Ned was recently interviewed on Epicenter, where he mentioned the Steem Backed Dollar as a component of complexity. This was in response to one of the interviewers commenting that the Steem White Paper was describing a "super complex system" making it "hard to understand what is going on".
Ned had to transform into a robot and merge with
cyberspace for this podcast, as shown above
You can catch the start of the interviewer's comment at around 40m, and Ned's response afterwards, in the full audio file linked above. Thanks to @seanmeeh42 for posting the full podcast earlier.
Here is Ned's response, a short 2 minute clip:
Stream or Download
Ned explains the SBD's origin as a complex mechanism to "give people a place to go" as an alternative to STEEM, as a "Smart Contract wrapped around STEEM" and pegged to the US dollar.
An interesting thing about the SBD is brought up, Ned mentions "there is less of a need for the Steem Dollar" now that the STEEM cryptocurrency has stabilized from the inflation correction.
Additionally, Ned added a question to expound upon the previous comment, asking:
"Does the community want to continue to be paid out in Steem Dollars, or do they want the system to be even more simple?
i.e. to only have STEEM and the invested STEEM-Power.
What does the community think?
- Keep the SBD
- We only need STEEM/SP
Thank you for your participation, comments, feedback, etc. :)
Please feel free to share and resteem for more participation.
@krnel
2016-12-21, 7:18pm
I'm going to disagree with almost everyone here and say that in the long run we will be better off without Steem Dollars. I think a lot of the opposition comes from people who don't understand the fact that SD is not a token in itself.
It is a smart contract to buy one dollars worth of Steem and it introduces the whole issue of debt into the economic equation in a way that may actually make Steem less stable. Getting rid of it may actually increase the value of your payouts.
Speculators will either have to buy Steem or not buy Steem - the presence of SD gives them a safe place to hedge against volatility 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.
Getting rid of it has nothing to do with simplicity - that is an added bonus. The real reason to get rid of it is economic and if you are here you should care about that.
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To steem, SBD is a like crutches, a wheelchair, or bicycle training wheels, it's time to move on without it. I see a bright future for steem with no steem dollar
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Great points! The increased volatility of Steem due to SBD wasn't mentioned on the show and it is true.
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I am all for the removal of SBD if doing so serves to give STEEM the wings it needs to soar to the heights we all know it is capable of reaching. One thing that I believe needs to be clarified in greater detail is how that process would be actuated.
There are plenty of SBD tokens out there currently being held by members of the community. It seems to me that if all SBD were exchanged for $1 worth of STEEM at the same time then that would be a serious problem.
I would expect the removal of SBD would have to be phased out over a period of time, and I think that you or Dan should present the community with a plan of action for how that could--should the community want it--be implemented.
There needs to be a clear method in place as to how this would be achieved before users can confidently decide whether it will be helpful or hurtful to the economy.
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This is the main issue that needs addressing.
The community/traders would have incentive to lower the price of Steem in order to get more Steem per SD. Simultaneously, this would incentivize the holding/buying of SD to sell at latest point possible.
The only clear solution and fair method to address this connundrum that I can see is for Steemit to purchase ALL SD at either market rate or preferably an agreed price which would also have to have the consensus of the community/stake-holders. We can't just take or force holders of SD to sell, however holders after a certain date would be holding them on a defunct chain.
The further benefit to this is that it would distribute Steem further, help further de-centralise consensus/influence and substantially reduce Steemit's holdings. This would be consistent with Steemit's stated goals and would address the further problem of perception and FUD currently circulating by detractors.
If this can all be managed, then I believe Steem has a great chance to become THE digital cash of the future. This would help marketing and general perception and adoption by the larger public I believe. Anyway, just my thoughts....
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Thanks.
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The main benefit that I see with SBD is that there is little to no risk "cashing it out." I've withdrawn around $5000 since starting steemit, but all in the form of SBD. Since it'll always be worth around $1.00, I won't miss my chance by selling it too early or too late, so it's a safe way to earn something now from steemit.
I have almost 7000 liquid STEEM, because I have only rarely powered up 100% and I have never sold any STEEM. My SP and STEEM will be held long-term.
From my point of view, SBD is the best way to withdraw something from the wallet without risking major losses in the future because of a premature withdraw.
Of course, we all want the value of STEEM itself to increase, so if removing the SBD from the platform can help accomplish that, then @papa-pepper will support that decision, but the stability of the SBD may be worth more to the platform in other ways, so many variables must be considered.
Thanks for all that you guys have done and are doing @ned!
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In the long run sure, SBD could be done away with. But not while people are still learning about crypto and we want to be the ones to introduce them to it. We are miles and miles away from being ready to give up the stable gateway cryptocurrency that brought so many people to the crypto space back in July.
Honestly, I don't think I'd even be here if it weren't for SBD. At the very least I think we should take our time to adjust to the recent economic changes before we go making more.
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I don't think you understand the point I am making. People will go where the money is whether the SD is there or not. For example I prefer Bitcoins to regular money because of the potential for it to grow in value.
SD let's people hold a cryptocurrency without any risk of loss of value - that means that there is no incentive for anyone to really buy Steem. That cuts demand which reduces price.
At what point do we say we have gone too low 1 cent, one tenth of a cent? It is not sustainable.
Simplicity for newbies is not good enough of an excuse to maintain it. If Steem goes down to virtually zero no newbies will be coming after it - nobody will want it.
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As Ned says in the interview, the price is not what's important right now. What is important now is growth.
I understand perfectly that SBD is a token if debt. Technically though, the pound is a token of debt too. Yes, it will reduce demand for steem for those who are still adjusting to cryptocurrency. But for those who decide that cryptocurrency is a concept worth learning about and buying into, it is SBD that will ease them into it. Everybody else will gradually see value in Steem as SP and that will gradually increase demand.
I'm not worried about the price hitting 1c although I don't think that it will. There is enough passion for steem right here, we don't need to force noobs into it. They need to come to the realisations we did themselves.
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You can't disentangle the two. The pound (even though it is doing badly now) has nowhere near the volatility of a cryptocurrency.
The lower the Steem value goes, the smaller the value of payouts will be. New people will be less attracted by that.
Further I don't think having a pegged note is any simpler than having a cryptocurrency on it's own. People can understand that different currencies have different values.
I really don't see any disadvantage to removing the Steem Dollar in that sense. People will go where the money is like I said before. Money is a great motivator to learn new things.
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People will go where the money is -correct. So what does it matter if the payouts get low? I don't see any other social media platforms paying me a couple cents for a comment. We're safer to attract a userbase while the price is low, rather than when the price is unrealistically high, as people quickly get used to making that kind of money, and suddenly $40 a post isn't enough. This is a better price to grow at!
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I think most people would go where they are getting $40 dollars versus 40 cents. Further at some point i.e. when your payouts become next to worthless you don't have any benefit left versus other websites that don't pay you.
We must also be wary that there are several alternatives and someone could easily spin off their own version of Steemit that gets this right.
I don't see the compelling reason to keep the SD on that basis.
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steem will be a much stronger currency without the ball and chain of SBD, and users who get paid will follow the money wherever it goes, steem with SBD is like a baby with a pacifier, already got rid of pampers(hyper inflation), and steem will be a toddler soon, no need for SBD
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Absolutely, it's not needed and will help simplify things over all, as Ned suggests. But those who want the quick $ will want to keep it around for now.
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Those people have no grasp of economics.
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Steem Dollars have, for me, always been a quandary.
On the one hand, it has been really nice to have them as an option. On the other, I realize that having the power to demand a certain dollar amount of Steem at any time can only lead to Steem inflation.
I don't know that I am ready to let go of the Steem Dollar, but, at the same time, I don't know if Steemit can survive with it.
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It leads not specifically to inflation but to leverage. That is, increased inflation when the STEEM price is declining but decreased inflation when the STEEM price is rising (i.e. $1 paid out in SBD rewards can only demand a smaller number of appreciated STEEM)
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Nonsensical to you perhaps. Not to me. On the basis of that reasoning we don't need SD anyway since we have USDt or real USD.
We will not agree on this so let's just leave it there.
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Why not offer a competing and potentially superior USD peg token within the ecosystem instead of using something external? Unless I'm wrong, Tether has 10 minute (average, so you could be waiting 30 minutes+ sometimes) confirmation times because it's built on Omni which is built on the Bitcoin blockchain. Steem blocks are 3 seconds apart. Nowhere do I see Tether being advertised as speedy.
It might be a longshot but Steem's SBD has the chance of being a popular and possibly even de facto USD pegged token in the cryptocurrency world as it expands to include more than just computer nerds (in line with the goal of Steem).
