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Offline Rune

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Bitcoin = trustless. Bitshares = trust-abundant
« on: October 26, 2014, 12:33:03 AM »

So the more I start to forget my old bitcoin lessons, the more certain I get of bitshares' success.

Recently, I've started to think that because of the way everyones economic incentives align when getting paid directly and transparently by stakeholders the blockchain, the old idea of everything having to be "trustless" doesn't really apply anymore. Because we most definitely trust a lot of people, in fact the whole point of DPOS is that we can trust the delegates because they're incentivized to stay honest. The obvious reason is that they are economically incentivized to be honest. Another reason is that they are incentivized to be transparent because netizens are an inquisitive bunch of people who will jab and pry at everything they can, and who automatically shy away from things that are locked down because it appears dishonest. Once there is absolute transparency in the system, it becomes very difficult to collude.

Finally, however, the most important thing is not economic in nature, it is social. At first I expected that delegates would be kinda like miners or mining pools; anonymous individuals who act purely out of greed in competing to extract as much money as possible out of a fixed pie taken each block out of the stakeholders wealth. But once you begin to embrace the company analogy that bitshares really is, you will realize that delegates have very little in common with miners. What they have the most in common with are ordinary employees. They are trusted people who have been hired for a set salary to collaborate for the same goal: to increase the value of the blockchain. Additionally, because of point number 2, the entire organizational structure is and always will be completely transparent. It is a rankless, factionless and frictionless organizations of likeminded workers who all work together on a giant team. And thus, in the long run delegates will not compete, they will collaborate. There might be clashes on salary and other minor frictions, But the blockchain will always hire EVERYONE who is profitable to hire, so once you're on as e.g. a developer, and you're delivering, you can expect to never get fired again unless you really mess up. Stakeholders will vote to increase the amount of delegates rather than firing a valued employee.

This existence of collaboration rather than competition completely changes the framing of what being a delegate means. The lack of "SoTF pressure" will be especially important to the atmosphere of the company. When you work together with other public people in a team, and collaborate over time, you can expect to increasingly become attached and loyal to your team, your coworkers and your company. This positive social atmosphere will do wonders to ensure the security and profitability of the blockchain, and I think going forward some of the most important goals will be to come up with some great frameworks for increasing company culture and social atmosphere.

Having these things in mind you start to realize just how safe it is to trust an individual in this system. You can always see their network of trust, since it is transparent through slates, and so can EVERYONE else on the internet. They are highly paid to do their job, and they are chosen for their specialized and proven skills (ie they are never average people looking to make a quick buck - they are programmers, researchers, professionals). They are a part of a greater whole, of a team that they have worked with for months or years, many of whom they know intimately and personally. It would be absurd to think that 51% of a team like this could EVER, under any concievable conditions, decide to collude to destroy their company. It is simply not a plausible scenario.

And with that in mind, I think we can begin to change the way we see things. It's time to get rid of the bitcoin mindset because bitshares is really a completely different beast.

Offline gamey

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Re: Bitcoin = trustless. Bitshares = trust-abundant
« Reply #1 on: October 26, 2014, 12:46:42 AM »

Uhh don't think anyone around here has had the "bitcoin mindset" for some time.  It sounds cool, but frankly I'm not sure whatever that even means.

You are right though in that delegates will change, but thats because the definition of what a delegate is has changed. 

You have 2 things confused.  Competition to be a delegate doesn't mean you are at odds with Bitshares and achieving things.  So you've taken normal expected competition of running as a delegate and made this long post where you're confusing it with other issues.  People will always compete to be delegates.  Thats what will keep the capital infusion efficiently spent.

For example - Whenever you are hired at a job you usually compete with others, and ideally the company hiring you competes too.  This has nothing to do with what happens once you get hired.
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Offline tonyk

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Re: Bitcoin = trustless. Bitshares = trust-abundant
« Reply #2 on: October 26, 2014, 12:55:03 AM »
Recently, I've started to think that because of the way everyones economic incentives align when getting paid directly and transparently by stakeholders the blockchain, the old idea of everything having to be "trustless" doesn't really apply anymore.

Ahh... I hope and believe BTS is as trustless, as it gets... I really do not get the point of this enormous post of yours... and the

"bitcoin
mindset" has not changed and will not change in that  regard...


I hope!
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline luckybit

Re: Bitcoin = trustless. Bitshares = trust-abundant
« Reply #3 on: October 26, 2014, 02:21:17 AM »
So the more I start to forget my old bitcoin lessons, the more certain I get of bitshares' success.

Recently, I've started to think that because of the way everyones economic incentives align when getting paid directly and transparently by stakeholders the blockchain, the old idea of everything having to be "trustless" doesn't really apply anymore. Because we most definitely trust a lot of people, in fact the whole point of DPOS is that we can trust the delegates because they're incentivized to stay honest. The obvious reason is that they are economically incentivized to be honest. Another reason is that they are incentivized to be transparent because netizens are an inquisitive bunch of people who will jab and pry at everything they can, and who automatically shy away from things that are locked down because it appears dishonest. Once there is absolute transparency in the system, it becomes very difficult to collude.

