, Steem is traded on exchanges, while SBD can be sold only on steemit for exactly $1. (And the conversion between steem and SBD also only occurs only on steemit).
You can check my wallet it you like, but you might discover that there are outlets for the SBD (and STEEM) tokens elsewhere. Try Poloniex if you dare, but I happen to have just tried out Bittrex. It's a bit hard to get setup, but I am already getting fiat US Dollars into my bank account from a few SBD coins at around $11 USD per SBD. Learn how the exchanges work and you can make real money and profits this way.
Exactly. And as long as it is true that you can convert SBD in an actual market, there is no way to control SBD prices to make sure it adheres to a peg. (And I 100% agree with your Poloniex evaluation, it's down there with Kraken. I don't understand why they have so much market share given all their glitches. But that's a topic for another day).
Woot. You'll have to excuse me while I rub someone's smug little face in this comment.
thanks for this :)
Wow, I never expected an economist to think in line with me on economics. Today was a good day. X-D
SBD can be traded for BTC on Polo 🤔 ....?
If you read the first sentence of the paragraph and last sentence of the paragraph as well:
The fact that SBD is trading on other exchanges, like Poloniex, is why its price cannot be fixed at $1.
It's like you are also making a point here. I would like to hear more
In January I'm hoping to start doing bi-weekly posts explaining the academic literature that's been published around cryptocurrencies and cryptoassets. Since I'm interested in the international market aspects, I suspect that a discussion of pegs will make its way into one of my posts sooner rather than later.