Author Topic: How much should the hard coded cap on dilution/share issuance be, per year?  (Read 7753 times)

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Offline Mysto

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I personally don't think there should be a hard cap. We don't know what the future holds and we don't know if maybe 20 years down the line we will need DCI (Delegated Capital Infusion) for something very large scale and important. A fixed percent a year is fine but a hard cap is not imo.

Offline stuartcharles

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I would look to increase value instead of dilute.

How would we get that increased value without development and marketing, and if you agree it has to be through development and marketing how do we pay for that if not through dilution?

Offline bytemaster

Note:  as market cap grows dilution percentages can fall even as spending increases.... as the system matures fees can cover operating expenses and growth. 
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Offline bluebit

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Offline stuartcharles

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+5% for this thread.

I think a hard coded cap as a "safety net" on "abuse of voting in the short term".... I think the social consensus should be 'as necessary and agreed upon by shareholders'... the "cap" should be like the bitcoin block size cap... and perhaps set to the same as Bitcoin's dilution schedule.

I absolutely agree, this is as much about market confidence as anything. The cap of 22 million bitcoins has become sacred, everyone knows that know one in there right mind would consider changing it. To gain the absolute confidence of investers, public and users we need some things to be sacred. A hard coded cap and dilution rate along with a statement from dev's that this was iron cast would add a ton of confidence to BTS

No

It can be hard to understand, but I think the easiest way to explain it is bitcoin = gold 2.0, bitshares = stocks 2.0

That dose not explain your "no" to me. I will need a lot more than that to be convinced that a set of clear rules arnt important. Blockchain technology lives outside the law and regulations so it does need some rules built in.

Companies typically have "by-laws" that control how the board of directors must operate...

http://en.wikipedia.org/wiki/By-law

They can be thought of as meta-laws but the directors are given the authority to make day-to-day business deals.  The shareholders get to elect the directors and vote on any changes to the meta-laws (bylaws).

by-laws or social contracts are great but i believe we must have some ridged rules built into the code too. Without them too much trust is required. Also we would give our competitors a stick to hit us with.

If we had a high participation in voting there would be a argument for this but given i3's influence and the lack of active voting we dont have that luxury

Xeldal

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+5% for this thread.

I think a hard coded cap as a "safety net" on "abuse of voting in the short term".... I think the social consensus should be 'as necessary and agreed upon by shareholders'... the "cap" should be like the bitcoin block size cap... and perhaps set to the same as Bitcoin's dilution schedule.

I absolutely agree, this is as much about market confidence as anything. The cap of 22 million bitcoins has become sacred, everyone knows that know one in there right mind would consider changing it. To gain the absolute confidence of investers, public and users we need some things to be sacred. A hard coded cap and dilution rate along with a statement from dev's that this was iron cast would add a ton of confidence to BTS

No

It can be hard to understand, but I think the easiest way to explain it is bitcoin = gold 2.0, bitshares = stocks 2.0

Yeah, what's the most optimal inflationary model for a company? It's definitely important to keep the "coin vs. share" metaphor in mind when deciding on whatever model we choose. Perhaps it would be best to start analyzing what real world corporations do... Look at some case studies.

EDIT: While taking into consideration the point stuartcharles made: this is a crypto company. Should cryptos have hard coded limits? Why or why not?

Optimally your company is so vastly profitable that inflation is not necessary.  I believe there may be diminishing returns from infusion/inflation based on how successful/pervasive you already are.


 

Offline Stan

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+5% for this thread.

I think a hard coded cap as a "safety net" on "abuse of voting in the short term".... I think the social consensus should be 'as necessary and agreed upon by shareholders'... the "cap" should be like the bitcoin block size cap... and perhaps set to the same as Bitcoin's dilution schedule.

I absolutely agree, this is as much about market confidence as anything. The cap of 22 million bitcoins has become sacred, everyone knows that know one in there right mind would consider changing it. To gain the absolute confidence of investers, public and users we need some things to be sacred. A hard coded cap and dilution rate along with a statement from dev's that this was iron cast would add a ton of confidence to BTS

No

It can be hard to understand, but I think the easiest way to explain it is bitcoin = gold 2.0, bitshares = stocks 2.0

That dose not explain your "no" to me. I will need a lot more than that to be convinced that a set of clear rules arnt important. Blockchain technology lives outside the law and regulations so it does need some rules built in.

