See this link for an opposing view https://steemit.com/steem/@leprechaun/steem-dollar-benefits
Okay. How would the smart contract work? .
See this link for an opposing view https://steemit.com/steem/@leprechaun/steem-dollar-benefits
Okay. How would the smart contract work? .
Similar to Dan's article.And my argument is that the costs overweight the benefits. Either SBD get's really backed up by Bitcoin, or it has to be removed.
I am not a programmer, I am sure some good programmer can figure it out, perhaps after Segwit passes, we can create SBD as an alt-chain for Bitcoin, to make it accesible and somewhat sovereign.
You cannot back SBD with btc because as soon as btc falls it will be fractional reserve. You BTC could be printed, then it could back it.
You need to revisit your assumptions.
Wow thanks for responding, it's a pleasure to see that you have read my article.
However I have to disagree, because you don't back it with the value of BTC, but just with BTC itself. Therefore the price of BTC doesn't matter, that is the individual risk that every investor has to assume and it lies as a collective burden on the hands of the BTC investors.
So for example going with the analogy of the article let's say 1 SBD = 0.001 BTC, every time 1 SBD is issue, 0.001 BTC has to be bought and set aside in a segregated vault that can be redeemed for it.
Now it could be fractional, if that would give more flexibility to the system, however to make it sustainable the interest on SBD has to be removed to prevent unnecessary inflation, and post should no longer be paid in SBD.
So the risk will be contained inside the Bitcoin price, and as we can see, Bitcoin has been a pretty solid storage of wealth so far, so I think it's worth a shot.
Perhaps we could create a 4rd currency next to SBD, where we can test this system and see if it's successful or not, and it could run parallel next to SBD and see which one is more liked by investors.
That wouldn't be pegged to dollar but to btc.
I just watched your long chat with Jeff from Oct. - @dollarvigilante -- I couid listen to you and Ned speak all day, I learn so much from finding nuggets of you guys everywhere. I appreciate you guys like I said a few days ago in that post on your page a week or so ago.
Yes that is the whole point. I think a BTC peg is much more elegant and easier to achieve in the cryptocurrency world, than a dollar peg, that would bring regulatory problems.
Besides BTC has already proven itself to be a better reserve currency, just look at the BTC/USD price of the last 2 years.