Bounty 20 Steem: Should we fix SBD?

in sbd •  9 months ago

question-2736480_1280.jpg

I've been thinking about SBD lately and how we should deal with it. Clearly the intention in the white paper of a stable currency that reflects the USD price is not working.

As a recap directly from the white paper:

"....Steem Dollars were designed as an attempt to bring stability to the world of cryptocurrency and to the individuals who use the Steem network....."

Assumption

So I am going forward with the assumption that SBD is to be a

  • Stable currency, pegged to some other currency (in this case the USD)
  • The purpose of such is to protect users from price fluctuations (i.e. money earned should not have to be sold to protect its value)
  • there is a bigger vision for steem than just blogging and SBD are to be useful as cryptocurrency to entire industry and not just steem content creators

A design flaw that makes everyone money

There has been quite some debate about SBD on Steem in the past and it will likely be hard to change anything at this moment.

The reason is that any price of SBD above the $1 brings value into the ecosystem, without any direct cost (other than the loss of SBD utility). Everyone that gets any sort of rewards in SBD has been overpaid dramatically. Specifically content creators have had their rewards multiply.

This money basically is coming from the market. As people on the market overpay for SBD people who earn and sell SBD benefit. So in a way this is free money flowing into the Steem ecosystem paid for by traders/investors. That makes steem grow at no cost. No wonder everyone loves this idea.

High SBD is good short term and bad long term

Because the value that is flowing into steem from the high price of SBD is really good for content creators this is really good for growth of new users and keeping existing users active. it also helps with wealth distribution. So this is simply fantastic.

In the longterm however the objective of SBDs is stability and without it they have no utility. Even worse the advantages that they are supposed to bring are not available to users. So while the there seems to be no cost for not having working SBDs there clearly is one. It is just not as noticeable in the short term, while the advantages of high sbd price is clearly felt by everyone. Immediately.

But imagine how great it would be if you could trust that SBD's are stable and one could use it to park value. Essentially the entire value of TUSD could be captured by SBD and flow into steem. If that were the case the steem blockchain would be more than twice as valuable.

Fix it in the long term and in a way that increases the price of steem

So I would suggest to let SBD go on as it has right now until its value comes down to its peg or at least close. Then however I would suggest to fix the design flaw that it has and make sure a volatile SBD price cannot happen again.

Allow people to create SBD

One of the great things of Steem and SBD is that the debt ratio can never be more than 10%. As such there is no problem creating unlimited amount of SBD. Therefore we can come up with a solution like @timcliff suggested

  • Allow users to buy SBD by converting STEEM into SBD
  • The conversion from STEEM to SBD should have a fee that is set by the witnesses (it would be their job to make this so high that the system cannot be exploited)
  • This fee can either be burned or used for marketing or development purposes
  • Steem used to buy SBD should also be burned

How this would increase the value of steem

If the utility of SBD would create lots of demand for it, the price of steem would increase. At first price of SBD would go up, this would then trigger arbitrage opportunities, which would increase demand for steem, which then would increase the price of steem.

Imagine the entire crypto market using steem as stable currency instead of USD, this would catapult the price of steem. I think the value of a stable currency is still vastly understated by most people in the space. In the end no cryptocurrency is money or currency as the most important attribute of such (that most often is omitted) is stable value. As such steem could be the only real currency in the space, if only we would get it right.

I think it is better to fix a faulty design than to forget a good vision. SBD are essential for making steem more than just a simple blogging site but a whole financial system that can change the world. In order for that we need working SBD.

Bounty

I am sure many of you will have interesting ideas about this so I look forward to your thoughts. In order to encourage you to share them I have put a 20 Steem bounty on this post, which will be shared among the top level comments, depending on how much upvotes you will get from me (80%) and from the community (20%).

This is from the bounty project we are working on with out witness steem-bounty, which we will announce in the short future.

Please vote for us

For now, thank you very much for your attention and we hope you will vote for us!

We announced our witness here: https://steemit.com/witness-category/@steem-bounty/announcing-our-new-steem-bounty-witness

If you like this content please consider voting for our witness. In order to vote for us you can go to:

https://steemit.com/~witnesses

And enter the "steem-bounty" account into the text field and click vote.

Screen Shot 2018-02-27 at 3.05.35 PM.png

Or use steem-connect to vote directly for us as Steem witness!

Thank you for your attention

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

I can see how a stable SBD would attract resources that just want to be parked for a period of time without the extreme volatility. The crypto market is in desperate need of more stable options for sure. But, is stability the unique mechanism the STEEM ecosystem is trying to offer? For me, I don’t think so. Cash flow is STEEMs unique mechanism. Selling dreams of cash flow is much more attractive in my opinion then stability. I didn’t get into crypto for stable prices. I got into it for big gains and cash flow. The way the SBD is currently “broken” creates the most amazing opportunity for income growth I’ve ever seen. To change this and opt for stability would be a huge mistake from where I’m sitting today. Over time my mind may change, but for now I want the highest levels of cash flow possible without much weight being put on stability. Thanks for the post and getting this important conversation started! Resteem

·

Correct. We're still at our infancy stage for me and we need more and more sustainable income. If steem attracts more people joining the platform (including big whales/players), then that's the time a fork or change needs to happen.

·
·

So I'm admittedly new. But why would new people on the platform mean needing some sort of change? Maybe a better question of why specifically a fork or other change in case of growth?

·

Well put Brett! I was going to put in my 2 cents about this but you have taken the words right out of my mouth so all I will say is... Ditto!

·

Congratulations! Your submission earned you 3.708 STEEM from this bounty. You have received 3.547 STEEM from the creator of the bounty and 0.161 STEEM from the community!

