STEEM Politics : Witness Policy for STEEM DOLLAR Supply Increase
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I hate politics, but when the alternative is tyranny and/or apathy I see it as a necessary side-effect of a properly functioning democratic process. In my family I have always encouraged participation in the democratic process. Even though I live in a safe Labor electorate and my vote is usually irrelevant, it’s the principle of it. We are very lucky in Australia to even have the opportunity to vote so I make a point of cherishing it and I take time to be thankful every time I stop to chow down on a Democracy Sausage (this is an Aussie tradition of having BBQs at voting booths).
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On STEEM it is no different. I may be only a small player, but we have elected representatives here called “Witnesses” that we can vote for. They decide on many platform policies that affect us all, so it’s important to understand how and why these policies get decided. There is a democratic process here on STEEM and it’s important to get involved and vote if you care about the future of this blockchain.
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With politics, to my eye there is good politics which focuses on positive, constructive efforts for change….and then there is bad politics which is often negative and divisive. This post is an attempt at some good politics. I want to highlight a network policy along with a handful of witnesses in the Top 60 who are doing something about an issue I care about.
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Yesterday I wrote about how Speculation killed the STEEM DOLLAR Utility and while it may be a controversial subject and I copped a bit of flak for it, I stand by it. Whether you believe the STEEM DOLLAR should return to the $1 USD peg or whether you believe the high STEEM DOLLAR is good for the platform because it rewards Authors more, the Witness policy I am promoting here might appeal to both camps.
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I am talking about the BIAS setting. This is a setting that Witnesses collectively decide on when they publish their price feeds. My understanding is that a positive BIAS setting results in an increased supply of STEEM DOLLARs and a greater share of post rewards being paid in those STEEM DOLLARs. So a positive BIAS actually rewards authors MORE with the currently high price of the STEEM DOLLAR. Increased supply of STEEM DOLLARS also provides some slight overhead resistance for the STEEM DOLLAR price so it can also help to stabilise it against the current speculative wave.
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Now before the Anarcho Capitalists and Libertarians come at me with gnashing teeth and start downvoting me, this is not about Socialism or intervention in the free-market. This is about identifying an increase in demand and then increasing supply to meet that demand. I will use a basic analogy of a Shoe Factory. For years it’s been making ordinary shoes and selling them to the public. All of a sudden these ordinary old shoes have become the latest fashion fad and the public is going nuts for them. So the Shoe Factory cranks up production to meet the heightened demand and the extra profits go back to the Shoe Factory and the workers at the factory get a nice bonus too. This is just basic supply and demand economics at play here.
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So once I had figured out what this BIAS setting was about, I had a look at the Witness rankings HERE to see who was supporting a positive bias. Only 2 of the Top 20 and 8 of the Top 60 Witnesses support this, so I thought I would shout them out and give them kudos for being on top of the situation. It was no surprise that most of these people were already on my Witness list because I have been voting for Witnesses who are actively involved in (and contributing to) the STEEM community.
| Witness | Rank | Bias |
|---|---|---|
| @pharesim | 16 | 706% |
| @netuoso | 18 | 300% |
| @drakos | 30 | 400% |
| @abit | 31 | 6567% |
| @yabapmatt | 39 | 300% |
| @arcange | 54 | 1049% |
| @reggaemuffin | 56 | 706% |
| @liberosist | 57 | 706% |
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Only 3 of these people weren’t already on my Witness list, but they all are now. I’ve spoken to a couple of them about this policy just to make sure I was on the right page. This is what @reggaemuffin had to say about his BIAS setting :-
My bias is pretty high and tied to the SBD price. This means that (simplified) more SBD gets printed and the price can drop faster. But since I am not that high up in the list and many witnesses disagree with a bias (or just don't know what it does) it does not make a huge difference it the moment.
If there are any other Top 60 Witnesses reading this and willing to change to a positive BIAS then you’ll get my vote too. I should clarify that I have no ambitions of becoming a Witness nor am I anyone’s sock puppet. I am just agitating for what I believe is better Witness policy.
