The steem platform was designed with Steem, SBD and Steem Power driving the Steem economy. In my opinion the combination of these currencies and mechanism of influence is working nicely together.
This post is nothing more than a question to the community would love to see answers in the comments section.
Quick recap
What is Steem?
Steem is the fundamental unit of account on the Steem blockchain. All other tokens derive their value from the value of STEEM. STEEM is a liquid currency, and therefore can be bought or sold on exchanges, as well as transferred to other users as a form of payment .What SBD?
SBD is a stable currency which were designed to create stability in the Steem Economy where one SBD can be converted into one US Dollar.What is Steem Power?
Steem Power allows users on the Steem platform influence in the form of voting etc. Steem POwer or SP cannot be traded on the Crypto Exchanges.
SBD is currently trading at more than $10
Over the past few days SBD has been trading at much higher than usual rates and in my opinion this is not a bad thing. At the end of the day we all want more and more users to join the platform. I have not done much research on how this higher value of SBD is influencing the economy, and if this is actually a bad thing. I have also not researched what is causing this massive increase in the value of SBD.
I do know that it will probably take some time to move the peg back down to $1, but my question is why not peg SBD at a higher ratio to the US Dollar?
Will having SBD pegged at a higher ratio to the US Dollar not have a positive effect on the Steem price in the long term?
Happy Steeming!
because steem backed 10 dollars sounds weird af lmao
and because that would have zero impact in the long term for the use of SBD. Remember, make it as simple as it can be.
LOL it does sound weird. Thanks for the comment.
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Do you agree here? anw, I followed you and give an upvote to your post.
I do agree that SBD was not designed to HODL. SBD was designed to create stability in the economy. In addition it was designed as a mechanism to spend money earned on marketplaces etc. My question is however, why not peg SBD @ $10 as it will still provide stability. I am just not sure what the impact will be in the long run.
If you do that, you would be getting 10X less SBD per post reward, so it would be just the same as it was before...
exactly, theres zero difference. The algorithm needs to issue SBD instead of steem power in order to bring the price down in my opinion.
It is in the definition that SBD is supposed to be a stable currency, but creators, curators and commenters are making 10x as much for each action with the price as inflated as it is right now. Like you, I would be very interested in finding out if there is actually any downside to keeping the price pegged at current levels so that we can all continue to make more money and reinvest in the platform. I've done a lot of searching, but I have yet to hear of any downside from the inflated price of SBD.
i think it has to do with goshens law of good money pushing out the bad.. in this case, more fiat and even bitcoin being forgone for hodling sbd
Thanks for posting!
Gives a greater understanding of steem to all the newbies.
Thanks for the comment @teeegs90
I see that if we peg sbd higher it will effect the stability of the steem. Then slight change of it to have a new experience wouldn't be mind by me. But not to the extend of effecting other revenue.
BTW it is always a great post from you I do hope can learn more from you.
Thanks for the comment @steemfuture
No. Specifically, if the platform can freely re-peg the SBD whenever, then the peg loses it value. It strikes me that the best possible outcome in the current configuration is for the platform to guarantee a $1 market price for SBD, but then allow it to trade outside at any price the market decides.
Hi @prof-pieters, thanks for a great answer and it makes a lot of sense. I am currently on my annual leave until January 2018, but would love to have further conversations around your studies on the use and implication of cryptocurrencies as a globally traded alternative to national currencies or assets. This sounds very interesting.
We are in the process of designing a Crypto Economy and are talking to various economists and other specialists in this field. Can I interest you to join our slack channel?
Our Website: https://sportspodium.io/
You can join our slack channel here: https://sportspodium-slack.herokuapp.com/
Joined.
How can you guarantee no lower than $1, though? I think the current situation proves that it can't be capped on the upside with current parameters, so why should we expect it to be contained on the downside?
It sure would be nice to have a system like that, though. Talk about a no-brainer buy if that were true and SBD ever reached $1 again.
