TL;DR: The conversion is a good idea later when we're bigger. Don't do it now unless the business case lands at our feet.
My fellow Steemians. A great debate entangles the many brilliant minds of the Steem blockchain Witnesses and public input from the user base could greatly aid the discussion of the issue at hand.
The central question posed is should we hardfork the Steem blockchain to allow Steem to be converted into SBD at a rate such that $1 dollar worth of steem creates 1 SBD.
On either side are good people trying to find the best pathway forward for Steem. We all go to the same moon, and the question at hand is what is the best way to achieve that. Underneath the question of should we hardfork the chain to do this lies the question "is it better for the platform to have high and low SBDs or just a stable SBD near 1 USD?"
How best to achieve platform growth?
I believe that focusing on growth is the best thing to do. Honestly I think both are approaches that intend to improve platform growth. Allowing a high SBD appeals to active posters. A stable SBD appeals to those that want to see it used as the base of commerce. Both are meant to improve the usage and acceptance of Steem.
Many of the top 20 witnesses who want a stable SBD through this conversion (there are more of them than those that want a high SBD) envision SBD functioning as the next generation visa, cryptopaypal, and/or a substitute for tether. We could even be a stable currency for a hyperinflated country. We all envision Bittrex listing prices as BTC_SBD just like they would BTC_USDT. This is a wonderful aspiration and we should make all efforts to get there. To be trusted at that level we need to be at an appropriate scale. To match even the smallest of those aims; a competitor to tether, I estimate we need roughly 1.6B SBD (the current number of tether).
To support 1.6B SBD at a blockchain limit of 10% of the marketcap then we need a market cap of 16B at the barest minimum. We as a community likely need a larger valuation before people would trust it completely because trust is diminished if we're at the extreme edge of our ability to support it. It's possible we don't need to match the quantity of tether penny for penny, but the earliest I could see this working is a $10B marketcap and we would likely need higher. We're currently hovering around $1B. We're not at the size yet that this makes sense which is why to my knowledge no exchange, major US business, or bank like Coin Base is knocking down our door asking us to provide a stable currency for them. We're the 32nd largest coin by marketcap. Egypt is the 32nd largest economy by GDP. To me it's similar to trusting the backing of the NY stock exchange with the Egyptian Pound. There's just not enough economy there to it to support it.
I want a high SBD because I believe it attracts active users now. I assume people come to blog at Steem for money. We pay them for proof of brain here. High SBD makes their hourly salary higher and makes Steem a more attractive place to proof of brain. Some of the pro Steem--> SBD conversion crowd doesn't believe this and so they don't follow the logic of where I take this next. This is a fundamental assumption I'm making: higher post rewards means more users. I also suggest more users equals a higher valuation. If investors are kind enough to keep high SBDs for a while then I envision we'll get to the necessary marketcap faster than by putting in the conversion right now. At that point we could conceivably institute the conversion with a business case behind it (tether, coinbase, bittrex, amazon, or ebay acceptance... something large enough to be worth giving up high sbd) and get the extreme benefit of working with one of those partners.
Am I against this conversion? No, not at all. Am I against it now? Yes, until we're larger or the business case lands at our feet.
What are the steps if we put in the conversion?
- Code it (2 weeksish)
- Announce it (2 weeksish)
- Implement it
- People start converting 1 steem for sbd at a rate of $1 worth of Steem for 1 SBD
- then....
What happens next is speculation:
Pro-Steem-->SBD Conversion:
- SBD is returned to $1USD very quickly
- Businesses sprout and investment grows because SBD is a stable currency
- The ecosystem grows because SBD is implemented as a Pegged asset in many places
- Users come to the system because SBD is ubiquitous
Con- Steem-->SBD conversion
- SBD tanks not only to $1 but below one with confidence destroyed after losing substantial value in 3.5 days. This requires inflation from the witnesses and/or reverse conversion to fix.
- Bloggers lose incentive to continue posting on the chain and the active community shrinks.
- The amount of people using the platform can't support either the SBD in place and we're not close enough to the lowest goal out there of tether to reach the aims of the conversion in the first place.
- Steem and SBD go down in value
What are the steps if we don't hardfork for the conversion?
- Nothing is done
- Steem continues to grow at an accelerated pace as long as investors keep SBD at a higher rate
- Steem value increases as more active bloggers are on the site
- SBD goes up and competes with BTC as a cheaper/better store of value or SBD comes back down or a major potential business partner wants to integrate SBD but only if it's stable
- We reevaluate
People are the value
I've stated nearly since I got here that people are the value of the currency. Currency is proportional to goods and services and goods and services are best approximated by the number of people in a currency ecosystem. If we want to increase the total value of the currency than the best thing to do is increase the number of people within it. At various stages of growth what is best to attract people here may be subject to change.