·

This comment right here. The two trails of thought I'm seeing sum up cryptocurrencies perfectly atm. On the one hand we have those seeking a useful tool (a stable currency), and on the other we get those looking for the next big thing in investment. This is why the chaos we have coming from so many different currencies is actually a really good thing - just like with many other things, there is not one method to suit everybody, so I'm just glad that we do have so many (in time the ones with true value will stick around). In the context of Steem, however, it would make sense for SBD to have a stable price - this would boost the price of Steem greatly over time (and, I imagine, quite reliably because, as it's been said, stability is a genuinely useful commodity that we need in the crypto market), and in this way benefit both investors (those looking into Steem could simply invest and know safely that their investment will grow as more people join this genuinely great website) as well as those looking for that stability to make sure that the money they spent a week ago doesn't suddenly become worth all of what they own now or anything like that. Just my thoughts as a crypto newbie :3

·
·

I'm new to steemit, and steem in general, like some of the commenters below. I read this post and replies with interest, and I appreciate the reasoned discussion from both points of view. I don't yet have a good enough understanding the system to have an opinion, but hope to be able to offer useful input soon.

Thanks for your work in developing this community!

·

Nicely said Brett I'm agreeing with you

·

I totally agree with your opinion👏👍

·

Forcing the peg back is anti-free-market and pro-regulation. It's everything crypto is against.

Witnesses arguing for a repeg should be unvoted. They are literally attacking your wallet while printing 100+ Steem a day.

·
·
·

It takes time . You have to keep reading and studying.

·
·

Same here, follow me, then, will follow you :)

·
·
·

Hi, bosslui. I'm new too. I would like to introduce Korean culture, K-Pop, and food etc. Please follow me then I will follow you :)

How about dinamically controlling SBD inflation based on an SBD price algorithm?

When SBD > 1$ each payout produces more SBD (and creates inflation)
When SBD < 1$ payouts release less SBD (therefore inducing deflation)

·

I didn't see this comment before I posted my response below but this run along the same lines as my solution proposed below. Basically all thats needed is to create an algorithm that can influence the price of SBD according to the monetary price of SBD at any future time point (x). There any many ways in which this algorithm can be written. @lightproject just proposed one and I proposed another in my comment below.

·

LMAO
That is EXACTLY what they are doing!!! I've been watching...

Measures ARE being carried out to "normalize" the SBD prices. I started watching this in mid December of 17 and the SBD in circulation was roughly 6 million units. It is approaching 11 million now. Steemit INC is inflating the SBD supply. Clearly the rate of inflation has been accelerated, nearly Doubling the supply in the last 3-4 months is an increase over what was done in the first 2 years. So STINC (steemit-inc) IS doing something about it.

·
·

You don't seem to understand how SBD works.

That is normal inflation. SBD in circulation is increasing with every post paid out.

·
·
·

Built in adjustment. Even Better! Which was totally LEFT OUT and overlooked by the OP.

;)

·

Congratulations! Your submission earned you 3.589 STEEM from this bounty. You have received 3.547 STEEM from the creator of the bounty and 0.042 STEEM from the community!

Loading...

Correct me if I'm wrong but SBD merely guarantees you a dollar's worth of STEEM if you choose to redeem it with the blockchain correct?

So it's merely a price floor. By holding SBD you are guaranteed the purchasing power of a USD. Nothing more!
If traders are driving the price of the SBD up, that's merely a bonus. The instrument doesn't promise you that at all.

Would I be correct in saying SBD has a price floor at 1USD but no ceiling?

·

Yes. What I am saying is that this is a design flaw relative to its purpose which is to represent USD

·
·

Right. If I had to pic a flaw.. that's the one I would pic! haha.

For Muse, this design flaw is good. Since we need to guarantee that artists and rights holders get the purchasing power to pay their bills to allow them to continue focusing on their music career.

·

I'm new to the environment and I think this question right here is one that is helpful for newcomers to understand. I admitily need to look into it more but this entire post sounds intriguing.

·

I agree with you, we cannot predict the Market globe that control by trading market. It depend on how many trader use sbd as payment tool. When the moment sbd many use it will up, otherwise when this sbd rarrely use, it will fown. It is system.

·

Would I be correct in saying SBD has a price floor at 1USD but no ceiling?

Yes, at least to an extent. That doesn't mean it can't trade below $1 for long periods of time. We've seen that happen multiple times.

·

Congratulations! Your submission earned you 1.415 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 1.415 STEEM from the community!

I don't disagree with your proposal for addressing it, but I would add that even in the short term, it seems to me that the only stakeholders who really benefit from high SBD prices are authors. I think other stakeholders are harmed in both the short and long term. I wrote about it from a stakeholder perspective a few months ago: About those high SBD prices.

Two questions that no one seems to be asking:

i. Does restoring the SBD peg reduce the whale self-voting/voting-clique problem?

ii. For a healthy platform, what are the desired ratios of voters/authors, investors/authors, and even readers/authors?

Authors are the ones with the megaphones, so these discussions usually assume that every Steem user is an author, but is that really the way the platform works best? It seems to me that the platform would be healthier with many more voters, and investors than authors (who have the smallest incentive to hold steem). The high SBD price does nothing to encourage that dynamic.

·

Correct me if I'm wrong but is this platform's Intention to be used as simply another form of open and free social media? If so then it is in the hands and interests of all users to Inherently become authors by Posting content they find meaningful and being rewarded for doing so. Given the underlying intention of creating a community of meaningful content via rewards.

Refocusing on the intensions of the coin produced and witnessed on this block chain network, If it has been define as a stability seeking method should be not strive to maintain that original purpose?

·
·

This is in the whitepaper (page 27):

So yes, anyone can earn rewards by posting content, but voters are needed too, and you need many votes per post (on average) to achieve effective curation. High SBD prices tip the balance in the opposite direction, reducing the relative value of voting, since curation rewards are paid in SP.

And yes, if I understand you, I agree with your second point. SBDs were designed with one purpose in mind, to have a stable value. If they're not doing that, then they are failing.

