RE: STEEM 101_3: IS THERE A SHORTAGE OR SURPLUS OF SBD?
Yo my man, thanks for the info yet again. i have a few questions tho or just one that i broke down...
Let's use an example.
If there is nothing to spend newly generated SBD on, then users will either power up what they earn (which reduces the amount of circulating SBD), or trade their SBD in the open market. If everyone converts their SBD to STEEM(thus destroying it) and then powers up, there will be a shortage of SBD the moment a service comes around and accepts SBD as payment (such as bots).
If everyone sells their earned SBD into the market then there will eventually be surplus of SBD, IF AND ONLY IF there aren't enough new users to gobble it up.
For the quoted part above in bold, I don't really follow... Can you elaborate?
If they didn't sell their SBD what would they do with it? And if they just held it, what's the difference from them selling it to someone else, and that person holding it?
Your answer is in the question. If you don't sell your sbd, what else would you do with it? That's part of the problem. Nothing. It's pretty much useless unless someone wants it for some reason. Collecting it and waiting it to go up in value does nothing unless there is demand.
Right now the demand comes form users buying up votes or playing games on the blockchain.
The other part of your question has to do with how sbd is turned into steem and not the other way around. There are two currently tokens. Steem and sbd. Both are awarded, but the sbd that is awarded is brand new sbd created out of inflation. If sbd were unique then it would have a never before seen serial number.
When that sbd enters circulation it can do two things. Be traded to other users, or be destroyed by exchanging it for steem on the blockchain level (as opposed to user to user level). So sbd that is destroyed (forever) will decrease the supply. If collective behavior continues to destroy sbd in this manner it will run into a shortage.
Ok, so I think I'm getting now, and that this scenario is less likely. And that the answer I was looking for is that people are less likely to hold onto a seemingly useless SBD valued at +/-1:1 USD.
Thus they are way more likely to just trade it in for Steem, or to buy upvotes with it and ultimately create a shortage. Which, as you've pointed out above, is what's causing the value of the SBD to increase...
I just realized that the above quoted paragraph is what threw me off, in particular the text in bold. I read it in a way that made me think the only way for a shortage to occur was:
It would appear that even without a 'bots service', the understanding that a shortage in SBD could cause an increase in it's value, might (have) influence(d) the market to react in a way to force a shortage...
Ok so now more dumb questions...we know how SBD is generated but how is SBD acquired? How does one get newly generated SBD?
All new tokens are earned through content creation, curating or through interest payments on existing steem.
And yes, I think the shortage was inevitable. We have high usage of sbd inside steem and also a high volume being traded on the external market. In combination we created an environment where sbd demand is too high.