Author Topic: What is the Profit model of BTSx ?  (Read 5223 times)

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Offline BTSdac

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I think a company is profitable , no matter how many shares this company have.
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Offline alphaBar

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Here is what the argument really boils down to:

Will the negative perception/stigma and bad PR that we've created by implementing dilution be outweighed by the investment capital that is generated through dilution? Well, we can make certain assumptions. The first assumption I will make is that the technological competitive advantage (let's call that TCA) doesn't matter past the point of saturation. What I mean is that there is a point of diminishing returns on technological improvement. Once you have 10 second blocks, decentralized exchange, bitAssets, and DPOS/TaPOS then the next dozen features bring you far less return on your investment when competing against an asset like Bitcoin or Litecoin, that is inferior in literally every possible way with respect to technology. Nobody is sitting on the sidelines thinking, "man I will totally buy Bitshares once they prove to me that their technology is superior to Litecoin...

As a result, my second assumption will be that marketing is where the majority of our resources should be spent. But to what objective? I agree with Coinhoarder that the lowest hanging fruit in terms of user growth and reputation are crypto-currency hobbyists. And what does this demographic want? No dilution, fair distribution, transparency of funding and community assets, and lastly, no dilution. So we've come full circle. The best way to spend our funds is to create a reputation as a fair, transparent, non-inflationary coin with all of the TCA we've already built.

We've proposed two fundamental changes: a merger of competing DACs and dilution. I'll let you guess which is killing the share price right now...

Offline kisa

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Agree multiple income streams would help to support BTS value, which is needed to issue a substantial amount of bitAssets. This is the advantage of the merged DAC compare to stand alone BTSX. And,  if the velocity of bitUSD circulation gets very high, then tx fees might get to become reasonable income stream. I doubt though tx fees alone could support BTS valuation on any of traditional Price/Earnings measures if 2x or 3x collateral requirement stays...

What arhag is saying is that as long as BTS provides bitAssets with strong utility at saturation, it doesn't need to be profitable... my question then - why would an investor then hold any BTS close to.saturation, if it is not growing in value and doesn't  provide any income? With BTC thats easier because one holds BTC as money. With BTS you need 3xholders compared with money base. Why would someone put 3xBTS for bitAssets issuance at saturation?
« Last Edit: November 03, 2014, 08:49:27 am by kisa »

Offline starspirit

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Thanks for the reply arhag. To be clear, in my analysis I'm questioning whether bitAssets as a sole source of income supports a long term profit model for BTS. I'm not debating that network growth wouldn't see us able to hire great developers and do lots of great things outside that - indeed I'm saying that I think this expansion is critical to the profit model. I think the heavy focus on bitAsset growth is misplaced because its not a high enough source of revenue. Its power will come from facilitating the use of a wide variety of other services, and its those other services that will generate most of the value for BTS. (And incidentally, I'm a holder because I think this will happen). Of course my analysis could be wrong on various assumptions (such as how much users are willing to pay in fees), happy to have those challenged as always.

Even if the theory that BitAsset growth doesn't necessarily directly stimulate BTS growth is correct, I think you do agree that at the limit of all BTS being stuck as collateral, the market cap of BTS has to at least be the market cap of all BitAssets, right? If that was not true the BitAssets would be undercollateralized. More likely it will at least be 3x the marketcap because of the 300% collateral ratio requirements. So if we had $1 billion of BitUSD, we would expect at least a $3 billion market cap of BTS (most likely a lot more because of the speculation of future value). That is already 100x higher than our current market cap. The transaction fees are insignificant compared to that growth.

Yes I do agree that in this hypothetical, BTS would have to be worth at least $3bn to support this level of bitAssets. That's in fact why I chose this hypothetical, to illustrate that even in this most grand of scenarios, the percentage income generated for BTS holders from bitAsset transaction fees on their own is probably very small. So if that were the best case income scenario there ever were to look forward to (say 1% or less), its clear that either sensible people don't bid the BTS price up to such lofty levels, or irrational people do so regardless and create a bubble. I suppose there is only one case where I can think that people would use accept tokens with next to no income, and that is if BTS were so widely used for transactional purposes that it derived value as a currency. The hard bit is building a bridge to that point, as BTC is finding.