·
·
·

The whitepaper also has 52+ week power downs and exponential whale voting.

The repeated appeals to it are fallacious appeals to authority.

·
·
·
·

The whitepaper also has 52+ week power downs and exponential whale voting.

Actually, it doesn't. The copy I pulled that from was rewritten last year to match the current state of the block chain. The link is here - https://steem.io/SteemWhitePaper.pdf

And it says:

Users are able to commit their STEEM to a thirteen week vesting schedule, providing them with additional benefits within the platform. STEEM that has been committed to a thirteen week vesting schedule is called Steem Power (SP).

And

When users vote on content, their influence over the distribution of the rewards pool is directly proportional to the amount of SP that they have.

And even if it had been obsolete, that wouldn't change the thrust of my comment which is that high SBD prices incentivize authors at the expense of voters and other stakeholders in a way that discourages quality content discovery.

·

Congratulations! Your submission earned you 2.318 STEEM from this bounty. You have received 2.199 STEEM from the creator of the bounty and 0.119 STEEM from the community!

Personally, I believe whatever is best for Steem then that should be the option moving forward, I dont think we will see it drop to $1 in the short term.

Although looking at BTC it could happen sooner than expected if the price continues to fall.

Can I ask - Do you think new people to the platform actually understand that the payout that is shown in a $ value is wrong?

I had no idea when I first joined, and many people I speak to don't either.

It was only after watching many videos and looking at articles that I started to understand this.

Conclusion - Long live Steem and Steemit :-)

·

I had a suspicion the displayed $ value couldn't be accurate. Do you have any references or could you go into as to how that is calculated versus what the returns really are?

·
·

@prlndra I use this online tool - http://steem.supply/rewards

Just make sure you change the Steem price and also SBD to the actual price and it will show you your earining per post.

·
·
·

What is the best place to track the steem/SBD prices? Within the steem platform itself or an external exchange?

·
·
·
·

I use Coin Market Cap - https://coinmarketcap.com/

On the righthand side is a search box - Type Steem or SBD in there and it will give you the price.

·
·

Basically, 1/2 is paid in SBD. The other half is paid in enough Steem to equal the USD value. So, if you see that your post pays $2.00 in rewards, you get ONE SBD. and one dollar's worth of Steem.

·

Congratulations! Your submission earned you 1.600 STEEM from this bounty. You have received 1.561 STEEM from the creator of the bounty and 0.040 STEEM from the community!

·
·

That is AWESOME :-)

Thank you for letting me know @steem-bounty.

Can you let me know where to find out more information about the bounty and how this works as I would like to learn more please.

Thanks

·
·
·

We are still testing and will announce more soon.

If SBD can not be pegged to 1 $, there will be no reason for it to stay. Why don't we just remove it from the whole system? It confuses newbie.

·

Lol... Removing it means no stable value for the volatile Steem. That's a good way to think about it but it's impossible. Fixing what is broken is better than throwing away.

·

Congratulations! Your submission earned you 0.230 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.230 STEEM from the community!

I favor a SBD 100% pegged to the dollar, it is a no brainer. We already have a volatile crypto that is the Steem and all the others around. We miss a stable coin in the cryptosphere. Monstrous volatility is useful only for speculation purposes, but not for regular people.

·

You got a 25.03% upvote from @mitsuko courtesy of @discernente!

·

Except, it's actually not a no-brainer, because the natural mechanism to fix this situation is already working.

SBD.png

You armchair Keynesians need to sit the fuck back down.

·

Congratulations! Your submission earned you 0.213 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.213 STEEM from the community!

There is no reason to intervene now as we don't have any bussineses or projects running that would benefit from a stable 1$ SBD. Leave it as is and it will just serve as a jet engine propelling us forward.

It will go back to 1 on it's own when steem goes to 100 after SMT and HF 20 are successfully implemented. It will balance itself back to 1 as a ton of new SBD will be created every day.

·

Yeah but when?you think it will go down to 1$ just like that. People don’t understand that SBD is only mined in this platform. And only by authors. steemit is actuve 2 years now and we have only mined 10mill sbd. The number is really small. AAnd I don’t think that anyone can interfere in the protocol just like that. If it was so easy we could also change the circulation supply of Steem which-i don’t know how many of you have noticed- but out of the 269mil we are standing at around 253 as we speak. And judging by how quickly it escalates i assume within 4-5 months there wont be any more steem for mining.
At that point things will take their way. Steem will roll while sbd will return to the price it was originally designed

·
·

...judging by how quickly it escalates i assume within 4-5 months there wont be any more steem for mining.

Steem does not have a hardcap, from page 26 of the White Paper:

Starting with the network's 16th hard fork in December 2016, Steem began creating new tokens at a yearly inflation rate of 9.5%. The inflation rate decreases at a rate of 0.01% every 250,000 blocks, or about 0.5% per year. The inflation will continue decreasing at this pace until the overall inflation rate reaches 0.95%. This will take about 20.5 years from the time hard fork 16 went into effect.

·

"It will go back to 1 on it's own"

It's already doing that, even while other top-upvoted comments in this thread "lie" and say that it's price isn't normalizing.

Literally, many of the top comments in this thread are boldly lying about SBD not reverting to normal from normal market activity.

SBD.png

Derp? Which way does the line go? I think it goes from $12 to $2 (83% loss) in under 3 months.

Bueller?

·

Congratulations! Your submission earned you 0.167 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.167 STEEM from the community!

My opinion is SBD should definitely be pegged 1USD because there’s no such thing as a dollar constantly fluctuating and being volatile 24/7 it’s unpredictable how much your SBDs would be worth, won’t make it as a Steem currency unless it’s stable like USD fiat.

That or just change the whitepaper so people don’t get confused and spread lies to the community that SBD is pegged and promised to be a stable crypto when its not!

