RE: STEEM is 10 Ranks Lower than BitShares!? What the...
https://steemit.com/bitcoin/@edicted/unit-bias-fallacy-21-million-bitcoins-is-not-scarce
Steem actually has fewer tokens than Bitcoin. All that matters is the smallest unit of transfer. A Bitcoins contains 100 million Satoshi. If we redefine the value of a Steem coin (because it's totally arbitrary) to having 100 million pieces (instead of its current 1000) then there would only be 3000 Steem coins total.
However, none of this matters. It's all arbitrary. What really matters is inflation and how that new money is distributed. You'll notice in that post I wrote 3 months ago that there were only 277 million Steem in circulation. It's only been three months and we've already experienced 8% inflation! We're already up to 302 million coins. Ouch.
This is what we get for taking out credit with SBD coins. During the good times, half of our inflation gets kicked out to SBD and the value of Steem surges. This is especially true with the way coins are powered up and down.
Powering up coins makes the market more volatile because there is way less liquidity on exchanges.
During the bad times SBD gets converted back into Steem coins. During the bull run 25 SBD would get created on a post paying out $50. That same post today would of had a face value of $2, creating 1 SBD. Those 24 SBD that should have never existed are now being turned into Steem coins.
When Steem was $4 a coin, no big deal. You'd get 1 Steem for each 4 SBD you burned.
Today you get more than 2 Steem for every SBD burned. If we didn't have a haircut rule it would be 4, seeing as Steem coins are worth 25 cents. The haircut rule is artificially forcing the value of Steem coins to 40 cents so we don't get totally screwed.
Still, it's obvious that this system isn't working. We just created a year's worth of inflation in 3 months. SBD doesn't get burned until it dips under $1. The SBD we print during spikes comes back to haunt us on the dip.
These 25 million new coins alone are enough to completely tank the market temporarily. Combine that with FUD and ned not buying enough runway for his company and we have a real problem on our hands.
Good to know. I've always seen SBD as superfluous, only a convenient way to convey monetary relevance for those who think in USD terms. It adds complexity for nothing, and as you point out, has negative consequences. Everything should just be STEEM, and the value of posts can stay the same, as a measure of the value of STEEM.
I hate sbd with a passion. It's basically steem inflation that's under the radar that only becomes noticeable during steem price crashes.
Just read your other post. I have to wonder if the intent wasn't for this exact situation to happen. I would guess the odds of those deciding these issues being some of the larger holders of SBDs is high, as well as I mentioned on your post how the bidbots were taking it in charging SBD and the loss for the buyers were incurred when they got half of it back as SP which was always lower than the SBD half.
Those damn bidbots... just money sloshing around, not doing anything good for society. A perversion of the social-media valuation purpose of the original blogging app, not to mention making reputation worthless as a measure of anything any longer.