@bbrewer and Free Meme GeneratorI was initially quite surprised to see discussions here on Steemit about re-pegging the price of one Steem Backed Dollar (SBD) to $1 U.S. Dollar (USD) like it was originally intended. I thought to myself, "Why would anybody want to do this?" I couldn't imagine why anybody would want to cut down our payouts so much by pegging SBD back to $1 USD. If you are unsure what I am talking about, let me explain briefly. Then I will get on with the discussion.
PAYOUTS
Currently payouts work like this (on a high level):
*Half of the payout for each post and comment, after curation, will be paid out in SBD.
*The other half is paid out in Steem equal to the second half of the dollar amount displayed (after curation). See example below:
The total payout after curation for this post is:
That's $24.41 divided by 2 (50/50 payout), which equals 12.202 SBD and $12.202 USD worth of Steem. The math is not 100% exact, I believe because of fluctuations in the reward pool.
SO WHY THE TALK ABOUT PEGGING SBD AGAIN?
Why would anybody want re-peg SBD to $1 USD?
Well, the main reason that I have found so far in the little bit of research that I have done is that:
Pegging it would help stabilize the price of SBD and enable merchants to use SBD to receive payments without having to deal with changing the prices of their goods and services to ensure their profits come out as expected.
MERCHANTS
I really do want to encourage merchants to accept SBD and Steem and thus increase mass adoption, as this cryptocurrency and tech is one of the most proven out there, with 3-second transactions, no fees, ease of use, and relatively long term positive track record.
In addition to those virtues, there are millions of social interactions already occurring across the world on the Steem blockchain. Steem really seems to be the best candidate at this point in time to be adopted on a mass scale by users and merchants alike. However, we are still in the early stages of this experiment. I have been looking a lot of stats recently with my friend 
Let me be clear, I don't begrudge those who hold a lot of tokens on the blockchain. But, while I can see that the volatility of SBD price would be a barrier against merchants accepting SBDs, an even greater barrier to adoption is the still very small number of people (relatively speaking) around the world that actually have expendable amounts of SBD or Steem.
It also doesn't help that it is such a laborious process currently to buy Steem and SBD, and you can't buy Steem/SBD directly with fiat. This is one reason that presently a majority of people in the world are not spending large percentages of their fiat paychecks to purchase SBD and Steem to buy goods and services. There are a lot of us doing it, but there are a WHOLE lot more that would do it if it were easier. Hopefully 
There is a relatively small number of whales, orcas and dolphins out there that are actually willing to spend there SBDs and Steem on products and services when compared to all the plankton, redfish, minnows out there. The majority of users still have very few tokens they are willing to spend. They are HODLING their crypto in hopes that it increases in price to a point where it becomes life-changing money. I do hope we get to the point where a greater percentage of users on Steem based applications have expendable tokens to spend. I don't think we are there yet.
The focus should be on creating more large minnows and dolphins (dare I say orcas) that stay engaged on the platform, learn what there is to learn here (lots of good stuff!) and then when they have some life-changing money, they can begin changing the world by making fiat more and more obsolete.
Let me ask you all this? Are there hundreds or thousands of merchants around the world clamoring and begging for SBD to be pegged to the dollar so they can do business? If so, I haven't seen it. Again, I would love to know that is the case but they aren't exactly filling up the trending page or my feed with posts about that. Maybe I have just missed them. Please point them out if they are there.
However, there ARE many thousands of people who are currently coming to the platform wanting to have their good content recognized and upvoted and earn some money in the process. Let's focus on them for now!
CURATION REWARDS
Another reason I have seen explained for pegging 1 SBD to $1 USD is that it is somehow unfair to the curators. I do agree that we need to incentivize curation. If dolphins, orcas and whales were to manually spread their upvotes out to a wider circle of users, it would also encourage people to stick with the platform and grow their Steem Power and ultimately reach the maturity level we are talking about where merchants will adopt Steem/SBD as a payment method.
Many ideas for further incentivizing curation on a wider scale have been discussed. I hope the witnesses do come up with better solutions. Maybe a solution would include making curation rewards pay out in a 50/50 split of SBD/Steem-Power. Or we could work on other structures where curation is incentivized for upvotes on high quality blogs with low reputation scores and/or accounts with low Steem Power. This would do a great service to the ecosystem, by retaining new users, would it not?
SUMMARY
I think it is too early to make huge changes to accommodate merchants, especially in the form of a hard peg of SBDs back to $1 USD which will negatively impact other important stakeholders.
One of our main focuses should be on retention of active users and rewarding quality content at all levels. I think this could be done by further incentivising curation. We need whales, orcas and dolphins doing more curation on a wider basis. I don't know how it can be done but I know some brilliant people are putting their minds to the task.
Once we have brought in a greater number of users who are actually able to see their earnings (hopefully largely in the form of Steem Power) grow and therefore remain active on the platform and people actually have liquid SBD or Steem to spend, then let's talk about merchants. If we reach that level of maturity we should be thinking less in terms of the fiat value of our tokens and the concern of that fiat/token price volatility becomes less of an issue, doesn't it? I am no economist but those are my thoughts.
CONCLUSION
The SBD cat has been let out of the bag! A hard peg to the dollar, especially a sudden one is going to make people leave and less people join. The result will be that the curators and merchants will have fewer people to do business with.
If you enjoyed reading this post, please Resteem it to let people know that we want the SBD to remain un-pegged from the USD as it is today unless we can be convinced otherwise!