Does a high SBD increase the number of people faster at this stage or does a stable SBD designed for internet commerce move it faster?
Right now Steem is still in it's infancy and the priority should be attracting users. We have 50,000 active bloggers a day.
We have a handful of businesses. 90% of all the SBDs are sitting in Bittrex and Poloniex. They don't appear to be used in commerce hardly at all. I think we should focus on growing the active blogger base until it's large enough to have more businesses and then we can prioritize business needs appropriately.
Let me pose it to you this way. If you haven't started a business on Steem but you are the kind of person who might be inclined why haven't you done it? Is it because SBD isn't stable and you are unwilling to price things in USD and then accept Steem/SBD as the medium of exchange? Or is it because the Steem ecosystem isn't quite large enough and it's hard to figure out a business that could appeal to a wholly digital and global community of only 50,000 active users in a highly distributed geography? Are you worried that if your company only reached 1% of the active user base you'd only have 500 potential customers to support your business? Or are you more worried that you're going to experience a 10X swing in SBD price making it a challenge to stake a business in this virtual landscape? It's likely a mix...
As an entrepreneur building a digital game called Steem Monsters on the platform I can tell you I'm enthusiastic despite the fluctuation of Steem/SBD. I accept that as part of the risk of being in crypto. I can mitigate for now by pricing in USD. I can share I'm nervous about getting a return on my investment with so small a pool of users to choose from. Speaking personally I don't think it's price stability that's limiting our SBD usage so much as the number of people using our network.
Is there any evidence that high SBD is growing the Steem ecosystem?
As many of my readers know I created a group called the Minnow Support Project and house it in a Discord group called Peace, Abundance, and Liberty Network. Since from June 1st to mid December it took our team 7 months to go from 0 members to around 4,500. From mid-December to January we more than doubled in size to 9,500 people.
Here is unedited data going back to September about how we've grown thanks to tracking by @discordiant.
It is my contention that people come to Steem to earn rewards blogging. The increase in SBD price is what is bringing them here at a faster rate than what I've seen in months.
Price vs Activity
I interpret these (possibly incorrectly) as highly suggesting that high prices are driving high activity (thanks @reggaemuffin for the top graph and @penguinpablo for the second graph). The logic matches the correlation assuming active posters blog on Steem to earn money as a central motive. Since SBD is currently responsible for 88% of post rewards (see below) I assume high SBD explains the high activity.
Why do I think it's SBD that's responsible? Let's look at post rewards under different rules
I had a Peace Academy post payout just over a week ago.
The value shown on Steemit.com was 57.45
For my effort I was rewarded 24.131 SBD and 4.953 Steem. Steem at the time was $4.08 and SBD was $6.38.
The total payout in USD was $174.16 with 88% coming from SBD and 12% coming from Steem.
If this proposal goes forward the point is to drive the value of SBD down to $1. Because the amount of SBD is small and 1 steem goes a long with the conversion I don't expect a large spike in Steem to result in the short term. For the same post I assume it will look like this.
The value shown on Steemit.com stays close to 57.45.
For my effort I would be rewarded 24.131 SBD and 4.953 Steem. I estimate Steem to be $4.15 and SBD to be $1.
The total payout for my post would be $44.69 roughly 50% coming from Steem and 50% coming from SBD. I estimate active bloggers have post payouts quartered.
For the same post to earn as much in the new system I estimate steem would have to be roughly $15USD.
Value on Steemit.com would show $208
For my effort I would be rewarded 87.36 SBD and 5.81 Steem. I estimate Steem to be $15 and SBD to be $1.
The total payout for my post would be $174.72 with 50% coming from Steem and 50% coming from SBD.
So in my mind the pro-Steem --> SBD converters have to demonstrate how Steem will go up almost 4 times in value to justify it. Could a large business partner do that over night? Yes! Do we have any lined up? Not to my knowledge.
Stakeholders
I think it's best to answer this question by thinking through the stakeholders and how the changes are likely to effect them all.
Steem is made up of roughly 100 substantial investors controlling 93% of the stake.
Steem is made up of a dozen businesses on the chain.
Steem is made up of 50,000 active bloggers every day.
In my eyes all groups benefit by supporting and growing the active userbase with high SBD right now and when we're larger, have more businesses, and have a marketcap which attracts major business partners then we reevaluate. We have a kick ass platform, a great community, fantastic devs, and a ton of highly passionate people that want to see this work. I have faith that in cryptoland we're talking 2 years at most, maybe sooner until we're ready to implement this conversion. Let's do it then!
It's in good faith to the community I represent that I present these arguments as counter points to the majority of top 20 witnesses that favor Steem --> SBD conversions now. I highly respect my colleagues and appreciate the opportunity to add a voice to the public debate while arguing from the minority position.
