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RE: How to fix Steem Inflation? - RESCUE PLAN

in #steem • 8 years ago (edited)

So holding a reserve is definitely an interesting idea. (Like Fort Knox holds a reserve of US gold.) You are right that it would most likely need to be in BTC instead of USD because of the regulations. With today's market conditions, the 50% that is held as 'reserve' would help to combat the inflation. The flip side though is that if the BTC goes way down or STEEM goes way up, then the money that had been put into the reserve would essentially be lost/wasted (or at least significantly reduced). I would argue that it is essentially a hedge, and would more or less have the inverse effect of the 'non-reserve backed debt' portion of the coin.

8 years ago in #steem by
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     8 years ago 
    • Yep, and it would be transparent, whereas the Fort Knox Gold is very dubious
    • Well that is why we select BTC because it's the biggest on and most widely used, so the risk of going down is small. In fact I would argue that BTC is better than USD, since the USD has a higher inflation than BTC, so while the BTC risk is uncertain, the USD risk is guaranteed.
    • It's not hedge, we know that BTC's price is more or less upward trending, if not for anything else, but for the fact that it has the lowest inflation rate amongst all currencies, so it would be wise to save in BTC rather than ETH or OneCoin (haha).
    • No it would lift everything up, Steem would still be the basic currency, and this asset would bring a net positive transaction balance into Steem, adding net positive demand to it regardless of what happens to the asset itself (but BTC should be stable). Since people have to buy Steem first before getting access to this asset, Steem's value would be dependent on this asset's trade volume.
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