End SBD Now!
Why
is it that nobody realises that the greatest component of Steem hitting the market is automatically being sold by the SBD smart contract and has been the biggest problem for the whole time since the consolidation after the initial pump?
People think 'stable' means 'pegged to the almighty USD'. Why even hold a crypto asset when you think that USD is so almighty and superior. You could have saved yourself the fees and commissions buying the BTC and converting it to Steem, and still be holding the asset you evaluate so highly.
The price keeps going down, and down, and down, it's driving people off the forum, people are crying that it must be because of some flaw in the voting system, when the problem is affecting almost everyone, even the people who get the lions share are getting less and less value from their astronomical rewards.
In my opinion, it is time to try out one last thing before everyone starts to think there is something wrong with DPoS and the idea of distributing new currency by a forum voting system. Stop issuing SBD in rewards. 50% SP, 50% Steem (of the 75% to authors).
End Steem Backed Dollars Now!
We can't code here! This is Whale country!
Vote #1 l0k1
Go to steemit.com/~witnesses to cast your vote by typing l0k1 into the text entry at the bottom of the leaderboard.
(note, my username is spelled El Zero Kay One or Lima Zero Kilo One, all lower case)
SBD is ultra important for steem. Steem hs many other design flaws that need fixing.
I disagree. Perfect the forum rewards distribution and it's not going to matter if every month the price drops another 5-10%, that's a 5-10% drop in the number of people who are going to write, the forum will slowly wither and all these other perfections are meaningless when you got a black hole in the centre sucking it out into another universe...
@l0k1 maar door SBD kan ik makkelijk aan mijn vriendinnen uitleggen hoeveel het waard is dan met Steem. Nee dus - ik ben niet akkoord .. Doe maar niet man :P
maar ik heb toch voor je post gestemd..waarom niet - punten maken mag ..zolang dat het aardig blijft
hahaha - translate that - this is what you get for suggesting this man
peace!
EDIT : okay it's this - with the SBD I could easily explain how much its worth is (1SBD = almost 1$ ) compared to Steem
so no I don't agree with you :P
please don't end it
but I still voted for your post cause its allowed to make your point as long as you keep it peaceful!
@l0k1 but with SBD I can easily to my friends pay how much the value is than with steem. No, thus, I disagree, Don't Do it Man :pBut I have just voted for your post... why not - points make possibilities, as long as you stay down to earth.Hartelijk Bedankt voor Uw commenteren!
In response:
PRECISELY.
SBD = Payment Instrument.
Steem = New Internet Currency Between Steemians.
Steem Power = Proof you are Sirius about Steem!
You could call it Proof of Steem.
Also it just made me think of something - you could have terms for SBD instruments, where additionally they will unwrap after some period of time in exchange for a discount for being shorter term. Longer term note: higher total cost. They would have an accounting feature where they are split in accordance with the discount they contain for their duration.
So you can then instead say you want to lock the price to the dollar for a week, you put that dollar in escrow with the business you purchase something from, and they know that the dollar value of the payment is the same when the escrow is released, for example. This arrangement could be a lot cheaper than one with a 1 year validity. Automatic expiry as well as unwinding with some other administrative fee for early cancellation.
@l0k1 if they do end SBD ... will the ones I have be automatically converted into Steem or would it turn to zero?
How did you do that - making the font look like this? it's cool!
EDIT : I see.. the sbd is causing us much debt?
how much debt? so much?
is it fixable?
so it was html thanks I'll try it's cute
how about the problem with the h2 inside <>? It hasn't been solved either I see.
I still see giant letters that keep growing on posts that has it. What could be causing that? A bug?
SBD is not why the price is declining. SBD is crucial for the platform to work. There are true economic design flaws in steem. I have outlined them several times. You are blaming something that is completely irrelevant for the decline of value in steem. In fact SBD creates and does not destroy value.
SBD has to sell off steem to raise its value. When steem's value goes up, the rate of selling off steem has to rise to hold the peg. What part of this is adding value to Steem? Not only this but apart from the stuff that goes into @null, the total amount of it is being added to at a percentage rate with the rewards payouts, and that which is not burning is slowly increasing in value, which will again increase in value, and continue to demand more steem to sell to hold the peg.
