BTS will dilute maximum 10% per year?

[julian1]

Not being able to tell people that Bitshares is deflationary - just like bitcoin is a big disadvantage imho.

It would be better to create a once-off 3 billion btx allocation, instead of 2.5 and create a .5 billion fund to the delegates to distribute for marketing/development.

Inflation is a bad thing and uncertainty about future unknown inflation is worse. Scarcity is what made Bitcoin valuable and it even gets enforced cryptographically.

If Bitcoin is to be considered a 'currency' and Bitshares a 'company share' (at least what it used to be until recently), then it should be fine for a 20% dilution first year and max 10% dilution following each year.  This is because most companies (in real life) have their dilution schemes and Bitshare DAC should not be considered any different.  Dilution is part and parcel of a company's life.

If we pursue the company metaphor, then directors frequently demonstrate their confidence to the market by pursuing the opposite tactic - a share buyback. Also, companies generally prefer debt financing to equity financing (issuing more shares) because it increases leverage and therefore shareholder dividends, after fixed interest liabilities and taxes are met.

Create an open-ended ability to tap the Bitshares issued base, and you will lose the support of all the libertarian, conservative, Von Mises types that were attracted to crypto-assets/currencies due to their ability to enforce scarcity via technology.

Clearly, the Bitshares ecosystem/community needs to be funded, and there's a free-rider problem which makes it difficult to allocate the costs. A one-time increase in the share issue to create the required fund is a lot more likely to keep outsider's confidence in the system.

[svk]

You guys also forget to take into account that transaction fees will be burnt and thus counteract the delegate capital infusion. So the final maximum yearly inflation will be even lower than Ander's calculation.

This is an excellent point.

Is there any data on the rate of BTS burning from transaction fees and where best to track it?

Not yet, although you can estimate it from the current supply vs the initial supply of 2 billion.

I'll start tracking and plotting supply of BTS as well as assets soon on my site.

[starspirit]

You guys also forget to take into account that transaction fees will be burnt and thus counteract the delegate capital infusion. So the final maximum yearly inflation will be even lower than Ander's calculation.

This is an excellent point.

Is there any data on the rate of BTS burning from transaction fees and where best to track it?

[liondani]

Don't forget the Interest rates that bitAsset's holders will get...

[fuzzy]

You guys also forget to take into account that transaction fees will be burnt and thus counteract the delegate capital infusion. So the final maximum yearly inflation will be even lower than Ander's calculation.

This is an excellent point. 

[gyhy]

Must not be inflation, at least at this point

[cube]

Not being able to tell people that Bitshares is deflationary - just like bitcoin is a big disadvantage imho.

It would be better to create a once-off 3 billion btx allocation, instead of 2.5 and create a .5 billion fund to the delegates to distribute for marketing/development.

Inflation is a bad thing and uncertainty about future unknown inflation is worse. Scarcity is what made Bitcoin valuable and it even gets enforced cryptographically.

If Bitcoin is to be considered a 'currency' and Bitshares a 'company share' (at least what it used to be until recently), then it should be fine for a 20% dilution first year and max 10% dilution following each year.  This is because most companies (in real life) have their dilution schemes and Bitshare DAC should not be considered any different.  Dilution is part and parcel of a company's life.

[julian1]

Not being able to tell people that Bitshares is deflationary - just like bitcoin is a big disadvantage imho.

It would be better to create a once-off 3 billion btx allocation, instead of 2.5 and create a .5 billion fund to the delegates to distribute for marketing/development.

Inflation is a bad thing and uncertainty about future unknown inflation is worse. Scarcity is what made Bitcoin valuable and it even gets enforced cryptographically.

[svk]

You guys also forget to take into account that transaction fees will be burnt and thus counteract the delegate capital infusion. So the final maximum yearly inflation will be even lower than Ander's calculation.

[teenagecheese]

If Bitshares were a currency, I would not be o.k. with this dilution. But since Bitshares is not a currency as is more like a company, I am o.k. with it.

I think people who are not o.k. with it probably still see it as a currency. Gotta make sure the distinction is made clear and obvious

[zerosum]

"Future dilution will have a hard coded limit of 10% per year and will be allocated to delegates that campaign and get approval for their pay.  This 10% limit may be raised via a hard fork with shareholder approval.     Our new "social consensus" will be that "majority shareholders rule" and everything else is subject to change.   "

Does it mean BTS will expand to 2.5billion and dilute 10% of 2.5billion per year?

