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Offline fluxer555

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Capital Infusion question
« on: October 31, 2014, 11:06:16 PM »

Let's say somebody wants to invest $10MM into BTS. Let's say that BTS stakeholders want to honor that investment. Do we currently have a system that allows for this kind of capital infusion? Or is all the 'capital infusion' that takes place 'time and skills of hired delegates'?

Would somebody buying $10MM worth of BTS be the answer? I'm thinking not, because that's just value changing hands, right? The new holder of that $10MM worth of BTS isn't being hired, and probably doesn't bring any time/skills to the table.

Is there any way we can 'sell new shares' and have that new money be given to delegate operations? All on the blockchain?

Offline biophil

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Re: Capital Infusion question
« Reply #1 on: October 31, 2014, 11:12:00 PM »
Let's say somebody wants to invest $10MM into BTS. Let's say that BTS stakeholders want to honor that investment. Do we currently have a system that allows for this kind of capital infusion? Or is all the 'capital infusion' that takes place 'time and skills of hired delegates'?

Would somebody buying $10MM worth of BTS be the answer? I'm thinking not, because that's just value changing hands, right? The new holder of that $10MM worth of BTS isn't being hired, and probably doesn't bring any time/skills to the table.

Is there any way we can 'sell new shares' and have that new money be given to delegate operations? All on the blockchain?

Interesting question... one thing is that if someone buys $10M of BTS, that would drive up the price of BTS, which would increase delegate pay. It's not the exact effect you're talking about, but it's at least qualitatively equivalent.

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Offline Ander

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Re: Capital Infusion question
« Reply #2 on: October 31, 2014, 11:25:37 PM »
1) The investor sets up a paid delegate, and gets voted in (because the shareholders approve of the plan). 

2a) Every time their turn comes around, (every 101 blocks), the investor gets 50 BTS.
2b) The investor then pays 50 BTS worth of money into 'capital infusion fund', which everyone can see and is used for whatever purpose this investment was supposed to be going towards.

3) Repeat #2 for as long as needed until 10 million $ has been given.  (At current market cap this isnt really possible.  At a billion dollar cap it would be over time).



More realistically though, for most purposes the investor would simply buy $10M worth of BTSX on the open market and drive up the BTSX price.
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Offline fluxer555

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Re: Capital Infusion question
« Reply #3 on: October 31, 2014, 11:34:00 PM »
Ander, I believe that wouldn't work, as it would be like trying to 'pull yourself up by your own bootstraps'. To show you want I mean, you can see that anybody with any amount of money could do the exact same thing. You're taking money from everyone and selling it back to everyone, without adding any value to the DAC.

EDIT: I misunderstood your post... I see. That would take a long time for sure.

I can see that driving the price up would help, but then what if demand drops off after the investor finishes investing his $10MM? The price would drop again. (Read: pump and dump)
« Last Edit: October 31, 2014, 11:37:28 PM by fluxer555 »

Offline Ander

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Re: Capital Infusion question
« Reply #4 on: October 31, 2014, 11:37:42 PM »
Ander, I believe that wouldn't work, as it would be like trying to 'pull yourself up by your own bootstraps'. To show you want I mean, you can see that anybody with any amount of money could do the exact same thing. You're taking money from everyone and selling it back to everyone, without adding any value to the DAC.

In order for them to get votes, they need to show shareholders value - people need to see the money they are spending, what they are spending it on, and they will need to see results that it is working.

If this didnt happen, the person would lose votes and wouldnt get paid shares any more. 

Shareholders are not going to continue to vote for a paid delegate that is not providing value to the DAC.
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Offline fluxer555

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Re: Capital Infusion question
« Reply #5 on: October 31, 2014, 11:47:29 PM »
So perhaps we could call these people 'Patron Delegates' who are investors with the intention of amplifying the funding of all or a set of delegates. The benefit would be that Delegates would not have to sell their shares on exchanges, driving prices down.

As a matter of fact, even without them amplifying, we could greatly benefit from individuals who are looking to invest large sums of money to buy BTS from delegates directly. Sort of like how I've heard the biggest bitcoin mining pools don't sell on exchanges, but sell full block rewards to the highest bidder in private auctions.

Offline Rune

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Re: Capital Infusion question
« Reply #6 on: November 01, 2014, 12:04:55 AM »
Interestingly, BTS doesn't actually need investors in the traditional sense. The kind of capital infusion you are referring to here will never be required by the system because delegates can be paid a salary through inflation, and because of the completely frictionless and transparent nature of the system, any positive business transaction should theoretically instantly get priced into the market cap. Thus a diluting delegate will always be "funding itself" directly by continously increasing the market cap by more than it takes as payment (on average, if it's profitable), so we should never find ourselves cash starved and in need of capital infusion in the traditional sense.

Offline luckybit

Re: Capital Infusion question
« Reply #7 on: November 01, 2014, 01:27:47 AM »
Let's say somebody wants to invest $10MM into BTS. Let's say that BTS stakeholders want to honor that investment. Do we currently have a system that allows for this kind of capital infusion? Or is all the 'capital infusion' that takes place 'time and skills of hired delegates'?

Would somebody buying $10MM worth of BTS be the answer? I'm thinking not, because that's just value changing hands, right? The new holder of that $10MM worth of BTS isn't being hired, and probably doesn't bring any time/skills to the table.

Is there any way we can 'sell new shares' and have that new money be given to delegate operations? All on the blockchain?

I think you would need a cooperative as a patron delegate or a universal Bitshares Cooperative. Large amounts of money flowing in will have to be handled differently but I think it's possible.

You need cooperatives to act as the legal entity which can accept donations, gifts, etc. Then you could use the cooperative for big donations because people moving a lot of money have to deal with taxes and other legal issues.
1) The investor sets up a paid delegate, and gets voted in (because the shareholders approve of the plan). 

2a) Every time their turn comes around, (every 101 blocks), the investor gets 50 BTS.
2b) The investor then pays 50 BTS worth of money into 'capital infusion fund', which everyone can see and is used for whatever purpose this investment was supposed to be going towards.

3) Repeat #2 for as long as needed until 10 million $ has been given.  (At current market cap this isnt really possible.  At a billion dollar cap it would be over time).



More realistically though, for most purposes the investor would simply buy $10M worth of BTSX on the open market and drive up the BTSX price.


There can be no investors according to the SEC. You donate to the cause if you believe in it or you don't.
« Last Edit: November 01, 2014, 01:31:14 AM by luckybit »
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