But I think even if there wasn't any dividends (DAC revenue balances DAC costs perfectly), people wouldn't just take the BTS out of the reserves and dump them. I think it would still be in demand by traders who would use them to speculate on the rise and fall of BitAssets with respect to one another and try to make profits from that speculation (however I think the collateral ratio would need to drop to provide them with higher leverage, which I think would be acceptable risk since I expect that BTS would be far less volatile at that point).

People don't need to hold BTS to speculate on bitAssets, they can just buy and sell them against each other or USD. So speculation doesn't give rise to BTS demand. Actually its my current view that the valuation that the market is willing to give BTS will act as a ceiling on the amount of collateral available to support such trading activity amongst bitAssets.



Offline arhag

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Imagine BitAssets were orders of magnitude larger in market cap, maybe billions of dollars. Now how much could BTS earn in transaction fees from this?

Even if the theory that BitAsset growth doesn't necessarily directly stimulate BTS growth is correct, I think you do agree that at the limit of all BTS being stuck as collateral, the market cap of BTS has to at least be the market cap of all BitAssets, right? If that was not true the BitAssets would be undercollateralized. More likely it will at least be 3x the marketcap because of the 300% collateral ratio requirements. So if we had $1 billion of BitUSD, we would expect at least a $3 billion market cap of BTS (most likely a lot more because of the speculation of future value). That is already 100x higher than our current market cap. The transaction fees are insignificant compared to that growth.

The transaction fees could be just enough to support operating the 101 delegate servers to keep the system going. People would still want to get in on the investment that grew two orders of magnitude in a short period of time and could potentially grow another few orders of magnitude if more BitUSD was expected to be held in the system. At max 5% dilution rate (say after 4 years) and at that market cap, that means the DAC could support paying each delegate up to $1,500,000 a year and still grow in market cap as long as there was more than 5% of the market cap worth of wealth moving in per year on average (and it would be way higher than 5% growth if BTS became successful enough to reach a $3 billion market cap). You seem to be too hung up on the transaction fees. They only matter in the saturation stage which is many years away. They are completely insignificant in the growth stage. The proof of this is BTC, it inflates 10% per year for completely unproductive purposes and yet it has had an order of magnitude growth roughly every year.

Now your analysis with transaction fees is more interesting in the saturation stage when there isn't much growth left. Certainly other DAC services could increase the future dividends on the BTS. But I think even if there wasn't any dividends (DAC revenue balances DAC costs perfectly), people wouldn't just take the BTS out of the reserves and dump them. I think it would still be in demand by traders who would use them to speculate on the rise and fall of BitAssets with respect to one another and try to make profits from that speculation (however I think the collateral ratio would need to drop to provide them with higher leverage, which I think would be acceptable risk since I expect that BTS would be far less volatile at that point).

Oh and by the way, I see BitAsset yields completely disappearing in the saturation stage. I even suspect that certain BitAssets that track an underlying that historically has had consistent large yearly gains to become impossible for the system to support. I think these things can only last in the growth stage because BTS holders are essentially sharing the profits from growth with BitAsset holders to incentivize them to adopt the system. But that is okay, because BitAssets other than price stable currencies become far less important in the saturation stage (in fact I would argue they aren't that important right now).


« Last Edit: November 03, 2014, 03:50:36 am by arhag »

Offline starspirit

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I wonder whether the business model of BTS absolutely depends on more than just BitAssets. Again, its just a view I'm currently forming that I am open to changing if others show it is inaccurate.

In essence, BitAssets seem very capital intensive for BTS holders to support, and therefore on their own will generate very low return to BTS holders.

Imagine BitAssets were orders of magnitude larger in market cap, maybe billions of dollars. Now how much could BTS earn in transaction fees from this? I think that comes down to how much transaction fee leakage users are willing to bear for using bitAssets. What could that be? I am currently thinking no more than a few percent per annum loss in transaction fees, but that's simply a guess. And remember that in an ideal world, we should be seeking to lower the transaction fees for users to reduce unnecessary frictions and improve their experience as much as possible.