Great post!

·

The whitepaper is obsolete. Stop obsessing over it.

What is a "steem currency"?

·
·

The white paper shouldn’t be obsolete due to it explaining in detail what the company is about. Which for people that are serious in investing/using the platform or crypto like to know.

And “Steem cryptocurrency” same thing.

·

Congratulations! Your submission earned you 0.135 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.135 STEEM from the community!

We should just use the BitUSD model, and allow people to issue steem-backed dollars. BitUSD has tracked the peg extremely well over the years.

·

Congratulations! Your submission earned you 0.107 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.107 STEEM from the community!

No!

·

Congratulations! Your submission earned you 0.102 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.102 STEEM from the community!

If it ain't broke, don't fix it

·

Congratulations! Your submission earned you 0.100 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.100 STEEM from the community!

The only logical solution to this is to leave SBD as an asset that can beat the value of a QE fiat dollar, and create a new asset pegged to the price of gold. Steem Gold (SG). That way we keep SBD as it is working, and get to have our pegged asset.

·

Congratulations! Your submission earned you 0.099 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.099 STEEM from the community!

SBD should not exist if it does not maintain a stable unit of currency pegged to some asset that does not fluctuate as much as Crypto. When SBD was wroth $1 it added value to Steem and Crypto community by providing a safe harbor during uncertain times. In its current form it just creates unnecessary complication for all participates. It is crazy that and asset which is supposed to be worth $1 could ever go to $12+.

·

Congratulations! Your submission earned you 0.079 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.079 STEEM from the community!

Yes, the higher SBD price is definitely great for content creators and it's making this blockchain much more popular, I'm sure of it. But I see that it's not doing us any good in the long run. I think it's best if we wait until SBD comes down to 1$ on it's on, and when this happenes, it's time to fix it and make sure it never goes up like that again.

Sure, it's nice to have those big rewards. But it's always better to go with the long-term plan that will make this blockchain the best one there is!

·

Congratulations! Your submission earned you 0.048 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.048 STEEM from the community!

How would a bunch of money being parked into the Steem Backed Dollar, as opposed to the Tether or United States Dollar raise the price of Steem... did I miss that part or something?

·

No, nobody here has provided any logic to that effect. They just assume people are going to flock to some no-name, 200-ranked crypto because some weirdos promise to peg it.

·
·

Hmm, that's what I figured, and thank you sir.

·

Congratulations! Your submission earned you 0.043 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.043 STEEM from the community!

·
·

Pegging SBD to fiat currency that is losing its value is also questionable idea .

·

Congratulations! Your submission earned you 0.042 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.042 STEEM from the community!

People don't seem to understand that you can't have it both ways. You can't hold a fixed 10% limit of SBD/Steem and then hold the peg. You could hold the peg temporarily if you had unlimited ability to print SBD, but as a debt instrument if you printed too much then after some downward movement if everyone called them at once for conversion to get their 1 USD worth of Steem , it would collapse the value of Steem. A hard pegged SBD is a stability problem for the instrument which has to underwrite the stability. This is why it was designed as a soft peg in the first place with a limit on supply as a % of the market cap of Steem. SBD goes down interest rates can bring it back up , in contrast if the SBD goes up it will increase author rewards value and increase conversion of user SBD into Steem, which in turn as the steem price goes up further increases the supply of SBD in payouts up which puts more downward pressure on SBD.

Fixed pegs just don't work; unless you match them directly with the underling asset (ie this would involve banking one USD in an fiat based account for every SBD , just look at the conjecture about Tether and if they are actually doing this). You can't just print money on a real world pair without having something backing it (just look at the relative value of a USD denominated bank account in Zimbabwe held with the new USD pegged Zimbabwe dollars) . Financial systems have to be stress tested for extreme fluctuation so the whole system does not collapse. The recent price spike and subsequent increase in supply of SBD and lowering of the price of SBD is a system that is working, not broken. This is how it was designed to work. Stability in currencies comes from having large stable GDP being transacted in that currency. Its the incredible volume of regular nominal monetary transactions and flows which creates the stability. You can't create a stable currency then invite commerce. You have to bring commerce to the currency, then when the nominal transaction based flows dwarf the speculative flows you will end up with a stable currency. So unfortunately its a little chicken and egg, and simply takes a long time to develop those transaction based monetary flows.

·

Finally! Someone who gets it.

·
·

Nice to have someone understand what I am trying to say!

·

Thank god someone with economics knowledge.

I cannot believe how many idiots are yelling about how the SBD "peg" is broken and not working, and it must be forcibly re-fixed.

Yeah, because it's not rapidly doing EXACTLY WHAT IT'S DESIGNED TO OR ANYTHING:

SBD.png

Fucking liars, all of them.

·

Congratulations! Your submission earned you 0.037 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.037 STEEM from the community!

You are suggesting making SBD "stable" and pegged to the U.S. Dollar; however, what's to guarantee it won't go LOWER than the U.S. Dollar in value. Is there going to be an algorithm that secures this? I think if you tried to restrain SBD that would be a bad idea, that would be like restraining Bitcoin to never raise above $1000 so that people would think it was stable (would Bitcoin have grown as big as it has if this was the case?). I think we should let the market run its course and decide what SBD are worth in the short term and the long term. I thought cryptocurrency was about decentralization. The rules of the Steemit platform have been made and have worked wonderfully, we should be coming up with ways to market the app to go mainstream, and concentrate less on restraining it. This reminds me of the Federal Reserve creating monetary policy and artificially messing with interest rates. I think if we start artificially messing with the Steemit, then that will actually cause it to lose "it's stability" and faith as you suggest it. I believe letting the market decide what SBD's value should be in the short term and long term is what's best. Just my 2 satoshis.

