Funny money backed by funny money, or funny money backed by no money. An SBD peg would work about as well as Tether does, in that it would implode in a short while. BitUSD is also vulnerable.
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Funny money backed by funny money, or funny money backed by no money. An SBD peg would work about as well as Tether does, in that it would implode in a short while. BitUSD is also vulnerable.
Vulnerable how? You stated some opinions. Can you also share what they are based on? Financial value itself is determined in the moment of transaction. For all the value backing SBD or bitUSD to fall so low as to have some catastrophic black swan event bringing them to zero... we’ll that would be difficult to imagine. BitUSD has been doing quite well so far.
I would tend to agree they are theoretically vulnerable. If everyone wants to get out of BitUSD or even BTS itself at the same time (essentially a run on the bank), the resulting release of massive amounts of BTS collateral and accompanying selling pressure could cascade the price of the whole thing down to essentially zero.
Similar things could happen to STEEM (or BTC or any other coin), but really we are simply talking about a loss of confidence or market crash where no one or nearly no one wants to speculate on a recovery and everyone just wants to get their money out. People participate in these assets because the believe the utility and/or future upside are enough to compensate for the risks, but if that perception changes, then what is left to hold up the value?
FWIW, I think Steem is slightly better positioned that BTS to not suffer from catastrophic loss of value because it at least has some non-speculative utility. People might pay real money for censorship-resistant blogging, to be part of the community, etc. even in the absence of high speculative demand for the token, while Bitshares is simply speculation and tokens. If demand for the latter goes away then there really is nothing left. Likewise a pegged token backed by STEEM is probably slightly less risky for this same reason (underlying backing has more non-speculative value, even if not necessarily a lot at this point).
All of these things are difficult to measure though, so this is just an opinion.
Well, considering as of this comment BitConnect is still selling for $13.35 USD, anything is possible (or, maybe more accurately, anything is possible in this cryptocurrency bull-run).
Yeah, that's a good point about STEEM having some utility value that some may actually pay money directly to obtain does give it a bit more security. At the same time, I see the value of BitShares as largely untapped. What BUILDTEAM is doing, as an example, is quite interesting. I can imagine many other companies doing a similar token model with staking and such. Exchanges that work well have tremendous utility value and BitShares has that also as a functional exchange. This is why systems like OpenLedger, Rudex, and CryptoBridge exist: people want some of that decentralized exchange value and to charge fees for the assets they support. BitShares (the token) makes all that possible, so there's great value there as well.
I agree on all counts. My point on STEEM vs BTS was not that BTS doesn't have value, but that a bigger portion of STEEM's value might be robust against a collapse in interest for speculative tokens. Of course, there is no way to know for sure.
Cool. Thanks for clarifying. It’s difficult not to fall for the trap of thinking “X is better than Y!” means Y is crap. Y could actually be the second best thing out there. I try not to fall for that one, but it’s so easy. Maybe it’s a sign of our polarized media consumption.