Now you need to take that (say 3%x BitAsset market cap) and spread it over a BTS capital base that is at least 3x as large, due to the minimum requirements of the collateral pool. That leaves BTS holders with 1% or less annual income on the value of their BTS holdings. If that's the only revenue source, nobody would want to hold BTS for that maximum income level in my view, and that would lower the value of BTS, force it out of the collateral pool, and in turn collapse the market caps of the bitAssets. Therefore it is essential to develop these other BTS services that people are willing to pay BTS holders a higher return for.

If this is right (?), we should be treating bitAssets as the oil in the economic engine to drive users into a range of value-add services that are less capital intensive. So this model depends on a network effect, but critically must expand to the development of higher value services.

It is lazy thinking to believe that bitAsset growth alone will drive up the valuation of BTS. I believe that there is no market dynamic that supports this ...see thread I started here https://bitsharestalk.org/index.php?topic=10690.0, and transaction fee income is not supportive to drive it either. Its possible greater fools in any market could keep bidding up for a long time, but unless a higher valuation is then justified by new and valuable services, it won't last.

Therefore we need to be thinking about what really will drive the long term capital value of BTS.

Edit: Something that may help BTS holders to earn more from bitAssets offering is to charge a percentage of the bitAsset yield. Users may be more likely to accept this because they see it as a reduction in profit rather than a cost.
« Last Edit: November 03, 2014, 02:53:08 am by starspirit »

Offline arhag

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I'm not saying necessarily saying Bitshares dilution is bad (other than the negative stigma involved with it) or that it won't work as intended (as I have no way of knowing if it will or won't). I am simply trying to convey that dilution for marketing and developing isn't necessary to the success of a cryptocurrency, corporation, or community... however you want to define the C in DAC. Bitcoin and other large alternative cryptocurrencies have proven this (Litecoin, Doge, etcera).

It may not be necessary for the technology to succeed. Maybe. Maybe the technology is good enough that eventually people will come to their senses and adopt it. And slowly through donations of money and developer time the improvements to the technology would be completed at some point. But the success of BTS is not at all guaranteed without dilution. I would in fact say it is way more likely it will fail than succeed without dilution.

What is the difference? DPOS + BitAssets can be adopted by the Bitcoin community while BTS is still small. That is an example of the technology succeeding and BTS failing. The only way to combat that is network effect. We need to grow in network effect and market cap faster than it takes the Bitcoin community to realize the gold mine open source technology that exists for the taking. So if you at all have a stake in BTS (meaning you have a stake in BTSX, AGS, PTS, VOTE, DNS), you likely care about not just the technology succeeding but also BTS succeeding.

Now what if you don't care about the money aspect at all and just want the technology to succeed? Well fine but then there are two arguments. First, if you don't care about the money you shouldn't care about BTS being diluted since its value is irrelevant to you anyway. Second, if you have ideological objections to dilution (even though BTS is not a currency) then what about the argument that without funding via dilution the pace of innovation will be MUCH slower because it will be funded purely on altruism?


The issue with dilution is that the outcome of that dilution is not certain, as it will not be seen until some point in the future. There is no guarantee share price will grow >6% to outpace the dilution. Dilution causes the need for incoming cash flow just to maintain today's value... just like Bitcoin. This argument against Bitcoin is one of the biggest reasons why I got involved in Bitshares in the first place. How many start ups have diluted their initial shareholders to raise capital for development and marketing? And how many of those start ups have failed? ... To answer my own questions, in both cases a large percentage of them.

Everything is uncertain. That's just life. It is uncertain whether BTS will take over the world or completely fail. The question is do we want to let the fate of this project (meaning the dilution payment decisions) rest in hard coded decisions that we cannot change (although technically we always can with 51 delegate approval and/or 51% stake approval), or do we want human beings called BTS stakeholders making these strategic decisions, whose incentives are aligned to try to maximize BTS growth? Artificial intelligence is just not good enough. You cannot rely on code to make these complicated strategic business decisions. Humans have to do it. Relying on only code to make these decisions will result in poor investment and likely the failure of this project.


