My last post was uncomfortable to write although it was also a lot of fun. It was uncomfortable because it was a long way out of my area but as I wrote it, a whole range of little things clicked along the way to build a picture that I had only grasped glimpses of before.
First things first, this blockchain as a system is filled with brilliance and there are many hidden gems to its design that people rarely consider. It is easy to get lost in the payout side of the function without seeing the other potentials.
The next thing that became apparent is why SBD is so vital to the future and why it should be pegged. People have said it before but without realising how the system managed it, I didn't see the significance and even now am trying to get my head around it.
One trouble with crypto is that it is hard to spend as it is likely an appreciating currency, meaning what you buy today becomes more expensive tomorrow. Spend 100 STEEM today and if over night it doubles in price, what you bought is twice as expensive. This means there are lots of holders.
On the exchanges there are tethers like USDt where if prices are dropping, one can 'buy the tether' and then use the tether to buy back in later as the tether is equivalent to cashing out to fiat. This maintains some stability as fiat doesn't swing as fast as crypto. However, for a tether to be stable it is meant to have a 1:1 ratio with what it is tethered to, generally USD. It didn't and as the volumes increase, this gets even harder to maintain.
But, SBD doesn't have this problem as it is backed by STEEM and as long as it holds value, SBD holds value. This means that SBD can be used to trade for goods without having the risk of it fluctuating in price (hopefully) meaning that what you buy today would be the same price tomorrow as if you bought it in US dollars. Now, that doesn't seem to be so brilliant does it, why not just use USD? Well, because USD is USD and is a currency controlled almost entirely by banks and are subject to all of their fun and games.
The brilliance of the system here is that it cuts out the requirements for middlemen and fiat completely (potentially) and as crypto grows in uptake and usability, SBD can become a transfer coin. For cryptocurrencies to fulfill their promise, they need some stability but that is unlikely in the early days (as we can see) but, SBD could potentially fill a gap in the market and offer price security in transfer while the industry stability is developing with volume and distribution.
I think this would mean that any users could buy and transfer in SBD and that would be backed by the Steem community making the Steem blockchain vital to the crypto ecosystem. I think.
Really, I am trying to get my head around all of this and it is something I really should have looked into much deeper much earlier but, all the numbers and technicals scare me a little. What I am learning though is what I teach and that is, What I teach, I learn. I am not here to teach though, but spending the time trying to explain to others what is in my head does have that effect but with the added benefit of feedback, discussion and clarification. Discussion now is vital for the future.
There are a lot of complexities here that not only appear on the Steem blockchain but also in the world at large. To really understand it all one not only has to be willing to get technical but, also to get deeper into economics and politics, social development, psychology and education. One has to be prepared to forget everything that has been learned and slowly relearn new ways to live as a global community.
I know that sounds a little far-fetched and perhaps corny but, if we truly are going to make this world fundamentally better, we have to change the fundamentals and to do that takes a lot more work than any of us have done together before. Perhaps every generation and every person says this about the point they occupy but, these really are interesting times.
I am looking to get a little deeper into them, no matter how uncomfortable.
Taraz
[ a Steemit original ]