My thoughts on the SBD price and a potential witness intervention
Would you like a 75% pay cut with that?
A few days ago, I became aware of a push by the majority of top 20 witnesses to force SBD back towards $1 USD. As I now earn the vast majority of my income posting on Steem, this would have a truly devastating effect on my personal finances - my income would drop by 75% and I'd be back to writing for The Man.
Terrified by the prospect, I immediately removed the vast majority of my witness votes. I am currently only voting for witnesses who are against an intervention, or who have personally assured me they aren't in favour of a reckless "shock and awe" action.
Though I'm a staunch supporter of a high SBD, if action is going to be taken; it should be cautious, measured and scaled - deliberately causing a crash in the SBD market could have disastrous and persistent economic repercussions.
An argument for a strong SBD
In my opinion, the high SBD price is an overwhelming positive for the platform and community. A high SBD price benefits authors, existing Steem based businesses and investors, as well as the community as a whole, through increased aggregate wealth and demand for STEEM.
Authors
Authors are the most obvious beneficiaries of a high SBD price. Authors are the life-blood of Steem, without the authors, there is no content - there is no value. If good authors aren't fairly remunerated, they won't arrive in the first place, let alone stick around.
When I first started on Steem in June last year, there were only a handful of authors making a wage here. Blogging full time on Steem seemed like an impossible dream for most of us. The SBD rally changed all that - everyone is making money now, not just a select few.
Steem is a social media platform that rewards creators first and foremost. An SBD charged Visa card would be awesome, but if no one has any money to charge it with, what's the point?
Steem based businesses & investors
A stable SBD might be a wonderful thing for people considering doing business via the Steem blockchain, but what about the guys who are already here? What about the existing businesses that are doing really well from the high SBD price? What about the investors who have bought STEEM and powered it up to invest in these businesses?
Due to the SBD price, these Steem based businesses are paying returns exceeding 50% on SP delegations. That is, if you invest 100K USD in STEEM, you can pretty much hang your boots up now and retire on a 50K pension. This has investors going understandably crazy: they are loving it, they are telling their friends, family and investor buddies about Steem ... do we really want to fuck with that?
On a highly related, surprisingly debated note ...
High SBD --> demand for STEEM
A high SBD leads to increased demand for STEEM. This is extremely basic market economics and it's a little worrying the point is being debated at all.
- STEEM can be powered up into SP
- SP yields SBD and more SP
- SBD appreciation makes STEEM a more attractive investment due to rising yields
- Demand for STEEM rises
That explains the raw investor rationale, but what about the creator community?
- The community is predisposed to buying STEEM with a portion of their disposable income.
- A rising SBD leads to rising disposable incomes for the community
- Increased disposable income allows for increased consumption of STEEM
As long as water evaporates under heat, investors seek the best possible yields, and minnows and dolphins dream of whalevolution; a rising SBD will lead to rising buy-side volume on STEEM and a falling SBD will lead to reduced buying interest.
The bigger picture
Steem is changing lives right now. Like right now. We have thousands of Steemian's from developing nations earning a living here. Steem is putting ham on tables that once struggled to serve bread. That is amazing. I honestly can't express how amazing that is - Steem is changing the world.
I recently arranged auto-vote support for the @air-clinic account. For those of you who aren't aware, @air-clinic is a service based on Steem and Discord that provides free medical advice and GP consultations. Originally they offered public consultations for free, but private consultations were 3 SBD.
This cost seemed extremely prohibitive and I'd just witnessed some poor sod talk about his urinary tract infection in a public discord ... I decided something had to be done. I had a chat to
@nairadaddy and asked him how much post revenue he'd need to offer free private consultations.
The number was surprisingly small: $50-$100 in post rewards a week. I made a few calls, sent a couple DMs, did a few sexual favours and voila: the entire Steem community now has access to free, private GP consultations via discord. That could literally save lives. Seriously, if that guy who died playing WOW had access to a Discord doctor, he may not have died ...
If SBD is manipulated back to $1, those votes will no longer be enough to cover the time of the @air-clinic GPs.
Alright, I've been writing this all bloody day now and my twisted sense of humour is starting to come out, so may as well leave it there.
tl;dr Everything is so damn good right now. The party is rocking and no one has work on Monday. Please don't throw a turd in the punchbowl.
