but the price for that is reduced demand for the real currency which is Steem. As long as you have the SD it will prevent the Steem market from maturing.
Can you elaborate on that? How is the demand for steem reduced? Interested to learn more about this.
Read my responses elsewhere in the same post. Sorry it is 2 am here and must go to bed:)
Can you paste a quote maybe? I did read your posts and couldn't find any explanation which is why I am asking.
Here is the simple one. This is not the only reason though.
I want to increase my Steem holdings. I could buy Steem now or buy in the future. If I buy now I have the risk that Steem will devalue and be worth less in the future.
If I hang onto SD it will still be worth one dollar in the future and if Steem falls I will be able to buy more Steem for my SD in the future.
It therefore makes sense for me to hold onto SD if I think that there is a potential for Steem to fall.
The more people that do this the less demand for Steem there will be, further you also increase outstanding debt in the system. This can then become a self-fulfilling prophecy - less demand for Steem leads to lower prices, leads to lower demand. That makes SD even more attractive.
Even if Steem is only falling slowly it encourages more people to invest in SD instead of Steem. Markets work on sentiments and this kind of sentiment can easily get out of control and become a downward spiral.
I hope that explains it.
Getting rid of SBD does not change this. If I think STEEM is going to fall I will hold BTC or Tether or real USD or something else. I won't suddenly decide to hold something I expect to fall because you have removed one of a huge number of available alternatives. This argument is nonsensical.
Also, SBD isn't in high demand externally. Look at Poloniex... there are zombie coins trading at higher levels. People don't rush into SBD as a hedge... they go to BTC, Tether, etc. My god, has SBD become the zombie coin within Steemit.com??
Thanks for your answer. I don't know why but I always had this idea that the SBD interest incentive would bring in many investors and thus create demand for steem. I was wrong I totally forgot that they could directly buy SBD on the market instead of steem so SBD doesn't really offer any benefits for steem/ SP holders does it?
If the answer is no then it's a no brainer to remove SBD entirely.
Users who invest in steem can deal with the fluctuation, this is to be expected. And I don't think users who earn steem by blogging would be really bothered with slight price movement.
It looks like SBD owners would create debt whether they sell or not, when they sell more steem are created and when they don't the interest they receive from not selling would also mean new steem were created, how does the system keep the debt in check ? Seems like SBD is creating constant inflation is that right?
It make sense to get rid of SBD I think.