You are viewing a single comment's thread from:
RE: The benefits of inaction: a defense of a high SBD.
I am not really opposed to “do nothing” at the current point in time, but I am not taking some of the other options off the table either. High SBD is good for all the reasons you state - and I totally agree, but the problem is when it goes the other way. When SBD is not being pumped, the main value proposition is that it is a stable currency. If that is no longer the view of SBD in investor’s eyes, it could unfortunately cause things to go the other way. We do need to make sure that we hold on to that, although a stable currency that occasionally has spikes up to 10x does not seem that bad of a value proposition either :)
SBD was meant for being a stable currency and it should be a stable currency. It would also question the legitmacy of SBD's purpose cause it was always meant to be a stable pegged coin.
By the way, authors are loving the SBD to the moon. ;)
SBD is great for the usage of Steem but no pegging will definitely reduce stability. However, this is crypto so I guess the default is to let it destabilize and deflate.
😕😎
I do, but it makes quite a quandary for the fledgling author. I want to convert everything so that I can get more power for forum use, however the constant rise means I also want to hang onto it because of trading out too early.
a stable currency should be a long term goal but when the amount of coins is limited is that even realistic? Since steemit and steem are in the early stages, how do you peg that when we have millions of users and investors AND it's limited in amount? Forgive me if my economics are lackinghere..
I think the long term goal of two currencies should be to keep one stable so an economy can grow within the platform.
BUT that isn't much of a priority right now as that inner economy hasn't yet developed much and the current situation is GREAT for minnows like me, and for the platform as it's creating a healthy middle class.
So I vote "do nothing" for now and set up a kind of "gradual stabilization plan" if this is possible. Is it possible to "print more steem" or is that something we can't or really don't want to do?
Thanks @timcliff and @aggroed for trying to represent so many users concerns.
That would require a hardfork. No sane guy is going to do that to just peg SBD. Of course insane ideas like mine could promote something like it when I called for a hardfork when zeartul scammed people. Lol I was just making a point but we are not going to do anything likethat. Are we @timcliff ;)
So, we can't print more steem out of thin air. Daily about 20k SBD is printed. That's a very low amount to peg it now. It has gone so high that it will take at least a week to go back to its original price.
In fact, SBD might stay high for a much longer time if the pump kings keep on increasing the demand.
I think our views are pretty much in alignment. The proposal to allow users to create new SBD tokens by running the 'conversion' process in reverse is basically the way to address the supply-side problem.
I will start by pointing out that I am new here. But the conversion being only one direction has really confused me. It is not explained anywhere and with the rise of SBD in past week well it just muddied up the waters even further than they were for NEW people like me.
In the article, the author states that he does not want the conversion you are propossing because he feels the SBD gains should go to authors and not STEEM holders. I think this is quite a flawed argument because it is possible for someone to convert steem to btc then btc to SBD. So by making the transfers seamless by implementing bi-directional trading through steemit this would allow for the gains seen in SBD be be more evenly distributed across the two currencies.
The way I see it, Steem should somehow be attached to the SBD price. Not sure how we would implement this kind of mechanism but when Steem rises 10% so too should SBD (Vice Versa).
This environment is still new to me, so I could be completely wrong and not understanding the economics properly.
The point about it benefiting new users is that for most people, earning SBD through author rewards is easier than buying STEEM (or SBD) for real money. As long as the price of SBD is higher, users who get SBD rewards will be able to afford more STEEM for the same amount of SBD. Example - right now, SBD is trading for about $12. If you wanted STEEM, you can get $12 worth of STEEM for every 1 SBD that you earn.
No, your economics isn't lacking.I'm a PhD economist, and in light of Venezuela's announcement, I've been trying to figure out exactly how you could peg a crypto.
The only way that I can see is to would be to disallow trading on external markets. In other words, Steem is traded on exchanges, while SBD can be sold only on steemit for exactly $1. (And the conversion between steem and SBD also only occurs only on steemit).
You can check my wallet it you like, but you might discover that there are outlets for the SBD (and STEEM) tokens elsewhere. Try Poloniex if you dare, but I happen to have just tried out Bittrex. It's a bit hard to get setup, but I am already getting fiat US Dollars into my bank account from a few SBD coins at around $11 USD per SBD. Learn how the exchanges work and you can make real money and profits this way.
Exactly. And as long as it is true that you can convert SBD in an actual market, there is no way to control SBD prices to make sure it adheres to a peg. (And I 100% agree with your Poloniex evaluation, it's down there with Kraken. I don't understand why they have so much market share given all their glitches. But that's a topic for another day).
Woot. You'll have to excuse me while I rub someone's smug little face in this comment.
thanks for this :)
Wow, I never expected an economist to think in line with me on economics. Today was a good day. X-D
SBD can be traded for BTC on Polo 🤔 ....?
If you read the first sentence of the paragraph and last sentence of the paragraph as well:
The fact that SBD is trading on other exchanges, like Poloniex, is why its price cannot be fixed at $1.
It's like you are also making a point here. I would like to hear more
In January I'm hoping to start doing bi-weekly posts explaining the academic literature that's been published around cryptocurrencies and cryptoassets. Since I'm interested in the international market aspects, I suspect that a discussion of pegs will make its way into one of my posts sooner rather than later.