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I think it is dependent on how many people it brings in. It might be useful to get some more expert economic opinion on this - I wonder if there are any economists in the community who can look at this?
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That is the heart of the problem I think. We want what is best for Steem but common sense says to hold onto those SD if we think the price will fall. Multiply that by a thousand or ten thousand and it is a problem for demand. On an individual basis it makes sense because we want to increase our holdings but as a community it hurts us.
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That really really doesn't make sense. There are plenty of price-stable places to put your money if you want a volatility hedge; for example: USD. By your argument, "as long as we have the US Dollar, it will prevent Steem from maturing." I have a (relatively) large SBD balance; I have that balance because I want price stability. If I were forced to get rid of my SBD, I'd simply convert it to USD.
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Maybe but my view is that it distracts attention from Steem itself. Right now you have two choices if you want to invest in Steem, Steem itself and SD.
I would be interested in some professional economic opinions on it.
That doesn't mean everybody would. It is not a straightforward issue and I think everyone does things differently. That is why how markets behave can often be counter-intuitive. For everyone who sells there is also someone who buys.
I'm certainly no expert though so I would love to get some feedback from someone who has professional knowledge in this area. Perhaps there are historical examples of something similar that we can use to guide us?
Also what do you think of @tombstones suggestion of reducing the interest on SD?
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So let me ask you, why was SBD created in the first place? Why are the reasons for its creation any different today as then were then?
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The original reason as I understand it was to give a more stable currency to be utilised against the hyperinflationary nature of Steem itself. I don't think it was meant to be used or traded the way it was. Since we no longer have the hyperinflationary model the rational for it is gone.
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I'm happy we've done away with hyperinflation, but that's no reason to remove SBD since it wasn't the only way of escaping the hyperinflation to begin with. In fact, there were many options to avoid the hyperinflation of STEEM (including SP, almost any other cryptocurrency, most fiat currencies, etc.)
For many people, the primary value proposition of SBD was (and still is) instead to escape the volatility of cryptocurrencies, while still holding an asset 100% in their control (i.e. zero counter-party risk). In fact, I would argue that this is the best reason for most people to hold SBD (perhaps aside from earning interest, depending on your needs and point of view).
Some have also argued that SBD causes systemic risk. But in that case why not just lower the interest rate (substantially, if need be)? That way fewer people will hold it, but it will remain a selling point for some % of people that otherwise might not consider the platform.
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Great point. I hadn't considered that. Could we make the interest rate zero or equivalent to it to in an economic sense to just compensate for real world inflation? I think that could be a compromise. Thank you:)
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Great points here @tombstone! It also allows people to "hide out" in times of volatility in the underlying currency while not leaving the ecosystem... not many other cryptocurrencies allow you to do that! :) BTW, what made you pick your name? Tombstone is one of my all time favorite movies! :)
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Granted, we did away with hyperinflation, but there are other benefits that are just as valid to helping noobs understand and adopt SBD and Steem and easier for merchants to understand. Isn't that just as important?
Can it be sustained and paid for with the Steem price so low? That seems to be the real issue. Is it being managed right?
I know some of my friends joined because they liked the simplicity of the SBD. It's easy to understand for them
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I don't think there is any way to know for sure. These are new realities and it is all very experimental.
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Perfect response. I agree... always thought it would be too confusing to have two tokens. Having two tradeable tokens is confusing to new users.
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Oh sir you hit the nail on the head.
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Your argument seems logical to me @thecryptofiend!
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Thanks:)
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Thanks.
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No they don't. They can simply go elsewhere (including USD etc.), as can merchants and users. No one is limited to the choices offered on one particular blockchain.
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You miss the point entirely.
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I disagree. I believe you are missing the point. SBD provides a distinct service, which brings more people to the Steem blockchain and ecosystem, adding value to both through greater adoption and incremental utility. The situation that is realistic is not people being forced to choose between STEEM and SBD and therefore choosing STEEM instead, it is people choosing between anything Steem and something else. People who are put off by volatility (which is a huge impediment to cryptocurrency, even the least volatile) and want stable value will not suddenly decide on STEEM from the entire universe of assets (or the smaller universe of blockchain) if SBD is eliminated, they will simply not be here at all.
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We will have to disagree on this.
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Can you elaborate on that? How is the demand for steem reduced? Interested to learn more about this.
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Read my responses elsewhere in the same post. Sorry it is 2 am here and must go to bed:)
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Can you paste a quote maybe? I did read your posts and couldn't find any explanation which is why I am asking.
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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.
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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.
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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??
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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.
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I was on the fence, but your comment just made my mind up. I didn't understand the complexities of SBD and how it effected the price of STEEM, and judging from the comments, neither do most here. Thank you for explaining it in perhaps the most concise way possible.
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Thanks I'm glad it made sense.
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I have read enough of your posts to know that this is simply not true.
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Thank you :) Sorry I edited out the second bit but thank you for your kindness. It is hard to know how well one is explaining things oftentimes.
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Stable concurrency as SBD is the best thing which increase user addoption among non-crypto people. SBD combined with rate-limited-free-transactions is a killer feature for wide global adoption.
I am not objective, because right now I am leading new startup called Prio (more details soon!) which use STEEM blockchain as backend.
One thing is sure: SBD is essential for us. Thanks to SBD, our application is super simple for average Joe, who knows nothing about technology and can use cryptocurrency without even knowing that.
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I like the SBD they are simple and pegged to the U.S. I think they should stay. It's less confusing to grab some money when you want to take some out or pay someone. I vote to keep SBD. It's also what I would withdraw first and leave my Steem in place (unless Steem is dropping)
It's not the system that's confusing people. It the lack of good organized and centrally located collection of educational and support videos that explain all aspects of Steem, SBD and Steemit.
When a new user logs in they should be given a walk through and access to video training.
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YES!!!
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worth repeating
And include an intro to the blockchain concept if you want to draw in complete newbies
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Worth repeating again.
This is absolutely the case. There is nothing whatsoever "complex" about SBD from the end users' perspective. It is the simplest thing about the entire system!.
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and one more time
Exactly! 10 times more difficult is explaining how to add pictures to blog posts on steemit.
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Are you kidding me? Before the effects of the last fork and change to payouts can even be evaluated, there is happy discussion of removing the the pegged dollar? That is the only unique thing about this crypto currency, without it this little blog farming project will turn into bitlanders.com.
Obviously a massive failure is anticipated due to the power down changes or this would not be filtering up to public discussion.
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Yeah, if such a change is going to be commenced, we should at least wait a while first to better observe the effects of the last hardfork. Too many changes too quickly would rob us of our ability to learn from them.
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I agree with the above wholeheartedly; however that doesn't mean that there won't ever be a need for SBD.
The fact remains that SBD is still a good long term investment; you have a pegged cryptocurrency that holds its value over time. That is something we don't want to forget, apart from bitcoin, what over crypto can claim that?
Next is the fact that the existence of Steem Dollars means that a lot of Steem is tied up in order to back the SBD being produced, which helps the supply side of the supply/demand equation.
Which leads onto the fact that SBD is a great way to burn Steem via the promotion tab, again shortening supply and increasing demand.
Ultimately, I don't want to see SBD go, it is a Unique Selling Point of Steemit.com, and we shouldn't rush to get rid of what makes us different and special.
My two Steem cents :-)
By the way, brilliant article @krnel, thanks for sharing this.
Cg
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SBD is a good idea, but bootstrapping SBD to a wildly volatile network was a huge mistake. The SBD debt collected during the initial peaks of Steem has been greatly detrimental to the Steem network. It's been an incredibly vicious cycle of people losing confidence in SBD > witnesses offering massive discounts to Steem > pegging SBD at an enormous expense in the value of Steem > now with a high debt ratio, offer further discounts etc. This further increases the SBD debt, so on and so forth.
Not to mention the overly complex currency system. It should just be Steem. Steem Power is already redundant - just make the current Steem holding in a Steem account determine influence. SBD can be done away with.
It needs to be one token. Everything else is poor design.
Of course, keep the "Estimated value in USD" for familiarity; the rewards shown on posts can also be the same.
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You are greatly overstating the magnitude of the costs. The highest the debt ratio ever got was 9% which means assuming that SBD had no original cost and was all redemeed at that moment (in fact neither was the case), the result would be an incremental 9% dilution.
In fact the cost of debt problems, overstated though they are, was only even that large because action was not taken to properly manage debt earlier into the decline, when the cost would have been extremely modest (e.g. 2% reduced to 1%). Even that is not really a pure cost, except in hindsight. When the STEEM price goes up, the opposite benefit occurs. Given balanced up and down fluctuations, there is no (or negligible) net cost.
