Can SBD Be The New Tether? Which Witnesses are Against The Reverse Conversion Mechanism (Steem --> SBD)?

in #steem6 years ago (edited)

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The broken SBD-USD peg has been in discussion for a long time on this platform but I haven’t ever given it much thought as it didn’t appear to me that any serious action is going to happen on it anytime soon. But now it seems time has come to consider this issue on priority.

Community Hardfork Proposal


It’s been over a year now that Steem Witness @timcliff is advocating for Steem to SBD conversion option on Steem blockchain as a tool to create a downward price pressure on SBD prices. There are sufficient tools at the disposal of Witnesses to not to let the SBD price fall below $1 USD mark, which are being efficiently used by them to keep SBD around or above $1 USD. But it was always a challenge to get it back down to $1 whenever SBD price surged higher due to market speculations. So here he comes up with his proposal:

Community hardfork proposal -
Implement "Reverse" (STEEM->SBD) Conversions

Burnpost initiative - until when?


Initiating the process for pegging the SBD prices to USD, when it was as high as $6, wasn’t thought to be a good strategy. Therefore, some months back, @smooth had initiated @burnpost project to put a downward pressure on SBD prices. On 24th June, 2018; SBD prices touched a low of $1.02 and is very close to intended $1 for some days now. However, @burnpost project is still operational to this day. But if Steem --> SBD conversion option needs to be implemented, I think this is the right price point to do that. But are we really going to do that? If so, how close are we to this?

What about SBD --> Steem conversion?


Late last year, when SBD-USD peg was broken, SBD to Steem conversion GUI from the Steemit’s Wallet page was removed to safeguard the interest of users who couldn’t differentiate between the SBD’s price by blockchain and its market rate. However, many users kept choosing 100% powering up option while authoring their posts on other interfaces; and thus incurred a loss.

But now SBD prices have almost reached to $1, so when are we going to have SBD --> Steem conversion GUI again?

Who else is opposing Steem --> SBD conversion?


I don’t have a very good understanding of this issue yet, but I’d like to read on both sides of the arguments, if Witnesses are seriously planning to act upon this proposal now.

I did read some discussion on it in the past but it was long back. So far, I’m more tilted towards @aggroed’s stand on this issue. But I’d like to read up all the arguments put up recently on it by both sides, esp. where these arguments are expanded in good detail.

In case, if you are following these discussions, I’d like to ask you for the following information:

  • Can you post the links to all relevant posts made on it in past fortnight?
  • Can you list out which of the Witnesses are Pro-peg and who are against the peg?
  • Is there any existing post which lists the names of Witnesses with their stand on this issue?

Do help me with the exact links so that I can educate myself on it.

Thank you all! 💓

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I oppose a hard peg. I think it's nice that we get a bonus when SBD is above $1. It's hard enough to make money on here as it is so I don't think we should make it even harder.

It’s always nice to get more money, however this hurts the ecosystem overall and creates other issues.

A peg can never work if market forces become too strong. If a huge order to buy/sell meets a tiny market, the exchange rate will change.

not sure if this is how it works. I think some part of the potential rise in steem was absorbed by very high sbd. User payout is limited by money flow into the system and that does not matter if it is just steem or steem plus sbd.

I prefer to have free market dictate price. Having something always stay at the same value never made anyone rich.

To have SBD and Steem move up over $1 gives all the little fishes a chance to one day earn more. Thanks.

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If steem starts considering sbd real value to reward posts, price will automatically fall. Plus it won't be an issue. All in all i don't see in having any value in having 2 coins. Just give out SP and liquid steem.

One is a currency the other is not. Without Sbd steem does not have money/currency. Just like having Facebook likes or apple stock is not money/currency. For any economic activity people would have to leave the ecosystem, while now they can stay within.

Think about the bounty app we have and now think about a bounty that runs for 3 months. This can’t effectively be done in steem, because the value will fluctuate too much. We would need a different stable currency, like usd. Conversely if Sbd were stable, people could exit usd and enter steem ecosystem. This is so important for the growth of the ecosystem.