·

@jfltmisc You bring up a very point. How can this cryptocurrency reflect that of an actual already centralized physical currency and also hope to have a future with in the digital currencies space? What I mean by this Is if theo original purpose and intention of bitcoin is carried out and the collapse of physical money takes place then where would the value in SBD Lie moving forward?

·

Congratulations! Your submission earned you 0.033 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.033 STEEM from the community!

You might remember our post announcing a huge 20 steem bounty for what seemed like a little, easy to fix bug. Many people suggested to use multi threading to deal with discord. py API's problems, and while I was hard at work trying to make it happen, someone submitted a pull request with a much easier, better fix, which also made the bot much faster.
It was no other than @mys with his contribution that handled the issue by... refusing to use python-steem API. Turns out, all of the big websites ditch JS, Python and PHP APIs in favor of api.steemit.com. He made use of that, and with a simple json request use made the bot not only magnitudes faster, but fixed the infamous freeze that was stopping SockoBot from ever being deployed to big Discord servers. This solution (along with a new look for our response message you can see above!) has now been merged into the project and is the official solution to the issue.

·

Thank You for remembering me!
That was about 3 months age when all the python-based bots just stopped working.. Sometimes it is better to search for an alternative than trying to workaround bugged part :/

·

What the hell does this have to do with anything, you fake-accounting ID thief?

·

Congratulations! Your submission earned you 0.028 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.028 STEEM from the community!

I don't think there is anything wrong with SBD. Given the ratios rewarded in the 50/50 split, this is a self correcting problem. It may take a while but it will correct itself. In any investment when the number of investors are relatively limited (like with steem/sbd) there will be volatility. It's unavoidable but will also be self correcting if and when the community is large enough. There is already a market for buying and selling sbd built right into steemit.

It isn't clear to my why SBD rose so much in value but I suspect it happened in large part due to the fact that it was generally encouraged that people power up 100% instead of taking the 50/50 split. Maybe then the "fix" is simply to not even allow this as an option? If users want steem for their SBD then they have to use the currency market to convert it. More SBD means a lower price for each SBD after all...

·

Yes, self correcting is right:

SBD.png

·

Congratulations! Your submission earned you 0.025 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.025 STEEM from the community!

Having the SBD price high is a huge benefit for authors, a huge opportunity for visibility on exchanges, and consistently puts buying pressure on Steem which is very good for all of us. We might be unwise to try and force the price down because "we think it should be lower" while most of our community is very excited to be where it is. After reading this post I am going to ask both witnesses biasing feeds to remove the bias.

·

Congratulations! Your submission earned you 0.023 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.023 STEEM from the community!

I strongly agree with you and thanks for informing I already think about this that where this money is come from so you explain it well I appereciate you you confrm about my this question and i agree with you that the real way to increase the value of STEEM you explained it well
I also appereciate and agree with you that Fix it in the long term and in a way that increases the price of steem
So I would suggest to let SBD go on as it has right now until its value comes down to its peg or at least close. Then however I would suggest to fix the design flaw that it has and make sure a volatile SBD price cannot happen again.

·

Have you ever considered the use of the period?

It is a very friendly piece of punctuation.

·

Congratulations! Your submission earned you 0.022 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.022 STEEM from the community!

Brilliant! Amazing people with smart ideas continue to emerge from this community and I am loving it :)

·

Congratulations! Your submission earned you 0.021 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.021 STEEM from the community!

I agree with you, how SBD are actually created. Let's think this through:
SBD price goes down further
People start to use "convert" instead of selling into the market
A week later, they get STEEM
Steem are sold
The market cap of Steem goes down
Less SBD are created from posts (because the market cap went down)
Less sell pressure due to SBD sell-off and convertion due to less amounts available
Meanwhile people start to understand the implications of SBD (free instant micropayments, interest)
Buy Pressure for SBD starts to build up again
Meanwhile the network grows and demand for SP grows aswell
People buy into Steem to get SteemPower to obtain more VotingPower and higher rewards
Marketcap rises
Rinse and repeat until sufficient market traction slows down the process

·

Congratulations! Your submission earned you 0.020 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.020 STEEM from the community!

short term good for everyone who does Power Up!

·

Congratulations! Your submission earned you 0.019 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.019 STEEM from the community!

To truly create a stable currency, SBD included, it needs to be backed by something or multiple somethings that are stable...more stable than USD. If SBDs were backed by a portfolio of gold, silver, Carbon, Bronze, oil and other natural resources across the globe it would be stable and could be used as global store of value. The systems holding it would also need to be secure (NO HACKING!), easy to use and accessible by all.

·

...it needs to be backed by something or multiple somethings that are stable

Ding ding ding! An asset will not have stable value just because you want it to be stable.

·

Congratulations! Your submission earned you 0.020 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.020 STEEM from the community!

I hope that you will make Steemit better than Facebook!

Good point you are making. Yet I think the amount SBD in circulation is in fact what is needed to create all the steem and steem power. The lack of SBD maybe because most are in steem power, not steem. Therefore it is not possible to move steem into SBD or else its making a collateral on top of another collateral. I can be totally wrong on this. Your thoughts?

·

Congratulations! Your submission earned you 0.016 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.016 STEEM from the community!

To listen to the audio version of this article click on the play image.

Brought to you by @tts. If you find it useful please consider upvote this reply.

·

Really useful!
Is there a way to call it any post?

·

Congratulations! Your submission earned you 0.016 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.016 STEEM from the community!

I agree with your idea. The uncertainty is unhealthy for Steem community. What's the point of having SBD if it's not pegged to USD? Why don't we just use STEEM? It's pointless to have 2 volatile currencies on Steem community. SBD and STEEM should serve different purposes.

·

Congratulations! Your submission earned you 0.016 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.016 STEEM from the community!

Great proposal. I do believe we need some change on SBD, if it's not working as supposed to. Although it seems the problem is due to the irrational, ignorant market. How you would control that I don't know, but whish you the best. Cheers!

