Sorry, gotta disagree with this one. SBD serves an important role in the steemit economy. Being able to save some money in SBD and even collect a little interest is pretty nice.
A large population thinks in terms of dollars, and seeing that a post is making 5$ is a huge psychological plus.
Are we going to wait until literally people can't run the network before we concede that there is something seriously wrong with the mechanics of the system? If steem falls below 5 cents, within 2 months there will not be witnesses anymore and there will be no Steem.
The biggest issue I have is that essentially through SBD, the Fed is stealing the money of Steem users, because what their currency does is all about stealing money from people, mainly the poorest, and yes, SAVING DOLLARS IS IMPOSSIBLE. Next year your dollar buys at least 2% less than it did this year.
Psychological incentives like this are costing the network. I see no problem with sidechains with derivatives like this, but people won't think they are so great when they have to pay the real cost instead of spreading it over the whole of the population of steem users.
Well I suspect that the witnesses will lower the interest rate to 0, which will make holding SBD unattractive. A 2% interest rate would be enough to make me dump my SBD and power them up. (So it's close for me already.)
Almost everyone in the witness leaderboard has got negative interest rates already. You know what, that number is meaningless. It's the rate at which the witness will perform the "Convert to Steem/SBD" operation. It's nothing to do with the algorithm that chooses how to split the rewards, and all SBD starts as a reward.
Meanwhile, everyone just exchanges Steem and SBD on the market. Mostly towards SBD, as the price keeps going down. The price goes up, then the SBD sells steem, driving the price down to hold the peg.
It's like putting sheep and wolves in a pen with each other and expecting the productive (steem) to not be eaten by the consumptive (SBD).
For the record, I'd be totally fine with Steem Silver Ounces rather than Steem USD. Golos uses grams of gold rather than SBD (or Steem Based Rubles for that matter.) which I think is cool.
I don't have a problem with SBD per se. Just that it should not be issued alongside (and at equal amounts, generally) to Steem.
I think derivatives should not be part of the monetary base of a blockchain currency, period. The reasons for SP are pretty simple and obvious, but SBD, it should be something you have to choose not something that is dished out every time you get a reward. This keeps the supply in a lock with the supply of Steem which means the fenced off area with wolves and sheeps. There should be a fence between Steem and SBD, or, you get what we see in the price chart.
I think I remember seeing a comment from Dan a while back that they have contingency plans to move SBD's anchor to silver if dollar inflation gets out of hand.
Huh? I don't see that at all. There is not a single negative interest rate in the top 19. Are you sure you are not looking at "Bias"?
I'm not even sure how to actually set a negative interest rate on it. I am going to tinker with that a bit later today. My bias is set to -10%. I just hate USD and anything resembling it, for very many reasons I don't think I have to explain to most people here (even if they still are deluded that you can even save USD at all).
No, it does not allow negative interest:
unlocked >>> update_witness "l0k1" "https://steemit.com/witness-category/@l0k1/witness-update-jan-31-2017" "STM7Cw11iPPnXewfPbA3Jso7RSar67pMcVGpPi7v1uvo29jm1YPLV" {"account_creation_fee":"10.000 STEEM","maximum_block_size":65536,"sbd_interest_rate":-0010} true ... 10 assert_exception: Assert Exception sbd_interest_rate <= STEEMIT_100_PERCENT: {} th_a steem_operations.hpp:388 validateYou also bring up a good point: SBD is actually a better asset than the USD. The USD has negative interest rates on it (inflation) and they passed the ZIRP through the looking glass into la la land where they pay you to borrow the money and charge you to deposit. Or at least that's how banks are treating each other now. We are getting gouged on account fees and spreads as hard as they can.
This sounds like assumption. I would like to see data about that.
For people outside US, keeping SBD can be much easier.
USD, EUR, GBP, CHF, AUD, CAD, they are all more or less the same, they don't really diverge against each other that much.
And there is Bitshares if you want to hold this kind of derivative.
Utility of SBD is one thing... but also did you heard about Cyprus? And what happen there with money in the banks? I prefer keep some saving on Steem network in SteemDolalrs in case of Polish government would decide to do something similar.
There are not many crypto-assets which are considered as stable comparing to USD/EUR
Like I said: bitshares bitUSD.
As it stands now, everyone with Steem is paying the interest for everyone with SBD, and SBD is selling off steem every time the Steem price goes up. It literally cannot go up. Without the potential for upside, nobody wants Steem, they then buy SBD, and the problem goes around in a circle, and none of that SBD is convertible. You can burn it at @null, or you can sell it to someone else. But it's going to sell steem to keep the steem price down against the dollar. That should cost SBD holders, not profit them.
Also, nobody is going to bail in your Steem (or SBD, or SP). If steem doesn't appreciate in value that's because most people are abandoning it. So it is supposed to be an indicator to tell you what you should do with it. Value keeps dropping, ditch it before you lose even more money.
With no witnesses to run the network with Steem under 5 cents, it's a moot point how valuable your SBD is. Nobody is going to be able to trade it.
Correct. The problem with bitassets was always the same - lack of liquidity, and premium price which you have to pay for those assets.
1,05 USD for bitUSD
That seems like about right. Either it costs 5-8% more to buy it than real dollars, and 5-8% less when selling it. It's liquid. Liquid assets should lose value more than illiquid assets. SBD has an unfair advantage and it's costing Steem Power holders.