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I’d encourage anyone else who cares about the future of the platform to vote for these Witnesses also. Or, if you don’t feel like you can keep on top of policy decisions like this then please feel free to nominate me as your Proxy to make sure your vote still counts.
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http://www.funnyjunk.com
http://www.brokennews.com.au
http://www.micoregon.org
http://www.azquotes.com
http://art.fritsahlefeldt.com
https://sites.google.com/a/oroville.wednet.edu
http://www.brianlemay.com
https://www.dreamstime.com
https://uogreenhousefacility.uoregon.edu
https://steemit.com
This verbiage has different meaning to where you stand.
Politics tend to corroborate the significance of this so called issue.
few want changes, in the long run it benefits the ones who institute the change.
Keep on steemit.
Who else still didnt get the witnesses thing?✋
I apologise if it was not well explained. Which part don't you get? The bit about them being our elected representatives on the platform? Or the bit about how your vote works?
This is how you vote for them
Not terribly explanatory but it's all I have time for. Witnesses maintain steemit platform and every person who has an account on steemit can vote for 30 of them. The more steem power you hold the more weight your witness votes carry in affecting the rankings shown in the lower right image.
Sorry, I did not really understand because of my bad English, what are you calling for? Do you want so many SBDs to be printed to drop its price? But this is the debt of the system, and if Steem comes back $ 1 or less, we may have problems with fulfilling our obligations. This is very dangerous, and I would have voted against the witnesses who expose the inflated feeds and increase the debt of the system in excess of the official course.
According to coinmarketcap.com the current market cap of STEEM is approx $1,433 million while the current market cap for SBD is $42.8 million. That means the SBD debt is less than 3% of the STEEM market cap. This is tiny compared to most companies that operate in the world today at much higher debt ratios. Besides, if STEEM goes back to $1 it is likely that SBD will go back there too so the debt burden would scale accordingly. Unless the mad speculators decide to pump SBD and dump STEEM in which case they are incredibly stupid and probably deserve to end up as bag holders.
Do not compare companies that produce products and have a stable cash flow from it, with a Steemit that produces nothing, except of the constant issue of its own shares. The business of companies does not depend on the price of their shares, but the "business" of the Steemit depends linearly on the exchange price. So these are incomparable things.
I see you do not understand how the algorithm works. The debt of Steemit is always equal to 1 dollar for 1SBD, regardless of its price on the exchange.
The problem is not this, but that the SBD issue algorithm is a deal with investors and speculators. They buy it instead of Steemit, because it's a rare asset, it's not enough for all. To then pump the price, and make money on it. If, with an increase in the price of SBD on the exchange, its issue is increased, this is a violation of the deal. There is no point in accumulating SBD, if its emission can be increased simply at the will of some witness. And this means that SBD will not buy speculators, and the authors, after it falls below $ 1 instead of selling it on the exchange will launch its conversion into liquid steem, and then sell it (steem) on the exchange, putting constant pressure on the price, and and the size of the pool of awards!
So you better think twice before offering to support witnesses who violate the algorithm !!!
You are correct, the debt is only owed at a rate of $1 worth of STEEM. So it is in fact far less than 3% and more like 0.5% which is miniscule. I disagree that the Steemit produces nothing, it produces content and it's value is in it's knowledge base and it's network effect.
Really it seems like you've used the debt argument as a smokescreen and are spreading a bit of fear about it but your REAL argument is about preserving the "contract" with the speculators who've been pumping the SBD (and intending to dump for profit). Sorry, but I have no love for those people, nor sympathy should they get burnt in the process. If they weren't aware that the network could increase supply by a mechanism that is IN THE DESIGN of the crypto they were speculating on, then they haven't done their due diligence. There is no violation of any algoritm if it's part of the system design.
SBD is coming back down now as it was always going to do and I do wonder how many people have been taken in and burnt by this pump and dump.
Thank you @buggedout! Sometimes it's really hard to do what you feel is the right thing when that thing is not the popular choice. Most politicians just do whatever will placate the masses and that's why real change never happens.
