RE: What is up with Steem Dollars??? SBD
That article was outdated. Steem inflation rate is at 9.5% a year, and will continue to fall by 0.5% each year until it reaches 1%, less than the USD inflation. The reason why I wouldn't worry about inflation is two fold.
For one, if you power up, it's inflation proof. Meaning whatever percentage of the total Steem that you powered up represents, you will have when you decide to power down. So if you power up 100 Steem when there are only 1,000 Steem in existence, you'll own 10% of the total shares of Steem. When you power down, and lets say there are now 10,000 Steem in circulation, that 100 Steem is now 1,000 Steem.
Secondly, most of the Steem that is being created is not put into circulation. It's mostly going into Steem Power which locks it up. So although there may be a high inflation rate, it's not impacting the total liquid Steem in circulation.
As long as the growth rate of Steem matches the inflation rate or exceeds it, Steem will continue to rise in value.
Thanks for the info, I did not see the update :) Had no idea that powering up had this effect, very useful information and thanks for sharing!
I have been studying up on the subject because I want to invest more in Steem, and I must admit that like many others it created more questions than answers, i.e. the SBD has had a name change in the updated white paper to "Steem Blockchain Dollars", and from what I read it is no-longer pegged, as it is traded freely on exchanges and prices decided solely by the market. Also read an article where the witnesses discussed if they should attempt to "correct the price" of SBD, which made me conclude that not even a "soft peg" i.e. the guarantee that 1 SBD = minimum 1USD, is no longer in effect, but perhaps I have musunderstood something. It left me wondering, what is the point of having SBD and is there still a usage for them?
Article link: https://steemit.com/sbd/@aggroed/the-benefits-of-inaction-a-defense-of-a-high-sbd
If you have some knowledge on the subject I and others would greatly appreciate it :)
well TBH I think releasing the SBD from USD peg was the wisest thing, the USD is going further down this year now that China begins to challenge the petrodollar with gold-backed Yuans