I don't think SBD should be cut out of Steem. It goes hand-in-hand with the goal of Steem, to broaden the userbase of cryptocurrency. People that live in economies with shaky currency may be able to adapt to 100 STEEM today being worth what 10 STEEM was a few months ago, but the simple fact is, the people who have money don't deal with that as well.
Given its relevance, I'm surprised nobody's linked to this post from the architect of Steem yet:
https://steemit.com/steem/@dan/steemit-s-evil-plan-for-cryptocurrency-world-domination
Conversely, SBD is a reckless idea when Steem is 95%+ volatile. Steem should not be backing anything, let alone a USD. The SBD debt collected during the initial Steem peaks has been tremendously detrimental to the Steem network.
Perhaps the idea of the SBD can be revisited once Steem is stable, but then the argument would be there's no need for SBD.
That post should be taken with a grain of salt - much has been learned and has changed since that post. Part of that is Steem is better desinged as the global currency
And to amend that post, the big goals are really three fold:
1/ grow the greatest social network possible
2/ grow a censorship resistant content network for the entire internet
3/ bootstrap a fervently supported digital currency
I worry that without SBD 3/ will be may be impacted when trying to convince merchants to price and sell goods in an unfamiliar currency. In some ways SBD is a simplification for these users and I wonder if it will become more difficult to onboard merchants if they have the additional worry of price fluctuations. That being said SBD does not come for free and it is hard to predict if the adoption benefits outweigh the systemic costs and risks.
This is exactly right. And I think this is one of the advantages that STEEM/SBDs have over BTC as a crypto that can actually be used as a currency instead of just a buy-and-hold investment strategy.
You can buy almost anything on openbazaar with steem.
A U.S. dollar pegged token was chosen because of the relative stability of the dollar and the familiarity that many people, not just Americans, have with it. A typical person that is used to a dollar or a euro or a pound is going to have more difficulty with a token such as STEEM as a currency because of its fluctuating value.
I understand the position of seeing SBD backing as a risk, but it's a risk worth taking for the benefits of broader adoption. The risk could be mitigated in some ways, such as reducing how much SBD is paid out, less so than now even. The idea of witnesses using enough of a bias to incentivize conversion is another method of deflating the SBD burden.
I wasn't bringing up anything about SBDs risk profile. Steem is the better currency to couple with mass adoption
As a businessman who has worked with many other business people in my life, I can tell you that a volatile currency is not the "better" currency for mass adoption - if your goal is to have this currency actually adopted as a currency. A peg to a native currency (and let's face it - there likely aren't going to be many crypto-only businesses any time in the near future) allows normal business owners to onboard with STEEM/SBDs for their goods/services without the need to monitor fluctuating prices of both STEEM and BTC, relative to their native currency.
So, if the idea is to get people to actually spend and receive STEEM/SBDs as payment, then having that SBD-Dollar peg will be much more attractive for those individuals.
STEEM may be better for mass adoption for the social media and investing part of the equation, but SBDs are better for mass adoption for the actual use of the currency as a payment option.
When I think of a peg, I think of Argentina, or Greece. Are there examples of successful pegs?
Nothing Tether or another pegged digital asset cant do if that's what you truly believe.
Steem is the better community vehicle ---- and overtime with increased liquidity it's good for payments. Case in point, I personally use bitcoin often for payments (because of its liquidity and contractors willingness to accept).
I agree with @ats-david on this point. Much easier to do the books and price things, making it easier to adopt. Easier to explain to noobs and merchants too. Stability in a token is a great benefit and selling point as well.
I like it a lot and think it helps steemit s a whole. I'm not sure why we're even discussing removing it. Why is SBD in the whitepaper to begin with? There must have been some benefit behind it and how has that changed today? Is it a liability in some way and, if so, to whom?
I still think the stability and intuitive familiarity of the U.S. dollar makes the SBD worth keeping. Increasing the value of STEEM as a token is very important. But if it's the only token to be used by the everyday people that Steem is meant to engage, I think it could be an obstacle to the wide adoption that is hoped for.
Furthermore I think SBD is an excellent token because of the fast blockchain it's running on. As long as it holds its value to within a few % of the dollar, it has the chance to become a de facto USD-pegged token because of its speed and user-facing simplicity. I hear what you're saying about complexity but so far it's been a complexity that's been manageable.
What does Dan think about the future of the SBD?
The facts ---
SBD increases STEEM volatility, which is bad for currency adoption
SBD creates systemic risk
SBD means a multi token system
We cannot say "Steem, yeah, there' should just one token"
Some are arguing SBD has some untapped value on the road to STEEM becoming a currency. I don't wholly disagree.
Dan and I uncover things until we feel we have the truth. Steem is the currency of the future.
We agree it's best to put the conversation to the community before supporting one way or the other what we think about the future of SBD, which does not need to be a binary position, it can live on, live on with a reduced role, or be retired. No decision need be made overnight.
Replying here because of nesting limit.
I acknowledge that SBD comes with risks. Bittrex and Poloniex using hot active keys on accounts that hold millions of STEEM is also a great risk, but it's one that has been tolerated so far. Furthermore, SBD risk mitigation has been baked into Steem.
I'd say SBD has been a selling point, driving some investment in the idea of Steem in general, and in Steem Power. At least it was for me.
