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RE: Steem v0.19.5 Witness Update
Hello @pfunk
...I cut short a date to get home and update my nodes. I was ready with my primary witness node and was the third block producer to make a block seconds after...
I see someone who really meant well for steem ecosystem. To cut chortle your date to take care of our steem is one sacrifice worth commendation! This goes to tell the voting public to be careful on their choice of witnesses. They must make sure only Steemians who has steem at heart are voted. Thanks for the sacrifice.
I would like you to shed more light on the implication of pegging sbd to $1,as I don't seem to get the real point.
Regards
@eurogee of @euronation and @steemstem communities
Thanks for your comment @eurogee
You're right in that I didn't go into much detail to explain why a peg of 1 US dollar value for 1 Steem Dollar would be a good idea. There are multiple advantages a stable-value cryptocurrency token has for commerce over a floating-value token such as STEEM or BTC. And using Steem to host a stable-value cryptocurrency offers even more.
A stable value token brings trust in pricing to both buyer and seller. I'm not sure how it is where you live, but using the US dollar, we have a general trust that what costs $2 today will cost $2 tomorrow. Prices do change over time, and some commodities change prices quicker. But a dollar still has the same general value day to day. The stability of the US dollar contributes to the strength of the US economy.
I imagine Venezuelans would be very happy to be using SBD in their day to day transactions and savings instead of the bolivar right now. While that's an extreme example, I believe such a de facto stable-value token would be very useful in other economies that aren't in a hyperinflationary tailspin, but still experience negative economic effects of too much inflation or even deflation.
A stable token reduces the speculative anxiety of economic participants. Recently there was a day when STEEM's dollar equivalent value went up over 25% on the markets. What might have cost 5 STEEM the day before would have cost 4 or less STEEM after the market rose. And in a dynamic market, someone might choose not to spend STEEM because they believe it may go higher. Or someone might choose not to accept STEEM because they think it will go lower. This is speculation, and the fear or anxiety of the unknown future puts friction in economic behavior. This is not good for an economy.
Another benefit specific to pegging to the US dollar is that because of American economic and cultural dominance, the general value of a dollar is known to more people outside of the country than any other stable government fiat money.
Putting a stable-value token on Steem brings even more benefit. The post I linked, (Steemit's Evil Plan for Cryptocurrency World Domination), explains some of it. The basic ideas are:
Steem's linking and blogging ability is an onboarding platform for every day internet users (non-nerds, these days). These are people who might not otherwise elect to use a cryptocurrency network because they don't understand it, they don't like the idea of a speculative token with volatile value, the software is clunky, or they don't want to invest their own money into buying some. People can make posts and comments on Steem and earn SBD as well as stake in the network, all through their web browser.
Steem Dollars are immediately liquid and as we know, Steem users can cash it out for bitcoin and then to their local currencies. But looking at the broader picture, a stable-value token can also be used to purchase what people want or need directly. With people earning SBD, it's a much more direct route to simply pay for things with SBD. People using Steem can also see the opportunity to sell things for SBD.
Furthermore, Steem is one of the fastest networks out there. Paying with SBD can be as fast if not faster than paying with a credit card. With a three second block interval, transactions take an average time of 1.5 seconds to be included into the next block.
So with a stable-value token, without the speculative anxiety I mentioned earlier, running on one of the fastest and most easy to use networks ever made, you can see there is fertile ground to build a market around the Steem Dollar. But if nothing is done to actually remove the possibility of positive value speculation, it is a speculative token and many of the advantages of a stable-value token are lost. We have seen this play out as the market value of SBD climbed above $1 for too long.
Why does this matter even if you're only here for post rewards? I'll let Wikipedia do the explaining for network effect. If a real economy builds around Steem, the demand for the STEEM token will most certainly increase, having a positive effect on its market price. The way Steem is built, the higher STEEM's market price is, the more post rewards are paid out. This means more SBD for you to spend. And wouldn't it be amazing if it could be spent anywhere?
This is by far the best explanation I have ever read. I have been trying to explain why the SBD needs to be pegged at $1 to so many people but the level of detail you go into with it is awesome. I agree, if the SBD is pegged at 1 USD, it will open up so many different opportunities for the Steem block chain all over the world and for people in countries that really need it.
Wow!! I have been opposing this idea for long but with this amazingly detailed explanation, I am capitulated! This is very amazing. I can imagine chain positive effect this would have on steem ecosystem when the crowd start seeing our sbd as the internet equivalent of US dollar. I guess the adoption would skyrocket, indirectly pushing our steem to the moon! What are we still waiting for!? They should just peg this! Damn!
Thanks for taking your time to explain this to me. Gonna have to pass this massage around.
Regards.
@eurogee of @euronation and @steemstem communities
Very well said. I hope @ned and team can be convinced of the value of SBD.