RE: Should SBD Be a Pegged Asset? If So, When Should We Peg It?
Literally every one of those items on your list except the first and last is guaranteed not to happen unless SBD becomes stable at $1 first. Since you saw fit to list them, you clearly recognize the importance of those opportunities and others like them to the Steem ecosystem. In order to have any chance to pursue them, we need to fix the peg first.
I don't see how the millions, billions, or trillions suddenly materialize because we had a $1 SBD before and no one gave a shit.
Read the post. The market conditions have changed dramatically. There was a time when Tether was a tiny little thing stuck at under $1 million market cap for years and no one gave a shit! Yes that's right, Tether went from $500000 to $1.6 billion. Likewise for BitUSD, NuBits and the others (though they are of course smaller; Tether is the current leader).
The answer to your (implied) question as to why this matters now when it didn't matter before is simply that it is 2018 now and not 2016 (however, I will say that even in 2016-2017, the Steem community was spawning its own SBD-based initiatives that could accomplish some of the same goals as items on your list, initiatives that were smothered in the cradle because we failed to act to fix SBD when it started to de-peg back then). The environment and market is completely different and the scale of the opportunity is vastly larger now. Given the other powerful attributes of Steem (large user base, ease of use, ability to on board users, speed and scalability of the blockchain, no/low fees, etc.) we are well positioned to pursue that opportunity but we have to fix SBD first, or we are just not even in the game.
I think you're right, because of the social media aspect we're still well positioned. Once the changes are brought in we can:
Normally it would take 6 to 12 months before anyone would trust a pegged asset with big money, especially after a somehow failed experiment like the SBD was. But if we are able to put across through the influencers the message that the SBD was only meant to be a coin with a 1$ floor (therefore pretending that it worked perfectly), and that SBPD is instead a new pegged stable dollar coin....then we can see adoption much sooner.
I don't know when the ERC 20 pegged coins will be production ready, but I believe because of the Ethereum brand they will be adopted immediately by the community. Ethereum has had more fuckups than any blockchain out there but somehow they can't seem to do wrong in the eyes of the investors for some reason which frankly I can't comprehend. Also their peg may be backed by real dollars in the bank (I don't know yet).
So it is possible that they might beat us in capturing the Fiat market on exchanges. Currently we only have Poloniex as potential market anyway. But for the retail and online shopping we're still in with a shot. Also lets not forget we have an internal market here on Steem which could skyrocket in volume.
To capture the retail market it would be wise to start already working on a SteemBay portal in preparation for the SBD changes. So it can launch as soon as the fork occurs.
Though it is very possible to imagine a future where retailers start accepting all battle tested pegged assets: OpenUSD, SBPD, ETHUSD, TETHER etc
Because of the integration with Steem social media and the 0 fees the SBPD could end up being the most convenient. Ultimately though no pegged asset can compete with a proven Dollar backed coin (meaning with dollars in the bank) like Tether was supposed to be.
So I might overstated the importance of having a properly pegged Steem backed Dollar, but we should at least give it a proper go. Even a small fraction of the finance and retail markets would bring enormous value to Steem.
Btw before announcing the replacement of the SBD with the new pegged Dollar coin it would be best to wait till it goes back towards 1$ so not to cause a major backclash in the market.
This is such an important point. We have to have a long, trusted history as a pegged asset before we'll be taken seriously as a pegged asset. It may take many months or even years and the longer we wait, the longer it will take to build that trust.
Daaaaamn. Either BitFinex is just friggen amazing at on-boarding new fiat into cryptocurrency or that sure seems like a nice money-printer they have there. Heheh... I won't get into that discussion here though. :)
USDT doesn't necessarily work the way people think it does in terms of so-called "on boarding" (i.e. people from outside crypto deposting new USD and getting USDT in return). It can also attract capital directly from crypto wealth and do so completely legitimately (i.e. without the rumors of fiat printing being accurate). Here's how.
Let's say people are selling their ETH, BTC, XRP, etc. (even STEEM) wealth into USDT, and this drives up the price of USDT (say to 1.01 or 1.02). Assume Tether/Bitfinex has $100 million of its own corporate working capital from VC, private backers, etc. They can use that $100 million to legitimately print 100 million USDT for their own account. At this point the printing is not fraudulent, fractional reserve, etc. because $100 million gets transferred from corporate working capital into the USDT escrow account. They then dump that USDT onto the market in exchange for BTC, ETH, etc., driving the price of USDT back down to 1.00.
Now the final step is interesting. Tether can take the BTC, ETH etc. they just bought and send it to a high-limit corporate account on a major fiat exchange, and sell it back for USD, replenishing the original $100 million corporate funds, to repeat the process again when needed.
I have a feeling this is actually where most of the USDT market cap growth has come from (assuming it isn't mostly fraud), but I have no proof it of, just inference.
Interesting. I question how they can keep printing new Tether and aren't burning it, but maybe that's just a sign of more people coming onboard. To my understanding, they can't print Tether unless it's backed by money in the escrow. If they keep printing, that implies real new money going towards the escrow, right? Maybe it's not "new" money, but money Tether/Bitfinex already has on hand, but it still seems to me when things fluctuate the other way, we should be seeing Tether burned and funds returned back from the escrow to BitFinex to cover real USD withdrawals. Maybe if the bull run turns bearish we'll see that.
Again it isn't a question of onboarding necessarily, just capital flows, and quite possibly it is because with $400 billion or so in newly-added crypto wealth the overwhelming majority of capital flows are from other highly-appreciated cryptos (BTC, ETH, XRP, many others) toward USDT not away from it. Also keep in mind USDT's role in trading pairs, which itself creates added demand for it (especially as USD price of the other coin increases; more USDT needed for buy orders). Also, to me it sure looks like many of the paths by which new outside, so-called "onboarding" capital is entering crypto have little to nothing to do with USDT (Coinbase, Korea, Japan, etc.). Or perhaps it is all or part fraudulent as many suspect. I don't know (and in some sense it doesn't matter; part of the problem with the non-trustless peg model is that it simply can't be trusted).
It isn't so much a matter of bull run vs. bear run as it is demand for stable crypto. It is quite plausible to me that demand for stable crypto has mostly just increased over the past year or so (and indeed this is mirrored by the other, smaller stable cryptos). But at some point when the demand for stable cryptos tops out and heads downward, there should indeed be burning of USDT.
By all accounts BitFinex's ability to handle real USD withdrawals has, at best, been greatly hampered by banking issues. So this path by which capital could conceivably exit USDT may be quite small. But in any case given the natural friction of exchanging between crypto and fiat (and relative lack thereof in exchanging crypto-to-crypto) it may always (or at least for a long time) be that the dominant flows into and out of USDT are between USDT and other cryptos, not between USDT and USD directly.