Many of my fellow top 20 witnesses don't think high SBD is contributing to growth rate. Will readers please describe below how price is effecting their Steem habits?
The pro argument-
White paper concern argument a comment by @eonwarped from Raggae's post
@clayop thoughts
Is the simple fix not to just increase the reward pool via HF?
That would result in a bigger distribution of STEEM, causing people to earn more SBD.
This would allow SBD to go back to $1, while allowing users to be paid much more, e.g. their $10 post could be worth $100.
A stable SBD allows for authors to be certain about their rewards. With the current high flux, a $100 post could pay out 50 SBD, but that could be $500 or $50 by the end of the 7 days...
Yeah, increasing SBD distribution is the way to bring it down fairly and organically.
@jasonyoakam, I agree thoughts on SBD.
The current situation was not the vision cited in the whitepaper for SBD, but is it really fair to even look at it as a problem? After all, who's the better authority on value - the whitepaper or the market? The growth is coming from the authors and from the investors and their security is more important than the small utility pegging SBD would afford the almost non-existant SBD-based commerce.
Let's not forget that flipping a switch overnight will almost certainly crash the market and would wipe a huge portion of the blockchain's total market cap.
Drastic measures in the name of stability in a market that's growing and doing fine is as misguided as things can get.
@someguy123 interesting points. I think this issue is purely relative. Many people have trouble in gauging growth within an enterprise. A very simple way would be to look at the SBD and steem prices over a given period of time. I think the newer people here get really excited when the prices rise drastically from where they were when they started. Whether or not that has a huge correlation to spikes in membership, it could be argued both ways, also there isn't a lot of data over a longer period of time to point these things out. If you are more established on the platform, of course you want a more stable price, among a lot of nice perks you mentioned it also brings a level gravitas, or respectability, rather than having value spikes up and down all over the place. Many people associate stock splits typically with a positive tone, and if we had something similar happen with the steem dollar I think it would generate positive press to the outside world for about an 8 hour news cycle. Many people do not understand that a split does not create literal value, but reorganizes the same thing of into more or less pieces of ownership. As of right now, I think word of mouth, through personal or social media is what's actually getting the word out. In my opinion as lowly minnow and being new to the platform, as of today I like the fluctuating price. It's an added value to buyers of the currency, having it being able to volatile as it is, as you feel you may have to get in at a certain point, it could create a sense of urgency within the steemit community and the outside investor (which we will be seeing much more of) becomes a little more nervous to short change the value of something so revolutionary and new as Steemit in my opinion. Great post once again @aggroed, interesting thoughts @someguy123!
I say, let's peg SBD to $10 then.
What would the point of that be? I honestly don't understand it. Also, wouldn't that wipe out 90% of the SBD rewards overnight?
I've argued for that too. It would seem I argue from the majority position there as well.
You are very correct in this. Many newer users are so excited.... and they are telling everyone. This assists greatly in growth.
Completely agree! Price control is a tool of the devil.
I agree with this. I am a new user and I must say the high value of SBD was confusing at first because I expected it to be 1USD from everything I've read. Once I discovered it was actually much more I was pleasantly surprised to say the least lol. I think the higher SBD gets the more people will be lured in from other platforms like Youtube.
agreed. I'm on the side of HIGH-SBD
As am I.
I agree, forking the value out of SBD is a bad idea for user retention.
I assume that if this hardfork happens, there will be a time when we are discussing another hardfork to create Steem out of thin air to cover the debt from the billions of SBD that was created out of thin air from this hardfork.
So I would prefer not to have my investments hyperinflated.
I remember the days when it was well below $1 and you were paid in Sbd to keep prices up. That’s when they starting burning and through promotions.
If it ain't broke don't fix it! Steemit has been doing so well lately! A hard-fork would be the equivalent of the Fed Chairman doing QE to suit the interests of those who own all the assets! Don't emulate those bastards! Instead have real free market economics and a burgeonning minnow-class! (LOL)
A rising tide lifts all boats. The Steem Holders will see their day, trust in that! I sense a real vitality and vigour to this platform in the last couple months that did not exist even when I joined just 5 months ago.
It's all going in the right direction guys! Don't fix it if it ain't broke! There's way more pressing issues to work on! No hardforks of SBD plzzzzz
I agree with this. Majority or should I say all would definitely want high payout especially for newbies. I myself can attest to that.
Let me tell you guys something right now. I want names of the witnesses that are trying to artificially drive down the value of SBD.
I want to know who is responsible when my posts are worthless and I leave the steemit platform to pursue wealth elsewhere.
DO NOT INTERVENE IN THIS, It is seriously seriously unhealthy. Steemit benefits when everyone makes money. And everyone benefits if everyone uses Steemit.