·

Congratulations! Your submission earned you 0.015 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.015 STEEM from the community!

Follow you and also vote for you as a witness

·

Thank you!

·

Congratulations! Your submission earned you 0.011 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.011 STEEM from the community!

Very good post

·

Congratulations! Your submission earned you 0.011 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.011 STEEM from the community!

So price of sbd is down right now but I think that this is good for investors on steemit as they invest less money to get more benefits from steemit

·

Congratulations! Your submission earned you 0.009 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.009 STEEM from the community!

I just think back to the the 12 dollar SBD days of December and I miss them. Pegging it might be good for stores using them but I am not sold on the idea being great for everyone.

·

Yeah, for bloggers, more money is better than less money. If Steem INC. is increasing the supply of SBD to drive the price down, I sort of feel pumped and dumped. I mean, I understand the promise of a higher Steem value in the future, but those are just predictions.

·

Congratulations! Your submission earned you 0.007 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.007 STEEM from the community!

I'm not sure why it needs to be pegged to $1.

Currencies like tether which have a visible peg, need to be backed by dollars. While SBD is just a token that floats.

·

Congratulations! Your submission earned you 0.006 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.006 STEEM from the community!

For new steemit-community-members like myself it would be a very comfortable situation, if SBD will notice much higher than STEEM. For this situation I'm still waiting. I have placed some orders on the internal market. If SBD will rise up I could buy more STEEM with my autor-rewards to POWER UP the STEEM on steemit and increase my voting-value.
Best regards from Germany.

SBD must have to be stable. We have steem that is not stable.

Why don't we do something that will increase the steem price

It's a pure game of supply and demand, that will increase or decrease the price. You have pointed that by collateraling steem we can increase steem price.

I have voted you.

where i can do photography course?

Plz vote, follow and comment on my blog and post. Thank you.

Great content and awesome post. I am new to steemit and really have enjoyed my first browse of the website. Keep up the great work.

hallo Mr @knircky vote back and followback my acount thank you iam from indonesia

I just realized this as I was commenting on another post, but...

Why not peg SBD to 2 USD (current state)? People complaining about not wanting the peg aren't focused on the peg so much as the price.

Or heck, peg it to the price in gold like GOLOS :P (I didn't even realize they were doing that until I looked recently)

excellent . Amazing people with brilliant ides. thank you

I believe steem is more stable, but it will always fluctuate with other cryptocurrencies.

really steemit is a stable platform

A bounty of 20.000 STEEM has been set on this post by @knircky!

·

okay.. im ready for it! :D

·

I cannot help but appreciate your content. I am new in the community, and I will apply the information you've shared.
I also read an article about the principles on how to be successful in Steemit. First, is to create a content that adds value to other people lives. It's your personal perspective. It should be Authentic, honest, open and sincere. . Second, It is a network with like minded creators so that you can work together and what was that enable you to do? It enables you to create content that adds value to other people's lives and so we have this positive feedback loop and follows and upvotes which are basically SBD. In my opinion, If you pursue this two principles that will help you become successful in Steemit.

·
·

Stop pasting this everywhere you moron. You are sucking up to a bot you goddamn idiot.

it is very useful to me ,thank you for your sharing.

I won't make out that i understand all the technical stuff However i agree that throwing out a good idea rather than fix the problem is a bad idea.
A stable currency is a must and its the single thing in my view that puts people off crypto currency.
I'm new to steemit but can already see what a great platform it is and has the potential to be even greater..
When i vote for a witness, what am i voting for??

I like steem. Thus I am glad for high SBD for you say.

Thanks for sharing! A link to your post was included in the Steem.center wiki page Steem Dollar (SBD):Links. Thanks and good luck again!

We win together, I want to talk with you abut witness project. I am on discord channel https://discord.gg/q9VEn5n

It is a good idea if you want/wish to, but fixing the SBD wont it get affected on the blockchain

The idea go let the value of SBD float until it hits somewhere close enough to the peg is probably the best compromise. I'm in favor of keeping it stable after that.

·

Congratulations! Your submission earned you 0.001 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.001 STEEM from the community!

I cannot help but appreciate your content. I am new in the community, and I will apply the information you've shared.
I also read an article about the principles on how to be successful in Steemit. First, is to create a content that adds value to other people lives. It's your personal perspective. It should be Authentic, honest, open and sincere. . Second, It is a network with like minded creators so that you can work together and what was that enable you to do? It enables you to create content that adds value to other people's lives and so we have this positive feedback loop and follows and upvotes which are basically SBD. In my opinion, If you pursue this two principles that will help you become successful in Steemit.

·

Congratulations! Your submission earned you 0.001 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.001 STEEM from the community!

Folback me pleads

Really make a steady cash, SBD included, it should be sponsored by something or different somethings that are stable...more stable the USD. In the event that SBDs were supported by an arrangement of gold, silver, Carbon, Bronze, oil and different assets over the globe it would be steady and could be utilized as worldwide store of significant worth.

Discuss makes better :-)

Keep up your great job and thank you for sharing

SBD prices do not work. how people respond.

hi my name is SHORIF, i am a newcomer in steemit. I hope we can establish relationships and help each other. thanks.

Its a nice initiative.I wish i could benefit from it but i do not even have sbd yet.

Hi @knircky introduce my name is @teennesies, I heard you like I care about the crowd, on social life. I am sorry you have visited without prior permission. I just entered and studied at steemit hopefully you can be a motivator for me and my best friend.
Today first I created my blog at introduceyourself.
Thank you.

nice info for we are stemians :))

Well put together. Thanks!

Really good content, Kindly check my Channel also.. Thanks

wow this amazing

I think we should leave it. I think problems will eventually work themselves out.

·

Congratulations! Your submission earned you 0.001 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.001 STEEM from the community!