Companies typically have "by-laws" that control how the board of directors must operate...

http://en.wikipedia.org/wiki/By-law

They can be thought of as meta-laws but the directors are given the authority to make day-to-day business deals.  The shareholders get to elect the directors and vote on any changes to the meta-laws (bylaws).

Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Xeldal

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+5% for this thread.

I think a hard coded cap as a "safety net" on "abuse of voting in the short term".... I think the social consensus should be 'as necessary and agreed upon by shareholders'... the "cap" should be like the bitcoin block size cap... and perhaps set to the same as Bitcoin's dilution schedule.

Bitcoins dilution schedule may limit us in the distant future. Maybe we will at some point need capital infusion 30 years from now and because of a hard cap, it can't be done. A limit of X% dilution per 1,000,000 blocks may make more sense. I'm neutral either way.

I wouldn't worry about it too much.  Think about what a hard cap really means and how it is enforced. 


Others -
Think about keeping it capped at bitcoin's rate.  People are quick to dismiss that idea, but it becomes a lot easier sell externally when we can now point to this huge distinction that we don't dilute as much as bitcoin AND all the money goes into productivity and not needless energy consumption.

I agree it is a fantastic way to frame the conversation. We're taking a "negative" and turning it into a positive. "Bitshares is just as inflationary as Bitcoin but our inflation gets spent on growth and infrastructure."

I guess the question we should be asking is, what is the most optimal inflationary model? Is it exactly Bitcoins? We should put lots of thought and discussion into this before coming to any hard conclusions.

So long as its less than or equal to bitcoins model the talking point works.  I don't think its necessary to string it out over 100 years like bitcoin though as its not a distribution/security model.  A much smaller window would suffice.  Just whats necessary to get into orbit (escape velocity)  then the window should be closed, or made monumentally difficult to open again.

The DAC is vastly more profitable than anything else out there, once you've got mass adoption momentum/network effect, it should be easily capable of funding itself through delegate pay etc. 

Offline Method-X

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+5% for this thread.

I think a hard coded cap as a "safety net" on "abuse of voting in the short term".... I think the social consensus should be 'as necessary and agreed upon by shareholders'... the "cap" should be like the bitcoin block size cap... and perhaps set to the same as Bitcoin's dilution schedule.

I absolutely agree, this is as much about market confidence as anything. The cap of 22 million bitcoins has become sacred, everyone knows that know one in there right mind would consider changing it. To gain the absolute confidence of investers, public and users we need some things to be sacred. A hard coded cap and dilution rate along with a statement from dev's that this was iron cast would add a ton of confidence to BTS

No

It can be hard to understand, but I think the easiest way to explain it is bitcoin = gold 2.0, bitshares = stocks 2.0

Yeah, what's the most optimal inflationary model for a company? It's definitely important to keep the "coin vs. share" metaphor in mind when deciding on whatever model we choose. Perhaps it would be best to start analyzing what real world corporations do... Look at some case studies.

EDIT: While taking into consideration the point stuartcharles made: this is a crypto company. Should cryptos have hard coded limits? Why or why not?
« Last Edit: October 21, 2014, 03:44:16 pm by MeTHoDx »

Offline stuartcharles

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+5% for this thread.

I think a hard coded cap as a "safety net" on "abuse of voting in the short term".... I think the social consensus should be 'as necessary and agreed upon by shareholders'... the "cap" should be like the bitcoin block size cap... and perhaps set to the same as Bitcoin's dilution schedule.

I absolutely agree, this is as much about market confidence as anything. The cap of 22 million bitcoins has become sacred, everyone knows that know one in there right mind would consider changing it. To gain the absolute confidence of investers, public and users we need some things to be sacred. A hard coded cap and dilution rate along with a statement from dev's that this was iron cast would add a ton of confidence to BTS

No

It can be hard to understand, but I think the easiest way to explain it is bitcoin = gold 2.0, bitshares = stocks 2.0

That dose not explain your "no" to me. I will need a lot more than that to be convinced that a set of clear rules arnt important. Blockchain technology lives outside the law and regulations so it does need some rules built in.

