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RE: How SBD could replace BTC: an Unconventional yet Possible Scenario

in #steemit6 years ago

Even if SBD will cease to be created, it will be temporary, until Steem's inflation will catch up to it,and then its production will be resumed, its so like gold, it will not be a limited resource.

Well... no. I gave a quantitative example already in the body of my article above. Suppose there are 100 million SBD tokens circulating. Then in order to let the "5% rule" apply, Steem market cap needs to stay below 2 billion USD (roughly a price of $8.- per Steem). In order to print new SBDs, the Steem price needs to rise to - say - $10.- per Steem. And as an effect, temporarily, lots of new SBDs will be printed. Say there are then at some point 150 million SBDs circulating, then to overcome the "5% rule" Steem needs to have a market cap of at least $ 3 billion USD (roughly priced as $12.- per Steem). If Steem does go above that, new SBDs will be printed even faster.

Do you now get my point? The more SBDs are circulating, the higher the price of Steem is required to overcome the "5% rule". Yet if it does, then the printing of new SBDs will be ever faster. And eventually the Steem market cap simply cannot keep up with the circulating amount of SBDs. And as an effect, SBDs will be scarce for they will not be printed anymore.