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RE: How SBD could replace BTC: an Unconventional yet Possible Scenario
I read most of it now, but have to read it all again, repeat it, verify it, think about it and internalize it.
I have a remark about utility:
While BTC may seem useless to some, it and other currencies have an important utility:
dividends/airdrops
In this case, holders of currencies receive other currencies, which may in turn be very useful, like Byteball and Steem.
In your scarcity scenario, one of SBD's very few utilities, which is conversion to Steem is disabled.
Regarding gold, it is mined and may be either brought from space, or airdropped (which is how it reached earth) from space.
So gold supply increases and is expected to increase.
OK, good! Love to hear from you when you have re-read it , thought about it and internalized it! ;-)
SBD getting "scarce as gold" is of course just a comparison. I could have (perhaps?) better just said "scarce". And that scarcity is not just a hypothesis but a real effect caused by the way the blockchain prints SBDs.
BTW, I'm not against BTC, in any way. The BTC-replacement scenario part in my article is a possible scenario; unconventional yet possible. Things need to advance, regarding the Steem ecosystem, a lot even, and the "SteemCommerce parts" are quite important for the scenario I talked about (regarding SBD replacing BTC) being able to happen. Having said that, of course in the BTC world, regarding sidechains, also loads of possible advanced mechanisms can be implemented. Like the usage of sidechains. We'll just have to see what's going to happen!
I have another problem.
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.
Its inflation rate is and in average will continue to be much higher than gold.
Due to this inflation rate and the unsustainability of Steem's blockchain, it can never replace BTC.
It should be preferred over Tether, which is what you should have compared it with.
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.
@youtake pulls you up ! This vote was sent to you by @stimialiti!
i have not enough sbd
Then produce some good content to earn some! ;-)