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Yup, that's what @thecryptofiend was getting at as well. It's not good in the long term to operate this way.
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If we get rid of STEEM dollars (one degree of complexity and value), then what can we gain in return that we can't have now BECAUSE the SBD is getting in the way? (more speed?)(more scalability?)(more Facebook options?)
You can't ask me to concede something of such high value without giving me something back in return. Nobody will buy it. If you don't want to show the noobs the SBD, then don't utilize it on Steemit.com, and just let other users (busy.org, e-STEEM, etc) access these kick ass features. It's that simple, unless, of course, we can get a new 1 second transaction engine and ditch this old 3 second transaction POS. If that's the case, and we can choose to add new features (let's discuss THIS) that we could not otherwise by hanging onto the SBD.
You are going to have to give me something pretty good if you want to take away the vehicle that shielded SBD holders from losses over the past few months!
Hey, maybe we can convince the government to eradicate the FDIC insurance because it is too confusing. Social security and medicare too! let's get rid of all confusing and complex and complicated stuff!
Yes, STEEM is complex, but so is life and the human body. One wrong snafu inside you, and it's lights out. In other words. YOU are complex, so when you say that complex stuff sucks, then....well... Maybe we should give Dan and Ned a couple lobotomies so that the average person can understand them better than they can now?
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Without STEEM dollars, the current market cap of STEEM dollars would surely be combined with that of STEEM, no? If this is true, then perhaps the pegged-to-a-dollar status of SBD could be liberated and we could potentially see the price of STEEM begin to rise and reach new heights. I'm no expert with crypto though, so I could be wrong about that.
What I do know however, is that you may be underestimating the power of an unnecessarily over-complicated system to deter new users from jumping on the Steemit bandwagon. If we have the opportunity to simplify things, and if doing so could increase the number of people who decide to join and stay on Steemit, then that is surely something that ought to be considered.
Have you ever heard the quote "A society will be judged on the basis of how it treats its weakest members," before?
While this quote was probably a lie told by some politician who then proceeded to get elected and did nothing for the weakest in society, I still feel that it nonetheless holds a vital life lesson.
Should we apply this philosophy to Steemit, then perhaps keeping things complicated in spite of the knowledge that it would put some of our users at a disadvantage, would ensure that this ecosystem and community be judged on par with that of the one that dominates society offline.
I believe the founders created this site on a block chain and with open transparency so that they could build something better than what the world has to offer. I see this as an opportunity to rise above petty arrogance and demonstrate the integrity of Steemit by providing equal opportunities to those whom otherwise would be left behind.
I shall admit though, that there is potential dangers with sacrificing a currency that has proven stable to the dollar, yet at the same time.. how stable is the dollar?
I feel this issue warrants a lot of discussion and I thank the poster for sharing it with us. I'm intrigued to see where the community lands on this.
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SBD is not what deters new users. Cryptocurrency might, but the SBD isn't specifically deterring users as I know that it's far easier to relate to for a crypto noob than the now highly liquid steem token. Imagine writing your first post and getting $100 dollars, then going away and coming back a week later to find out it's now worth $50. If you're used to crypto you might be OK with that, but for people who are new to it, that's a total turn off.
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Exactly. I know some of my friends that have joined and are now posting on Steemit would not have joined if the only rewards we Steem. The SBD's peg to the dollar and the interest it earned was a big selling point for them and made it easier to understand.
Plus, I think only having the Steem to trade right now would flood the market even further and drive the price lower. We haven't even moved past the 13 weeks change in the power down time since the last fork. We all knew the price was going to go down again. I don't think it's a good idea to kiss SBD goodbye. I'm for keeping it.
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I was not necessarily asserting that SBD in itself was deterring new users from the platform. It is the fact that there are two crypto-currencies involved with the site rather than one that may overwhelm some new users.
I know at first I was confused about why there needed to be two different currencies. I stayed and found out, but that doesn't mean that every oneelse will.
Making things as simple as they possibly will provide new Steemians with the most user-friendly experience that could be offered. It is my opinion that this will do wonders for user-retention, and in the long run the growth of the platform.
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I don't think 2 crypto's is deterring users I think crypto itself is. You read it's a "token" and suddenly it's not money. Even though that's exactly what a dollar bill is - a token of debt!
When I saw 3 cryptos I find SBD the easiest to understand and quickly concluded that that's the only one I need to know about. With time and presence on the platform I appreciate steem a lot more, but that takes time and I was NOT new to crypto when I came here! So it's much harder for those who are.
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I understand your perspective and it holds water too. Though, most people who are advocating your position to retain SBD in the comments are expressing STEEM's volatility to be a significant cause for its difficulty with new users.
@thecryptofiend's comment below does an excellent job of delineating the role that SBD plays in that volatility. Should SBD be removed from the equation, then we may very well see the price of STEEM stabilizing, negating at least one of the complexities of STEEM for new users.
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By the way, there is one thing they could do is make this more relateable to what people already know. Tokens/Steem/Steempower should be credits , or something. So Steem Power would be SuperCredits . Or, let users flip between ways of displaying it default to $ dollars and credits , but let crypto peeps flip it to the perspective token names steem / steempower . Also, maybe people can have the option of tucking away ' steem savings , steem power' I mean not everything has to be displayed by default.
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Agree with you 100%!
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There are not two but three. Sbd, steem and bitcoin. In order to get in you go through bitcoin and in order to cash out you go through bitcoin.. Sacastically speaking why not get rid of both SBD and Steem?
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Even if this is true (I reserve judgment), that would only add about 3% to market cap, barely enough to notice.
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I wrote this comment before I discovered @thecryptofiend's concise explanation as to what SBD is and how it negatively effects the growth of STEEM.
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I don't see how SBD complicates things. It makes the rewards easier to explain to noobs and easier to price things for commerce.
more stable than Steem and that's the point, isn't it?
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As I explained just a few comments below, should SBD be done away with then STEEM would have that stability anyway.
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I disagree. More Steem on the market will lower the price some more as did changing of the powerdown to 13 weeks.
It's a new crypto and the price is going to be all over the place. Look at all the other crypto's that have no additional tokens pegged to fiat. Do they look stable to you? Adding a stable token is a selling point. Perhaps it's unrealistic to think we could stabilize any token at all.
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The difference to STEEM would be minimal. SBD is currently about 3.5% of STEEM in terms of market cap. Folding back in that 3.5% would hardly make a day and night difference to anything about STEEM, including stability. A lot of these claims are greatly exaggerated.
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It has nothing to do with complexity. The SD reduces demand for actual Steem. That is the real currency. SD is a smart contract.
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ahhh I see, make us more like bitcoin. I get it, btc is hot, STEEMIT is not, but maybe we need to get a little more closer to the market cap of bitcoin before making a reverse course now. FULL STEM AHEAD , I say, let the men do their work, faster gents, more upvote power! let's go now!
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But if the only token we have to trade is Steem and everyone starts trading it, will it not just flood the markets and drive down the price, negating the stability claimed to be gained by SBD's removal. Having a place to park Steem, in steem power or SBD, is a nice feature.
We all knew the price was going to drop after the fork. I say we leave it alone and work on UI and onboarding features. Nothing will stabilize the price of Steem like more users that we can retain and engage.
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No the Steem is already on the markets. If anything it should reduce the Steem on markets as those who want to invest in the Steem ecosystem only have one choice.
It's a nice feature but no Steem is actually parked in the SD. It is a smart contract that entitles you to a certain amount of Steem in the future. If everybody parks there money in SD then their are fewer people parking their money in Steem itself.
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if all I had was Steem I would still have 2 choices. Power up or sell my steem for BTC or fiat. No different than now except I would have to decide the minute the Steem is earned to avoid the volatility.
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Exactly. So you without it you either choose Steem or you don't. There is no Steem lite with lower risk which is how I'm starting to view SD. By holding SD you don't take the volatility risk.
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I agree with the above comment, not for all the same reasons, but near enough I'm upvoting it.
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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
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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.
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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
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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.
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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.
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You can buy almost anything on openbazaar with steem.
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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.
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I wasn't bringing up anything about SBDs risk profile. Steem is the better currency to couple with mass adoption
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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.
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When I think of a peg, I think of Argentina, or Greece. Are there examples of successful pegs?
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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).
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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?
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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?
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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.
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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.
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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.
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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?
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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.
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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.
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@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.
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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.
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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.
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To steem, SBD is a like crutches, a wheelchair, or bicycle training wheels.. it's time to move on witout it
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Steem is 0 years old and it's time to take off the training wheels already?
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Maybe eventually, but it is very premature to do so now.
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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?
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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.
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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?
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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?
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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.