If author rewards are as important to you as they are to me, I suggest you update your witness votes accordingly. The great thing about Steem democracy, is you can make your voice heard throughout the election cycle, not just once every few years. You can also change your mind if the people you elect are no longer acting in your best interests. The following witnesses support a strong SBD:
@Aggroed - Vote
@Thecryptodrive - Vote
@clayop - Vote
@therealwolf - Vote
@adsactly-witness - Vote
I am also continuing to support my good friends @reggaemuffin and @ausbitbank - though they favour a lower SBD, I know them well enough to trust they won't deliberately cause a crash. I am considering re-voting @lukestokes as he's also a very level headed dude, though his stance is probably still a tad interventionist for me.
If you are a pro-SBD witness, please leave a supporting comment below and I will add your name to the list above.
@bulleth, you've made some very strong points and I feel the same way.
You asked me yesterday what my stance is on the SBD Peg and I'm right now clearly against it - simply because it would reduce the payout massively - for those users, who actually need it the most: small and medium users.
I understand why @reggaemuffin and & co. are pro-peg - especially for business use-cases.
We both know why a pegged-asset has value. But I don't believe that right now would be a good time to enforce it. I'd rather see this once steem has matured a bit - in the future.
Here is another comment I made 5 days ago on a post from @exyle:
If you want to support my stance on keeping the current SBD model and not enforcing the Peg, then please support me with a Witness Vote (Vote-Link with steemconnect)
Upvoted for Visibility
IM a month in and completely agree with @therealwolf and @bulleth as i write this in my sauna clear my head before work lol. I joined specifically to start a new direction in my life where my voice could be heard in a community that cares.
It’s good to see the attraction of a $25 post as a small ant here in the colony. Hoping to grow my organic community and hopefully you guys will add me on.
I’m here to stay. If the nibbles of effort were reduced ppl would leave. You’d have a phony community of vultures and no rabbits...
I’m a Sr Director in ux and could tell you first hand if that DOES happen you will have user fall out in the tens of thousands. People would assume this place is a gimmick and not cool... don’t try to reduce profits, try to encourage growth and more users. Once there are more minnows being rewarded then the platform can truly grow. Sometimes i tell my colleagues at the studio... it’s a beautiful mistake! That’s when something unexpected completely disrupts your model and takes it further then you thought!
This. I feel like we've stumbled on the goose with the golden egg and now people are seriously considering returning it to the shop because it doesn't lay normal eggs as intended.
well the onboarding process for this platform is not easy to intrepret... When my work colleagues ask me what the platform is like i say have you ever watched deadliest catch... they throw the crab pots out they wait to soak for 36 hours they pick up what the pots have. Some have tons of crabs and some dont. For me its the same as my posts. I can have the greatest content ever or some lesser posts but you wont ever know what people like until you let your posts soak a bit...
Overall i think people are uncomfortable with adverse results and when things don't go according to plan they run... I agree i think this platform has a LOT to offer but again it lacks the proper onboarding for easy adoption. I am a professional in the field of UI and am happy to help Steemit grow. happy to assist however is needed. Very passionate about this platform even if i have 100 followers and $200 bucks as my account. let me know how i can help
This I support 100% and agree with. It needs to be done, but it isnt the right time to do it.
I like the current SBD model, but it can really hammer us when this speculation dies down, Tether can't print money, and we're left vulnerable as we struggle to keep SBD at $1. I think free float in both directions is fine.
I have support for you @therealwolf and I have upvoted you and give me the list of all pro_SBD witness I will make campaign in steemit for next few days to vote those witnesses. Actually there is a politics in this, people who have high SP after earning millions now sayingit to peg it back...what the hell....just think about people like me or the minnows who are happy and got a revived passion after SBD is trading high and these level of minoows hardly earn 40 or 50 SBD per month and if it is peg back to 1 usd they simple run away and will do other stuff, see the time is very precious for everyone, and do you think a minnow will invest time here for just a earning of 50 usd per month where as with a price of 6 usd per SBD the same 50 sbd will be 300 usd which looks resonable.
Thank you and Have a great day.
Exactly, it is like a sales tax - the people most affected are the people who can't afford it.
Yes, I definitely see the value in it and in fact my @sbbank project actually took a hit on it. We ended up having to pay out 4 on the dollar. Thankfully, we didn't get that many depositors to begin with!
I've added your witness link to the list and voted you.
From what I can gather, the top 20 are now leaning towards letting it play out. Supply is increasing rapidly and something will eventually have to give.
Thank you for your nice post . .
I am your Fan. . Im inspired by U..
Can U plz visit my blog and give me some tips?
