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RE: Why the way the peg is currently working is bad for STEEM.
There is no evidence because it hasn't happenned yet.
My theory is that the SBD will crash, possibly below $1 and that will hurt STEEM in the short term. Then the experienced Steemians will buy up all the excess SBD and convert it to STEEM which will cull the Circulating Supply. Then the Witnesses will add the reverse conversion to strengthen the peg and STEEM will be unburdened, we can pick up Starbucks or Amazon or some other merchants and go mainstream - to the moon and beyond!
Just my opinion of course ;)
I'm quite liking the price right now but you are right mate. I'll be stocking up if it goes under $1 - there is always a silver lining. In fact I'm having trouble deciding - stay high or bottom out (temporarily of course).. lol
Thanks. Although I say that STEEM might hurt in the short term, that is only because of damaged sentiment and reputation. I don't think STEEM needs to come back to $1.
So you agree that the way it works now it detrimental to the price of STEEM, and that there needs to be a changed to a two-way conversion? But in order for that change to occur, we need to have a SBD crash, which will no doubt bring STEEM down with it (to what degree is anyone's guess). Timing is going to have to be very good to avoid major losses, disillusionment, and a mass exit.
Hmmm....I think the way it works now is detrimental to the poor ignorant bastards who are buying SBD at this price.
I don't want to crash the SBD or the STEEM market. There are a few different ways to skin the cat. One is to peg it at a higher rate, say at $5. Another is to do a coin split so you could get 5 SBDs for every 1 SBD. You could even do a one off forced redemption of SBD at market rate as part of the next hard fork. Any of these would soften the blow for SBD holders but cause other problems no doubt.
I do believe SBD is going to crash of it's own accord. I do believe the reverse conversion will prevent the peg breaking again. I do believe a stable SBD is important for the long term future of attracting merchants to the platform and going mainstream and if we get STEEM at $24 and SBD at $1 the rewards will be the same as they are with STEEM at $6 and SBD at $7.
I don't want to see a crash either, so we'll just have to sit and wait for SBD to bottom out, and then make the necessary changes. The problem there is that a gentle fall in SBD will most likely also see STEEM returning all the way back down to November levels, unless everyone starts buying up STEEM with all of their SBD sooner to force the issue. I'd rather have 1000 Steem at $1 than 1000 SBD at $1 if I know what is coming...