It's hard enough to get people --even bitcoiners-- to use BTC in commerce, let alone newer blockchain tokens. SBDs are much more familiar units of trade than a STEEM token to any American and probably Europeans who use units of similar value. Using STEEM will add complexity to the user experience because if they want to transact, they'll have to first convert the value of STEEM to a value they're more familiar with. SBD jumps that hurdle.
Just want to respond to @pfunk -
If there were no SBD option, I would have been cashing out all of my STEEM rewards as I got them - or whatever was left over after powering some of it up. So, the choice will come down to this for many users, especially those running businesses: Power up your STEEM, or sell it (relatively quickly) on an exchange. Holding the STEEM can really screw up your accounting if the price is constantly fluctuating by relatively large percentages, as cryptos often do.
The other option would be: Don't accept STEEM as payment.
Businesses need a reliable/stable pricing and payment system. You might find a few who are willing to dabble in crypto markets, but you won't get the widespread adoption.
Pros -----
SBD can lure none crypto ordinary ppl into steemit system.
Cons -----
SBD incur volatility on Steem.
SBD put downward pressure on steem Price.
I don't see anyone came to steemit system because of SBD, do u know any pfunk?
In response to @publicworker. Yes I do. Many people came to Steemit because they were able to earn "dollars." I'm sure there would be less adoption if so many people outside the crypto space would come and see you could earn something that you've never heard of called "STEEM" and its worth 13 cents but was worth 20 cents a bit ago and 4 dollars some months ago. And if they don't cash out right away, they may end up only getting 10 cents or maybe get lucky and get 20 cents because of a market upswing. This makes no sense to someone who doesn't understand a currency token with a quickly fluctuating value because they've used dollars all of their life.
I invested in Steem Power and then later in mining and then later as a witness because I believe in Steem's ability to draw in new users that wouldn't otherwise touch a cryptocurrency. To remove SBD would be counterproductive towards that goal.
Because they didn't cash out immediately, Steem's debt ratio intensified.
They could have changed their steem to btc if they want more stability. SBD has little or no benefit but cost is too high.
@ned - replying here because of nesting limits.
How does SBD increase STEEM volatility? Wouldn't more STEEM in the market increase volatility and drive the price down further?
How? If someone could explain these first two questions like I was a 6-year old, I might understand why we're even having this discussion about removing SBD from the system. I think I'm missing something here.
Even if only Steem existed, it's still a multi-token system from a practical standpoint. I can't spend Steem. I first have to exchange it for BTC then to fiat to buy most things.
A price stable cryptocurrency may be important at some point. I think it can be introduced again later, once there is more demand. In the short term, we haven't really needed either SP or SBD, and we now have an actual currency in STEEM. Let's focus on building up STEEM and taking on Bitcoin. If those other pieces serve a need later, they can be brought in again.
When I read this post earlier I felt that the right option is to keep the SBD but I think I have changed my mind. Why keep a financial instrument that creates debt on the system?.
The argument that people are familiar with value of the US Dllr I don't think is enough. A simple solution to that would be to have a feed that displays the value in USD in the wallet (much like today). Same goes for the payout of the posts.
To steem, SBD is a like crutches, a wheelchair, or bicycle training wheels.. it's time to move on witout it
Steem is 0 years old and it's time to take off the training wheels already?
Maybe eventually, but it is very premature to do so now.
I agree @pfunk for all the reasons you're discussing. It also makes it very easy to explain to my friends and they like having SBD's.
Before doing away with something in a system we should ask ourselves:
Why was SBD created in the first place? Why are the reasons for its existence any different today then they were when it was first implemented?
In part the reasons are different, and I think Ned covered that in the interview. Previously STEEM as hyperinflationary so it wasn’t reasonable to hold it as a currency. SP obviously can’t be used as a currency because it is locked. So SBD was needed to fill that gap. Now that STEEM is no longer hyperinflationary the gap is not as large. I still think SBD has value, but the need is indeed reduced.
Thank you. I have just spend hours posting on various comments related to this to get the answer I was finally looking for. Thanks for getting right to the point so simply.
I wouldn't hold Steem (other than Steem Power) as a currency though, would you? It's too volatile to hold.
Sell it or power up is all most people would do, right? If too many sell, the price drops, if too many power up, the price rises. Removing SBD would mean there's no place to hold Steem except to power up, the rest would be sold. Who and what benfits from that?
Yes at the early stage indeed. But eventually, there won't be a need. In 10 years when blockchains are more recognized, what would you say then?
Eventually sure. But this discussion makes it sound like Ned is thinking about removing SBD much sooner than a decade from now.
For now, here's my reservation with using STEEM as a currency: It's hard enough to get people --even bitcoiners-- to use BTC in commerce, let alone newer blockchain tokens.
People complain about the volatility only when the price goes down, the steem price is more likely to go up than down!
LOL true dat! But Ned was saying things are open for the community to change, since the interviewer said so many token was confusing. Ned wasn't saying to do it now, at least from what I understood. It's an option. I just ran with it and took it to the community to see what people where thinking. I never though it would be this popular with over 200 comments... really surprised me. I figured maybe 30 comments... lol
It seems to me this is a sooner rather than later thing on Ned's mind. In my mind it would be a much later, maybe never change.