Great piece. Not sure to what degree a potential Tether fallout would rattle the cryptocurrency markets though, considering Tether's market cap is just over $2B, versus Bitcoin sitting at roughly $150B at the time of this post.

What stands out to me from your post though and what seems applicable to the Steem blockchain is the regulatory implications of asserting that a cryptocurrency is pegged to an external asset such as the USD. There is no way of truly ensuring that this is in fact the case without recurring audits by established third-party entities, as you alluded to you in your post and what has prompted the wave of scrutiny around Tether.

Similarly, Steem Blockchain Dollars (SBDs) present a dilemma for the community here and the marketing of the Steem blockchain at large. I say this because , in my view, they are mislabeled as a token that is pegged to the USD in the Steem White Paper. As described therein, "...Steem Dollars were designed as an attempt to bring stability to the world of cryptocurrency and to the individuals who use the Steem network."

The free market has unequivocally demonstrated that the initially conceived stability that SBDs were supposed to offer is simply not the case. SBDs are currently trading above $5. When a buyer and seller exchange an asset at an agreed upon price, a market is made; this basic truth of trading seems to have gone over the heads of many of the Witnesses, some of whom continue to debate about their supposed obligation to manipulate the SBD price down to $1 by whatever "tools" they may have at their disposal.

Dan Larimer himself recently conceded in an interview that he accepts that SBDs are trading just as any other "...relatively fixed supply currency that is growing at a predictable rate..."

Why can't the Witnesses accept this evident reality too then? In my view, since Steemit Inc possesses the most Steem Power and thus largely defines the developmental trajectory of the Steem blockchain, it should represent the nature of SBDs accurately to the general public and users of the platform by removing any portrayal that their is somehow a pegged floor below which the price of SBDs can't fall and a maximal ceiling above which their price can't rise. With everything going on with Tether, one would think Steemit Inc would be on top of this.

The primary role of the Witnesses should be to maintain the blockchain. As for any notion that they have the ability to control the price of a token derived from the blockchain itself, such as SBDs, that is inviting the hammer of official scrutiny as time goes by and the adoption of Steem advances, especially considering what is now happening with Tether.