Comparing SBD to USD is an Apples to Oranges Comparison

The problem with the system is with the utility of SBD, not the price. The US government can print more money to cause inflation to devalue the dollar if needed because the dollar is used to buy EVERYTHING. There is an infinite demand for the dollar and a limited supply, so printing money causes the price of the dollar to go down.

The same is NOT true for SBD. SBD is only used to pay bots and buy Steem. Therefore, creating more supply when the utility is not there does not solve the problem.

My 2¢

To address this problem, you need to fix the utility problem. By leaving the problem to the open market, you let the price fluctuate. To me, I'd rather have SBD than steem because I can buy upvotes which will give me steem and steem power. If you can get a 2x upvote with your SBD, then (after accounting for curation fees) you've profited from the payment which means your SBD is worth more than a dollar.

To fix this problem, you need to create an infinite supply of $1 SBD. On Steemit, the defacto conversion system is blocktrades. If blocktrades permanently values SBD at $1 and any conversion through blocktrades used the $1 price instead of market price, you are removing the incentive for anyone to price SBD at anything other than a dollar. Why pay $1.10 for your SBD when you can get as much of it as you want for $1? As long as blocktrades is supplied with enough SBD to meet all the demand, the price should be pegged to $1 or at least very close to it

·

Good point! An infinite supply and demand at $1 should peg the price to $1. Backing SBD by any asset will fix the supply of SBD and we will run into the same problems the US government ran into when the dollar was backed by the gold standard. You just can't scale to where you want to be if there is a fixed supply.

·
·

The problem is that it is backed by Steem (thats how it gets its floor) . So an infinite supply creates stability issues for Steem when people want to get their 1USD which can bring Steem crashing down and SBD with it.

·
·
·

SBD shouldn't be backed by anything. It should just be a flat $1 currency. Steem tokens can be backed by the blockchain and can get market rates for its value

·
·
·
·

You cant have a fixed 1$ valuation of SBD backed by nothing; SBD are by definition exchangeable (aka backed) to Steem at 1$ market value thats what gives it its floor value. Otherwise its just another coin floating freely on the market. It seems there is little understanding in this debate of how market pegs for a currency actually work. The only people that can unilaterally issue 1$ of true USD currency is the US reserve. The SBD peg (its really a floor) to the USD only works because its convertible to 1$ worth of Steem regardless of the steem price. You can think of it as a financial derivative of Steem. A limit is kept for SBD's issued at 10% of the Steem market cap so Steem could go in theory go down 90% before the SBD conversion liability would almost double the total market supply of Steem (and all things being equal halve its price on the market). Falls far beyond the 90% become dangerous as they can risk the collapse the entire value of the steem blockchain if there is a run on SBD (ie when the Steem price tends towards zero you need exponentially more steem to hit the market to generate the 1USD required per SBD, as this in tern comes on to the market it lowers the value of steem further initialing a downward spiral asymptoting at an effective value of zero). I wrote a more detailed comment below which might help explain further.

·
·
·
·
·

Thanks, @intrepidphotos for your response. I have a very good understanding of market pegs. I welcome debate but please keep the debate to the facts instead of whether or not one side understands economics.

I can tell you that no asset, priced to the USD stays constant in value. Look at oil, gold, and anything on the market. The reason for this is because the market value of the dollar changes as well as the market value of the asset priced to the dollar.

"all else being equal" statements are not reflective of the real world. They are textbook economics answers that reflect how the should world work instead of reflecting how it actually works.

If you want to peg SBD to always be worth $1, creating an infinite supply and demand at $1 will maintain the price. Any fluctuations in price will be arbitraged back to the $1 mark. If you price a free market asset in terms of another free market asset, you will not get a fixed price, regardless of how much you manipulate the SBD supply.

·
·
·
·
·
·

I welcome the debate as well; I am not trying to offend anyone, I am simply referring to the fact there is not a good understanding on this forum that SBD is a financial derivative of Steem, its not a primary currency like Steem. And to peg anything to a fixed value, it needs something to underwrite the value.

The simple fact is that one can't simply create an asset that has a price of 1USD out of thin air unless you can print USD themselves (ie the US Fed). If you want to attempt to tie the price of one good (eg 1 SBD ) to another good (1USD) you need to have a mechanism to do that, which requires something to underwrite the price (ie you can always exchange good A for a variable amount of good B equal to a fixed amount of good C - this links A to C though the market value of B) . There is simply no other way to do that. You cant just create "infinite demand " of an asset as you suggest. If that was the case one could just ICO a new new currency to themselves and fix its price as one ounce of gold . The obvioius issue here is without any demand at the fixed price no one will buy my new currency from me no matter how much I insist its worth an ounce of gold per token. The only inherent value SBD has comes from its algorithmic underwriting by Steem, in that it converts to 1SBD worth of Steem at any market price of Steem. If you have infinite supply of SBD (which is in your control unlike demand) then it will collapse the value of Steem to zero and essentially break the algorithmic link. This is why they cap it at 10% of the total value of Steem.

Lets look at a comparison between SBD's and treasury bonds. Both are a potentially interest bearing derivatives of a primary currency. If the government issued an infinite number of bonds and then there was a run on the bonds they could always just print money and pay all the bonds back. This would lower the currency value relative to other currencies but not necessarily collapse it as their liability is held in the currency that they have control over and can print.

Now lets compare that to the situation with SBD. The SBD mechanism would be equivalent to if the US government issued interest bearing bonds that were redeemable not in a fixed amount of US dollars but in a variable amount of US dollars linked to a fixed amount of a currency they have no control over such as Euros. So to make that clear the bonds would be redeemable not in a fixed amount of USD but by a variable amount of USD that was equal to the amount of Euro at the time you purchased the bond ( just like 1SBD is an interest bearing derivative of Steem that is redeemable for a variable amount of Steem equal to the 1USD at the time of redemption). In our analogy this would let European investors by US bonds with a direct hedge to the euro and take no currency risk. Similar to what SBD tries to achieve in eliminating fluctuations in the underlying asset though a peg to an external asset.

