Hive Dollars are awesome. People talk about the killer apps of crypto, and it's usually the fad of the year. Before NFT's it was Defi, before DeFi it was ICO's.
The killer app of crypto has not changed, it has always been money. There is vastly more market potential for a functional, decentralized stablecoin than basically anything else you could think of. Stablecoins are huge and dwarf every other crypto use case - even when they're completely centralized and violate the basic principles of crypto.
Steem has had a decentralized stablecoin for almost 5 years. It has only been partially able to fulfill its function - much of the time it successfully stays roughly $1, and 99.9% of the time it's been within an order of magnitude of the peg, but a very substantial amount of the time it has been too far from $1 to be considered a stablecoin. Guess what, it's harder to do things in a decentralized way, but once you've worked it out - it's better.
HBD has 0 fees forever, fast transactions and is truly decentralized. There is no realistic possibility of your HBD being seized, or the collateral disappearing in the night. This can't be said about the many centralized stablecoins out there.
Since the hard fork to Hive, HBD has gotten better. The interest rate (yield) for holding has returned. The DAO with @hbdstabilizer is working towards an ever tighter peg, with more native peg instruments planned. With the DAO stabilizing the token, any excess demand for Hive Dollars can be funneled into value for Hive. The DAO can also potentially reduce Hive inflation by purchasing Hive Dollars at $0.95 - preventing the release of $1 of hive per token with the contract. Both sides are likely to be deflationary in effect.
Currently if you Google search "Hive Dollars", this is what you may find:
These results are better than how they've been in the past, but you're not really learning much about what the token is or what it is for.
The first or second result should be a page that explains what Hive Dollars are and why they're so great. Yes I know, be the change you want to see in the world. For now I just wanted to get this thought out there, we should stop neglecting the gold veins we've built our village on top of.
I wish I fully understood the rationale behind stable coins - that you clearly must get! - as I think I am still missing part of the puzzle...
Aside from the fact that they are decentralised, so less likely to be 'seized', what is the benefit?
The fact that they are pegged to the USD surely means that you risk the same slow but steady melt down of the value of your cash from inflation as holding USD directly - or am I missing something?
A stablecoin can be used as money, volatile cryptos generally are not practical as money. People want a stablecoin for the same reason they like their existing fiat currencies - they can buy and sell things at predictable prices rather than purchasing power which fluctuates wildly through the month. Inflation (at least a low rate of it) can be seen as simply a small fee for this functionality.
The benefit of a stablecoin over regular fiat currency is that you can (theoretically) use it in all the same ways as regular currency in addition to being much easier and more useful for transactions over the internet - and these days as a temporary escape from crypto volatility for traders.
Okay - thanks for the detailed explanation. Much appreciated.