I am actually quite concerned about a crash in Steem prices as everyone tries to cash out on that day. Since the money supply of liquid Steem is extremely low as it is, cashing out would raise the money supply multiple folds and crash the prices.

I think the system would make more sense if liquid Steem supply is much higher. I do like the vesting system for making sure that people are committed to the Steem network, but I'm quite concerned about the pump and dump abuse. It seems like it would be extremely difficult for the average user to cash out at a fair price. The SMD proposal seems like it could mitigate some of the problems, but I don't fully understand it.

Even if SMD could theoretically work, the average user is not going to be able to understand the system well enough to fully take advantage of it. You would still have big player market makers trading both SMD and Steem.

Another issue is that Steem does not function as a medium for exchange, so it doesn't really behave as a typical currency. It is more like a stock. Bitcoin is a currency because people actually buy a bunch of other things with it, but the purpose of Steem is to either vest in the website or to cash out. This is a big problem with the altcoin space in general. Nobody focuses on the transactional value of the currency. I want to go to a bar where the beer is priced in bitcoin or an altcoin, not in fiat.