That bias also matters on internal conversion. If somone decides to convert internally SBD --> the bias will weaken the trade. That's a pretty drastic haircut to someone that held an SBD. That's why not everyone is doing it. It's also not clear to me that having a strong dollar is bad for the system. Especially as the US prints way more and this platform does not the freemarket will take hold and the value of SBD will rise. If we print more that's no beuno because if the price ever dips we're stuck holding interest payments on many more debt notes. So, I think I came to the conclusion that I'll up interest however much we need to ensure sbds don't go below $1, but I don't think I'm going to change my bias just because it's over $1.
Just enjoy the post rewards. Better thing to do is fix the price feed so that you can see the amount of steem, amount of sbd, and a drop down to pick your fiat value of choice.
Thanks for jumping in here @aggroed. I'm glad to hear your opinion even though I disagree with it.
STEEM is supposed to be our strong dollar, SBD is by definition supposed to be pegged to the USD. If the value of the USD goes down then SBD should go down with it because that's why it exists, but STEEM will get stronger which is what we want.
Like it says in the blue paper:
If they are no longer pegged to the USD then they are no different than any other crypto token and they no longer function as a very important user-friendly feature of the Steem platform.
If we're not going to keep SBD pegged to USD then we should just get rid of them altogether as at that point they're redundant and just cause confusion.
Another way of thinking is that with price increase in SBD, almost all users are taking 50/50 profit and therefore, blockchain is producing more SBD. Since large number of users are converting SBD to STEEM due to astronomical ratio. Therefore, STEEMs supply is consumed and STEEM's price should rise due to demand. However, people are earning 4-6 times due to how payments are made. In theory, it should help STEEM's price, but SBD holders/traders are at risk in the long term. I wonder how long it can go on. Who are the people/traders who is buying SBD or hodling it? Is there a group or group of people intentionally pumped the SBD so that they can earn 4-7X times, I am not sure.
SBDs have also been referred to as half-pegged. Some don't see an issue in the value going above 1 USD. It still means the authors get at least the value in USD, no problem if it is more. The opposite is not true and there the witnesses should intervene.
Where are they referred to as half-pegged?
https://steemit.com/trading/@cryptographic/what-is-going-on-with-sbd
It's more complex than it seems at first sight. Do we really want to peg to the dollar? What if the dollar gets to hyperinflation? And how far can you try to correct to the negative side? We can't 'print' SBDs, it's a fixed supply. Pegged cryptos are a strange thing.
It seems pretty complex to me so it must be even more complex!
Whether we want it to be pegged to the dollar is not a question for current management practices but a question for revising the stated purpose of the SBD instrument. We should be doing everything to keep it pegged or change things so the peg isn't even a goal.
If it's not pegged then we don't need it and the blockchain should be changed accordingly.
You're completely right here, why aren't people getting this? Is it just being opportunistic and enjoying the price buoyancy?
In my opinion either it's pegged or we get rid of it completely, as you say here.
This is the right answer. Keep it half pegged.
If the dollar were so great, we wouldn't be all in on blockchain cryptos.