The platform would have to eat the loss, much like central banks do when they try to maintain a peg.
They should not be selling SBD, only buying (I don't consider the distribution of SBD selling). And they should buy at $1, and $1 only, no matter what the external price is. That way the SBD maintains the minimum value it was intended to do, without the need for the more exhaustive monetary policy required to maintain a hard peg.
Hmm. I don't know if that's healthy or not for the system. Seems to me, the more controls you try to implement to get the desired effect(s), the more points of failure you now have to deal with. More factors, more complexity, more likely to have problems down the road.
That is the correct sentiment. However, SBD is a peg that has already been introduced, and therefore it demands controls to obtain the desired effect.
There are very few ways to maintain a peg. Now, the good news is that SBD is a minimum price peg, which is an easy peg to maintain (as opposed to a strict must-equal-$1-all-the-time peg). Given the minimum bound peg, you have to implement controls. The question is, which ones? The interest rate route, which the platform has taken, only works under very specific conditions of credibility. The problem is that the exact time you need the SBD to be a peg and provide inherent value to the platform is the time the interest rate peg is most likely to fail (i.e. during a massive crypto-market crash). Granted, you could have a dual interest rate + guaranteed buy-back system ... but does that level of complication improve the system or weaken it?
I would love that! I'm definitely loving this change, and I've been trying to take full advantage of it hehe.
I say let’s just let it pan out without a repeg 😃
LOL I think we will all love that, but @prof_pieters reply above does make a lot of sense.
wow very important post you shared. thanks for share this post.
Very good news for me and all steemit user. You write really well and i hope to see more such posts from you.
Great post! Excellent piece. Thank you for sharing! This is my first day on steemit and I am very excited. I am following and I am replying my Friend! Positive energy and love to all! Great Karma! Please follow, upvote and spread the love! As I will do the same. Wishing everyone the best of health and happiness! GO STEEM! :)
In this moment the blockchain itself "thinks" that he is giving SBD peg to 1 USD... he thinks that 1 steem is equal to 1.73 sbd!! then if you receives 4 steems in 50/50 the blockchain will give you 2 steem power and 2x1.73sbd = 3.46 sbd... but you and me know that it is worth in 34.6 usd!! Wow!
If we peg sbd to $10 we are saying to the blockchain that it is the price... then you will receive less sbd (because if we adjust the price we need to adjust the inflation to have a stable economy).
I think we need to change the way it is pegged to usd, I want a strong an stable sbd!
I think that SBD are making Steem to go up! slowly, steady..
Makes me mad after spending a good chunk of my SBD trying to promote my posts. It has been a fun experience, overall!
Hopefully the rise of SBD doesn't affect the community.
I think at the moment, the rise of SBD is affecting the community in a good way.
can you explain the mechanism of how SBD is supposed to be pegged to $1?
The best will be to look at the SBD section of the Steemit Whitepaper. You can read it here : https://steem.io/SteemWhitePaper.pdf
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They've mis-used the Impossible Trinity. No wonder they're having issues maintaining the peg.
Getting back into it, smashed that follow button!
Thanks for the follow and comment ;)
it already pegged at 10$ ;)
LOL, it seems to be yes
We should peg 1 SBD equal to 1 Bitcoin!!!
It's good to set your sights high. :-)
LOL
Lol this post is receiving x5. We would all love to peg it at $10.
I hope steem would be at the same price soon :).
for steemians it will be great but how that will work for the system this is a thing to think and i think its a matter to debate on !!
wow that would be awesome if that happens ....thanks for sharing this post :)
It would be better if the blockchain was able to react to SBD price increases by arbitrarily creating SBD and trading it for STEEM from users in the internal market. The STEEM could then be destroyed in order to reduce the supply of STEEM and increase its price. The price increase of SBD would therefore be transfered to STEEM and the 1 to 1 SBD peg to the USD can better maintained.