RE: Steem dollars is designed to be a comfort zone for those who need USD. 10% annual interest is toilet paper money
I wasn't aware of the 10% interest on steem dollars, but it would definitely have consequences in terms of real-life economics if it builds up in terms of people having them parked to get interest.
If steem dollar = dollar, then that would make the steem platform something that would attract a lot of external investment to acquire steem dollars appreciating at 10% per year.
So say a fund comes along and buys 10mn steem dollars in order to make them 11mn steem dollars. That's -1mn dollars for the ecosystem in the end of the year. Is this sustainable? I mean banks get your deposits, give you 2% interest and then loan you with 5% - so they have a business model where they have income. Here there's no income except inflation. So perhaps that would create a lot of pressure in steem price as a lot of steem would be needed to support all the steem dollars interest.
old money like investments funds does things the old way.. cryptocurrency compared to them is like alien technology
Sure, but the scenario isn't that different compared to a bitcoin whale or a rich individual doing the same by buying steem dollars. In the end of the year you still have to pay him 1mn dollars if he buys 10mn dollars.
I don't believe in rich individuals and bitcoin whales, that's just another angle in the religious aspect of cryptocurrency. I know how much bitcoin I have, and that's the amount of bitcoin that matters to me.
If i understand it correctly there's still inflation if you keep STEEM DOLLARS, there is (almost?) no inflation if you hold your money in STEEM POWER. The developers have thought of almost anything you can ever think of already, don't understand them ;)
If you want to know everything you can always read the whitepaper. But for most people reading it will make their heads explode :)
There is no inflation in Steem Dollars. How can there be when you get interest on top of the "stable" Steem Dollar? Steem Power I read has 5% yearly inflation? But I'm not entirely sure I understand it right.
Right, my bad. Haven't slept much the past days since i joined SteemIt :)
I think they mentioned STEEM POWER has 10% less inflation than STEEM. There's also some 9 to 1 ratio, i'm really lost in all the details. Maybe we can figure it out if we read the whitepaper 10 times, but i'm too lazy right now haha.