Finally, however, the most important thing is not economic in nature, it is social. At first I expected that delegates would be kinda like miners or mining pools; anonymous individuals who act purely out of greed in competing to extract as much money as possible out of a fixed pie taken each block out of the stakeholders wealth. But once you begin to embrace the company analogy that bitshares really is, you will realize that delegates have very little in common with miners. What they have the most in common with are ordinary employees. They are trusted people who have been hired for a set salary to collaborate for the same goal: to increase the value of the blockchain. Additionally, because of point number 2, the entire organizational structure is and always will be completely transparent. It is a rankless, factionless and frictionless organizations of likeminded workers who all work together on a giant team. And thus, in the long run delegates will not compete, they will collaborate. There might be clashes on salary and other minor frictions, But the blockchain will always hire EVERYONE who is profitable to hire, so once you're on as e.g. a developer, and you're delivering, you can expect to never get fired again unless you really mess up. Stakeholders will vote to increase the amount of delegates rather than firing a valued employee.

This existence of collaboration rather than competition completely changes the framing of what being a delegate means. The lack of "SoTF pressure" will be especially important to the atmosphere of the company. When you work together with other public people in a team, and collaborate over time, you can expect to increasingly become attached and loyal to your team, your coworkers and your company. This positive social atmosphere will do wonders to ensure the security and profitability of the blockchain, and I think going forward some of the most important goals will be to come up with some great frameworks for increasing company culture and social atmosphere.

Having these things in mind you start to realize just how safe it is to trust an individual in this system. You can always see their network of trust, since it is transparent through slates, and so can EVERYONE else on the internet. They are highly paid to do their job, and they are chosen for their specialized and proven skills (ie they are never average people looking to make a quick buck - they are programmers, researchers, professionals). They are a part of a greater whole, of a team that they have worked with for months or years, many of whom they know intimately and personally. It would be absurd to think that 51% of a team like this could EVER, under any concievable conditions, decide to collude to destroy their company. It is simply not a plausible scenario.

And with that in mind, I think we can begin to change the way we see things. It's time to get rid of the bitcoin mindset because bitshares is really a completely different beast.

And once you have reputation and trust everything changes. Decentralized reputation and trust are game changing features.

To have trust you have to align the incentives so people have more to gain by following the rules.
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Offline donkeypong

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Re: Bitcoin = trustless. Bitshares = trust-abundant
« Reply #4 on: October 26, 2014, 05:36:10 AM »
"Trustless" with a "trustworthy" team...that's BitShares.

Offline luckybit

Re: Bitcoin = trustless. Bitshares = trust-abundant
« Reply #5 on: October 26, 2014, 08:45:43 AM »
"Trustless" with a "trustworthy" team...that's BitShares.

The community should be able to trust many of the individuals within it. How many and who? Reputation will determine that but once we can all issue our IOU currencies it will not be as difficult to figure out who we can trust.

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Offline mf-tzo

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Re: Bitcoin = trustless. Bitshares = trust-abundant
« Reply #6 on: October 26, 2014, 01:51:16 PM »
1. How do you solve that someone is only asking for services (has a very negative gifts balance) and never gives back? For eg. in bittorrent I can always download a movie, watch it and then delete the torrent and never share it with anyone else (leeching)

2. How can you determine the value of a gift or favor in the system? I suppose we could solve this issue by voting from the people in the system?

3. What happens if you form a parntership with an exterior investor who injects a lot of money in the system, earns a lot of patron points so he would expect some favors and gifts in return as the system grow and then it is discovered that this exterior partner injection of money comes from illegal activities. How do we apply KYC?

Offline luckybit

Re: Bitcoin = trustless. Bitshares = trust-abundant
« Reply #7 on: October 26, 2014, 07:34:05 PM »
1. How do you solve that someone is only asking for services (has a very negative gifts balance) and never gives back? For eg. in bittorrent I can always download a movie, watch it and then delete the torrent and never share it with anyone else (leeching)
Some communities are tolerant of leeching and some aren't. Depending on the community there could be consequences for leechers who hit and run. If they have a negative balance then people aren't going to share with them. Givers tend to share with other givers and having a positive balance is how you show you're a giver to the ecosystem.

So if you've got a negative balance then less people will give you gifts in the future.

2. How can you determine the value of a gift or favor in the system? I suppose we could solve this issue by voting from the people in the system?
Bitshares X can determine that. Price or value can be measured within Bitshares X.
I would just let the system handle all of that. If you look at AGS for example it handled just fine the size of gifts it received.
3. What happens if you form a parntership with an exterior investor who injects a lot of money in the system, earns a lot of patron points so he would expect some favors and gifts in return as the system grow and then it is discovered that this exterior partner injection of money comes from illegal activities. How do we apply KYC?

If you're using a Bitshares Cooperative then you could follow all the legal regulations. You could partner with legitimate corporations or with individuals who agree to follow all the rules, file all the taxes, and do everything by the book.

If you're talking about a rich individual who gives gifts to the blockchain then there isn't an easy way for us to know at this time where the gifts came from. How would we know where all the Bitcoins came from which got donated to AGS? In a partnership you could know which might be why you could have much bigger gifts flow through that than from an AGS address but you make a good point.

I'm not familiar with the law but I would think any Bitshares Cooperative would have to follow all the rules a cooperative has to follow when forming partnerships. KYC is easy because any partner would give their identity just like any member would. AML is an area I don't know a lot about but you could set it up right and then the Bitshares Cooperative could follow those rules as well.
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Offline speedy

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Re: Bitcoin = trustless. Bitshares = trust-abundant
« Reply #8 on: October 26, 2014, 08:06:59 PM »
Great post Rune, this is BitGold:

At first I expected that delegates would be kinda like miners or mining pools; anonymous individuals who act purely out of greed in competing to extract as much money as possible out of a fixed pie taken each block out of the stakeholders wealth. But once you begin to embrace the company analogy that bitshares really is, you will realize that delegates have very little in common with miners. What they have the most in common with are ordinary employees.

It reminds us why the first ever decentralized company is destined to grow :)

 

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