It may be nice to get $2.30 worth of steem for every 1 SBD that credits to your account… but, it can cause problems for people who transact on the steem blockchain.
SBDs are supposed to be worth $1 USD (or close to it) at all times. If the value is going to get messed up, most steemians would prefer that it go too high.
When SBDs are worth more than $1, it seems like no harm no foul. In fact this can be a great thing for people who are holding SBDs and get to cash them out at a higher price. For anybody who does this, there is no need to complain.
However it’s worth considering that even if high SBDs benefit you, they aren’t good for the ecosystem as a whole. Unstable SBDs break the expectation that an SBD will have a steady price, which can have bad results.
An Example of When Overpriced SBDs Are Bad
Let’s paint a hypothetical scenario: A guitar teacher is charging 50 SBD per hour for digital lessons. They give a two hour lesson to another steemian to help them prepare for an upcoming audition. The invoice is sent via email with a notice to pay within 48 hours.
The next day, the student goes to pay the 100 SBD that they owe. Their plan is to transfer some litecoin to SBDs via blocktrades and then send it to the teacher. At that time, they are startled to see SBDs trading at $2.30.
What happens when they see that steem dollars cost this much? Now, rather than spending $100 of currency to pay for the lesson, they have to spend $230.
This was completely outside of anybody’s control. Their goal was to transact with a stable currency. When they made the deal of “The student will pay 50 SBD per hour for lessons,” this was supposed to equate to approximately $50 USD per hour.
With the overinflated SBD price, it messes with the economy of steem. Now the student has to overpay, or to awkwardly ask to pay in a different cryptocurrency, or be late on the payment in the hopes that SBD prices drop.
Monthly Fees Have the Same Problem
What if a service wants to charge a monthly SBD fee? People are forced to overpay when the SBD price is too high and the bills are due.
I had this issue with my Sndbox membership, and despite waiting for a few days, SBDs are still overinflated. Pretty soon I might have to eat the loss and pay more than a 2x premium on my monthly fee as a result of the expensive SBDs. This is not ideal to say the least.
Not Sure What to Do
There’s not much that I can do about the SBDs. I guess it’s the result of pump and dumps from large whales - or some people speculate that it’s because money is leaving Tether after last week’s hack and going into other pegged cryptocurrencies like the SBD.
Whatever it is, it’s a symptom of the small crypto markets that can be influenced by the machinations of huge whales. If somebody wants to dump millions of dollars into SBD, it’s gonna push the price. That is just how it works for now.
Nonetheless I wanted to share my two cents and open up the discussion: How do you feel about the inflated SBD price?