I get why it’s worth a lot (it’s similiar to ebtc) but I think increasing supply is the answer. The 75 pct reward option. Seems perfect.
yes. I also think that the increasing price of SBD is really good for all stemian. because as increase in price of SBD then obvious acount value of steemit member increase. Steem and SBD are both cryptocurrency is important for all stemian. So like SBD, Hopefully price of steem will be increases.
It's temporarily good but in the long term it is not. SBD is not meant for being that high. It's called Steem Dollars for a reason. It is supposed to be pegged to 1$.
I chose to post my comment here so everybody will see. The world is a greedy place already. People tend to love what mostly benefits them. For the minnows, the rise in sbd is the most happiest thing to them.
For some of the whales,oooops they've already got lots of steem, so sbd rise is not something they'll be happy about. That'll want steem to grow instead of sbd.
Monitor the comments on this post and you'll notice what I'm talking about.
Those with more steem will want steem to rise and sbd to go low.
Those with sbd will clamour for the price of sbd to remain as it is or go up.
It's just what humans do.
Nice article.
Happy Steeming
And what prevents the SBD to be fixed currency, but with the price of $10? :) Yes it may sound illogical, but on the other hand, fiat money works on the same principle constantly changing in price relative to each other, and even their equivalent in commodities is constantly changing. Even gold may vary in price, although it is considered a standard. Pump cost, for example every six months is normal. I think more harmful is to force the lowering of prices, which again can jump. Such a scenario definitely rules out the concept of fixed currency.
That makes no sense. Do you want a stable currency? Or one that spikes by 10X? Those are mutually exclusive.
If SBD could be a stable currency over the long term, but occasionally have a spike - I think that would be OK.
I dont think so. If u cant trust the peg its useless.
Think about people that want to use sbd to be able to plan and manage their cost ?
Not exactly true. A minimum-peg guarantees the lowest price, but lets the currency go up as high as it wishes (a minimum peg from one perspective is a maximum peg from another. For the purposes of this response I'm using the minimum peg terminology to mean that the lowest SBD price is $1).
From that perspective, if the ecosystem can guarantee you that the lowest price you'll ever receive is US$1---but you may get more---is arguably is as good as a system that guarentees that you'll only get US$1.
Very true
SBD is not stable currency because its price increased suddenly.
It has been stable for a long time,
Just because people buy in for insane prices. Means that they probably didn't read the whitepaper.
Something has value when enough people want to buy it. Maybe the overall market is larger than the original ideas about creating a Utopian currency detailed in the white paper.
Basically if you look at it from a Perspective completely outside of a Steemit user the White Paper is essentially a plan for artificially suppressing two currencies (Steem and SteemDollars) in order to maintain a Pyramidical system of control.
Steem is artificially devalued by nearly 10% every year and SteemDollars are "pegged" to the US Dollar. Both of those concepts are essentially nuts. So you have an innovative BlockChain Social Media network where it's internal trading currency (SBD) is pegged to Fiat currency. Go figure. Pegging a Crypto currency to a Fiat currency is an Oxymoron right?
By volume Steem is one of the largest established Crypto currencies and is the only one that is being artificially suppressed and devalued. If it wasn't artificially suppressed then just on the value of Steemit having so many active users and being part of the Steem BlockChain the true value of Steem should be way closer to Bitcoin.
Maybe letting Steem and SBD rise naturally would actually be a lot better for Steemit users as a whole.
SteemPower is already locked in. Why do Steem and SteemDollars therefore need the artificial constraints? Why can't they just be traded naturally on the marketplace.
I think that the reason why both SBD and Steem have been devalued and suppressed all this time was to give an incentive to the whales to sell the coins. If you look at https://steemwhales.com, you will notice that very few users control the vast majority of the coins, and that is not a good thing for Steem as a platform.
By keeping the price of SBD high and Steem relatively lower for the medium term, the small minnows will at least get a chance to acquire more Steem Power by selling their author rewards in SBD and get Steem to powerup, which would improve the overall distribution of wealth on the platform.
Agreed. Also most of this will be solved with SMTs, since each SMT will have it's own distribution.
I totally agree. There are many, many Steemians, who provide high quality content. Additionally, the time stamp is default equivalent of a copyright, patent, registration, or trademark. This fact alone should be promoted more, and also makes content on STEEMIT very, very valuable.
Therefore, undervaluing STEEM and SBD is likewise undervaluing the content providers. This condition must be changed, whatever it takes.
yes. you are right. thanks for comment.
I really like this post as it includes historic analysis, financial facts and is written in language, I think is understandable even to a person who is not financial pro. dealing with higher SBD price, that's nothing special, as "Korean exchange start trading Steem and SBD". So Steem and SBD became "Hotter than two hamsters farting in a wool sock" :)
(southern US saying). When something is massively bought up, it becomes more rare on the market, right? Everything gets high in price with its rarity. If gold would be bought up, it's price would sky-rocket. And same thing happens with anything else on the market. This way of trading is old as it can be.
true.
the idea of a stablecoin isn't supposed to do stuff like this !
in this case we luckily experience the benefit side.
mmmmmmm
not sure what u ment