Bounty 20 Steem: Should we fix SBD?

in sbd •  3 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

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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

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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.

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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?

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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!

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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!

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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

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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!

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Nicely said Brett I'm agreeing with you

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I totally agree with your opinion👏👍

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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.

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

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

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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)

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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.

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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.

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You don't seem to understand how SBD works.

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

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

;)

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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!

I am in favour of a pegged SBD asset and exploring alternative proposals for achieving this peg. I welcome your proposal for further discussion and it may be a solution but there are some risks and additional dependency on Witnesses which I think adds an extra burden on the system.

Existing Mechanism

My understanding of the current mechanism is

  • Witnesses only need to intervene when the value of the SBD is below the 1 dollar peg. They intervene by increasing the interest rate payable for holding SBD.
  • If SBD goes above the peg the market will (in theory) drive down the price of SBD as it makes rational sense that more SBD will be printed so that people active posting on Steem/it will choose the SBD option and increase the level of SBD in existence.
    By market law of supply and demand will drive down the price.

This second part of the stability mechanism is what is not working at the moment. In my view the reason this is not working is because the supply of SBD is so small at the moment. i.e. Liquidity is the issue.
The current design should work if there is better communication over the design as well as more liquidity in the market. The latter will come in time if nothing is done now. The former we can be proactive on.

the objective of SBDs is stability and without it they have no utility

I completely agree with this statement and if the decision is to not in any way maintain a peg, or seek to maintain a peg, or change the peg then SBD has no utility. If that is the case what is the point of it all and should it be removed from the protocol?

The proposal you have outlined carries with it some risks and puts more control in the hands of witnesses, in particular over what to do with the SBD. Burn it etc. Is this an extra burden that is being put on witnesses shoulders?

At the root of the issue here seems to me to be a lack of understanding of what SBD is in the community at large and what the long term goal for it is. I would like to see consensus achieved on what SBD is and what its purpose is before tackling the question of how to fix it.

  • Is it a speculative asset?
  • Is it a counterparty free pegged asset?
  • Is it a mechanism for varying the amount of liquid rewards paid out via the reward pool?
  • Is it a mechanism for inflating the Reward Pool (Dollar Value) on an ad hoc basis?
  • Is it a tool for bringing in dollar investment from unknowing people on 3rd party exchanges?

Before we get answers to some of these questions and achieve consens on what it is intended for the path forward is not clear.

Just one last point I would like to add to the conversation

The reason is that any price of SBD above the $1 brings value into the ecosystem, without any direct cost

This is the view of the majority of people who I have seen discussing this on Steemit but I would make the case that there is a direct cost. The current lack of a peg allows people to extract a larger proportion of the dollar value of the post payouts in liquid assets immediately. i.e. the payout effectively is no longer 50:50. I see this lock in of value for a period as a huge asset to Steem and a major design strength. Of course if people power up their rewards it doesn't matter.

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Is this something we should really leave to witnesses? Can the blockchain not handle what is needed without their intervention?

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In addition to the cost you outline, which i agree with is the non function sbd and therefore lack of its utility. Again I feel this could be a 1b fuckup at the moment but likely even much higher. What do u think is the value of a stable currency in a 400b market?

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Not sure I follow the question exactly but this graph shows the daily Volume across different coins with market cap gt 1bn

Screenshot from 2018-03-14 12-06-46.png
*full size image

The big blue dot in the middle is the daily volume on USDT which clearly shows a large appetite for a pegged asset.

The issue with SBD is the market cap is around 30m with a daily volume of close to 10m (today). I wouldn't me surprised if it was just downright manipulation keeping the price high. Steem volume (the underlying asset has a 14 million daily volume, that doesn't add up). If SBD had a market cap in the 100s of millions then I am speculating that it would be more stable. But it's never going to have this until we have some way of trading it outside of the Steem System. We need wallets and ways to spend it.

At the moment part of its utility is supposed to be as a trade-able liquid asset but you can only spend it on Steemit with the exception of using it to speculate on exchanges.

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You have a much better grasp of the Facts of the Matter than the writer of this article. UV ;)
Here's what I added in my buried comment way down there LOL

measures that 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.

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Again, you do not understand how SBD works. SBD inflates NORMALLY, nobody is "doing something about it." You're just seeing the payouts from new posts, derp.

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What's with the derogatory statements? I'll be the better man here and let you take the low road, I have other points to take you to task on. Below...

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This was a good read.

Let me lead with - I wouldn't use a silver dollar at McDonald's on the dollar menu because, even though the tender is intended to represent $1 USD, the melt value is much higher.