Bitcoin has come so far in a matter of a few years in terms of its value, it has gone from pennies to hundreds of dollars. Bitcoin dilution is paid directly to miners for simply securing the network, and not to developers to develop or marketers to market. Developers are paid by community paid bounties and investing in Bitcoin itself. Both of which provide incentive for developers to develop, do a good job, and work hard to increase Bitcoin's value by increasing the quality of the Bitcoin product. The network effect takes care of the rest by exponentially increasing Bitcoin's value and producing supporters/shareholders which take care of the marketing (along with the media which market at no cost to Bitcoin itself.)

Bitcoin has had tremendous success because it was the first of its kind and had the first-mover advantage. It succeeded so far DESPITE its flawed models (POW, no dilution to pay development/marketing/legal, volatile assets attempting to be used as a currency). For us as an underdog to hope to compete we need to do MUCH MUCH BETTER than Bitcoin. The only way we can afford to do this is if we can pay developers and marketing. Relying on altruism will not cut it.
 

IMO we are alienating ourselves even further than we have already (PoS, DAC, Bitassets, etcera) from the cryptocurrency community by implementing dilution as a way to pay for marketing and development. This cryptocurrency community is what I deem as being the "low hanging fruit" in terms of potential markets and adoption. I know BTS wants to focus on markets outside of the cryptocurrency community, but will we be able to get where we want to go without establishing a large network effect from the most obvious potential market (the cryptocurrency community)? That remains to be seen. I believe only one cryptocurrency has been successful at doing so thus far and that is Dogecoin, and that is a very different proposition/strategy than Bitshares is taking.

We should try to educate the cryptocurrency community as much as we possibly can on this new way of thinking about things (DPOS, currencies should have price stability, company metaphor, dilution for capital infusion, etc.). However, I think most of the cryptocurrency is so stuck in the bubble that they will not be convinced by argument. The only way to convince them will be sustained meteoric rises in market cap. So, I think we should stop focusing so much on the cryptocurrency community and more on the general public who has the vast majority of the wealth out there ready to be invested. This is a harder task. We need our tools to be very secure and user friendly. We need multisig and lightweight clients on browsers and mobile platforms. We need beautiful UIs. We need easy to use on- and off- ramps. And we need a really good marketing campaign. But the returns on these investments can be so worth it considering how many orders of magnitude more wealth there is to be tapped in the general public vs the relatively tiny cryptocurrency community.
« Last Edit: November 02, 2014, 10:35:44 pm by arhag »

Offline Stan

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Every new business or feature added to the chain

...adds more revenue streams
...generates more transaction fees
...drives up demand for BitAssets
...enables more types of BitAssets
...increases market depth and liquidity
...yields another stream of news releases
...brings in new users
...creates a parallel economy
...raises our profile in the world
...motivates third parties
...attracts still more developers and businesses
...increases development and marketing purchasing power
...grows network effect

...rinse and repeat in a growing virtuous cycle.
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Offline Shentist

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many things are said so far - you could say - some expectations are placed with posts from I3 (bytemaster, Stan, etc.). If they come (successful marketingpush, growing demand on bitUSD etc.), new features who will drive people to use bitshares - the dilution will be well spend.

BUT

if this was all hot air, this was really a waste of time and a great opportunity for us all will be gone. In my eyes the merger increases the pressure for bytemaster and Co. because now it is only one arrow we have without any other left who could hit the target. So no much room to miss opportunitys, making big mistakes etc.

I would prefer to stop the talking and bring some planned roadmap on the table.

Instead of posting confusion we need something we could all discuss.

- what are our goals?

(BTSX was a bank, but what is BTS?? - the answer is missing. In my eyes we are competing now with everyone Bitcoin, Ethereum, NXT, Counterparty, Dogecoin. You name it and we are competing. So we have to watch them all closly and need to take the best ideas from everyone and implement them in BTS)

- what do we need to go there?

(how many developers, which features, how many marketing guys)

- what can the community active do to help, to reach our goals?

our community is not guided and instructed well, we need to improve this situation. More then 5700 people registered here, more then 30.000 accounts are created. we need better ways to focus us all and create more buzz in the future.

