RE: Unpegged SBD: A Pointless Speculative Asset
I agree with you 100%, will resteem and follow you now.
When I found about about the true nature of SBDs I was somewhere between surprised and shocked: It's an electronic fiat currency and it's in the hand of computer programmers who have only little knowledge about financial/economic aspects of that and zero experience in handling that. It led me to write this post outlining the risks that come with running this kind of scam (because that is what it is if you are honest.)
In the comment section I had a somewhat meaningful discussion with @timcliff, in which my impression got reaffirmed that besides good intentions (and some with Dollar signs) they have no clue about the economic end of Steemit or Steem let alone SBD and its difference to Steem.
This is very concerning because while it might go well for now in the hype-phase that cryptos are in, at one point there will be a reality shock followed by the first real bottleneck, in which cryptos without purpose are eliminated. SBDs are definitively among them because Steem has all properties that SBD has, but it is not fiat. That means, SBD will lose when the verdict by the market comes (Right now there is no verdict or any reality in the market, since nobody knows the difference between Steem and SBD and still SKoreans(?) pushed it higher again.)
One huge problem for the current construction is that markets tend to (ab)use loopholes/design errors as they exist with the two intertwined Steemit currencies. A major weakness is as I believe the idea of holding the SBD peg from below 1 US-$. Lifting it up again costs Steem and if you think it to the end, the peg could ultimately kill of Steemit because theoretically, it would have to eat up all bandwidth to thwart attacks on the peg (yeah, I know, theoretically, but after all possible considering the construction).
As an investor I would also wonder if there is a good product (=Steem) and a bad one (=SBD) or if not both are bad ones because they come from the same cradle. (In an extended thought, that would also apply for Bitshares and EOS.)
These aspects are toxic and they could end Steemit if there is a downtrend coming from the wrong side in the wrong way.
Personally, I believe it is much too risky to keep SBD alive (or allow it to freely flow outside of the Steem environment) and that's why it should be either abolished or reformed that it doesn't harm anymore.
Given the current irrationality of the market, it might not work just printing out SBD to get the price to drop. After all that should have already happened.
It seems preferable to me at the moment to slowly take SBD out of the circulation outside of the Steemit currency market and make sure it gets unlisted on coinmarketcup and other places. An article in a big crypto magazine about the true idiotic and counter-crypto-intuitive nature of SBD might help as well to push the price down again.
As soon as that is done, a controlled peg can be installed, so that services using SBD plus the blockchain as payment system can be developed. But first: Get rid of SBDs in their current form.
You made some good points and added a lot to the conversation, so you win the SBDs associated with this post. The irony also made this a good candidate for winning the SBD too.
omg are you nuts??! You just handed me over some 300 US-$, you know that, don't you?
That's extremely generous of you, thank you very much, but way too much considering the current SBD value (and the overall quality of my comment).
I'm happy to keep the money, but it actually feels wrong. If you have any charity project you want me to vote/resteem/put in some of the $$ or if you need a vote for witness, please let me know!!
If you want to give to a charity, you can. It's your money now. I made a promise a post a couple weeks to give SBD partly as a measure of kindness and partly as a critique of those significantly larger than me to start taking their position of power more seriously.
I also consider delegations a weak form of charity as there is really nothing to lose. Actually putting money on the line is a much better form of charity and it directly impacts people.
I do not know if you saw the post by @reggaemuffin which described a good way of preserving SBD and truly pegging the price to a dollar which would give the SBD some actual utility. If we allow users to convert from STEEM to SBD, then the price of SBDs should fall downwards given market pressure and an influx of new SBD.
However, I do agree with you that if SBDs are only to serve as speculative instruments rather than a peg I would rather just stick with Steem as the speculative instrument and remove the SBD for the sake of simplicity.
reggaemuffins plan could be a good compromise and what he proposes should work theoretically. But I don't trust this market, it's too irrational. I wonder how likely it is that the speculators lose trust in Steem as well? After all, those who hold SBD outside of Steemit will lose a lot, because they don't even have the chance to compensate with Steem trades. When they see SBD in free fall, it might pull Steem down as well and it might be for good.
I would completely remove SBD too. But when I was taking to timcliff, he made to me the impression that witnesses have zero intention in doing anything in that direction. I don't know if that is what they all think or most of them, but it will be very hard to convince them to make such a big change to the platform. After all: They are not economists or business people, they are programmers and enthusiastic about this thing. For them it's a working deal and why change that, it makes no sense for them.
I know for a fact that the witnesses have zero intention and will never remove SBDs unless a large enough population mobilizes against them which I don't see happening.
As for investors pulling out of Steem if SBD's plummet back towards $1, that might not be a bad thing. It helps to reset the market and return things to normalcy. It also helps to remove some of the short-term profit driven investors. It's not really our responsibility to make sure that they do their due diligence and research their investment by reading whitepapers and understanding the mechanisms behind different currencies on the blockchain.
Good to know...
Me neither... One correction here: It's not the size of the population that matters but the number of vests that you can mobilize. That is what drives the witnesses, because your vote for witness only counts as much as you have vests.
I didn't have time to look up the vest structure, which is basically equal to the ownership structure, but I have a hunch that the vast bulk of vests are in the hands of users who don't respond to the SBD issue (or maybe profit too much from it and don't want to change it).
So, I guess the next step would be to look up:
;-)
Two months its too little time for the market to adjust only based on supply.
Besides, the demand for steem coins increased a lot more than (exponetially) than the supply (linear)
Not exactly exponentialy/linear, but the demand became bigger than the supply. Eventually, If the demand doesnt increase, eventually here Will be more SBD on the market than the people on the market Will be able to absorb.
But to force this downward price for a sudden change might be more damaging, bringing the price a lot lower than 1 dollar.