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People complain about the volatility only when the price goes down, the steem price is more likely to go up than down!
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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
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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.
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Steem is rather famous for the amount of people it got involved in crypto, who have never thought about it until now. SBD is one of the easiest things newcomers relate to, it's easy to understand what its value is and it's also stable.
SBD is also the main coin that can be used in eCommerce as it provides value stability. I don't think giving up on it would be the best idea.
Why not working on clear messages (marketing materials, videos, tutorials, etc.) that make anyone understand the entire ecosystem better, in layman terms? Wouldn't that be more advantageous in the long run?
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There is a huge amount of simplification that can occur having nothing whatsoever to do with SBD. The question during the interview had to do with the whitepaper which takes 40+ pages to explain what I'm pretty sure I could explain in five pages or less, probably 2-3 pages.
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you know, I actually started on a simplified version of the WP a couple months ago as I also think it's an overkill, and should be kept under 5 pages overall. Maybe I should restart that initiative as I also wanted to focus on a couple more marketing materials to support telling others about Steem. Thanks!
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Also important because in addition to being horrifically over-complicated, the white paper is terribly out of date with how the system actually works now, which leads to even more confusion and frustration for people trying to learn about and understand Steem.
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I tried selling steemit.com to friends. I had been able to tell them how much I was making monthly, but that is gone now. It used to be that voting would render a constant stream of income with said initial investment, but as you said, it doesn't work that way any longer.
In order to make the same as I made in November, I would have to put up another $100k, and I don't even like have that much in one wallet unless it's a secured, off-line, paper wallet. Less likely to have in on one steemit account.
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wht are you waiting for ? explainnnnnn!
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The main barrier for new ones is not the steem, the SBD or the SP but the lack of diversity in Trending: always the same people and the same subjects (sports, steemit, etc ...) Non- Crypto do not see their place in such a social network! Maybe some changes in the voting system?
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@whatsup would agree with you as well, as do I with a lot of the trending content.
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Agreed. We need more responsible curators. I expect the curation guilds to be a great help with this.
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lately I started wandering... what if incentives for voting would be removed?
Why facebook, reddit can do it without giving money?
Problem of voting bots would be mostly solved, and only stuff which is really important for people would be voted.
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Right now curation rewards is the only incentive to hold long term. If we didn't have that I wouldn't have much faith in steems survival. I'm hoping there will be more incentives to power up (gamification maybe), but I also see curation being a really valuable role in making this the greatest social media platform alive. If people are rewarded for GOOD curation, I imagine there will some day be professional curators who started their career through steem! It will take time and the guilds are necessary for that to become reality.
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You actually didn't answer my question :P Why facebook or reddit didn't have to pay for people votes? IMO this is because people just like to vote, when something is worth the effort.
Right now on steemit most of articles always has more votes than visits - conclusion is simple - autoupvoting has really nothing in common with good curation.
People are smart, because we can learn from mistakes. How often people revisits their steemvoter settings? If they don't, they actually decreasing quality. And right now there is incentive to vote for anything if you do not know what is worth of your vote.
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The reason other sm platforms don't pay people to vote is because they prefer to use an algorithm to do their curating for them. Our likes and shares are only a small part of their algorithm. They don't care what we like or want to see. They care about what their stake holders want us to see.
An algorithm is cost effective but it's centralised and censored so we don't even always know what an algorithm is propagating or censoring.
Auto voting isn't always bad. A curator can decide this author should always get my vote without me always reading. But a responsible curator would regularly check and update their auto vote list, and be available to remove their vote on call in important circumstances.
Those with the most stake need to be the most responsible and careful.
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I think SBD is a good incentive for a new user: the SBD = ~ 1USD is a known reference, but a SB at 0.13 is less attractive.
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SBD was never valued so little:
latelly it is very stable around ~$1
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The steemdollar varied between 1.30 and .75 USD and now ~ 1 USD. However the steem rose from .18 to +3.00 and now to 0.13.
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ok... now I get it from where you took this 0.13. On daily basis I track only market cap, which is better indicator for me, because I am SP holder
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On the internal market, Bittrex and Poloniex
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Better when traders have more options no?
I'd prefer to keep them all, continuing with the choice of how we'd like to receive the rewards. The way the choice is offered could solve the problem for newbies... (like having advanced settings but having the default be only SP and STEEM.)
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I think the default should be SP and SBD, as Steem Dollars are both more stable and easier to understand for noobs. It is only those of us who are here long enough to know the value of steem who would want to choose to be paid in Steem.
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That would work ok for the default too.
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Actually, SBD makes things more simple. It lets you ignore the fluctuations, even when they're downwards, except for certain limits like when there's a currency crisis.
Say a user earns $50 SBD two months ago and the price of STEEM drops 50%. Then they remember they had that $50 and they convert it to STEEM. Unlike other cryptocurrencies, the $50 they forgot about will still be $50 by the time they remember (for better or worse).
I think, if we want to make it even more simple, we could let users set up their own policy, then give them a default policy. The default policy is how it works right now. If a user wants, they can set up an additional policy that will, say, automatically convert SBD to STEEM under certain conditions.
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Simple yes, it reflects dollars directly. Then you exchange for that amount of BTC. Or, you exchange STEEM for BTC, same things, it's just STEEM doesnt show US dollar value automatically. That's the major attractor for the SBD. The benefit of STEEM is that if the price does go up, then you can sell for more, while SBD holding give you nothing.
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There is no reason that SBD couldn't be exchanged directly with USD (or EUR other relatively stable fiat) and paid directly to a bank account. There just don't happen to be exchanges offering that service right now, but it is inevitable if the platform were to grow enough that would happen. In fact some exchanges were already considering it months ago but have apparently backed away as Steem as a whole has cratered.
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So, I get what @ned is saying. The community could decide that SBD is no longer needed since STEEM has less dilution than it did. The flexibility of the platform allows for this kind of agility. And historically, we've only seen STEEM fall in value, so SBD was critical for casual content creators. In that context, no one could argue against its utility.
But ultimately, I'd like to see SBD stick around as a speculative instrument for both long and short term uses.
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The way I look at it nobody is looking at the long-term. Ok, so SBD might delute the value of Steem in general ,but someday that won't be the case so we'll yank away the one thing that non-crypto users could make sense of , all because we are here for the money I guess ??
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That's rather simplistic of an argument to make that it's "all about the money", which can simply be thrown back to the SBD supporting as wanting the monetary transfer simplicity, so it's all about the money there as well. When looking at other currencies, 1$CAD is not 1$USD, nor is 1Pound. 1 STEEM is different too. Conversions can be looked at in terms of another currency, which is what people do to make everything weighed on the same scale. So you can covert STEEM, to any currency value representation, like USD, and have that value represented, rather than another token valued at a near $1 value... the extra bit of another token just to have a direct constant value... is for simple thinking. Currencies int he world don;t work like that, they fluctuate, which is what STEEM does. SBD does not really (yes minor changes to try to stabilize it), it stays pegged to the US dollar.
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I like the SDB because:
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Same here. It seems like there's more benefits than negatives.
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In my opinion, the complexity is percieved by new users because they are presented with 3 currencies/investment vehicles.
If they didn't have to care about anything but Steem (Backed) Dollars initially they would feel safer, but then again we can't really get rid of the Steem and Steem Power now can we... =D
For now, I think the verdict is we should keep the Steem Dollars.
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SP doesn't need to be considered a separate currency. That was probably a mistake. It could be just the same STEEM currency in a sort of savings account with restrictions on how fast you can withdraw it. That would be a nice simplification.
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Agreed.
Also, I'd like to know what you think about economically encouraging use of steem rather than steem backed dollars, by use of a fee applied to newbs sticking with a default setting of being paid in SBD? Would there in your opinion be any clear benefits or problems with that?
From the psychological rather than economic perspective, the confusion might be greater if they figure it out and start to think about it I guess. But for the sort of people who don't even consider such things it wouldn't change the actual perception.
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I don't agree with the view that has been expressed here that you can significantly encourage the use of STEEM by discouraging SBD. People are uncomfortable with highly volatile cryptos. This is nothing new and is a problem that has confronted efforts to achieve wider crypto adoption and use by every project, and would apply equally to this one. As an alternative to SBD, people will just sell their STEEM faster, or be discouraged by having taken some big unwanted, unexpected, and not-entirely-understood losses and quit. The idea that "the problem with STEEM" is SBD is largely nonsensical. There is a small grain of truth to it in the sense of systemic risk, especially if SBD is not properly managed by witnesses, which unfortunately has often been the case (with some contribution by poor and/or absent guidance from the dev team).