Offline CoinHoarder

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The profit model is apparently that there will be no "profits."

Once dilution is implemented, I venture to say BTS will never be "profitable" on its original goals of creating a profitable company out of a cryptocurrency by not diluting its shareholders and burning fees. No amount of marketing and development will ever be enough, shareholders will always want more no matter the value of the BTS tokens.

Now the model closely resembles how any other cryptocurrency would be "profitable" by its tokens' value rising. Whether this is a good thing or not is yet to be seen, but if I see someone say "they just don't see the big picture" one more time I'm going to flip shit. Apparently there are people that can tell the future, and the debate is not a debate at all as it is an objective matter and not a subjective one.  ::)

Just out of curiosity, I pose this question:

If 3% dilution is used to fund growth this year while the share price grows by 100%, what would your recommended investment rate be for the following year?

I suppose that was a rhetorical question.

I'm not saying necessarily saying Bitshares dilution is bad (other than the negative stigma involved with it) or that it won't work as intended (as I have no way of knowing if it will or won't). I am simply trying to convey that dilution for marketing and developing isn't necessary to the success of a cryptocurrency, corporation, or community... however you want to define the C in DAC. Bitcoin and other large alternative cryptocurrencies have proven this (Litecoin, Doge, etcera).

The issue with dilution is that the outcome of that dilution is not certain, as it will not be seen until some point in the future. There is no guarantee share price will grow >6% to outpace the dilution. Dilution causes the need for incoming cash flow just to maintain today's value... just like Bitcoin. This argument against Bitcoin is one of the biggest reasons why I got involved in Bitshares in the first place. How many start ups have diluted their initial shareholders to raise capital for development and marketing? And how many of those start ups have failed? ... To answer my own questions, in both cases a large percentage of them.

Bitcoin has come so far in a matter of a few years in terms of its value, it has gone from pennies to hundreds of dollars. Bitcoin dilution is paid directly to miners for simply securing the network, and not to developers to develop or marketers to market. Developers are paid by community paid bounties and investing in Bitcoin itself. Both of which provide incentive for developers to develop, do a good job, and work hard to increase Bitcoin's value by increasing the quality of the Bitcoin product. The network effect takes care of the rest by exponentially increasing Bitcoin's value and producing supporters/shareholders which take care of the marketing (along with the media which market at no cost to Bitcoin itself.)

IMO we are alienating ourselves even further than we have already (PoS, DAC, Bitassets, etcera) from the cryptocurrency community by implementing dilution as a way to pay for marketing and development. This cryptocurrency community is what I deem as being the "low hanging fruit" in terms of potential markets and adoption. I know BTS wants to focus on markets outside of the cryptocurrency community, but will we be able to get where we want to go without establishing a large network effect from the most obvious potential market (the cryptocurrency community)? That remains to be seen. I believe only one cryptocurrency has been successful at doing so thus far and that is Dogecoin, and that is a very different proposition/strategy than Bitshares is taking.

I think the dilution plan for marketing and development could very well work... at least it sounds like it will... but it probably is not necessary for the long term success of Bitshares DACs, nor is it a surefire recipe for success.
« Last Edit: November 02, 2014, 09:55:01 pm by CoinHoarder »
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Offline Empirical1.1

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The profit model is apparently that there will be no "profits."

Once dilution is implemented, I venture to say BTS will never be "profitable" on its original goals of creating a profitable company out of a cryptocurrency by not diluting its shareholders and burning fees. No amount of marketing and development will ever be enough, shareholders will always want more no matter the value of the BTS tokens.

Now the model closely resembles how any other cryptocurrency would be "profitable" by its tokens' value rising. Whether this is a good thing or not is yet to be seen, but if I see someone say "they just don't see the big picture" one more time I'm going to flip shit. Apparently there are people that can tell the future, and the debate is not a debate at all as it is an objective matter and not a subjective one.  ::)

Just out of curiosity, I pose this question:

If 3% dilution is used to fund growth this year while the share price grows by 100%, what would your recommended investment rate be for the following year?