I mean, just take a look at my STEEM MARINES project. It's only possible because SBD is so high and my posts are worth something. I was literally inspired by the increase in value.
It may be stupid to you, or stupid to a ton of people, but what matters here is that I was inspired to get as creative as I can to provide value to STEEM.
Imagine all the other content writers and how inspired they're getting because suddenly, post rewards are more rewarding.
When SBD/STEEM goes up, so does the activity on the steemit website. People are flipping out and over hyping, Hell, I got 3 friends to sign up using @someguy123's anonsteem
Let the freemarket decide what SBD is worth.
Normaly i don't comment on these issues as i believe the witnesses know what they are douing. In this case i reply to you that i agree. So that it get registered that i do :)
Tnx for looking out for us!
https://steemit.com/steemit/@zoef/should-we-peg-sbd-no
We had a stable SBD for over a year (basically) and look how businesses rushed in to use it as a currency... almost none. Intentionally crushing SBDs would be a major mistake.
This is an essential piece of the argument I've been making!
These economic destroyers are literally in favour of destroying X7 of Steemit's value. Complete and utter insanity! And for what? Because of "muh fiat currency"? Hey, you're obviously rich enough to throw away 700% of something's value, so why don't you gather some of your millions and create your own Dollar-pegged cryptocurrency?
Another of their crazy arguments seems to be that it "wasn't meant to be this expensive". Well, just because something "wasn't meant to be" doesn't necessarily mean we should force it to become what it was MEANT to be? Antibiotics weren't meant to be medicine; it was an accident that created this life-saving medicine. Does this mean we should ban antibiotics? I mean, it wasn't meant to be medicine!
Great analogy!
And I agree, High SBD value is also helping people in countries like Venezuela, where you absolutely have to look for ways of earning foreign currency as salaries from local jobs are ridiculously low...
High SBD does indeed attracts more people to join
I had a $100 payout when Steem was around $2 and SBD was near $15. I invested over half of that back into Steem and Steem Power and still got over $200 cash. I was dedicated to the platform, but this payout opened my eyes to the potential and gave me a huge incentive to stay invested. It also gave me a great selling point when talking to friends and family about the platform.
My wife @kokivyivana also runs an Etsy business and is accepting Steem and SBD. So far she hasn't gotten any Steem/SBD orders. While it would be nice to have SBD stable for commerce, the few orders she may pick up using Steem/SBD are easy enough to handle manually Dollar/SBD conversions. You are 100% right that the platform isn't large enough to create a stable SBD on the grounds of increasing commerce. I can't speak for all of the business owners on Steem, but I know we much rather have a high SBD right now, and deal with the small inconvenience of conversion.
well said @theferalone!
A high SBD isn't bringing that much uncertainty to business, especially when it's trading higher than expected. And let's be serious - the majority of the value on this blockchain has nothing to do with commerce. Let's worry about commerce if it shows any sings of taking off, until then, let's worry about the currency and the blockchain.
Take out SBD from market and let the STEEM die on its own - slowly and painfully or let the market do what it does the best.
Since SBD is supposed to be valued at around 1 USD, but often sells at an inflated amount, could the opposite happen should the hardfork be implemented? That is, could SBD ever be valued at a fraction of a USD?
Yes it used to trade at 50c
It has been.
Good analysis and arguments. I agree 100%. I said a long ago: we just need the high price of steem or sbd. People and business will come by themselfes without marketing. The system is self-balanced.
I agree but Sbd supply growth is too low. It should be increased a little bit this proposal is way too much.
Let the free market decide.
I don't fully agree. I'm in the camp that believes that the STEEM asset is for trading, speculating, and risk. While sbd should be stable. I have business use cases for a stable crypto. I could bring many brick and mortar clients on board with stable sbd
Even it was stable at $2 or $5 it would be better.
Just because the value fluctuates, doesn't make it any less of a type of currency. If you want to see examples of companies using SBD, look at @Privex, they accept SBD and STEEM. Not that I'm trying to tell you how to run your business or anything. The community benefits from a free market, and companies should adapt to that, not the other way around. At least, the company that's more likely to get my business that is.
This. I don't understand the point of the SBD if it's not actually being successfully pegged to the dollar. Why not just get rid of it and simplify things by having only a single floating currency on the platform instead of of two?
I also don't understand the "but we'll get less money for our content" argument. When I upvote something, I'm basically saying I want that post to get a fraction of the "pot" of Steem (or SBD or whatever) created that day, right? So if my upvote is worth 1 SBD when a SBD is worth X USD, then if the SBD is pegged by printing more of them, my upvote will just become worth X SBD when an SBD is worth $1, will it not? The percentage of the pot I allocate to someone with an upvote wont' change…
But maybe I'm just completely misunderstanding.
This is sketchy subject.
I should say that all steemians do care about SBD prices.
