RE: STEEM DOLLAR Peg Debate : Stakeholder Analysis
I am relatively new to Steemit but I can't help but wonder if the real question here is whether Steem whitepaper is still relevant? Was it intended to be a long term guide to the development of Steemit or just a document for getting it launched?
The introduction section of the whitepaper calls for "a stable cryptocurrency pegged to the U.S. dollar". The whitepaper goes on to state:
In effect, feed producers are entrusted with the responsibility of setting monetary policy for the purpose of maintaining a stable peg to the USD. Abuse of this power can harm the value of STEEM so SP holders are wise to vote for witnesses that can be counted on to adjust the price feed and interest rates according to the rules outlined above.
If the debt-to-ownership ratio gets dangerously high and market participants choose to avoid conversion requests, then the feed should be adjusted to increase the rate at which STEEM paid for converting SMD.
So, the whitepaper not only calls for a pegged currency but also indicates the mechanism for correcting deviation from the peg.
Another area in which Steemit has deviated from the whitepaper is in the area of recognizing contribution. Again from the whitepaper:
The challenge faced by Steem is deriving an algorithm for scoring individual contributions that most community members consider to be a fair assessment of the subjective value of each contribution. In a perfect world, community members would cooperate to rate each other's contribution and derive a fair compensation. In the real world, algorithms must be designed in such a manner that they are resistant to intentional manipulation for profit. Any widespread abuse of the scoring system could cause community members to lose faith in the perceived fairness of the economic system.
I don't know how the systems got started but to me it seems like vote bots and buying votes would qualify as "intentional manipulation for profit".
If the whitepaper is a document driving the development of Steem, then the decision is to enforce the peg on the Steem dollar. Not enforcing the peg means another deviation from the whitepaper. It is highly likely that potential investors in Steem will read the whitepaper, or at least part of it, prior to investing.
To maintain the credibility of Steem, the whitepaper needs to reflect reality. Is the whitepaper a guiding document for Steem's development or a set of lofty goals, some of which in retrospect tend to be naive. Granted there is a cost to enforcing the peg but we don't know what long term costs exists if Steem loses credibility.
I reckon this is the best comment on this post so far. Thanks!
"Was it intended to be a long term guide to the development of Steemit or just a document for getting it launched?"
It's a bloody great question! Maybe the whitepaper is a bit irrelevant these days.
Thanks @buggedout. I recently also just got into cryptocurrencies in general and normally read at least most of the white papers before deciding to invest in any particular coin. For me, this discussion is really a test as to whether these whitepapers really mean anything or not. If whitepapers really don't mean anything, I'll know to keep my coin investments under scrutiny unless I need to 'bug out'.
Sounds like you are applying some common sense! Excellent! So good to see and so rare!
I have a developer background so I do actually value the whitepapers very highly. To me it is important to understand what the system designers were trying to achieve and then assess whether it is sensible, realistic and well implemented. I guess that's my issue here, maybe it wasn't well implemented so it'll take some work to fix it without breaking something else. Change Management is hard when the system already has a lot of use and is politicised!
It seems like it is fairly common for management to deviate from the white paper. I wish I had more of an understanding of tech to understand if this is a necessity, or if it is more of a result of the traditional management systems which still control the blockchains.
It also seems like hyperinflation would be a risk if the SBD isn't pegged to something. There is some quality converstaion on this post!
I don't think it's management deviating. It is external market forces using the product in a way that is not how it is intended. Management are then faced with the decision of whether to try and revert it to the design, or change the design, or do nothing.