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RE: The STEEM "Shilling" Contest (Round 2) - 300 STEEM in prizes!!
One question before the "shilling" I heard a FUD about how STEEM or maybe it was SBD could just be created if needed, kind of like how the fed, creates more money? Is this true? Or is this FUD?
The witnesses have control over how much SBD is printed using their price feeds. If they report an accurate price, then the amount of SBD printed is fixed based on the defined inflation rate, and the marketcap of STEEM.
Technically the witnesses can provide intentionally high or low price feeds to cause the blockchain to produce more or less SBD, but this is not a common practice.
More information on this is available in the bluepaper and whitepaper.
Okay, thanks for clearing that up @timcliff. For STEEM, there is only a fixed amount. Right?
The amount of STEEM generated is fixed, plus there can be STEEM created when users convert SBD to STEEM.
The SBD conversions do add a form of variable print rate, because it depends on the difference between the price of STEEM when the SBD was created and the price of STEEM when the conversion takes place.
So potentially a group of witnesses could get together and form something similar to the "US Federal reserv" by just printing a whole bunch of SBD and turning it into STEEM, and create a hypothetical hyperinflation? That could sink STEEM...?
Or (please tell me that there is one) anything like a mechanism that prevents something like this from happening???? (Sorry for my novice questions @timcliff, I understand that they are irritating, but I just don't want to lie when "shilling" 😎, I mean the biggest selling point for BTC is that it is limited like gold)... Examining the bluepaper.pdf...
There is nothing preventing it from a technical perspective. The system uses a 3.5 day median of the price feeds for all calculations, so if a group of witnesses decided to try and do something that was not in the best interest of the stakeholders/network, then the stakeholders would be able to vote them out.
FYI, STEEM is not limited like BTC. The inflation rate will continue to go down over the next ~19-20 years, but it will never reach zero. (More details are in the bluepaper/whitepaper.)
Okay, I will study the blue and white paper closer...Thank you again for being patient @timcliff... If you have time, check out this post on an idea for an interesting feature for steemit:
https://steemit.com/steemit/@friendly-fenix/proposal-of-features-for-steemit-difficulty-levels