How do we get to a higher SBD price?
What goes up must come down.
Somehow it sustains the ecosystem for all minnows and steemians to stay active and earn.
The other day the value of steem and SBD were almost identical to $4+.
Let steem makes its ways to the moon and then if something is not working we can think as one to fix it.
That was a good post well delivered.
Keep on steemin'
Yes High SBD Rates not only attracts more users, but keeps more users active on a daily bases. I know that the more I earn the more I use this platform
I'm working harder than ever to create good content because of the higher sbd. I also know for a fact that more people are joining because of that attractive sbd value.
I'm 💯 with @aggroed on this.
I agree with you the high price of SBD directly effects the growth of active users and new members to the platform. While setting SBD to a 1 to 1 with the Usd in my opinion would slow the growth of individuals but increase the business interest to participate. I could imagine it would be in the form of ads much like Facebook or Instagram. In hindsight this will still happen but growing the user base is probably what will attract entrepreneurs and companies alike. I enjoyed reading up on this thank you @aggroed
High SBD values definitely correlates with user activity, and I believe that it is also the underlying causality.
As an entrepreneur working in ICO consulting, online courses and having just recently cofounded a tech start up and gotten funding, I have also started out as a blogger looking to turn Steemit in to one of my revenue streams. High SBD rewards make that possible - I am using the high valuation to buy steem and build a respectable presence on this platform.
While a stable currency backing Steemit has some very real use cases, I believe that the inflated SBD is bringing in users - from personal experiences, any friends that I have recruited have come primarily to make a profit blogging, so the bigger the rewards the better.
If I was deciding, I would do as follows:
I hope this helps!
I guess I find myself in the PRO 1SBD = 1 USD camp. I see a lot of the arguments here based on the assumption that we now have momentum going on and Steem is rapidly growing at the moment. Of course, if that's the case that is something valuable and precious and we shouldn't risk losing that.
However, in my perception he adoption we are seeing at the moment is still very very small. Steem has so much potential, these 50K active bloggers will soon become millions. Yet, the difference between numbers of signups and active bloggers (retention rate) is really way too big. More people are quitting than staying. I don't want to sound negative, but maybe the discussion about retention and growing of the Steem community should be more focused on eliminating adoption roadblocks instead of preserving possible adoption facilitators.
A big roadblock is usability and ease-of-use. I would argue that a 1 SBD = 1 USD makes Steem substantially easier to understand.
@aggroed can we chat? I need your help dude.
DANI!
Floating all the way. Let the market dictate SBD price! It is absolutely one of the critical factors that drew me to the platform, as you pointed out.
Ah excellent! I am really glad that you reached out to us. I am one of those incredibly active bloggers (Since I joined in early December 2017) and it is absolutely true that I stay here and continue blogging for the powerful SBD. I am powering most of it up because I believe in the platform, want to grow my account to have more SP, and because I think Steem as a cryptocurrency will only go up from here.
It would massively take the wind out from my sails/sales if our earnings quartered if the SBD was pegged to $1 and equalled 1 steem....
Personally, I would really have to reassess the amount of time I am allocating to steemit, and therefore reassess my spring, summer, winter, etc plans as steemit has a big play in my visioning of my finances for the future. That's because I see incredible potential in steemit.
I know I came at a great time for posters as SBD has not always provided such great liquid rewards at such great prices for bloggers. But I say with confidence that MANY on the platform would be discouraged and perhaps leave if this hardfork takes place at this time.
I think Steem would lose its STEAM...
^^^ @aggroed, you are absolutely correct and I hope the top 20 witnesses for pegging SBD at $1 are reading this right now as I don't believe I am alone in my sentiments. Many people will flee steemit is my prophecy...The fluctuating SBD is an incentive for people who join. I am telling all my friends! I hold it sometimes and wait for it to raise before I convert to Steem or sell for another crypto. I think that's an important part of the game!
This is so fricking correct!
Aggroed you are thinking with your head on this and not with your dick.
Seriously. Steem will go up with the buzz, like any crypto. High post rewards are creating buzz. It's making people want to invest in the platform and get a leg up. To plop their cryptogains from elsewhere here to have fun with the community
Let it happen and don't reason out of fear that you need to interfere and change things that are working well. Witnesses will only destroy themselves by acting from fear of losing and greed.
This social experiment is working incredibly well. Work on making it work even better at the user experience level, not the economics level! The free market is doing it's thing and many are already sold on the concept, they don't need additional economic theories to provide an incentive when high demand for this kind of stuff is already creating all the buzz neccessary!
There's an air in the world and people are looking for alternatives and Steemit is just gonna keep on popping up and up the more they feel ready for a change and giving something new a try! The solution is already here, so keep it attractive and sexy, and don't worry about the end result! Remember life is a journey not a destination!