When this whole SBD pump first started I posted a witness update about the price feed bias calling for other witnesses to increase it as well. I took a lot of flak for that post, but nevertheless I'm still glad I made it, and I really appreciate the recognition here!
Absolutely. Your article was good but unfortunately sometimes integrity and honesty can be a bit of a liability in the political arena.
The important thing for me is that people stand up for what they believe to be right, despite personal interest. We aren't always right and we don't always win, but that's what integrity means to me and the fact some of these witnesses like you have copped flak or even lost votes yet have stayed the course on this policy means a lot.
The thing is mate, if people on exchanges are willing to buy it at such high prices, I say let them. The free market will eventually balance everything out in the end, but have peace of mind knowing that it can't be less than a dollar. 🐳
If people are willing to buy at such high prices then why not increase supply and sell more of them? Responding to the demand with increased supply is actually a normal free-market response.
Isn't there a set amount issued out overtime?
There is a set amount of the reward pool allocated to post payouts in SBD. This can be increased via the BIAS setting.
Ahh, very well, and thank you!
I am pretty new so learning a lot! With the Steem Dollar so high does it affect the cost to power up, use vote bots, ect? Or is it all relative because those costs increase or decrease as well with the Steem Dollar? I know the cost to power up gets more expensive with Steem price rising.
Power Ups are unaffected. Vote bots do recalculate profitability as you usually pay SBD but you get SBD out the other end. Check this bot tracker for calculating bot profitability :-
https://s3.amazonaws.com/yabapmatt/bottracker/bottracker.html
The biggest loser with a high SBD is for those putting effort into curation. They get ZERO SBDs for their effective curation as it's all paid in STEEM POWER. This issue will probably be my topic for tomorrows post.
Ah, I did not know that. We only earn SP from upvotes in the comment? Or you mean we earn no SBDs from upvoting (curation rewards)?
You want people to receive curation rewards in part in SBD? Hmmm... Can I inquire what's the motivation behind this idea?
Are you in the camp that auto-votes and bots are a problem that needs to be tackled?
You can read my post tomorrow and I'll explain it :)
thank you for the clarification and the link!
I support a high bias. The purpose of SBD is low volatility. The bias and the APR are the only tools the witnesses have.
They can move the bias lever higher to bring down the price by increasing supply (which we need now). Alternatively, they can increase the APR to incentivize people to HODL. Hodling decreases the supply on the markets and increases the price.
I was tempted to write about the APR here but didn't want to blur the policy debate. I personally believe that the APR should probably be zero or maybe even negative, but a positive APR is inappropriate at this time.
I'd say a positive APR is irresponsible. Idk about a negative APR. It seems a little unfair. Or maybe it is irresponsible to sit on SBD when the price is so high.
Yes, it's a whole other argument to have. Feels a bit too much like central bank policy for me to be totally comfortable with it :)
Lol not even the fed does that. They can change the lending rate (no real parallel to Steem), print money to buy corporate bonds/call in the bonds (kind of like the bias), or increase the minimum reserve the bank must maintain (kind of like APR). Thankfully the witnesses have less power than that.
Negative central bank interest rates are actually quite common in other parts of the world....
Interesting. I will have to do more research on that!
Gday guys. New Steemian here from Cronulla. Loving the community that we are building.
On politics, we are stymied in the past until we abolish the Westminster system of government. Its like 2 divorced parents fighting and nothing gets accomoplished.
On Steem, it is unquestionably the way forward and i see it as a critical link in driving towards crypto mass adoption.
See you all around :)
I totally agree. This is potentially how direct democracy will work in the future. It's not such a big leap.
The more I learn about steemit the more I learn how much more I have to learn about it.
It is the same as with everything in life. Embrace it :)
very interesting, i didn't know about this. My self serving side says "screw this" but the good side says "yes this is a great idea"
Hopefully it gathers some traction.
It is a bit conflicting, I agree. When you can separate self-interest from the dilemma it can makes things a bit clearer as to what the right thing is.