I will be blessed if U follow me
https://steemit.com/reddit/@xtian2121/how-to-use-reddit-a-crash-course
Thank you for your nice post . .
I am your Fan. . Im inspired by U..
Can U plz visit my blog and give me some tips?
I will be blessed if U follow me
https://steemit.com/reddit/@xtian2121/how-to-use-reddit-a-crash-course
I don't mean to argumentative, but there are going to be some things that wont be taken lightly.
Why do you want a high SBD?
Does a high SBD payout mean that the platform is just becoming popular and we are lucky to be in the front end? Or does it mean your content is genuinely better? Has your content changed as a result of SBD pricing? I understand there is a difference between what was designed (the framwork for steem), and what really occurs (human behavior on steemit.com). And this is definitely the case here.
I took a look at your profile, and I have a sincere question for you. Do you really think your content deserves $100 payouts (in terms of rewards, not USD). We're talking about sometimes $500-600 per a post.
Do you buy those upvotes? Or do you have genuine supporters of your content that help you reach there?
Because if SBD dropped back down to $1.00 what does that really mean? Did your content become worthless again?
All of these questions are really there to question your need and intent of a high price in SBD.
You can pose the same questions to me if you wish, I have my answers. I've also invested tens of thousands of my own money into steem so I come from a different position than you.
What is the intent of $1.00 SBD?
On a blockchain level why should SBD not be $1.00? Just because you want money, doesn't mean SBD shouldn't be $1.00.
Before we go there, we all know that the original intent was that SBD was intended to pay out $1.00 worth of steem, not actually be $1.00. So in reality, it's a bunch of people who want a stable currency to use, NOT how much its worth.
Why not just pay them in STEEM instead?
To put it bluntly, no - I think all payouts on the platform are too high right now. Moderately successful authors like myself, who were earning a part time wage before the STEEM and SBD increase, are now earning Doctor's money. Having said that, I'm a professional markets writer with a couple big forex brokers as clients - last year I was charging $100 an hour and was planning on upping my rate to $150 this year. The going rate for a freelance writer in 2017 was $900 per day. When SBD was at $1, I wasn't earning anywhere close to what my expertise gets me in real life.
I think this is the problem - we are just going from one extreme back to the other and the other isn't enough to retain excellence in any field. Having said that, STEEM is literally 6x higher now and if the witnesses handle this properly, they will be able to deflate SBD without too much collateral damage.
As far $500 - $600 a post, I think I got lucky with one last week - @v4Vapid and @adsactly dropped by - loving it.
I used MinnowBooster a few times last week because internal STEEM price was lagging the market. At current prices I'm guaranteed 100 per post - I blogged, networked and grinded my arse off last year to get here. Due to the SBD and STEEM price, as well as the holiday season, I've been trading a lot less than I used to - this means less chart and trading content. My calls on Ether, Bitcoin, EOS last year made my followers a ton of money. I've been enjoying taking photos lately, I'm not that good at it I don't think personally, but I seem to get really engaging comments and positive feedback.
I think your blog is a great example of why lower SBD is going to be screwed. You are already not earning enough from your blogging, not through low calibre content, but lack of reach and poor content discovery on Steemit. Your posts die, it's not that people don't like them, it's that people don't see them in the first place. On top of that, your returns on investments like Smartsteem are going to go down dramatically.
Come on you weren't that bad mate :)
If SBD were one USD again, not only would the whale support I've arranged for air-clinic (from auto-votes I would have otherwise got), not be enough to cover the doctors' time - I'd need those votes for myself again. I wouldn't have enough disposable income to even consider philanthropy (without taking on freelance work again).
Hey @bulleth,
I agree with everything you have said here. The witnesses are supposed to be the Voice of the people not the voice of themselves.
Even my own life is changed and I can sustain a Clinic run on the blockchain with less than $10 per day just because of the SBD prices.
If anything happens to those prices, then our free services may be affected. I myself ain't earning anything from running @air-clinic. But I really don't care about earnings. All I care about is for people that are ill to get better.
There are so many witnesses that should rather spend their time supporting so many good courses on Steem. But they would rather support themselves.
Well, I don't blame them that much. They earn most of their income in Steem Power which they can power down at will. So they don't see that minnows, need this for survival.
I can't even count the surge in Signups during these SBD surge. Even if Steem gets to $100 it will only enrich those who are already here. The only way a newbie or minnow will benefit from this platform is via SBD payouts.
I will say this again, this time more emphatically;
The witnesses are supposed to be the Voice of the people not the voice of themselves.