As a community, I believe we will make it! <3
One thing to remember is that this isn't an American platform, it's a global platform.
When people talk about “making a living” from Steem, they usually imagine the big posts with hundred dollar payouts. Reducing a minnow's 2SBD payout from $10 to $2 is unfortunate, but not the end of the world, right?
Except that minnow whose payout is reduced might never see a single US dollar. Instead, he would convert his 2SBD directly to 600 INR. Spending 200 INR daily, his original payout would be enough to buy food for three days.
Limiting growth potential to benefit theoretical vendors at the expense of very real users will discourage those who have already started to believe in their ability to create opportunities for themselves on this platform.
I fully support this.i think that it is good for steemit to freely increase sbd because if people have no money then how they buy goods and services If we down sbd for implementing as stable currency
You're absolutely right. The economic reality does not look the same everywhere and the most intelligent regulator is the market. One way to inflate SBD would possibly allowing rewards payed out 100% in SBD.
Yes great point ellievallie I think you are correct. The excitement of the newbie is not totally tied in the run on the value, but it does validate to some point until they see some real success. I would be more up for a round number of availability, in the form of something like a reverse-split in steem/dollars, which would make much more sense down the road for sure. If you have the continual growth that a BTC experienced how stupid is it trading 1/10,000th of a coin? Good points @ellievallie UPVOTE
I support the idea. Because if there is no volatility there is no excitement. Backing SBD with 1$ will first of all reduce post reward and secondly no will be ready to adopt it for long term. We have tether we have other national currencies if we don't need to be aggressive.
But it will kill that excitement level specially among bloggers. Anyone can check the data as soon as the sbd prices booms number of posts on steem network increased.
Off course this is my view as a user now rest is upto the witnesses.
Let's hope for the best. I will stick myself to steem but I don't know this might impact the number of users including those with pending post rewards.
A higher SBD is what brought myself and everyone I've convinced to join to this platform. Based on the general consensus I've managed to notice(take note I do have a regular job, so this is certainly limited to the time I could spend there) on discord is that it will cause a very large amount of the users to leave the platform completely. I can't say that these weren't your opinions beforehand, but it seems that you really read the opinions of other users in the initial post by reggaemuffin, which suggests you're somewhat concerned about the uncertainty moving forward with this decision. Should the hard peg happen, would the platform be able to sustain an influx of businesses? From what I can see some major improvements have been made, and major improvements will need to be made moving forward. Do you intend to let businesses build on the blockchain through API and the available nodes or nodes created by the companies that intend to do business on the platform? If that is the case, it doesn't appear to me, based on discussions I have noticed, that the existing nodes will be able to handle that, and expecting a company to take a gamble by paying for their own node for doing business on a blockchain with a dwindling userbase is remotely practical. I wouldn't take the risk myself.
High SBD price attracts a lot of people to Steemit. Everyone I'm speaking with about Steemit and what it is, is getting so excited!
People are making High-quality content because of the SBD price. when the price will decrease to a dollar, people will be less active and we will see a huge decrease in new users registrations.
Additionally, I believe that if the SBD price will go back to 1$, the Steem price will massively decrease.
The new conversion they want to add is reckless and I can't find any good reason to do so. let the SBD price decrease slowly as more SBD gets printed.
I'm pretty sure all these points will definitely happen. From being a month in the Steemit blockchain, I've been benefited by just a fraction of the total witness community. Not saying this feeling entitled but it's just the reality that the more new people come in the platform, there isn't much incentive if everyone is getting upvotes of 0.10-1 SBD if it's pegged to the USD.
My sister in law said that even if she got 1 SBD a post now she'd be already happy and thrilled. I think that's because being in my country that it's currency is x4 weaker than the USD, 1 SBD Is equivalent to 1 (SBD) x 6 (USD) x 4 (my currency) = 24 (my currency)
Now if it's 10 SBD a post then that's 240 and the minimum wage in my country is 5.5/hour which is about 1.5 USD per hour. Only unless 3rd world countries are not considered into the decision then I suppose it'll not really matter if it's pegged to the USD.
I just hope we're taken into consideration as what Steemit is to us right now is life changing.
Trying to match SBD to US$ is a fools errand. They will never match for long as the factors that drive their value are independent of each other.
Also if the holdings of SDB are so concentrated - maybe those holders need to release some into the marketplace.
As a new blogger - the high value of SBD keeps me going.
If it was $1, it would be a lot harder to maintain the same motivation. I would probably explore other platforms.
