About 2 and 3
This is a short term windfall and the exploding SBD supply won’t resolve itself until people start Converting SBDs back to STEEM, and that’s not going to happen until it gets back near $1 USD
What i understood here is that he thinks that the high supply is devaluating the currency, wich is true, but that doesnt make SBD on hyperinflation, since the demand is still high.
The destruction of SBD (conversion) become avaiable below 1 usd exactly to avoid the hyperinflation, because It reduce the supply, increasing the value, and to help avoid that the sbd lose value.
One of the reasons bolívares have hyperinflation is that the venezuelan government force its value lower than the dolar. It isnt the market supply and demand that cause the inflation.
And yeah, the printing in itself doesnt make a currency less valuable. I think the system is working Fine. Its only a question of high demand. When we reach the point where there is more SBD on the market than people are willing to buy, the price Will naturally fall.
Ah okay, I think we are agreeing here. The point of contention is that perhaps it is wrong to label this as "hyperinflation" from an economics point of view?
I think so, because at this moment SBD have a high value, and not the opposite.
An price increase would add more value to it actually.
But If the price is lower than 1 dollar, then SBD lose its value, and the blockchain have systems in place to Bring the value up again (the conversion mechanism)
That is true if starting at $1. If you are starting at $10, then the currency can still hyperinflate and lose 90% of its value.
But the reason of SBD is exactly to be as close as 1 usd as possible, and when the price os above 1 dollar, the inflation increase exactly for the purpose of devaluate the SBD.
The hyperinflation would only occur if, when below 1 usd, the sbd would be printed at the same rate as now, on a continuous devaluation of the coin.
When below 1 usd, the mechanisms of deflation kicks in (less SBD printed, and the possibility to burn SBD through conversion)
We dont have hyperinflation right now, and we wont have hyperinflation when price os below 1 usd.
SBD Will never become Fully pegged to 1 usd, and like other strong currencies (usd, Eur, yen, and others) It doesnt have to be. But also It Will never rise in price nor lower in price forever because of the economic mechanism that already are in place on the system.
Also, allowing to convert SBD to steem now would burn SBD, thus increasing scarcity and driving the price up.