It's a debt instrument. Read the Whitepaper again. It is not a token like Steem (similar to a weight of silver or gold in terms of economics) or an asset like Steem power (which is like a corporate stock). Debt. It has to be kept in a balance with Steem Power because it has the effect of devaluing Steem Power, which should not devalue because it is Steem-Off-The-Market, decreasing Steem supply and thus raising price.
@dantheman even warned quite a ways back that hyperinflation of either dollar or Steem could cause a huge amount of damage to the Steem economy, even destroying it (by being worth less than is required to fund the infrastructure).
Right so they need to stop hyperinflating steem. If anything they should temporarily stop production of new steem.
The production rate of steem is probably about right now, but SBD compounds upon itself and SBD increases steem supply when Steem price goes up. Too much SBD and it pushes Steem prices down always and forever. I think that it has been too high a proportion from a very early stage. I don't think the supply of SBD should be allowed to get much over 2% of total supply or Steem cannot grow.
Sorry, gotta disagree with this one. SBD serves an important role in the steemit economy. Being able to save some money in SBD and even collect a little interest is pretty nice.
A large population thinks in terms of dollars, and seeing that a post is making 5$ is a huge psychological plus.
Are we going to wait until literally people can't run the network before we concede that there is something seriously wrong with the mechanics of the system? If steem falls below 5 cents, within 2 months there will not be witnesses anymore and there will be no Steem.
The biggest issue I have is that essentially through SBD, the Fed is stealing the money of Steem users, because what their currency does is all about stealing money from people, mainly the poorest, and yes, SAVING DOLLARS IS IMPOSSIBLE. Next year your dollar buys at least 2% less than it did this year.
Psychological incentives like this are costing the network. I see no problem with sidechains with derivatives like this, but people won't think they are so great when they have to pay the real cost instead of spreading it over the whole of the population of steem users.
Well I suspect that the witnesses will lower the interest rate to 0, which will make holding SBD unattractive. A 2% interest rate would be enough to make me dump my SBD and power them up. (So it's close for me already.)
Almost everyone in the witness leaderboard has got negative interest rates already. You know what, that number is meaningless. It's the rate at which the witness will perform the "Convert to Steem/SBD" operation. It's nothing to do with the algorithm that chooses how to split the rewards, and all SBD starts as a reward.
Meanwhile, everyone just exchanges Steem and SBD on the market. Mostly towards SBD, as the price keeps going down. The price goes up, then the SBD sells steem, driving the price down to hold the peg.
It's like putting sheep and wolves in a pen with each other and expecting the productive (steem) to not be eaten by the consumptive (SBD).
For the record, I'd be totally fine with Steem Silver Ounces rather than Steem USD. Golos uses grams of gold rather than SBD (or Steem Based Rubles for that matter.) which I think is cool.
I don't have a problem with SBD per se. Just that it should not be issued alongside (and at equal amounts, generally) to Steem.
I think derivatives should not be part of the monetary base of a blockchain currency, period. The reasons for SP are pretty simple and obvious, but SBD, it should be something you have to choose not something that is dished out every time you get a reward. This keeps the supply in a lock with the supply of Steem which means the fenced off area with wolves and sheeps. There should be a fence between Steem and SBD, or, you get what we see in the price chart.
I think I remember seeing a comment from Dan a while back that they have contingency plans to move SBD's anchor to silver if dollar inflation gets out of hand.
Huh? I don't see that at all. There is not a single negative interest rate in the top 19. Are you sure you are not looking at "Bias"?
I'm not even sure how to actually set a negative interest rate on it. I am going to tinker with that a bit later today. My bias is set to -10%. I just hate USD and anything resembling it, for very many reasons I don't think I have to explain to most people here (even if they still are deluded that you can even save USD at all).
No, it does not allow negative interest:
You also bring up a good point: SBD is actually a better asset than the USD. The USD has negative interest rates on it (inflation) and they passed the ZIRP through the looking glass into la la land where they pay you to borrow the money and charge you to deposit. Or at least that's how banks are treating each other now. We are getting gouged on account fees and spreads as hard as they can.
This sounds like assumption. I would like to see data about that.
For people outside US, keeping SBD can be much easier.