I think you are correct @papa-pepper. More growth in the currency (shown) value of the SBD is great early on. But when this platform becomes bigger a more normal stable SBD will be much better for the masses holding them. Maybe the reward pool should start buying up portions of the SBD at the current time, with full disclosure of course as needed to the public. Setting it up while on a good run (5-20x) the current value, having a reverse split to target a $1=1SBD down the road could be achieved that in my opinion down the road. The funny thing is the $ inflation that we could be realizing if the current market trends slow down, and the run on steem otherwise could be ridiculous. Good points @papa-pepper nice article @aggroed once again, always thinking ahead, I love it. --@cryptkeeper17
I will have to go with you Aggroed, I think the high SBD at the moment is an excellent incentive structure...We need to build a base from which we can branch, at the moment that base isn't there and we need to understand the mechanics we find ourselves in, I believe with time, there should be some stability with SBD but right now, I think SBD actual value is also a good metric of Steem growth.... Probably we can entertain stable conversion rate when Steem has establish a large enough base and trust is built within the system, for now we are not there
High SBD is like my own personal VC funding. It has encouraged me to work harder to gather more Steem so I can Power Up and grow with Steemit. Any decision to regulate SBD with a hardfork will affect my witness votes... so right now the only vote that is locked in is @aggroed. I will wait for other witnesses to weigh-in on the matter so I can change votes as needed. Thank you!
@aggroed, I'm surprised to hear about witnesses even considering HF to lower SBD price at this point of time when we are still so small and tiny. How naive they are, if they don't realize what a boost the high SBD has been to this platform, why cut the engines off midflight?
Where is this discussion happening and can we have more info on what each witnesses position is and explaining of the reasoning behind it?
In my opinion also, we must utilize every way to get Steem to ears of every possible human before competition shows up. Hell, even Zuckerberg is looking at crypto. We really don't have many shots at seeing Steem becoming a name next to Reddit, Pinterest and such. Let's not ruin our good trajectory.
Short response is that at this time I think having a floating SBD rate is better for the platform. As the hordes of new people join Steem, they're going to want to see progress. If Steem price is high and SBD is low, it's going to take a long time to level up. I'm not trying to use Steem as a marketplace though, so it helps me more to have the price of SBD high.
The high Steem price means that I was able to buy enough Steem to get away from the 15SP delegation I was given. Because they took the delegation away at a 1:1 ratio (rather than the 1:2 I proposed) every time I earned more SP, it felt like I wasn't going anywhere. Now, I feel like I'm getting ahead and because I'm making progress I want to get more involved. This wouldn't have been possible with a low SBD price.
If we're going to do a hardfork, why not get rid of SBD, after buying them back for $1 worth of Steem? Yeah, that would require more work, and speculators would be disappointed. But SBD failed as stablecoin, which is its only purpose. And @ned already said that Steemit, Inc. isn't interested in supporting e-commerce directly at the moment. They want other startups to use Smart Media Tokens to power retail apps.
As a minnow all you want to do is power up - through SBDs
After getting onto steemit a month and a half ago the price of SBDs jumped. I was lucky enough to convert some SBD to Steem at a terrific rate of 5:1 - adding to my post payout steem rewards in a major way.
In hindsight I find that the value of SBDs doesn't matter half as much to me as a favorable ratio of SBD to Steem does. If the ratio is unfavorable to minnows they may try to increase their ratio by commonly trading SBDs on exchanges before bringing the value back into steem and eventually SP.
Possibly regardless of SBD value.
I came here for the long run, and to a minnow like me there seems nothing more rewarding than to power up with satisfaction, feeling you actually invested in some sort of basis for the future - in a fair manner.
Instead of feeling you have "wasted" so many valuable SBDs for little to no share in steem due to poor conversion ratio.
I suspect many people would check out steem "regardless" of SBD value for its other promising appeals at first - word travels quickly.
That is until they find out first hand how tough it will actually be to power up to a significant level, hating themselves for not showing up earlier. It might send a lot of well-intentioned people away out of sheer frustration after they have seen in other wallets how much SP there is out there with earlier accounts.
If the power-up ratio sucks and both SBDs and Steem have 3 figure values one day I think the community might stop growing significantly (unless there is already hyperinflation in fiats everywhere ahahaha)
Then again maybe I just don't understand steemit's mechanics well enough, still learning... just my thoughts on SBD to Steem, since your question was worded so broadly. <3
Thanks for your article.
fascinating convo, thanks for sharing, wish i understood more of it but it's a starting point / i was startled by the extreme divergence in december / increase in steem and/or sbd attracts people, but steemit is not intuitive enough currently for a mass audience / peace
"higher post rewards means more users"
I agree with you Aggroed 100%
Well, I agree with you @aggroed, but the main problem we (Newbies/Planktons) are facing and going to face is ~ growth rate barrier. I am plankton and there are so many people who wants to become minnows, then Dolphins, then whales my acquiring more Sp. But you see, as the Steem price increasing and sbd is pegged to 1$ we are getting very less Steem after 50/50 split of the rewards. Which is greatly decreasing our growth rate to acquire more Sp. But having Sbd price more than steem at present, giving us opportunity to acquire more steem power.
