Given the controversy regarding Tether and Bitfinex being subpoena'd by the CFTC, does it really make sense for the Steem platform to put itself under the same scrutiny?
Some might ask "well if Steem Dollars aren't hard-pegged to anything in the real world, why bother having two payout currencies instead of just one?"
And the answer to that is important. Steem itself is the "real" currency. A set amount of Steem is printed and distributed each day, no more and no less. As the Steemit platform grows and more authors are competing for that reward pool, your payout in Steem power is going to diminish more and more.
What doesn't diminish in quantity? Steem Dollars.
Steem Dollars don't care. They are not "real" Steem but a debt instrument that was originally supposed to represent $1 USD worth of Steem, redeemable in Steem and did not exist outside your Steemit wallet.
Times have changed. Steem is no longer worth pennies and Steem Dollars can be transferred to the open market, and as we saw last night when Bitcoin pinched a big loaf that pulled the rest of the market down with it, Steem dropped to $4 US dollars, then very quickly rebounded to near $5 US dollars within a half hour. That in itself shows the strength and confidence in the Steem Platform.
So getting back to the value of Steem Dollars. If Steem itself is worth (currently) ~$5 US Dollars, would it not make more sense for Steem Dollars to also be worth ~5 US Dollars? That seems like a no-brainer to me when it comes to a debt instrument that is meant to be redeemable for something else. I would suggest it represents stability in the system if the open market dictates Steem Dollars have equal value, even if they are being distributed in a larger quantity; I believe it shows that the market expects the value of Steem to keep going up.
As I said earlier, Steemians will be competing more and more for the Steem Power that is being distributed to authors/commenters/curators. Steem dollars on the other hand you are not competing for directly. In theory Steem Dollars should always have a lot of downward pressure on the price, especially given that more of them are being distributed compared to Steem Power. But without the payout in Steem Dollars, you might as well pack up your bags and quit.
So from a legal standpoint, Steemit is not Bitfinex. There is not necessarily a centralized power that can be brought down. However, there are Witnesses, and if the Steem dollar was to be hard-pegged to the US Dollar (it's currently not, only "soft-pegged"), the witnesses could theoretically be subpoena'd or messed with by authorities - which is not a good thing because the witnesses are the ones mining the blocks for Steem and securing the network. There are plenty of backup Witnesses yes, but not just anyone can be a Witness given the expense and responsibility.
From an author standpoint, without Steem Dollars being paid out, you would be fighting tooth and nail for the limited Steem Power distribution, and that doesn't even take into account the freshly hatched minnows who would be climbing a wall that never stops getting taller. There would be only one way around that wall, and that would be purchasing Steem on the open market, transferring it to Steemit wallet and powering up into Steem Power. The whales on Steemit will feed you all kinds of BS about working hard and earning your place, but unless you have a rich friend on the platform, all that talk is nothing but BS. Steem Dollars is the only current way to organically grow for minnows on Steemit, as long as they choose 50/50 rewards for their posts and actually get upvotes.
While these are just my opinions, I believe the platform is still delicate and any sudden change in how the system works can be devastating for most Steemians. Steem Dollars are not just some unnecessary second payout currency of the system, at least not right now. without Steem Dollars, I would be wasting my time writing this post. I would be better off just curating whale posts and feeding a system that would eventually collapse on itself. Again though, just my opinion.
if you want to be more proactive in this community, try using steemfollower (sign in is done through steemconnect using your steemit name and your private posting key - found in your wallet under permissions). This Video will explain how the program works. It is a great way to motivate you to produce great content, and to reward others for producing great content.
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