USD, EUR, GBP, CHF, AUD, CAD, they are all more or less the same, they don't really diverge against each other that much.
And there is Bitshares if you want to hold this kind of derivative.
Utility of SBD is one thing... but also did you heard about Cyprus? And what happen there with money in the banks? I prefer keep some saving on Steem network in SteemDolalrs in case of Polish government would decide to do something similar.
There are not many crypto-assets which are considered as stable comparing to USD/EUR
Like I said: bitshares bitUSD.
As it stands now, everyone with Steem is paying the interest for everyone with SBD, and SBD is selling off steem every time the Steem price goes up. It literally cannot go up. Without the potential for upside, nobody wants Steem, they then buy SBD, and the problem goes around in a circle, and none of that SBD is convertible. You can burn it at @null, or you can sell it to someone else. But it's going to sell steem to keep the steem price down against the dollar. That should cost SBD holders, not profit them.
Also, nobody is going to bail in your Steem (or SBD, or SP). If steem doesn't appreciate in value that's because most people are abandoning it. So it is supposed to be an indicator to tell you what you should do with it. Value keeps dropping, ditch it before you lose even more money.
With no witnesses to run the network with Steem under 5 cents, it's a moot point how valuable your SBD is. Nobody is going to be able to trade it.
Correct. The problem with bitassets was always the same - lack of liquidity, and premium price which you have to pay for those assets.
1,05 USD for bitUSD
That seems like about right. Either it costs 5-8% more to buy it than real dollars, and 5-8% less when selling it. It's liquid. Liquid assets should lose value more than illiquid assets. SBD has an unfair advantage and it's costing Steem Power holders.
If they ended SBD then Steem itself becomes worthless.
Don't you understand? No on wants steem that is why they are all powering down and dumping and this feeds a cycle.
SBD allows them to at least remain within the steem ecosystem.
Steem is and always has been a speculative investment for speculators. The amount of currency will never go down because there is no forced burning by fees there is no consumption of the coin and the only reason to even own it is to convert to SP. But SP is only valuable if you value steemit and your so called influence. You need a metric crap ton of it to even begin to have any influence. As the price continues to inexorably crash, the value proposition of owning any steem at all, rapidly approaches 0.
You need more and more steem to have less and less influence over an ever shrinking audience who is only your friend because you gave them money.
SBD is a hedge against that. By owning SBD and holding onto it, you are saying that future steem is worth less than right now steem. It's the perfect instrument to wait out the slide while maintaining something approaching your original purchasing power.
Without negative interest rates on SBD, there is no incentive to hold Steem but instead SBD. But SBD grows endlessly and in the process increases the steem supply to back its peg.
I don't think SBD should be abolished, but it needs to be reined in and the simplest way is to allow interest to be charged on it rather than paid. Too many people are holding SBD but it's not people's fault entirely because the supply never stops growing in proportion to Steem. This is the problem. It has to be kept at a lower proportion compared to Steem or Steem can never rise in price.
Totally agree l0k1! Besides this economics mumbo-jumbo, SBD turned potential new users off, because they barely understood the concept of STEEM, let alone STEEM + STEEMPower + STEEM Backed Dollars ... It's invention was ingenious wizardy .. but so was the neutron bomb. ;) .. time to reduce complexity and lighten up this airship .. we need LiiiiFT!
Sure, so convert the SBD TO STEEM. Take USD from ATM put into BTM and ultimately buy Steem. Buy raw, buy from an exchange, buy products. Tell you what I will send you a fucking t-shirt with your @ and the revered STEEM symbol for 75,000 STEEM, WHILE SUPPLIES LAST(LIMITED EDITION 0-50), That's how you make it a commodity IRL. "DRINK THE KOOLAIDE" KOOLAIDE PARTY AT ESTER SHORT PARK VANCOUVER, WA 25 STEEM per glass and refills until it's gone. Wednesday March 8th From 12pm- 3pm Cosplay is encouraged. Rain or Shine!
Pardon my french.
You don't think it's ironic to disparage the primary currency asset of steem on the steem blockchain itself? The cognitive dissonance is breathtaking. This thinking is how we got into this situation, more of it is just gonna dig a deeper hole.
