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RE: Speculation killed the STEEM DOLLAR Utility
The way I understand it is that the SBD is supposed to be worth at least $1 of Steem. Not pegged to one dollar.
With the current price of Steem and Value of the Steem dollar, this is essentially still true.
Even in the wallet it says, "STEEM DOLLARS
Tokens worth about $1.00 of STEEM" nothing about a USD peg.
Not to mention the higher the value of the SBD the better it is for content creators. I don't get how anyone can complain about this. It's serving it's purpose. It is worth about $1 of Steem. The actual rate is about 0.85 SBD per 1 Steem. But it's very close.
I agree that there is no issue - but your logic is fatally flawed - your argument only works if STEEM was pegged to one dollar.
SBD is currently worth about $8 worth of STEEM, not about $1 ...
Sorry I shouldn't smoke and think too much. :P Just realized how what I said was dumb.
But either way. I don't see how they can expect to keep a currency pegged to a dollar without centralizing the creation of it and by allowing it to be traded on external exchanges. If they didn't allow it to be traded somehow then perhaps the peg could've stuck. Otherwise the supply would have to be manipulated by someone.
Yeah the problem is, unlike most coins ... SBD actually has intrinsic value - it is always worth at least $1 USD ... IMO some whale saw that flaw on the asset and the limited supply as an attractive investment!
Wow this received a lot of upvotes quick. Haha
Did you read the whitepaper quote? The intention of the design is right there in black and white.
How about the part where I explain that Authors on the platform have a vested interest in promoting the SBD price pump?
Congrats on your upvotes. How about you throw me one? Perhaps journalistic integrity is not valued on this platform and I should only write about things that serve the vested interests.
Know them feels dude. Keep up the good work.
My upvote on your post isn't worth anything, but a healthy critique of any system is necessary and welcomed for the continued longevity of said system, so there. I'd hate to be labeled a FUDder on my first day using Steemit but you can search tether on medium or look at @bitfixed on twitter for a collection of articles and information on a couple of alarming problems with crypto that might have led to the price action that's been seen. In addition to huge levels of FOMO, in short, 7 of the top 10 exchanges use tether, the majority do not have true fiat pairing at all, USDT cannot even be used by US customers now because the creators of tether fear imminent US regulatory scrutiny (and have possibly already been targeted as canaries at one exchange have gone missing), and are speculated to be used in the pumping of various alt-coins and Bitcoin itself.
Not looking to hate on crypto itself or the technology, but I think that if the price were to crash then posts such as yours do a service to the community by reminding people what the original mission should be, and it was definitely not supposed to be any sort of scheme to get rich quick. Lasting change won't come from money changing hands rapidly enriching a few early adopters, it comes from long-term systemic changes in the way people view technologies, the impact of their uses and how they can participate in systems that are more beneficial to the whole instead of the few.
Thought I did upvote. Fixed.
But I don't see any mention of a USD peg in anything you quoted. It's still relatively stable as it's worth about $1 of Steem right now. A little more.
The only time it became unstable was when it jumped before the Steem price increased.
I really have no idea where the assumption of a USD peg comes from other than the fact it has a dollar sign in front of it. There is no mention of the USD anywhere.
"Merchants need a currency pegged to their unit of account, normally dollars."
OP seems to confuse 1 STEEM with $1 worth of STEEM ...
And to answer your question about what SBD does that Steem can't. It's infinite. It's the rewards distribution. Steem has a hard cap and SBD doesn't as far as I know.
That's about the only thing it does that Steem can't.
SBDs are just steem wrapped in a smart contract that converts each SBD to one US dollar worth of steem when ever the conversion function is invoked.
Steem Dollars are Steem presented in a different package. So they are not infinite. Furthermore, if at any point the issuing of steem dollars gets to more than 10% of the total supply the blockchain will automatically stop the "printing" of SBDs.
Although, technically the Steem's supply is not hard capped. The inflation rate is set to decline over time but never stop. So you can say that the creation of steem is "infinite" but the creation of steem dollars depends on the market price of steem. The higher the price of steem the higher the print rate of steem dollars with a cap of 10% of the total supply in USD terms.
Interesting. I was curious as to how that worked.
So the amount of SBD created is correlated to the price of Steem then and supply of Steem then? Essentially SBD created will never exceed 10% of Steem market cap is what you're saying? What would happen to rewards if that scenario ever did occur?
And I thought the declining inflation basically does give Steem a hard cap no? I've seen a few places that list a max supply for Steem. Now I'm wondering where they get that number? Which is roughly 250 mil.
That has happened before. The rewards are paid out in Steem instead of SBD.
^ this is a good comment
Thank you.
Steem Dollars also only have a circulating supply around 5 million right now while Steem has a supply of 250 million.
So Steem is way more valuable atleast in terms of market cap.