Against the Price Feed Bias: Why SBD is worth more than Bitcoin, Why SBD should be left untouched + Interview with @dan

If repeated economic crisis situations have resoundingly clarified anything, that is the fact that you should not mess with the market. The market always regulates itself. It won't happen in the nicest way. Any non-idiot can see that the government bailouts wrecked the economy more than it helped. If you put aside the technological developments, the current economic situation is much worse than the housing bubble.

CME Futures case

Some people were happy and hyped because institutional money is finally getting into crypto (Bitcoin). Many short sighted people thought of it as a good thing. It was supposed to make BTC reach the MOON. For the short term it happened. And as many intelligent and/or experienced people expected, the prices came crashing down. What I'm going to ask you is: "Are You Happy?"

Yeah, it wasn't good. In fact messing with markets have never been good. From great depression to now and before, all crashes had some form of manipulation inherent to them. When there is a disparity, market solves the problem on its own. This is what "Human Action" is. People eventually figure things out.

Chaos Theory and Frédéric Bastiat

According to Wikipedia, Chaos theory is a branch of mathematics focusing on the behavior of dynamical systems that are highly sensitive to initial conditions. 'Chaos' is an interdisciplinary theory stating that within the apparent randomness of chaotic complex systems, there are underlying patterns, constant feedback loops, repetition, self-similarity, fractals, self-organization, and reliance on programming at the initial point known as sensitive dependence on initial conditions. The butterfly effect describes how a small change in one state of a deterministic nonlinear system can result in large differences in a later state, e.g. a butterfly flapping its wings in China can cause a hurricane in Texas

Frédéric Bastiat talked about this in his long piece of writing titled That Which is Seen, and That Which is Not Seen.

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause — it is seen. The others unfold in succession — they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference — the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, — at the risk of a small present evil.

In the above quote I can summarize why I'm absolutely against doing anything about the fact that SBD is trading above $1 USD. You can read the almost 2 centuries old piece of masterful writing at http://bastiat.org/en/twisatwins.html

I'd also like to share this interview with @dan who pretty much confirmed what I'm saying. $1 is a floor of value for SBD. The market can trade it at any price they want.

Market Manipulation by Witnesses

Some witnesses have been very unwisely fighting against the value of SBD without proper reasoning behind it. Bitcoin is backed by nothing. Each SBD is backed by $1 USD worth STEEM. As long as STEEM doesn't go below a certain price (at the moment ~4 cents) SBD is as good as Gold Backed Currency.

Yes. SBD is pretty much A Gold Backed Currency. Since SBD printing would stop when the debt level hit 5% we can calculate how much value STEEM should have for SBD to be as good as A Gold Backed Currency. There are 271,555,695 STEEM and 10,859,268 SBD out there. If you run the math when STEEM price go below $0.0399891005784283 USD, SBD cannot be backed by $1 USD worth STEEM. As long as STEEM is at 4 cents, SBD is As Good As Gold

Stupidity of messing with the markets

I'll start with a quote from my friend @ew-and-patterns

I know that it can and likely will get much worse before it gets better again. Worse because the witnesses are planning to soft peg SBD to 1$, once it reaches this level again.
They will pat themselves on the shoulder for bringing the price of SBD down to 1$ again and that their increasing the payout rate for SBD (and thus inflation) caused this. BUT THEY DID NOT CAUSE THIS. IT'S BULLSHIT. It's a normal crypto wave 2 correction. And here is the proof for that:

If you cause gigantic price inflation like they did with SBD (the amount of SBD in circulation more than doubled in only 3 months) you would expect the market to react in selloff movements on heavy volume because everyone wants to throw their SBD on the market. But that did not happen. We saw very slow selling on basically no volume at all.
That means people value SBD way more than its current price level is... There is just not enough buyers yet for the price to start a new uptrend.

Since 2 days ago, a portion of your Author rewards are payed in STEEM. Here is a post that explain what's happening: https://steemit.com/steem/@eonwarped/steem-rewards-news-flash The bottom line is that less SBD is getting printed. Less of something means more of a price for that thing. @ew-and-patterns Congratulations, you can pat yourself on the back. The efforts of some witnesses that used a price feed bias to bring SBD down is now making SBD go up.

Here we have the latest prices from coinmarketcap

• Steem (STEEM) $2.24 USD (13.57%)
• Steem Dollars (SBD) $2.36 USD (16.89%)

We can't have Knee-Jerk reactions and long term stability with a bright future

Witnesses are responsible to give a price feed to the STEEM blockchain. Some of them are unwisely using a price feed bias percentage (AKA feeding non-market/adjusted prices) which could also be called fake prices in an attempt to bring down SBD without thinking about the "Invisible hand of the market". This is just economics 101 and you don't need to know economics to be a witness.

But at least you could stay the hell away from the things you don't know!!!

In case you didn't know, here is a definition for the invisible hand:

Term used by Adam Smith to describe the natural force that guides free market capitalism through competition for scarce resources. According to Adam Smith, in a free market each participant will try to maximize self-interest, and the interaction of market participants, leading to exchange of goods and services, enables each participant to be better of than when simply producing for himself/herself. He further said that in a free market, no regulation of any type would be needed to ensure that the mutually beneficial exchange of goods and services took place, since this "invisible hand" would guide market participants to trade in the most mutually beneficial manner.

After discovering what was going on, I went to https://steemdb.com/witnesses and even though I only have a tiny 4.174 MV I unvoted all the witness votes I've given for those who use a price feed bias.

I'm not telling you what to do. I'm just laying you some facts. You can make up your mind on your own.