Offline Rune

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+5% for this thread.

I think a hard coded cap as a "safety net" on "abuse of voting in the short term".... I think the social consensus should be 'as necessary and agreed upon by shareholders'... the "cap" should be like the bitcoin block size cap... and perhaps set to the same as Bitcoin's dilution schedule.

I absolutely agree, this is as much about market confidence as anything. The cap of 22 million bitcoins has become sacred, everyone knows that know one in there right mind would consider changing it. To gain the absolute confidence of investers, public and users we need some things to be sacred. A hard coded cap and dilution rate along with a statement from dev's that this was iron cast would add a ton of confidence to BTS

No

It can be hard to understand, but I think the easiest way to explain it is bitcoin = gold 2.0, bitshares = stocks 2.0

Offline stuartcharles

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+5% for this thread.

I think a hard coded cap as a "safety net" on "abuse of voting in the short term".... I think the social consensus should be 'as necessary and agreed upon by shareholders'... the "cap" should be like the bitcoin block size cap... and perhaps set to the same as Bitcoin's dilution schedule.

I absolutely agree, this is as much about market confidence as anything. The cap of 22 million bitcoins has become sacred, everyone knows that know one in there right mind would consider changing it. To gain the absolute confidence of investers, public and users we need some things to be sacred. A hard coded cap and dilution rate along with a statement from dev's that this was iron cast would add a ton of confidence to BTS

Offline Method-X

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+5% for this thread.

I think a hard coded cap as a "safety net" on "abuse of voting in the short term".... I think the social consensus should be 'as necessary and agreed upon by shareholders'... the "cap" should be like the bitcoin block size cap... and perhaps set to the same as Bitcoin's dilution schedule.

Bitcoins dilution schedule may limit us in the distant future. Maybe we will at some point need capital infusion 30 years from now and because of a hard cap, it can't be done. A limit of X% dilution per 1,000,000 blocks may make more sense. I'm neutral either way.

I wouldn't worry about it too much.  Think about what a hard cap really means and how it is enforced. 


Others -
Think about keeping it capped at bitcoin's rate.  People are quick to dismiss that idea, but it becomes a lot easier sell externally when we can now point to this huge distinction that we don't dilute as much as bitcoin AND all the money goes into productivity and not needless energy consumption.

I agree it is a fantastic way to frame the conversation. We're taking a "negative" and turning it into a positive. "Bitshares is just as inflationary as Bitcoin but our inflation gets spent on growth and infrastructure."

I guess the question we should be asking is, what is the most optimal inflationary model? Is it exactly Bitcoins? We should put lots of thought and discussion into this before coming to any hard conclusions.

Offline xeroc

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Think about keeping it capped at bitcoin's rate.  People are quick to dismiss that idea, but it becomes a lot easier sell externally when we can now point to this huge distinction that we don't dilute as much as bitcoin AND all the money goes into productivity and not needless energy consumption.
Here you go: BAM!

Offline gamey

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+5% for this thread.

I think a hard coded cap as a "safety net" on "abuse of voting in the short term".... I think the social consensus should be 'as necessary and agreed upon by shareholders'... the "cap" should be like the bitcoin block size cap... and perhaps set to the same as Bitcoin's dilution schedule.

Bitcoins dilution schedule may limit us in the distant future. Maybe we will at some point need capital infusion 30 years from now and because of a hard cap, it can't be done. A limit of X% dilution per 1,000,000 blocks may make more sense. I'm neutral either way.

I wouldn't worry about it too much.  Think about what a hard cap really means and how it is enforced. 


Others -
Think about keeping it capped at bitcoin's rate.  People are quick to dismiss that idea, but it becomes a lot easier sell externally when we can now point to this huge distinction that we don't dilute as much as bitcoin AND all the money goes into productivity and not needless energy consumption. 

I speak for myself and only myself.