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Thank you for answering
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Nah, no fee. The economic encouragement is the success of Steemit/Steem to raise STEEM and get in on that train ;) lol
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haha allrighty then ;)
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Yup probably.
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I'd very much like to hear your take and others as well, on my question asked as a reply to smooth.
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My opinion is that Steam Dollars gives the non average trader a currency that he can speculate the price with no issues. I can't tell what would be the best. I think what we have is unique even though complex. This is going to be an interesting topic.
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Exactly. I see it as a gateway cryptocurrency. That's exactly what we need if we're trying to onboard non-crypto-heads
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One consequence of this which I think is undeniable:
If there is no SBD, then only speculators will hold their money on the Steem Network. Everyone unwilling to hold speculative tokens (Steem and Steem Power, neither have much practical utility today but may have some in the future) will be forced to exit their payouts immediately for short term stable currencies such as the USD.
Also, for how long are we going to keep radically changing the economics of the Steem ecosystem? How can we possibly expect businesses to build up around Steem if the ground keeps moving underneath them?
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I certainly expect radical changes continue for years, but I get what you're saying. We need a level of stability and SBD gives us that.
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Simple. Get rid of Steem Dollars. It's too complex for noobs.
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I think it's more confusing without steem dollars. Steem Dollars is like a gateway cryptocurrency. The value is always clear. Steem is becoming more and more liquid with the new economics. For non-cryptos, this is scary. Why would anybody hold money that changes value so often?? That sounds like gambling.
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I tend to agree with this. I think people are confused by this and that is a barrier to entry
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Confusion doesn't help but I think the worst problem with SD is that it makes Steem less desirable and reduces demand. Since it doesn't really go down in value people can hang on to it for long periods of time in the hope that the Steem price will go lower and they can buy back more. By reducing demand for the real currency it hurts us all.
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Keep the SBD!
Don`t change the system, it just starting to become good!
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Yeah keep the STEEM Dollar! it's so confusing to find the value of Bitcoin but with Steem Dollar it's different! in way if STEEM Drops i prefer to hold STEEM Dollar ! then exchanging it to Bitcoin!
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True. I think SBD will get even more useful. We'll see.
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It is fine either way with me. If SBD is removed then BTC will just be the stable currency to use instead!
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This demonstrates exactly the problem with this proposal. It encourages people to move their money into a separate ecosystem.
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agreed! I will adapt to preserve my investments best! Just like the changes to the hardfork forced my hand to adapt by selling off all my steem! Why would I keep a currency that I knew almost had a guaranteed drop in value?
I kept my SBD because I felt secure in the fact that it would stick to the peg! Yet the way that ned and dan make these proposal changes to the system suddenly out no where is disturbing to me . It does not give me much faith in SBD if they are willing to destroy their creation just as quickly as they made it though!
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Well, as I commented on my ONE and ONLY blog post ...
https://steemit.com/money/@brains/when-the-banks-stopped-paying-interest
I am leaving - me and my $15k, as I used to make 750SP per month and now I get 60SP per month - same voting effort, same SP - my first payment to exit Steemit comes tomorrow. Now that Ned has made this huge, scorched earth, pendulum swing to "not worth it", the price is still tanking.
What next? Steemit is a fish on the dock.
And to answer... SBD went from paying 15% to 9% and today I looked to see it pays 8% to have it in savings -yet I put a bitcons in savings almost a month ago and have yet to see one interest payment. You can bet I will be leaving with that too. What a waste of time and money.
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SBD interest is probably on its way down, so I transferred 0.001 SBD to your savings to trigger the interest payment. There needs to be an SBD balance interaction for it to pay out, at least 30 days from the last payment.
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I was thinking about doing the same for him but you beat me to it :)
:thumbsup:
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Thanks for that. It worked here, but my other account didn't get paid interest after I sent myself a payment to trigger the unspoken interest rule. I agree with @someonewhoisme that it should say on the wallet page.
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Not 30 days yet - and regarding the same bucket thing, SBD Savings only has one option, "Withdraw SBD", so it would be difficult to make a transfer without first doing the 3 day wait for withdrawal.
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The transfer has to be into or out of the same bucket, be that liquid or savings SBD. If it didn't get paid interest for a transfer in the same bucket then it probably hasn't been 30 days since the last interest payment.
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If we get rid of SBD and "savings accounts", now that the liquidity of STEEM Power is very greatly improved, we can simply increase the amount of return on held STEEM Power. It can never go back to 100% per year however LOL.. sorry about that! :) But perhaps 9.5% inflation + some % of interest?
If people want to transact with STEEM no need to have it readily available in savings, or in SBD, they can simply buy some if they are unwilling to power any down, or to keep some on hand as STEEM. Savings accounts is a feature that was added because it was possible, but when you think about it they serve no purpose, other than earning a little interest. STEEM and STEEM Power .. they are all we need.
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You need to send SBD to another account to receive your interest. Just send the lowest amount to any account. You need to do this every 30 days but you will receive all that your haven't received and that are due to you.
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If this is true, it should be made clear on the SBD wallet page. How are users supposed to know that...
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I just requested it to github. It should be at least displayed prominently somewhere.
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Thanks for that. It worked here, but my other account didn't get paid interest after I sent myself a payment to trigger the unspoken interest rule. I agree with @someonewhoisme that it should say on the wallet page.
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I just requested it to github. It should be at least displayed prominently somewhere.
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@brains: if you're thinking about exiting, let me know and I can purchase that Steem from you. For BTC or even for fiat. Hit me up on steemit.chat, same username.
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I think SBD is best feature steem have, yes many still don't understand it's potential, but when they do SBD can become most used crypto-token ever. =)
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I like the idea of SBD, and its ability to do away with much of the volatility of crypto. I think it is an appealing aspect of Steem and Steemit and would like to see it maintained. Does it add additional complexity to the economics? Absolutely. Is it really all that hard to understand for the users and future users? I don't think so really.
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The nice thing about SBD is that it can be traded in the Steemit market. I appreciate the option, even if I never get payout in SBD. If the SBD is gone, then so is the market, right?
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In theory yes. I don't think having the internal market is enough of a reason to keep SD around though as I explain in some of my other responses it hurts the viability of Steem as a currency and reduces demand. Would you rather have a Steem at $1 without SD or keep it around and have the price at 13 cents or lower? I am one of the biggest supporters of Steem and even I tend to hold back on converting my SD in case the price goes lower. Multiply that by thousands of times and it makes a huge difference to demand.
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nested reply to
Since we have been in that situation we have a pretty good idea.
The SBD price will likely drop due to the distressed nature and asymmetric payoff unfavorable to the SBD holder, even during a conversion window (though the size of the price discount would likely be less since the conversion window has changed from 7 days to 3.5 days). To maintain the peg witnesses will need to increase the interest rate, and should also introduce some conversion discounts. Last time something like 15% APR was sufficient (it might have briefly been higher). Given less price risk for conversion we could probably make do with less now, but to be safe we'll assume 15%. At 10% debt and 15% APR that's a cost of 1.5% of STEEM market cap if maintained for an entire year, though that is quite unlikely. Alternately we could state the cost as 0.125% per month.
At that point (>5% debt ratio) production of new SBD would be stopped. Any conversions that occur would necessarily reduce outstanding SBD supply, and this includes large conversions that would probably (though we can't be 100% sure) occur by important stakeholders (for example Steemit itself owns about 300K SBD) specifically for the purpose of reducing debt. While this doesn't entirely guarantee that the debt ratio would reduce, it likely would (and it literally can't go above 10% given the current code). Some additional costs would incur due to the conversion discounts. If all 10% were converted (a very unlikely prospect) at a 3% discount (previously discounts were higher, but that was using a 7-day conversion process instead of the current 3.5), this would add an additional one-time cost of 0.3% of STEEM market cap.
So again, while there would be increased costs to this situation we are still looking at costs measured in low single digit percentages.
No one denies that SBD adds some costs and risks, but the actual numerical magnitude of these of often greatly exaggerated. It isn't anything close to the huge boogeyman that it is often made out to be. Even the leverage component, which isn't a net cost since it applies equally during up markets as down markets, is not all that large. At a maximum the leverage ratio is 1.1x (currently about 1.04x). This is not even easily measurable, much less a huge factor in practice.
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Thanks for explaining.
Like I said I'm not an economist but I'm trying to expand my knowledge of such things. Having spoken to other people too - it seems the likely impact is smaller than I imagined.
Further as suggested by @tombstone the impact could be reduced further by reducing or eliminating the interest.
I had also underestimated the PR effect and attention that SD brings in terms of outside interest from non-crypto people. I think it is sometimes easy to get stuck in your own perspective and I am used to fluctuating values with BTC etc.
Merry Christmas!