The issue if the US prints a large number of these bonds relative to the size of the total money supply it creates a stability risk for the underwriting asset which in this case is USD. When the price fluctuates down and some people start to want to redeem their bonds the US Fed will have to pay the bond holders back in an increasing amount of USD. This is due to the conversion of the bond to an amount of the underwriting asset (in this case USD), to get the fixed amount of Euro that the peg was against. So they can simply print more USD as that is in their control, then they sell it on the open market to buy Euro (in the same way the Steem block-chain can produce more 1USD worth of Steem on converting a SBD which can then be sold on the open market to obtain the physical 1USD). The issue here is that this lowers the price of USD relative to Euro (or Steem relative to USD) as more supply comes on, so the next bond holder that wants to convert they would have to print more USD to redeem the same amount of Euro (or issue more Steem to create 1USD).

This is not an huge issue if you only have a small amount of these financial derivatives outstanding relative to the money supply from which they are derived (which is why SBD are capped at 10% of the total market value of Steem). However if there is a large amount this quickly becomes a self reinforcing downward spiral where the price quickly asymptotes to zero.

If you have a look at my other post in these comments list it might be a little more clear.

·
·
·
·
·
·
·

I have pasted my primary comment from this forum below so you don't have to find it

"People don't seem to understand that you can't have it both ways. You can't hold a fixed 10% limit of SBD/Steem and then hold the peg. You could hold the peg temporarily if you had unlimited ability to print SBD, but as a debt instrument if you printed too much then after some downward movement if everyone called them at once for conversion to get their 1 USD worth of Steem , it would collapse the value of Steem. A hard pegged SBD is a stability problem for the instrument which has to underwrite the stability. This is why it was designed as a soft peg in the first place with a limit on supply as a % of the market cap of Steem. SBD goes down interest rates can bring it back up , in contrast if the SBD goes up it will increase author rewards value and increase conversion of user SBD into Steem, which in turn as the steem price goes up further increases the supply of SBD in payouts up which puts more downward pressure on SBD.

Fixed pegs just don't work; unless you match them directly with the underling asset (ie this would involve banking one USD in an fiat based account for every SBD , just look at the conjecture about Tether and if they are actually doing this). You can't just print money on a real world pair without having something backing it (just look at the relative value of a USD denominated bank account in Zimbabwe held with the new USD pegged Zimbabwe dollars) . Financial systems have to be stress tested for extreme fluctuation so the whole system does not collapse. The recent price spike and subsequent increase in supply of SBD and lowering of the price of SBD is a system that is working, not broken. This is how it was designed to work. Stability in currencies comes from having large stable GDP being transacted in that currency. Its the incredible volume of regular nominal monetary transactions and flows which creates the stability. You can't create a stable currency then invite commerce. You have to bring commerce to the currency, then when the nominal transaction based flows dwarf the speculative flows you will end up with a stable currency. So unfortunately its a little chicken and egg, and simply takes a long time to develop those transaction based monetary flows."

·

Congratulations! Your submission earned you 0.001 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.001 STEEM from the community!

hmm very informative...

Very good your post ,amazing

I like your content - can't wait for new post! Cheers!

50 STEEM bounty

Very few participants for now for the 50 STEEM bounty! If you think you can successfully help me attract new users to the extension, please write your proposal in the comments of this post.

Overview of features
Available on Steemit and Busy
Voting slider for minnows (you do not need to vote at 100% anymore!)
True value of your account on your wallet (calculated with current SBD and STEEM market prices)
Delegation button in your wallet (with list of delegatees and undelegate button)
One click switch between Steemit and Busy (Shift+Alt+B) and Steemit and Steemd (Ctrl+Alt+D)
Available on Steemit (and mspsteem)
Feed+ : Filter your feed by tags, resteems (hide, show, blacklist, whitelist), reputation and sort it by upvotes/date/payout
STEEM/USD and SBD/USD values in the user dropdown
Option to add beneficiaries to your post (you can say that 10% of your post payout will go to one of your friends for example)
Cool badges on user profiles show their rank: Plankton, Minnow, Dolphin, Orca and Whales

·

These are interesting UX changes. I'm a bit concerned about reputation filter, because it can increase a gap between whales and newcomers and de-motivate new authors, but other changes seem great.

When and how are you planning to implement these features?

·

Fuck off with your off-topic spam.

I'm new to this platform and reading through this post got me a little confused. I hear things like sbd, crypto. Please can someone help me. Thanks

·

Congratulations! Your submission earned you 0.001 STEEM from this bounty. You have received 0.000 STEEM from the creator of the bounty and 0.001 STEEM from the community!

So as we've seen in the real world so far only one currency had been able to sustain such a peg to the dollar and that would be USDT.

#1 they only were able to do so because they claimed that they had the equivalent in USD sitting around in a vault.

#2 they caused much controversy, are getting audited, and everyone is sketched out over it.

What can we learn from This?

#1 basically if we cannot keep the reserve of cash on hand to match, we have only the option to allow SBD to play in the market until such a time as the whole of cryptocureency calms down and stops being so volatile

#2 we shouldn't try to force the free market to do our bidding.

#3 if we claim to have usdt in a vault we will invite skepticism, audits, and mistrust from the crypto community.

what options does this leave us?

#1 let the free market do its thing and allow the platform to mature how it likes

#2 open up the voting on the currency to have consensus from the whales to only sell their SBD at $1 USD (won't happen)

#3 actually have the whales or whomever wants to build the vault and peg it 1:1 ratio to USD.

#4 simply wait for #1 to mature and if the platform survives it will eventually be a stable currency.