Support Projects that make sense like @AIR-CLINIC...
Instead of campaigning for a crappy minnow economy.
#AIR-CLINIC
Thank you!
That is exactly why I'm against enforcing the peg right now. You need more time to earn and save money, so that you are not getting destroyed if the price falls.
@nairadaddy - that is exactly why I decided to become a Witness. In my Introduction Post, that I've created yesterday - which you can read here - I wrote about the reasons why I want to be a Witness.
And I wrote this:
Witnesses are able to BE THE CHANGE that Users are wishing for in Steem.
True, a forced peg is benefitial to the plattform - but it is destructive to the Users - and right now, the Users made Steem what it is today.
Yes, SteemitInc are doing their huge part - Hardforks, SMT's, Communities etc. but where does Utopian and dtube come from?
From the Users!
People like you and me.
Hey @therealwolf,
since you have this sort of ideologyand you are a freshly baked witness, I will love to invite you to Steemit health community aka #AIR-CLINIC. We can add you to the other witnesses we support in our 650+ discord members (& counting). Lets go bring good health & joy to all Steemians.
See link here: https://discord.gg/rqded5m. See yah!
BTW: You got my vote!
I agree with you @bulleth. #steemit have changed many lives in different country and race. Somehow it shines bright of HOPE as they've started to earn. I personally changed some lives hear in our community as I give out my earnings to one of our indigenous community here in Philippines and it gain such impact that we really put them at ease.
I understand very well the game like other games that surrounds blockchain however last year I really thought this is different. When we say decentralize digital currency there's must not have MONOPOLY but it seems there is in this system.
Sad but still hoping to a great comeback of all. Bless you!
Words cannot describe how angry I am about this. Witnesses need to think about the best interests of their VOTERS so they should definitely reach out to their constituents before making such a dangerous economic move which could potentially kill all crediblity that the Steem ecosystem has worked to create.
Thanks for sharing this @bulleth. I had talked to a few witnesses in the comments section of their posts about this issue - while I am in favour of a strong SBD, I do think that they have a good point for trying to peg it to a dollar in that they are trying to create an economically sound currency that doesn't fluctuate hugely.
I myself am trying to build wealth on this platform, while also getting extremely involved in the community in any way possible. I work full time in ICO consulting, online course creation, now blogging and I also recently co-founded a tech start up. The high SBD value has given me the chance to focus less on monetary work outside of Steemit, and more on work that I am passionate about.
I think that a lot of other people also share this feeling, especially those who are from disadvantaged background - like you said, people are now able to put ham on tables when before they struggled to bring home bread (that is a great way to describe the situation Steemit has awarded a lot of people). Even though I see the value in having a stable currency for the platform, I see more value in a currency that is not pegged to the USD on a 1:1 ratio.
Maybe there is a happy medium that could work. I'm not sure what that happy medium could be, but I think that a lot of users have made it clear that a $1 SBD is not what they want. What I would suggest to witnesses who are for a $1 SBD is that they put together a business proposal of sorts - almost like a mini white paper, where they propose the benefits of the project etc., and those who are against a $1 SBD do the same for their arguement. That way, we can each read through the two PDF documents and give our opinions. I think there needs to be some sort of vote too - @lukestokes pointed out that votes could be rigged, and after looking in to sybil attacks I agree. I'm not sure how a vote could be smoothly done, but I think it would benefit witnesses to actually see how many users are either for or against the idea.
Thanks for sharing this post, and I hope that my input helps! If there is anything I can do to help, I'm all for it - just let me know.
I support this idea with the two PDF documents. Perhaps each side could "elect" a representative, and then the two could battle it out in a civilized text-based discussion?
That sounds like a good idea! Would you be interested in talking more on Discord? I'm sure we could put a proposal together for the witnesses. My username is @lukebrn#3369 if you are interested! Thanks for getting back to me.
Added you.
They should focus more on accurately representing SBD true value rather.
Anyways I don't think that SBD will always be as high as it is right now. The market will get it back to values around 1$ sooner or later so that we could just let people enjoy the ride. Like you say it's changing a lot for many of us!
Manipulating the market here would be worse than just watching the price decline over time as the supply of SBD increases massively.
I totally agree with you steemit is changing people's lives and I don't want people like witnesses to mess up with their lives with such stupid decisions, I personally think sbd need not be linked with dollars, if the price of sbd is going up that is good for steemit community.
I’m in the same boat as you so am going to have to update my witness votes too!