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This is another nonsensical statement from you. I'm frankly stumped at where your head is at on this. Have you lost a lot of money on STEEM and looking for someone or something to blame?
There is no rational basis to suggest that STEEM would be or become worth 8x as much were it to not have a few percent of its value in SBD as is currently the case (at one time it reached a maximum of 9%). That's just completely and entirely absurd, bordering on an irresponsible and outright dishonest sales pitch.
There are some very good reasons why STEEM's price has been declining and is now what it is (though it is always hard to know precisely what moves markets). SBD is not, to any significant degree, one of them.
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Like I said before we disagree on this but I'm frankly disappointed on your tone. I am not going to indulge this any further.
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[nested reply from below]
I have been advocating vigorously to reduce the interest rate for more or less exactly that reason. In fact recently more of the witnesses have begun to see it the same way and the interest rate has started to come down, to 6-7% currently. I believe it should go even lower. I agree with tombstone that SBD can add a lot of value (in fact I believe it already does) as a payment vehicle without piling a lot of effectively long-term debt and risk.
BTW, I do intend to answer the question you asked about what happens if the debt ratio goes to 9% but I haven't had time to compose the reply yet.
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Thanks. I think that may be solution that everyone can get behind.
No problem I think we are all busy right now. I love this kind of discussion because I find economics and the interface with psychology fascinating. Plus I also find it quite educational to discuss it with others particularly if they have different perspectives.
I do like the Steem dollar and I am not opposed to keeping it having thought about and spoken with @Beanz too - there are more psychological factors at work than I had previously considered - such as the PR potential for non crypto people and greater ease of acceptance by merchants.
I wonder if we have any economists, or psychological economists (is that the right word) who could also give some opinions on this subject?
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Sad that you can't even address the rest of my comment which points out with cold hard facts (i.e. numbers) how what you are claiming makes no sense. Why are you so reluctant to connect your views on this to some sort of actual logic or factual evidence?
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OK then. It is 3.5% now. What if it get's to 9% again? The momentum and sentiment that creates on the market is what worries me more than anything. I'm not saying it is responsible for all our problems.
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I hope I didn't come across as being too harsh or dogmatic in my opinion. I can sometimes be quite forceful in my opinions and I am in no sense an expert in these things. I think @tombstone makes a good potential point here:
Perhaps that is a better solution which can take both sides of the argument into consideration?
Anyway my opinions are never really set in stone even if I may sometimes give that impression. I am happy to be involved in the discussion because I think that makes us stronger as a community - even if it means confronting things I don't initially agree with.
It is always a learning exercise for me. It would be interesting to get the opinions of some professional economists (assuming we have some in the community).
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It surely would stop trading in and out of SD internally :P . Maybe that would put more pressure on the external market? Would that be substantial enough to even cause a blip?
I play the market here a bit, so appreciate it. I NEVER take Steem off the site. I'm not saying that I won't, but that I don't right now. It's either powered up or I'm trading it in the market... or holding for a potential trade later. I like having that option.
Since it exists, is there really a compelling reason to get rid of it? Is the internal market really affecting the price? I honestly don't know.
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It affects behaviour on the internal and external markets which creates downward pressure.
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Can't we sell Steem for BTC in the internal market?
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Not right now. You have just two choices in the market - Sell Steem for SBD or buy Steem with SBD.
Otherwise, we can power up Steem or transfer both Steem and SBD (including onto Poloniex).
It's so easy to move Steem and SBD to Poloniex, perhaps it's not really worth it to have an internal market that trades anything but SBD and Steem. That's my perspective, anyway. IMO, the current setup works nicely. No sense complicating it.
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Yeah I know, but if we leave SBD, trading steem for btc on the internal market would possible yes?
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Not as things stand now. That's a whole new ball of wax. It's beyond my tech grade, so I'm not sure what's involved. My guess is that it's not worth it, since you could just move them over to Polo and trade there for SBD, BTC or ETH.
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Internal trading of btc could be very useful to the community here, but if there was a chance that it would discourage trading on bittrex and polo, then that would NOT be good for steem as it would be less visible to speculators who are not on the platform.
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No.
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Keep steem dollars.
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Since we already have the 3 markets and 2 steem market option may be simpler. How about the following choices:
- 100% STEEM POWER
- 50% STEEM POWER / 50% (liquid) STEEM (STEEM + SBD)
- 50% STEEM POWER / 50% STEEM (as new default option)
Keeping our current options and adding a new one as default with the idea of 50/50 STEEM POWER / STEEM.Also shared on twitter
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Disclaimer: I am just a bot trying to be helpful.
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I know it's all been said already in other comments, but just to get my 2 cents (or about 0.0026585 Steem, lol) in.
I honestly don't see the complexity being an issue for non-crypto people. In my opinion they are going to have to go through a near identical ramp up process to understand Steemit with or without the SBD. I still see us having the same non-crypto adoption issues regardless.
I do want to note hear that with the big benefit of the SBD being a way to 'not worry' about the inflation issue (which is not so much an issue after the economic changes) and volatility (which we're still somewhat dealing with due to the quick powerdowns/selloffs.)
Personally I'd at least like to give some time before doing away with the SBD, like 3 months since were about 2-3 weeks since the new power down schedule kicked in. This would allow the volatility from the 13 weeks of sell offs to ideally end and things can ideally stabilize.
Right now with steem being about 13.3 cents, we are nearing the scary points of the Steem Marketcap to SBD debt ratio that we had seen before...right now about 24.43%. While we do have some measures in place to deal with this (such as being paid out in all steem anyway) the fear of the SBD debt looms yet again, which makes the black swan concerns always come back. When steem prices go down, each Steem Dollar earned/bought at a higher rate require more Steem to pay off the debt/contract. (1 SBD while Steem is at 25 cents would be a call for 4 steem, when the price is at 10 cents, it's 10 steem.)
These concerns are something that I do fear when this debt to marketcap ratio gets high like this because nobody wants to see the price crash, potentially killing the currency and Steemit as a whole. (At least that's my understanding, I could easily be mistaken here.)
Long story short (...too late,) I don't see us doing away with the SBD in a few months, with simplicity being a rather moot point and the relief on the economy itself being a plus.
I do see the my own benefits, and ease, by being able to hold a SBD to protect myself from volatility. However my desire to have the Steem economy to survive as a whole outweighs my individual benefit/ease in this case, in my opinion.
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No idea where you got that number. It is actually about 3.5%.
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I just took market cap divided by sbd balance online. Easily could've been a case of late night math. That can happen. Sry.
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Doesn't this help with the amount of transactions that happen with STEEM and also give the incentive to hold some liquids instead of cashing out or powering everything up?
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As an ignorant n00b and a wee bit of a trouble-maker - one of my first of few posts mentioned getting rid of STEEM Dollars in order to reduce complexity, making it easier for us to herald STEEM. My STEEMIT friends thought I was an ahole at the time, because SBD was so innovative .. so bloody interesting!
After the recent and very forward-thinking deflationary changes that have been made, SBD is no longer a necessary tool - although it is still pretty damn cool.
The benefit to onboarding new users through reduced complexity will outweigh whatever perceived benefit still lingers. STEEM and the powering up of STEEM can be understood by anyone, even Kardashian fans.
Let's keep it movin!
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It won't be reduced complexity. It will be harder for noobs to understand steem than it will to understand SBD because they are only used to stable currencies (ie fiat). I had difficulty buying and selling steem for bitcoin because the exchanges were new to me and I had no idea if I was selling high or low. It was much easier to work this out with SBD though because i know exactly how much it should be worth. Plus I can leave it there and it will be worth the same 3 weeks later when I actually decide to take the time to learn how to use the exchanges.
Honestly, I think if SBD hadn't been here when I started, I would have just asked my brother to buy my steem off me because I couldn't figure it out. SBD makes things easier, not harder!
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snip
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How about making it a premium service set to default for new users?
In other words, charge them a fee for protecting their asses ;)
(and mine)
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We definitely need SBD. It's a price stable currency, and that is important. If we use SP instead, we need to power down as well, and I prefer not to,although this might be mostly psychological.
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Keep SBD (lots of benefits) but get rid of SP (useless). Just keep STEEM and SBD and lower STEEM inflation to fixed 1%. Then you will have (almost) perfect setting.
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I agree, that SP already lost his power as long term commitment tool.
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Keep SBD!
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I vote keep it.
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Think twice, It generates downward pressure on Steem price.
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could you elaborate why you think that It generates downward pressure on Steem price?
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There are strong tendency that 1 SBD trade on market like 0.9x dollar. Why? government will not compensate it if Steem default on SBD, so ppl naturally treat SBD as less worth then its face value. In order to anchor 1SBD to 1dollar, Blockchain have to print steem constantly. This is called feed discount . There are other details but this is main point.