It's worth nothing, upvote bots may have some role in lack of pegging to $1 USD. By sending 1 SBD to a upvote bot, the return right now is approximately 1 SBD + $ 1 USD worth of SP under a stable value scenario (before curation's cut). The reality is of course, there is a likelihood of ending up with less SBD than sent to the bot originally, this is due to fluctuations in market price during the seven day period and timing of when upvote bot lands on the post. However, when I use these services, there is some reasonable expectation of receiving most of my SBD back under stable 7-day value, receiving some Steem, and the value of inherent post promotion.

Let me know if you agree or disagree, but it seems like pegging the USD value would be difficult when the upvote bot rate of return on 1 SBD is so attractive.

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I agree with this~

While I do like pegging it. I also like the returns from bots, even if its just for the SP.

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马马虎虎吧

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The value can go up or down and your taking a risk when you you use an upvote bot. So even if todays value gives you return of $1 you may or may not get that and the one dollar is the fair reward you get for taking a risk. I see this is a slightly different phenomenon than the pegging of the SBD asset.

I agree that voting bots have a role to play in the pegging issue but I don't see them as a cause. People are exploiting the voting bots to maximise how much they can extract in daily rewards from the $ denominated reward pool.

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Thanks for the perspective.

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un entretenido aporte

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down side is when steem goes down so does you post value!!

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"This second part of the stability mechanism is what is not working at the moment."

ORLY???

SBD.png

Do you normally ignore facts before posting? Or is this a special case as you have some agenda?

"SBD has no utility"

Except allowing us to cash out from posts without waiting 13 weeks. Just that tiny little utility.

"I see this lock in of value for a period as a huge asset to Steem and a major design strength."

Oh, well, there's your problem. You like market controls and think an asset that forces you to wait 13 weeks isn't screaming from the rooftops how weak it is because it literally needs to FORCE YOU TO HOLD IT.

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SBD is going to 0?

For the record I have no agenda other than promoting the growth of Steem.

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You are taking him almost completely out of context with the "SBD has no utility" pejorative... Here's the context:

| the objective of SBDs is stability and without it they have no utility
I completely agree with this statement and if the decision is to not in any way maintain a peg, or seek to maintain a peg, or change the peg THEN SBD has no utility. If that is the case what is the point of it all and should it be removed from the protocol?

That entirety changes it all up, but you do make a good point about "not needing to power down" which is a 13 week process. If we dispense with SBD and "the peg" to U$D then our 50/50 could be Steem and SP I suppose.

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Steem provides this utility. Ie if there is too much SBD in circulation the blockchain pays rewards in SP and STEEM. So that is not a utility of SBD. What SBD provides right now when it trades above $1 is higher rewards. But the intended utility of sbd is non existent when the peg is not working.

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Agreed, but I still think that the embedded market control system of SBD issuance is slowly bringing about the "peg" that would show STEEM is a stable and marketable cryptocurrency. The ballooning supply of SBD is bringing down prices faster than any other moves and as explained by your boi @lexicomical, this is simply from the higher post rewards. Looks to me that the system is working rather well. I'd just be interested to find out if this is by original design or a result of HF19 or a prior hardfork.
@knircky

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I am very glad you are talking about this because I believe your voice is likely to be heard. I know others have talked about this in the past, but I don't see this being taken as seriously as I would like it to be.

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Witnesses don't have to do anything when SBD is below $1 USD, because you can just trade it within the system for $1 worth of Steem. They currently disabled the system because people were using it to lose SBD/Steem...

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Congratulations! Your submission earned you 3.632 STEEM from this bounty. You have received 3.547 STEEM from the creator of the bounty and 0.085 STEEM from the community!

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U are more knowledgeable than the author of the post. I agree with u more than author. There is no need to change anything. Design is perfect - market forces will make it correct.

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?

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

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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.

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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.

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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.

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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.

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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.

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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?

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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.

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

The repeated appeals to it are fallacious appeals to authority.

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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.

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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 :-)

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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?

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@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.

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

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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.

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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.

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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!

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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

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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.

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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.

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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.

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

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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.

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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.

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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

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...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.

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"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?

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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!

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The whitepaper is obsolete. Stop obsessing over it.

What is a "steem currency"?

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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.

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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.

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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!

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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

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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.

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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+.

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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!

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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?

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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.

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

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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!

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

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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.

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Finally! Someone who gets it.

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

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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.

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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.

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@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?

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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.

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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 :/

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

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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...

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Yes, self correcting is right:

SBD.png

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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.

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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.

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Have you ever considered the use of the period?

It is a very friendly piece of punctuation.

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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 :)

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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

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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!

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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.

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...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.

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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?

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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.

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

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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.

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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!

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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

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Thank you!

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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

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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!