What I am saying is ~ It would be very very great, If we peg Sbd to 10$!
Converting would make steem higher but cutting back supply of steem. Assuming Sbd is 5pct of supply of steem, Steem would go up 20 pct if the supply was increase by 8. I’d take that trade. Most people have way more tied up in steem ham steem dollars.
I'm still brand new to the Steemit platform, just a mere minnow, and don't understand all of these systems 100% just yet, but I believe a high SBD value makes it less likely for people to buy-in with USD, no? If people feel like the value is in a "bubble" it makes it more difficult to justify buying in. Maybe I'm misunderstanding though. Still learning!
The flip side of that is people don't have to buy in. They can post in, which lowers the barrier of entry and helps bring Steemit (and possibly other cryptos) even further into the collective mind of the general populous.
Yes, people are dumping the SBD onto the markets, and there are buyers in the exchanges simply trading off of the charts. The marketplaces for bid bots and delegation leases haven't collapsed because of speculation on that speculation continuing. And yes, I would agree that most of the actual new users of steemit are people who want to earn sbd, not people coming in with bags of cash, those are much rarer.
But think about it, who has bags of cash? Probably the very groups (corporations, MSM) we wouldn't want controlling vote power.
At these prices and with a user base of this size I doubt they're making any moves like that yet. They're just laughing to themselves as we post everything we think on a public blockchain for them to parse through.
But we don't people to buy into SBD anyway. We want them to buy into steem, which is the central coin.
I must admit I am commenting more because of the Sbd run. However I think a happy medium could work. If we allowed 100 pct Sbd post it would double the supply and should slow (if not reverse the growth in Sbd. I think this would make us more stable but still have a premium valuation. As Sbd becomes more stable it can be used for more things. Another move to make it stable would be to pay interest in Sbd. This would also increase the supply by a small amount. We can likely find lots of small supply increases.
Lastly a variation in your proposal is to allow conversions at market prices . So $7 of steem would get 1 Sbd (if that the price) this would increase steem supply but would increase much slower than a $1 steem = $1 Sbd rules
A high SBD leads to higher buying pressure on steem. These days, as I earn in SBD, I immediately buy back steem because I am an investor and I believe this coin will be huge in the future. So, when SBD is over 1$, it encourages people to buy more steem, and the price of steem rises in consequence.
The SBD price is pumped up by traders and bots that don't understand its fundamental purpose. Let us allow their money to pump the price, while our steem community earns higher post rewards!
One day everyone will understand SBD's purpose and the price will go back to 1$ even if we don't implement the reverse conversion. That said, in the meantime, let us enjoy the high payouts! I have convinced many friends to buy steem just because of the high ROI.
I completelly agree with you, I dont see no reason to implement STEEM to SBD conversion!
minnowsupport helped me to hold on to steemit when I almost gave up. As for your question, how steemit prices are affecting my daily life
high SBD has indeed helped me to convert to other cryptos with good return and helped me cash out in fiat for high rates last december. it helped me in my sons education and also save a bit in crypto. now waiting for crypto to rise again so that I can invest back into steemit.
we are farmers and not rich people. So, I really appreciate high sbd value. Only thing I am unsure about steemit is the fact that many high valued posts are not getting its due while others get overpaid because of manipulative votes. I hope some regulations on the part of steemit owners in the likes of cheetah or grumpycat are introduced to restrict such manipulations, lags, whale wars and ...
Keep doing good, stay blessed
It is definitely attracting new users and retaining existing users.
I agree that we should do nothing right now.
At the minimum, wait until the market cycle is over and SBD is trading sideways.
This whole SBD peg was easy to keep when STEEM stayed under $1 US. After that, the balanced shifted immensely.
I would like SBD to be pegged to the dollar, but I do not feel that now is the right time to do it nor that the current proposed plan will work.
A way that may work best is to wait for parity of SBD and STEEM. And then give every account an equal amount of STEEM for the outstanding SBD. And then, implement a pegged SBD with a good method for over and under valuations.
Of course, by the time we get this worked out, the US$ will crash and burn
... sometime next month.
Serious hat:
Indeed I have notice immense growth following feminist, lgbt and gender tags. There are new users in these tags a couple times a day. I hope that the community is having an affect but I also believe that word of mouth about "my account is worth XXXX now" !!! but I will say its been going up and down and sometimes I worry it will fall below a dollar again. I think I need to read this a few times to be sure I fully comprehend. Honestly I still don't know why we have both SBD and Steem. AND YET the high price was a huge moral boost for everyone. I personally have been less active but thats because I'm too busy on Discord. :/
Lima Hat:
Wait, what are they smokin?