Looks like it was a long experiment, that came to an end. Steem Dollar looks to be over. After creating unnecessary inflation for months, Steem Dollar looks to be taken out of circulation.
Just recently Steem Dollar is no longer awarded for posts, so there is no new one being issued, and the remaining ones are being taken out by people using them for promotion purposes. So the supply of Steem Dollar is approaching 0, although this would probably take a longer time.
I have already talked about why Steem Dollar was a bad idea, and that it should be replaced with something actually being backed by a real asset:
- https://steemit.com/steemit/@profitgenerator/a-few-steemit-ideas
- https://steemit.com/steem/@profitgenerator/how-to-fix-steem-inflation
THE PROBLEM
The main problem with SD was simple: It wasn't backed. When we talk about an asset, it has to be backed by something. A currency should be backed by consumers, merchants, investors actually using it. An asset like SD was supposed to be backed up by real dollars, but it wasn't probably because of regulatory issues, so instead it wasn't backed by anything. Therefore it has 0 value technically, and whenever SD was cashed out, it actually siphoned off real value from STEEM.
This is bad, very bad monetary policy. STEEM has it's own technical challenges, but STEEM could stand on it's own leg once those consumers, merchants, investors start using it for financial/economic transactions.
However SD had no leg of it's own, and all it did was to parasite off STEEM's value, this is obviously bad, and it's just a design flaw, it's nothing impossible that could not be solved by a better monetary policy. The 1$ peg is unsustainable without a real 1$ backing it, this is how reserve banking works.
So SD was a volatile instrument from the start, and it was pretty bloated, not to mention inefficient, but we see it's value plummeting very hard recently:
So I think people should sell their SD, and Power Up to Steem Power! At least this is what I did. I am also having 100% SP posts from now on, to help stabilize this change.
Now that SD is over, we should create a real asset that would be backed by Bitcoin, and redeemable in Steem & Bitcoin. This would be the ultimate way to fix Steem's long term price decline, an exchange rate stabilization fund if you will! I have explained it here:
Disclaimer: The information provided on this page might be incorrect. I am not responsible if you lose money using the information on this page! This is not an investment advice, just my opinion and analysis for educational purposes.
Upvote, ReSteem & 
