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RE: The Rate of Steem Backed Debt Issuance is Too Damn High
So maybe for the sake of the system I should convert my 48 SBD to STEEM? I'd lose the little bit of interest income and risk a further decline in the price of Steem, but if it's going to be a help to the platform, however small, I am thinking of doing it!
NO!
This does not help. Someone else will get the interest payments on it which is part of what is increasing the proportion of SBD to Steem. Currently the only influence we can have, which is by its nature altruistic, is to use it to promote posts, which deletes the SBD from the blockchain.
Better you keep it than it get into the pool of an exchange like bittrex or poloniex. This is why the parameter has to be changeable (the proportion of SBD to Steem issued). It's too much and then on top of this it is a desirable asset to hold for someone (like an exchange) who depends on keeping a cash reserve.
If you see reason (or want to join this campaign) use the SBD you have to promote your posts and maybe drop a little link to this post to explain why you are promoting. It's more important that we get a mandate built that this reduction of issuance needs to be done (and justifying this mandate with some analysis will help too) than anyone personally sacrifice their SBD holdings. The exchanges won't do it so it's a prisoner dilemma that won't go away until we can stop printing so much debt (ahem, dollars).
I have thought through the possible ways to do this and the only one that fits the architecture of the system is to simply not issue so much. Negative interest rates on SBD would also reduce supply but it is possibly impossible to implement (charging is not a procedure that blockchains can really do, they are credit-focused), and allowing people to unwind it has no guarantee of sufficiently reducing it, because it is work for no benefit (unless there is a dividend payoff, a discount on SBD vs Steem in this unwinding of the contract).
Witnesses, on the other hand, if they had an influence over the interest rate of Steem, and as a group probably can make the best decision about steering the issuance rate up or down.
I am burning my SBD in protest. It's not going to have a measurable effect by itself and it costs me exactly how much I burn. It is to raise awareness and get this subject settled because it has been on the table at least 2 times in the last 6 months and it was partly why they introduced the promotion tab.
Thanks for your excellent reply!
I was under the impression that if you Convert SBD to Steem using the UI on the Wallet page, you were actually burning or destroying the SBD. The SBD would be gone, not simply transferred to another owner, but the Steem associated with it would be "unlocked" and received from the conversion.
I have been further informed that convert does free the Steem (delete SBD). But currently you pay a little for it. It works on a moving average of a median momentary price. I am investgating it further.
Thanks for all the thought and effort you put into investigating this matter for the good of the community!
@l0k1 I still like the SBD and IMHO a lot of us does specially that it's now worth $1 freaking easier to understand :P but I still voted for your post why not :)
When steem goes up, it has to sell steem. So too much of it and it sells too much steem. I'm not saying abolish it.
@l0k1 okay copy that
I always get rid of my SBD by putting a little towards promoting peoples post that encourage conversation. This is really what the community is about and I think others should consider doing this for posts they really like. I put my SBD where my mouth is by adding to the promotion pool of this post with some of my SBD.
Thank you for the post and getting the conversation going! ;)