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 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:
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.