If there is one topic I keep reading about regarding STEEM outside of the blockchain is the inflation myth.
I think in 2016 people took one look at STEEM saw the insane inflation at the start (the mining + 160% inflation), classified it as a shit coin and that was it.
Two years later anyone outside of STEEM still has that memory.
Of course, we know, the inflation was changed in December of 2016 to 9,5% (and lowering with 0.5% every year).
But no-one else seems to know this fact.
Here's a recent example pointed out to me by my friend @ezzy.
This person Davincij15 has become popular seemingly overnight due to his BTC predictions in the past.
He was interviewed by MMcrypto and he mentioned STEEM as one of his favourite coins which as you can imagine made me happy.
STEEM talk Starts from 34:54
But then the doubts start pretty quickly when the (incorrect) inflation is mentioned @ 36:00.
"It may or not may work with the high inflation"
But there is no high inflation. At least not as high as it was and not in the way they think.
@ezzy and I left a comment defending STEEM. (I also snuck https://steemapps.com in there, because we should spread that message for and wide).
Inflation right now:
But it doesn't mean STEEM is off the hook.
Current inflation in 2018 is higher than it should be.
Look at the numbers from coinmarketcap.
23 April 2017 = 235 million STEEM
22 April 2018 = 254 million STEEM
16 December = 302 million STEEM
From April 2017 to April 2018 everything worked fine. Inflation was 9% per year.
But it's easy to see that this year the inflation is a lot higher.
We are already close to 20%.
A large part is due to the SBD conversions that have been taken place and the fact that almost no SBD (1%) is printed, only STEEM.
Trouble is we still have 12,6 million SBD left waiting for conversion at some point in time.
And it's becoming alarming.
Every time SBD gets under 10% of the market cap of STEEM optimal conversion (1 SBD to $1 worth of STEEM) is possible and a ton of STEEM is created.
We are always so close to this 10% ratio and the lower prices go the more harmful it is.
STEEM marketcap = $67,067,836 USD
SBD marketcap = $6,858,437 USD
In other words, if SBD marketcap continues to drop we can expect a huge increase in STEEM tokens because every SBD can be converted to $1 worth of STEEM (and at the current price of 20 cent STEEM that is about 5 STEEM each).
Now we are obviously in this shit show because no-one expected SBD to ever drop below a dollar. But it has. And it's becoming a threat that should be talked about.
If STEEM drops to 10 cents (30 million marketcap) and SBD drops to 20 cents (2,5 million marketcap) it will be possible to convert every SBD to 10 STEEM.
It will theoretically increase total STEEM supply by 126 million STEEM.
I am interested in some thoughts about this and will contact some other witnesses to see if I'm right or wrong.
I have no problem with being wrong if I can learn from it.
Please share your thoughts.
EDIT
I have dropped the question in the witness channel, also contacted @timcliff.
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