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right now SBD is worth $1.03 and and lately is rather stable:
AFAIR situation is stable since feed discount was introduced, but I do not agree that this cause additional significant inflation. SBD is a promise, and feed discount is a way to deliver this promise. So... feed discount is actually a cost of operation, which is made only when someone decide to take a risk and convert SBD to STEEM (which IMO is not done very often (real data is needed!)).
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feed discount make steem to be sold on market. With trade volume of steem, even that amount cause problem. I think only justifiable reason of existence of SBD is If it worked as a bait to lure none crypto ppl into the steemit and make them buy steem which I strongly doubt.
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@publicworker - because of nesting level I am responding here:
I am not sure, whether there is a place where I can find information about price feed discount of all witnesses, but
right no @abit has according to this:
and I am also not sure, whether this feed bias -0.1% is in fact still 0.1% discount... or.. it is not called discount anymore, because right now it is more like fee, because of current price of SBD - that would be interesting
[EDIT]: I found a place where you can find information about discounts of all wintesses: https://steemdb.com/witnesses
In top19 wintesses, there are:
this gives on average 1.35% discount, but I would not be surprise if average will be below 0 if price will above 1 USD for a long time.
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There is little to no feed discount now (though my view is it should be a bit higher).
The main reason the price is stable is that witnesses actually started paying attention at all. Several are running bots that absorb some of the daily volatility and adjustments to the parameters are now made at least some of the time when the economics call for it. That is a huge improvement over what happened before, though it could be done even a bit better.
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please check my response here, I coudn't respond to your comment, because of nesting limit.
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Yeap sometimes feed discount average will be below 0. That condition is called feed premium. Problem is, It is not symmetric. It's asymmetric. Biased to feed discount of course. So, again, only justifiable reason of existence of SBD is when it could perform as a bait to lure none crypto-ppl into steemit.
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It's a good question, it kind of depends on the stability of steem. Although I wouldn't mind if we did switch
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The easier it gets better
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I think that we should keep it as long as the peg can be maintained which it has been. It doesn't need to be seen a complexity it is simply an assurity provided by steemit inc
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Exactly. Newbies don't even read the whitepaper unless they are already in the crypto space! The concept was not that confusing for me when I started. I just ignored steem and SP and focussed on learning to cash out first. Since then I've learned a lot about the exchanges and I'm happier to trade steem. But it was very confusing to trade steem for a while because the value and price I buy/sell for wasn't always obvious to me.
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In the end in my mind SBD provides safety, if steemit inc wants to provide safety then it should not remove it. Personally as a soon to be an employer in the steem economy I would be more comfortable paying any employee in SBD, as then I know that my employee will for sure be paid what I am telling him/her.
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Keep SBD. The more complex, the better in the long run.
If it's too easy than everyone would be doing it. - @bola
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Blockchain itself is complex, should we get rid of it? As long as it is either profitable or fun to be here blogging or interacting, people will come. It is not because SBD is confusing or anything. People learn when incentivized. The point is to create incentives, not to deprive the possibility of learning. So, I support keeping SBD but paying options can be discussed.
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We only need STEEM/SP. Is irrational: a decentralized system pegged to USD, WTF!!! Is like fucking for virginity, amen Vigilante.
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Entrepreneurs should not be focused on creating perfect systems, but focused on something what can be widely adopted (like USD). Only this kind of thinking can actually cause global impact.
This is like Tesla vs. Edison, where Tesla wanted to create perfect electricity system, but Edison succeeded with wide adoption.
Listen from 35m17s:
Moment where we should remove SBD because it would be no longer needed is in my opinion years ahead from now.
Concurrency need to be has utility, its' real value is when it is a true medium of exchange a, but because of volatile nature of bitcoin price, right now crypto-community gathers enormous amount of people which accepts risk on daily basis (popularity of Steemsports on steemit is not a coincidence). But we will not be able to build product which will be mass-adopted if this will target only people which accepts risk.
There is a reason why adoption curve looks like this:
and because of the same reason here we have so many opinions that SBD is unnecessary (current steem community accepts enormous risk).
We need to eliminate a risk from steem and steemit as much as we can, and from user's perspective SBD is a way to participate in the system without big risk.
SBD should stay if steem want to be mass-adopted
(...and by mass-adoption I do not meana tiny adoption which bitcoin has right now, but adoption which has Facebook or Apple)
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I think you are right... SBD can go away, but in a few years when Hesitant Hank finally falls in line. That would be my grandfather, mind you.
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Keep the Steem Dollars and get rid of the stupid Steem savings that nobody uses.
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Lol. Well I'll probably use it some day. Perhaps the wallet could be tidied a bit if you find the option to save confusing.
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AFAIK Steem saving is important part of the system because it's will be used for anonymity as zkp pool.
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The sbd interest should apply only on saving accounts!
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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?
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I'd be happy to get rid of SBD. Converting steem to btc is quick for those who value stability.
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SBD is an unnecessary financial burden that do more harm then benefit to Steem.
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Yes get rid of SBD, and only keep SP and Steem.
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get rid of SP and only keep SBD and Steem :)
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That wont work though, because SP is needed in order to run the voting system. SBD on the other hand is useless, since the peg is costly to maintain and it's not that liquid as Steem.
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voting system cun run on STEEM, exactly like in BTS.
SBD is not useless, since launch thousands of SBD transactions were made between users. I am preaty sure, that if we would exclude transactions to exchanges, then we would find out, that SBD is used more often as real money then STEEM.
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Yes but it creates a parasitic behaviour since SBD is dragging away value ,7.5%/year from Steem, andi t's not backed by anything. You cant maintain a peg without actual reserves in dollar.
Its just a fuat currency that is ineficient and siphons away value from the system.
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why 7.5%/year?
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Go to your wallet and see there, sometimes it's 7% sometimes 7.5% sometimes 8%, I am not sure how the algorithm is working, but it's rought around that number.
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SBD is usually about as liquid or more liquid than STEEM. It is common to be able to trade 1-3k SBD near the market which is equivalent to 8k-24k STEEM. The latter is only sometimes (not all that often either) available near the market.
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That is not the issue, the issue is th value siphoning, I will write an article soon about it, where I will detail the problem.
Liquidity is measured in the spread and the market depth which is much much less for SBD than for Steem.
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The value 'siphoning' (as you call it) is frankly so small as to be negligible. This is something where you really have to work out the numbers and especially look at the market cap ratios along with a reasonable calculation of what percentage of the market cap is a reasonable estimate of costs. My rough estimate is well under 0.5% of STEEM market cap per year possibly (with somewhat favorable assumptions) as low as 0.1% per year. I view SBD's utility as easily adding enough value to carry its weight and it isn't close. I have some other doubts about it, so this shouldn't be viewed as unconditional support, but I just don't by the 'siphoning' argument holding water based on the numbers.
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Here is my response article:
https://steemit.com/steemit/@profitgenerator/sbd-should-be-removed
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This is a very insightful discussion!
Great to see everyone's perspectives.
Thank you krnel
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@ned,
Is there anything to be said for a compromise?
You and the team came up with an excellent solution for the NSFW issue of censorship to suit both sides of the argument. Options are always nice.
If the main issue of SBD is that it causes Steem to be more volatile - which I presume is the reason why our payouts have been partly steem to reduce this effect - then perhaps the affects could be further reduced by giving people the option to be paid out in steem and SP only. This could even be a locked in option, where once opted in you cannot opt out, so that anybody who wants SBD after they've chosen to be paid out in steem can still get it on the market. This probably complicates how the dollar is pegged I guess that's a question... But if that were possible it could serve as a short term solution, so that new users are still introduced to cryptocurrency in a digestible way.
I had bitcoin for over a year before I actually thought of it as money. I got €20 worth as a Christmas present (thought what the fuck is this shit lol) and within a month or 2 it was worth €50. While I thought that was interesting and impressive it didn't make me want to cash it out as I figured it could still go up or down and it wouldn't matter if I lost it - I still didn't value it as money. I had €300 worth of bitcoin the week I joined steemit having still never touched it (mostly won from a family experiment, not trading). The stability of SBD, knowing what it's worth today and what it will still be worth tomorrow made me cash it out and that is what made crypto real!
I would be opting to be paid in steem if the option was there - but I see too much value in being introduced through SBD to agree that it should be done away with... Certainly at least not so soon after the changes we're still adjusting to. Experiments should be given time to have the results measured accurately.
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The option would be interesting to see for those not interested in holding SBD but I don't agree that it should be an unchangeable option.
