I don't agree with the minimum price formula. That means if all SD in existence right now except for 1 SD was collected into one account and then converted to STEEM with a single conversion request, that 1 remaining SD would likely be able to claim 13503 STEEM (which at current prices is worth approximately $19,444 USD) through a later conversion. Now obviously, that is a ridiculous example, but it demonstrates how a sudden large decrease in SD supply due to conversions, can cause later converters to get a lot more STEEM than they should due to that minimum rule, even if the price of STEEM in USD doesn't change.
There is no need for the minimum price. If the USD hyperinflates (which I disagree with you regarding it being more likely than the other type of black swan), then the witnesses could just transition to tracking the price of some other asset with reasonably stable value. For example, the witnesses could instead track the price of some other currency, or if necessary maybe even the price of gold. An appropriate factor would be included into the definition of the price being tracked so that there isn't a discontinuous change in the SD/STEEM feed price during the switch over from tracking USD to some other asset.
The social contract regarding the price feed should not be to track USD, but rather to track an asset with relatively stable purchasing power that has a well-defined computable price relative to STEEM, whichever the best asset for satisfying those conditions is at the time. Obviously, we would also want to avoid switching the assets we track unless it is truly necessary to satisfy that social contract. And the decision to switch and the particular asset to track instead should only be made after extensive community discussion (and enough time for stakeholders to reflect their views through witness vote changes) which includes the opinions of both relevant parties: SD holders and STEEM/SP holders.
We should have in parallel more that one "stable" assets. Why waiting the $ to collapse and then making the switch? (it will be too late if it happens too fast) We should give the option to the steemit users to get paid on any currency they want! Steem Dollar, Steem Gold, Steem Bitcoin, Steem Silver, Steem Yuan etc.. So in case one of the"stable" steem currency collapses only a part of users would be affected and not all the project! Right now we are vulnerable to a one point of failure and that is the US dollar value (how ironic would it be the steemit project to die because of a FIAT currency fail!)
At some point it might sense to switch to Bitcoin. Bitcoin would need to be much more stable and much more widely accepted before this is feasible but I don't see hyper inflation or deletion anytime soon.
There are trade-offs either way. US dollars will likely bring in more users outside of the crypto world, but it has a real threat of hyperinflation, given enough time. Too many markets, as you suggested, would cause confusion and create illiquidity in markets. Gold may provide a nice balance. Its likely to never hyper-inflate and its a single market that most users on earth can relate to, although with a bit of perceived volatility.
People perceive volatility in gold because they are measuring its value against fiat currencies whose prices float against each other. "Two sides to every coin", so to speak... which asset is volatile? the metal or the paper currency? It's a reflection on the instability of the fiat money system that exchange rates on currencies fluctuate so much against each other and nations engage in currency wars to game the system.
I don't understand how your conditions could be met if USD fails quickly.
Perhaps that is a good reason to find an alternative to the US dollar sooner rather than later.
Can u explain why you do not like this and downvoted Dan?
I posted a comment that I like the proposal. I downvoed it because I don't like seeing thousands of dollars sucked out from the reward pool day after day every time he posts a proposal or update on the development process. That's not Dan's fault, it is just my disagreement with some of the other voters.
@liondani, Yes communication from the team helps bring confidence but I'm pretty sure this is not the way to do it. When investors see thousands of dollars being paid to founders day after day, including voting for themselves to do so, it contributes to the narrative of this being a scam that is set up to enrich insiders. It isn't necessary at all, since the team already has a $100 million "pre"-mine and should be sufficiently well-compensated to post updates without draining the reward pool doing it. If not, then something else is very wrong.
As far as the trending list, i want a sticky feature for team updates or some other way of organizing them that does not drain rewards. 100% of well-run projects already keep their investors and users well-informed without being individually paid thousands of dollars for each update. This is not rocket science!
I still think Daniel's post's bring more value than it "sucks out" due the confidence it brings to the shareholders ! At least that is the case for me! Every-time he post's updates it gives me one more reason not to Power Down but to Power Up... I certainly want his posts on the top of the trending list to be sure nobody misses it...of course it doesn't need to be on first place or having a big gap from the next posts in value...
@smooth I agree with your action. Ned downvoted Dan's previous post from the same reason - to remove the reward from the post.
As Dan mentions below, an option to 'not pay rewards for this post' would be nice.
Also, did the Comment Reply chain get reduced to 4 instead of 6? I would have replied below to @liondani's comment but can't anymore.
Maybe votes' functions should be tied to how those votes are voted by others. You know, similar to what we have with typical democracies, not like the USA though. Current voting structure with Steemit resembles American elections - Money talks. Votes' effectiveness should move from bottom up. That is votes that are upvoted should count.
@smooth I think it would be helpful if there were a feature to "opt out" of the reward pool. still show the "value" for trending but some way of saying that you are giving the reward back, and have that be built into the system.
My question is what happens after the federal reserve can't push their forward guidance to the people any more, and they stop believing in the USD, their for cutting down its purchasing power.
And or if quantitative easing is brought back this time being bigger then the last three and the USD index drops .does that mean Steem dollar drops with it.? @dantheman thanks for the read your articles have been great to read.
SBD is linked to the US dollar (including all of the US dollar's warts) as long as that is feasible to do. Dan's post and the previous one are about what happens when it isn't feasible any more.
I LOVE the idea of pegging the value to gold instead of USD as USD will collapse at some point in time as all fiat currency's will. Yet gold has been used as money for thousands of years and will continue to be so.
As long as we are only pegging to the VALUE of gold, and not to the commodity itself, which can just as swiftly be confiscated or withdrawn black swan style.
And I do not agree with the max price. This means that SD would be worth less than 1 usd in (the very likely imho) scenario of steem having market cap of less than 21 mil USD , as of this writing for example. In other words the promise for about a dollar value of SD will not be valid for all current SD holders in the very like scenario of steem price returning to the levels we saw just 1.5 months ago.
I agree that it would be important to switch the peg if needed. Also agree that the idea of sd is stability and not fix to USD, although right now USD is the best way to do this.
Howev, does a limit not make sense anyway? To prevent black swan events?
Why do you think the US dollar is the best peg now?
Yes, very well said. Most important is that we have some kind of stable currency, not that we have a currency pegged to USD.
Perhaps that could be a long term solution if the Steem Dollar hits the minimum price or appears to be close to hitting the minimum. But I think it's important that some sort of safe guard be in place in case of an extremely rapid price change.
You're not going to be able to switch what is being tracked on a dime, and even if you could, there's no way to know if what ever you're automatically switching to has the same problem as he USD.