It seems for the past few weeks, Steem Dollars has wanted to sit at around the 68,000 Satoshi mark, regardless of what Bitcoin is worth.
There have been times when that has meant that SBD rose to almost 16 to 1, now it means that SBD is hovering around 9.5/10 to 1.
So there are two ways of looking at this, when Bitcoin has been pumping, SBD dollar amount pumps along with it.
When Bitcoin is falling the SBD dollar amount stays steady, whilst the Bitcoin value falls.
Hmmmmmmmm . . .
Associating With A Loser
Aligning yourself with a failing entity has never really been a great strategy for success. Unless you form some part of a save day cavalry, then it is usually best to stay well away from failure.
So why then do we peg SBD to the USD?
Well there are a number of reasons, some really good reasons, however in life when we make long-term decisions, it pays to come back and review them from time to time.
In my mind this is just so one of those occasions whereby we look back and check our previous assertions still ring true.
The Case For The USD
Familiarity: There aren't too many people in the world, who are over the age of about six, who haven't heard of the US Dollar. Hence when attempting to introduce an innovation such as Steemit to the masses, pegging a token to a familiar currency will help with ease of understanding.
Understanding: Cryptocurrency is a brand new concept to most people. The rise in Bitcoin has brought the term to the ears of more people, however understanding value is still hard for some people. Making a currency worth $1 as opposed to 0.0072689 sats will make it easier for most people to digest.
Geographical Vagaries: The founders of Steemit are American. Most of the early users were also from the United States, hence it is perhaps natural that the dollar should be the go to currency.
Market Function: Pegged cryptos are used by traders and investors alike, for a number of reasons. For instance, an individual may not like to cash out to fiat currency, and a pegged crypto gives them the cushion of always having a stable currency to default to.
The Case Against The Mighty Dollar
Distinction: Whilst there is some merit in trying to attract new users with familiar terms and signs that they are used to. It also pays to be distinct, the question; if it's worth a a dollar, then why don't I just stick to using dollars? is a valid one, and one that in the grand scheme of things, does not really have an answer.
Fractionally Reserved Instability: (Try saying that after 3 glasses of egg nog!) The fact remains, that a large part of the raison d'atre of cryptocurrency, is to break free from the shackles of the lombardy pirate banks who have financially enslaved us via oblique market economics. Therefore pegging a crypto to the absolute pinnacle of that manipulation is somewhat self-defeating.
Falling Value: Slowly people are realising that, a large part of Bitcoin so well, is that the dollar is doing so badly. $10,000 in 2010 is now worth $8,600. America is constantly at war, and war waged over time costs trillions of dollars, the only way to pay for those wars is to print more money.
The Solution
Let us create our own 'gold standard', instead of saying the SBD is worth one measly US dollar, let us say that the it is instead worth the 2017 value of 0.00072000, which is roughly $10.45.
This way we disassociate ourselves from fiat currency, however because we are using the word 'dollar', the familiarity and the understanding will perhaps be kept.
Also this solution pays homage to the elephant in the room, and that is that lots of people have agreed between themselves, without prior collusion, that SBD are worth somewhere between $10 and $13. This is one of the most, if not the most, important component of value, is the agreement between a bunch of buyers and sellers of exactly what the value of a given asset actually is.
So if a load of people, Koreans, Americans, Europeans or whomsoever are saying that SBD is worth roughly 10 USD, then who are we to argue with that?
Mic drop; walks off stage.
SO WHAT DO YOU THINK? SHOULD WE JUST LEAVE SBD AS IT IS, AND RE-PEG IT TO BITCOIN? OR SHOULD THE WITNESSES DO SOMETHING ABOUT IT AND FORCE THE VALUE BACK DOWN TO ONE USD? AS EVER, LET ME KNOW BELOW WHAT YOU THINK.