That explanation makes sense. But only when you look at the value of cryptos against USD but i don't understand why we do that. For example, how many pesos you get for USD doesn't matter to an american. This will only matter if you go in that country or have imports with that country. But within US, this doesn't matter. In the same way, what the value of steem is in USD will only matter if steem moves out of steem ecosystem, otherwise 1 steem is just equal to 1 steem.

This is why i love economics, it made a simple thing like barter so confusing :)

Every country needs to trade with others and steem also interacts with the rest if the world. As such a currency and stability is crucial.

Great idea, It would speed up the conversions.

Being the new tether may not be such a good idea. Many wallets (like SpectroCoin) now offer the option to exchange for fiat and hold and once BTC/USD pairs are introduced again (I believe Binance has plans to); tether will have no practical use.

Very interesting question, but it is not as easy as allowing free two way conversion. SBD's are essentially loans, promises to pay steem to the holder in the future.

Currently only the steem-blockchain can issue SBD, backed by the ability to print more steem in the future.

When people should issue SBD, allowing the opposite way transition, these SBD need to be backed against fluctuating steem prices. How this can be done is well known on bitshares smartcoins. But it is much more complex than adding a butting to turn steem into sbd.

So it can be done, but it involves bigger changes and will make the two-currency system even less understandable for the average user. Therefore I would oppose such a change.

The advantage is that the concept of SBD becomes easier to grasp, but that does not help adoption as everyone is happy when sbd is worth "too much"

I am of the opinion that “stablecoins” are a stop gap measure between fiat and full crypto adoption. I consider them the laserdisk of the finance world; they will serve a purpose in the transistion from VHS to DVD but will lose all relevance once DVD is the standard. Stablecoins are way to make people unsure about crypto willing to dip their toes in the water. If you want to stay in cash, then stay in cash. If you want to be in crypto, be in crypto. If you want safety, diversify your portfolio between cash, crypto, stocks, bonds, securities, mutual funds, gold and silver. The best way to safe guard your money is diversification. So my suggestion is this; why not eliminate SBD altogether and use Steem as the currency of exchange instead? You can stake your Steem as you do now in the manner of SteemPower or keep it liquid. Convince me why this would or wouldn’t work below. Thanks for the post @xyzashu!

Stablecoins allow a real currency and thus real economic activity. Think about a person that uses steem to earn money. It is very valuable to have these earnings be stable and not have to sell them right away.

This in turn is good for steem as people can now stay in the ecosystem and do not have to exit it to manage their risk. This is sooooooooo important.

But if you are a hodler you are looking for long term gains than keeping steem no matter the price is the point because you expect future gains. Also hodling because you believe in the project is irrespective of price as well. And if the point of a stablecoin is to hold value to the dollar as a long term safeguard, then why isn’t steempower based on SBD not steem? Not to mention that the value of a dollar fluctuates compared to other currencies and precious metals.

I had not thought about SBD keeping people in the ecosystem, but then why doesn’t every crypto have a stablecoin alternative of its own then? How about LiteDollar or BitDollar and the like? I would asssume that Satoshi and Charlie would prefer to keep people in their currencies’ ecosystem as well.

Maybe I don’t have enough or earn enough from steem yet to see the need for sbd being pegged to the dollar; I only see it as a means of attaining steem and steempower and dont keep any of it around for any length if time. Thanks for the response @knircky, I enjoy a good conversation!

I agree with you for stablecoins based on fiat. But you can make stablecoins based on real assets. Like gold, or even grain prices. This has huge applications. If you know you need to feed yourself for 20 years when you are old, its great to save in "grain-coin". You are guaranteed to have bread in retirement independent of grain price fluctuations.

Steem blockchain already has this provision, SBD can be backed with any asset instead of USD. It depends on the Witnesses' consensus.

This concept makes more sense to me; fiat is worthless inherently because it is a representation of debt, not worth. Having a coin pegged to a physical asset such as gold, silver or as you mentioned, grain would be much more stable for the long haul I would think and be a better way to store value. You could theoretically define the worth of the backing asset in anyway you see fit as well. Why not have gold/btc, gold/eth, silver/btc, silver/eth, grain/btc or grain/eth? I think this idea has some real legs! I like it @frdem3dot0!

This x 100 ..... no need for two cryptos on here.

If i find what you are looking, i will postvit to you

Would be looking forward to. Thanks for your help!

In my opinion Sbd should be stable

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