"Complicated"

As @ats-davis has expressed so well. I find that I agree. I too find it absurd that there is talk of removing the dollar.

It is preferable to have a system that presents a simple interface to the user rather than something that is simple inside. As an example: There was a time when no cars had automatic transmissions. Standard transmissions are easier to make. Automatic transmissions are easier to use. It is easier to learn to drive a car with an automatic transmission than one with a standard transmission.

A currency that keeps the same value as the dollar lets novices understand immediately what the cost of something is when they receive an award or pay for services.

Why a Peg is Good for Experienced Users Too

I am a long time bitcoin user and as a holder of bitcoin, I do not mind the volatility. But when you are going to spend money in the next two months, its good to have money that wont lose 20% of its value. Volatility is bad for short term use.

With few exceptions altcoins have more volatility than Bitcoin. Altcoins must not only overcome market effects but also greater volatility.

Now enter pegged assets, these have even lower volatility than bitcoin does because it stays close to one dollar. This is seen in nubits, bitusd and tethercoin to name a few.

Interesting Interest

Although interest is an incentive to buy and hold Steem backed dollars, interest also increases money supply. The increase of supply means that eventually the same value of goods can require more dollars. This is inflation and if too high, the peg will eventually collapse. If too low, the per unit price will exceed the value of one USD.

Interest rates should not be the only incentive to own Steem Dollars. Steem Dollars need to be spendable. It needs market acceptance. Market acceptance is like reputation: you don't own your reputation._ It takes time. Projects like Piston are very important because they allow people like me to build applications that bring value to SDB but do not increase the supply of SDB. Steem Payments payments brought value. Low level services like VPS for SBD would help greatly. I am the author of Steem Edit and I am looking for a place to host a file hosting sevice. Is anyone doing that and accepting SBD? Whales can protect their investment by upvoting projects that make SBD useful. That is any service that accept sbd as payment.

FOLLOW @leprechaun