RE: Steemit Monetary Policy: Why the SBD Peg is Broken and How to Fix It. But Do We Really Want It?
The last part about the USD and it's diminishing spending power is one of the reasons I don't like the $1 USD Peg at all. I never mentioned it in my post (I don't think I did anyway), but it is not a good long term solution. In fact, I would prefer the SBD to be something more like SBSD (Steem Backed Silver Dollar), but even that has it's pitfalls because Silver and Gold and Zinc (and other metals) are manipulated on the markets and deliberately devalued or pumped, so that doesn't really work either. I think this highlights the problem with pegging anything to anything else, in that no matter what you're pegging to, the referenced currency isn't going to hold value either, especially Fiat that is guaranteed to devalue by 2-4% every year in spending power.
I do however like you idea of the reward/penalty system. that actually solves other problems too, like #rewardpoolrape where someone with deep pockets thinks they are going to come in and abuse the system. I would suggest adding an additional variable to your solution, by taking into account future payouts as well as current SBD value, so that way abusers/attackers would be shooting themselves in the foot before they ever got paid out.
Great post, and great discussions.
Hi @briggsy, thanks for the reply and engagement! Couldn't reply yesterday due to low bandwidth so I had the chance to mull over what you said for a day ^.^ I agree with what you said. If we want a peg, we want a stable reference so the USD isn't all too bad compared to something like precious metals with high volatility. That sort of explains why so many countries peg to the USD! It's the best option that you have - not ideal, but it serves its purpose.
I wrote this post to remind people of the trade-off with a peg. There's always going to be a trade-off between the benefits of a stability in a peg against the costs of maintaining a peg + the loss in control over the value of the peg. We just can't have the best of both worlds and choose to go off the peg whenever we want to (because that makes it harder to maintain the peg next time since people will start asking, "are they going to go off the peg again??").
I agree. I think the reward/penalty system will work better than the current Steem-to-SBD conversion system proposed by witnesses. In fact, I think the Steem-to-SBD is a well-intentioned idea that will have very bad consequences... I'll write a post about that soon...