Oooooo.. oh no you didn't.. :)
I like that there are smart people who know to relay a point and don't have to get nasty.
whales like @berniesanders which sales everything on poloniex are the reason for low price:
http://steemwhales.com/berniesanders?weekly
in next 2 weeks most people which wanted to leave platform quickly will complete their 13-week power down period. Price declaiming after hardfork16 (Dec. 6.) was actually expected.
It may be the case but I don't see how, considering the supply of steem contracted 90% after HF16. Where is the steem coming from that is being sold? No, it's not whales. There is about 1 million of SBD on the market, total market cap is 20 million of steem. Every time the steem price goes up, SBD contracts take a big share of the newly issued steem (and it's worse now with lower issuance rate). If Steem goes up in value 10%, SBD sells all of that to maintain the peg. The end result is every time new buyers come in and buy steem, push up the price, and then SBD eats all the gain. The people see lower and lower post rewards and they panic and convert to SBD, further compounding the problem. Sooner or later it's going to have to go or Steem is going to be forked to a non SBD form.
I think it's the 91 day power down from Dec-6 through Mar-7. Look at the bottom chart on this page: STEEM Exchange Flows. More than 10 times as much left on March 1 as came in, and the volume leaving was the highest it's been since the start of the year (by far).
Well, so I guess by the end of march this should stop then, right?
After that, and the price still keeps sliding and witnesses drop off the network because they are not covering costs. Then what?
Don't worry. There are people which care not only about money. If there will be a problem with number of witnesses, I can personally run 4 witness nodes on my single dedicated server.
Being a witness is also a privilege. If low price would cause some witnesses to resign, then I would prefer to have low price for some time.
From people which decide about future of whole network (whether to accept or reject particular hardfork) I expect more faith in end result.
If being a witness was a privilege, why do we pay them? Shouldn't they be paying us?
My argument against an interest accumulating derivative like SBD is economically sound, and the way it works now flies in the face of every other business practices of every banker on the planet. Liquid assets you charge interest. Illiquid you pay. SBD is liquid, SP is illiquid. SBD gets 3% interest now, SP only gets maybe 2%.
It's not any wonder at all that the price of Steem keeps falling, to keep this magical US dollars that somehow increase ahead of the rate of inflation (somehere between 2 and 8%), someone is paying for it. That's everyone holding Steem and Steem Power.
I don't want steem to die and you can already see on the Witness Leaderboard that backups are dropping like flies. It will be a crisis if the cost of running a witness is greater than the pay rate. You can be the first to volunteer to pay for keeping a dead network and paying interest on liquid assets contra to the laws of economics. I'm on a crusade about this now. It's not rocket science, but people have some superstitious beliefs about the Federal Reserve's shell game currency system, stopping them from admitting that logic is against their faith.
c'mon. Most of them earn much more earlier. They have money to "survive" this "though" period. If they will leave because being a witness is not profitable for them.. another witnesses will be happy to replace them. Most of witnesses which are running nodes do not care, that right now they are not in TOP19 and they probably spent more than they earn.
But when the top 19 pay rate drops below average VPS hosting prices for a witness, why would anyone want to run a witness? I'll be moving on to other pastures, a friend of mine has been talking about investing in a Dash Masternode token. If after this 'tough' period ends the price still goes down, as far as I am concerned, my assertion that SBD kills Steem will be confirmed and I'm getting out before it sucks up any more of my resources.
I sure hope so, but I guess the negative sentiment could create a self-perpetuating cycle that lasts longer.
People could start witnessing on their home computers if it came to that. I've got 4 steemd nodes running miners in linux VMs on 2 windows PCs. It's costing me nothing that I wouldn't have paid anyway. I don't really think it'll come to that, though. (knock on wood. ; -)
Right now I am just afraid, that this is a panic attack of someone who thought that Steem is a way to quickly become rich. So just in case, I will repeat myself: "Never invest more than you can afford to lose."
With that being said,
I am not saying that you are not right. What you could do better, with such open system like steem, in your post you should provide hard data and calculations about whole thing.
Your post looks very emotional. You might be right, you might be wrong, but for sure serious analytical discussion is always good. But please provide more data if you encourage people to talk about this topic.
One possible reasoning may be, that if we won't pay them, someone else will.
You just got me thinking... about that...