Its actually more like 6.3% maximum (bytemaster changed it to 50 BTS per block max, which for a year is around 6.3%). 
50 bts per block * 6 blocks a minute * 60 minutes per hour * 24 hours a day * 365 days a year is 157,680,000 BTS that could be created in 1 year, if we elected 101 delegates at max pay.  (Which wont happen)

157,680,000 is 6.3% of 2.5 billion. 


What is a more realistic number?  Probably under 2% inflation.  Why? Because we arent going to be electing 101 paid delegates at max pay! 
We are probably going to elect way less than that for max pay.  Most delegates will probably sit at the default 3% pay which is similar to what they currently get, and therefore the actual inflation will be much lower.

For no practical value at all, other than being contrarian :)

157,680,000  of 2.0 billion is 7.884% max.
(500/2) Million / 2.0 billion is 12.5%   - SuperDAC airdrop inflation/dilution.

So the total is  20.384% max inflation in year #1....

Just saying....



[disclaimer] I am strongly pro SuperDAC, very strongly so, I just do not like the unnecessary overstatements.

[Ander]

"Future dilution will have a hard coded limit of 10% per year and will be allocated to delegates that campaign and get approval for their pay.  This 10% limit may be raised via a hard fork with shareholder approval.     Our new "social consensus" will be that "majority shareholders rule" and everything else is subject to change.   "

Does it mean BTS will expand to 2.5billion and dilute 10% of 2.5billion per year?

Its actually more like 6.3% maximum (bytemaster changed it to 50 BTS per block max, which for a year is around 6.3%). 
50 bts per block * 6 blocks a minute * 60 minutes per hour * 24 hours a day * 365 days a year is 157,680,000 BTS that could be created in 1 year, if we elected 101 delegates at max pay.  (Which wont happen)

157,680,000 is 6.3% of 2.5 billion. 


What is a more realistic number?  Probably under 2% inflation.  Why? Because we arent going to be electing 101 paid delegates at max pay! 
We are probably going to elect way less than that for max pay.  Most delegates will probably sit at the default 3% pay which is similar to what they currently get, and therefore the actual inflation will be much lower.

[donkeypong]

Delegates don't vote for it, shareholders vote for delegates taking into consideration the pay rate they request, and the pay is taken from shareholders by dilution if they approve the delegate.

A more accurate explanation than my shorthand. Thank you.

[zerosum]

We will have the same dilution level as bitcoin at max but it will be directed into direct and continual improvement of BTS.   8)

Am I going blind or did Rune stole you account password?

Or just the pom-poms you found on the street and decided using them, so they do not go wasted?

[gamey]

We will have the same dilution level as bitcoin at max but it will be directed into direct and continual improvement of BTS.   8)

[Troglodactyl]

No.  That's not true.  BTS will sharedrop on the 5th, expanding the supply to 2.5 billion, not 25 billion.  After this point, dilution will occur only as approved by shareholder vote, and that's capped at a maximum rate that can be changed only by hard fork.

Your title is a little off. Maximum 10%, only if delegates vote for it, and that would be for the purposes of allowing in someone who markedly increases the market cap. So it's a maximum of 10% annual "dilution", but you could just as easily call it "growth". How much do you want this to grow?

Delegates don't vote for it, shareholders vote for delegates taking into consideration the pay rate they request, and the pay is taken from shareholders by dilution if they approve the delegate.

[jojomaster]

Your title is a little off. Maximum 10%, only if delegates vote for it, and that would be for the purposes of allowing in someone who markedly increases the market cap. So it's a maximum of 10% annual "dilution", but you could just as easily call it "growth". How much do you want this to grow?

;) get it

[donkeypong]

Your title is a little off. Maximum 10%, only if delegates vote for it, and that would be for the purposes of allowing in someone who markedly increases the market cap. So it's a maximum of 10% annual "dilution", but you could just as easily call it "growth". How much do you want this to grow?

[speedy]

Im not too worried about this because Im fairly certain BTS will grow at > 10% per year.

[jojomaster]

"Future dilution will have a hard coded limit of 10% per year and will be allocated to delegates that campaign and get approval for their pay.  This 10% limit may be raised via a hard fork with shareholder approval.     Our new "social consensus" will be that "majority shareholders rule" and everything else is subject to change.   "

Does it mean BTS will expand to 2.5billion and dilute 10% of 2.5billion per year?