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You're right I've changed my mind on that. Just wondering if there needs to be some kind of incentive to be paid out in STEEM and SP. From what I understand the market value of steem is not actually the same value as the steem we get from a payout and the witnesses somehow determine that value... (?) So I'm wondering now if in that given situation would people choose the way they are paid out based on where they can get their steem for a better price... The payout or the market...
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A compromise is indeed in order. Let's put our heads together to think of a way to merge all three currencies S - SP -SBD into one token, give it a 7.5% APR, make it both tradeable as a token and a smart contract that guarantees a dollar peg. Then you can choose to power it up - or not - for any given amount of time that scales exponentially by the length of investment. Isn't this like the US Dollar? I mean, you can do anything with one dollar... trade it, buy with it, sell with it, save it, lock it into an IRA for 30 years or package it into a derivative and cut it up into a thousand contracts.
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Indeed it is, you're welcome :) I figured there would be some discussion, but am pleased to see more than I expected hehe.
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I'm just glad to see that I'm not alone in thinking that the SBD is an unnecessary liability.
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If you would ask someone on the street whether they would prefer to get dollars or STEEM, how you think they will respond?
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It doesn't matter because Steem Dollars aren't dollars. They're just bundles of steem.
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technically apple computer is a set of transistors, a little bit of plastic and aluminium, but this is not important. Concept of value comes from user's perception. If something is seen as valued $1, then it becomes $1.
How you call your dollars in bank account? "Bits, ones and zeros which represents my money" or just "my dollars"?
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A computer is a combination of many vastly different things whereas a SBD is just a collection of steem. Calling a collection of steem "dollars" is erroneous and misleading to those who don't understand what they really are.
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answering here because of nesting limit:
SBD is not just a collection of STEEM, oh no.
most money of the world are debt, but no one use this term. Dollar is already abstract concept (would you be able to explain what is a dollar to someone from stoneage?). SBD is the easiest way to understand on entire steemit. You do not need to know how engine works, to drive a car.
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The other things you mention are not part of the SBD itself. They're auxiliary support components. The US Dollars we use today depend upon a vast array of supporting systems, people, and devices like the Federal Reserve, Treasury, Secret Service, bonds, banknote printers, etc. Auxillary support components like those are essential to the function of the Dollar but they are not part of dollars themselves.
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We need to have an easy method of converting SBD to and from STEEM. Click of a button type of deal.
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Converting and trading are 2 very different things so I'm unsure which you're talking about. There are is a button to convert but it takes 3 days and there is an internal market for trading - this could maybe be made easier to use as most exchanges are unnecessarily hard to look at. I would love to see a much simpler way to just sell for a bid and have it done without having to look at all that indigestible data.
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Agree with you. I have suggested a shapeshift-like UI where you put in an amount, it gives you a price (for modest amounts this will be very near the market midprice), and you click "Trade".
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I really like the internal market. First, I learned to trade. At times, I achieved excellent markup (50%) ... on small amounts. I always keep a certain amount in SB and SBD to take advantage of fluctuations.
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K.I.S.S.
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I agree. For a new user it's hard to wrap your head around the SBD, steem and Steempower!
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@everittdmickey, @daveks:
Actually from average Joe's perspective Steem Dollar is super simple (for average Joe understanding is: it is just a dollars kept on Steemit platform)... STEEM and SP is a new thing which is complicated.
Apple computers are really complicated inside, but from outside they are simple and elegant. SBD can be complicated from technical point of view, but this is a true reason why Steemit attract so many new people which never had nothing in common with crypto.
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Ok I'm coming around and now leaning towards keeping the SBD, after doing more research!
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An excellent post indeed and very well thought out comments as well.
I get what Ned is saying and it leaves me much to ponder. I do think that for the here and now things should be left as is...but IMHO we need to to go to a Steem only platform sometime in the near future or at least transform Steem dollars into something else.
I'm not crazy about it being pegged to the U.S. dollar or any other fiat government issue currency for that matter a lot of the volatility you see is not so much from Steem gaining or falling in value it is the currencies gaining or loosing strength that effects the price of Steem in that particular currency. One last thing that nags me about the U.S. dollar peg is well ......the U.S. dollar. The dollar is on the verge of loosing world reserve status and it's once monopoly on world commodities in particular oil is coming to an end and this will cause hundreds of Billions of U.S. dollars held by other countries in reserve to be repatriated back into the U.S., when that happens the dollar will drop and drop hard and take Steem dollars with it. Some are saying when this happens the dollar could loose 30% right out of the gate. Of course a drop in the dollar will push the price of Steem in dollars up because it will take more dollars to buy Steem since the dollar is worth less.....
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Absolutely, it's not needed and will help simplify things over all, as Ned suggests. But those who want the quick $ will want to keep it around for now.
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STEEM. Couldn't this become a useful and convenient currency? Something like the @freewallet system, where STEEM can be spent with just a PIN.
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Or we cut it out or we give more options for choosing bit assets! Why only steem dollars and not steem gold, steem euros, steem bitcoin, steem anything? Or a variety of options or just steem....
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I do not know enough about the dynamics of the system to know what the herks is the best thing to do.
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If steem power behaves the same as sbd (pegged to $1, btc or some other currency) and gets interest, i am ok with leaving sbd behind.
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Economics asides, I actually like the SBD for its straight-forwardness. The APR / year is quite good too, it's like putting money in the bank, but of course I want it to be better than my bank's annual rate.
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There is nothing I can add that hasn't already been said here but I also don't see any value for SBD anymore and wouldn't mind for it to be gone.
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Ask a business owner pricing his products in Steem or SBD if they see any value of having SBD. What do you think the answer will be?
Ask a noob joining Steemit and is already confused about BTC and cryptocurrencies in general if SBD, which are pegged to the dollar, has any value? 1 SBD = $1 USD Simple, elegant, easy to understand = value.
It doesn't matter if I or you think it has value, it's what a new prospect, merchant or user thinks.
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If (apocalyptically, of course) SBD were to be eliminated, how would this be done? I have a relatively large SBD balance. Will I be paid what it's worth? Or will I just be forced to take a haircut and well shame on me for believing that the Steem blockchain would honor its commitments.
It's a more complicated issue than simply "to SBD or not to SBD." We live in a world with SBD. It's not simple to switch from this world to one without SBD.
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This post has been linked to from another place on Steem.
SBD should be Removed! by @profitgenerator
Debating Steem Backed Dollars - Come On Baby Let Me Know Should I Stay Or Should I Go by @luzcypher
The Steem-Backed Dollar (SBD): Having your cake and eating it too by @mark-waser
Learn more about and upvote to support linkback bot v0.5. Flag this comment if you don't want the bot to continue posting linkbacks for your posts.
Built by @ontofractal
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After reading @profitgenerator article, sorry everyone but I must now use the correct name for the SBD token/contract: Steem-Backed Derivative.
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Today I found few very interesting words made by @ned during his visit in Oslo:
whole video: [2016-10-15] Ned Scott Seminar at Oslo Steemit Hackathon: "(...) one of my favorite ideas going into this project, was the idea that we are going to create this pegged instrument - the SteemDollar"
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Ned never said he wanted to remove the SBD. Listen to the interview for anyone still confused about this post. He was suggesting a possibility if the community wanted it could be done.
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Correct. But IMO, it is important to just note, that words like those were also said.
That was posted from non-profit account, which aggregating all videos of Ned for archive purpose.
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It supports him supporting SBD, which he did and does :)
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Get rid of it. It only adds complexity on system.
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I disagree. It adds simplicity in explaining how this works to someone and to a merchant.
Ask a business owner pricing his products in Steem or SBD if they see any value of having SBD. What do you think the answer will be?
All we'll be doing is shifting the "complexity" to the end user when they have to price conversions on an hourly basis.
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No, It adds unnecessary complexity on Steem system.
More seriously, it adds downward pressure on Steem.
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To clarify, it adds downward pressure on Steem because SBD that gets cashed out has to be paid for by Steem at its current lower prices?
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Nope more complicated then that.(though not rocket science) SBD transfers its volatility to Steem, which is BAD for all kinds of token, Also it causes FEED DISCOUNT . FEED DISCOUNT requires Steem network to print Steem and sell it on market. Lastly, there are ridiculously high interest rate.
Which is all bad for steem price. Maintaining SBD is not free. It's actually quite expensive. ( Cost to maintain SBD ) > (Benefit from SBD)
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So to keep SBD stable we have to sell more Steem on the market and that drives the price of Steem down, especially when the price is already low. Have I got that right?
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If this is true, then post HF16 means that Steemit has become the Federal Reserve and SBD is Quantitative Easing QE4.
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