Just out of curiosity, I pose this question:

If dilution is proposed to fund growth this year & the share price drops by 50% partly in response to that, despite being on an uptrend, despite benefitting from a value adding merger, despite market knowledge of a big marketing push in the pipeline, what should the actual dilution rate be?

Or alternatively

If 3% dilution is used to fund growth this year while the share price grows by 100%, whereas the share price of your main competitor grows by 10 000% which is a BitAsset hard cap, what would your recommended investment rate be for the following year?

:) (I think BitShares as it stands needs dilution, I'd like to see it locked in, though it's seeming unlikely, and I'll also invest in a competitor with shares for development set aside, which will give it the same % access to funding as BTS for the first few years anyway.)

The answer to all of these is clear:  In a race for preeminent network effect, get there first and stay there - whatever it takes.  Anything that will plausibly generate more value than the shares it costs is positive net thrust. 

The challenge, of course, is whether the shareholders as a collective, or even a company's best experts, have the ability to correctly assess whether a particular investment meets that characteristic.

But when the choice under discussion is whether to decline to spend 3% to fund development and marketing targeting several orders of magnitude (10 x 10 x 10...) growth, we have a proposition that falls pretty clearly in to the category of "penny wise and pound foolish"  :)

I think a lot could have been funded with 5% of shares set aside, but I can't not be invested in BitAssets & in some of the talent here, so I certainly hope to be proven wrong and eat some of my words. I'll probably be able to evaluate the plan for network effect once I see it, at the moment we're obviously in the dark.
« Last Edit: November 02, 2014, 08:25:05 pm by Empirical1.1 »

Offline Stan

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The profit model is apparently that there will be no "profits."

Once dilution is implemented, I venture to say BTS will never be "profitable" on its original goals of creating a profitable company out of a cryptocurrency by not diluting its shareholders and burning fees. No amount of marketing and development will ever be enough, shareholders will always want more no matter the value of the BTS tokens.

Now the model closely resembles how any other cryptocurrency would be "profitable" by its tokens' value rising. Whether this is a good thing or not is yet to be seen, but if I see someone say "they just don't see the big picture" one more time I'm going to flip shit. Apparently there are people that can tell the future, and the debate is not a debate at all as it is an objective matter and not a subjective one.  ::)

Just out of curiosity, I pose this question:

If 3% dilution is used to fund growth this year while the share price grows by 100%, what would your recommended investment rate be for the following year?

Just out of curiosity, I pose this question:

If dilution is proposed to fund growth this year & the share price drops by 50% partly in response to that, despite being on an uptrend, despite benefitting from a value adding merger, despite market knowledge of a big marketing push in the pipeline, what should the actual dilution rate be?

Or alternatively

If 3% dilution is used to fund growth this year while the share price grows by 100%, whereas the share price of your main competitor grows by 10 000% which is a BitAsset hard cap, what would your recommended investment rate be for the following year?

:) (I think BitShares as it stands needs dilution, I'd like to see it locked in, though it's seeming unlikely, and I'll also invest in a competitor with shares for development set aside, which will give it the same % access to funding as BTS for the first few years anyway.)

The answer to all of these is clear:  In a race for preeminent network effect, get there first and stay there - whatever it takes.  Anything that will plausibly generate more value than the shares it costs is positive net thrust. 

The challenge, of course, is whether the shareholders as a collective, or even a company's best experts, have the ability to correctly assess whether a particular investment meets that characteristic.

But when the choice under discussion is whether to decline to spend 3% to fund development and marketing targeting several orders of magnitude (10 x 10 x 10...) growth, we have a proposition that falls pretty clearly in to the category of "penny wise and pound foolish"  :)


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.

Offline Empirical1.1

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The profit model is apparently that there will be no "profits."

Once dilution is implemented, I venture to say BTS will never be "profitable" on its original goals of creating a profitable company out of a cryptocurrency by not diluting its shareholders and burning fees. No amount of marketing and development will ever be enough, shareholders will always want more no matter the value of the BTS tokens.

Now the model closely resembles how any other cryptocurrency would be "profitable" by its tokens' value rising. Whether this is a good thing or not is yet to be seen, but if I see someone say "they just don't see the big picture" one more time I'm going to flip shit. Apparently there are people that can tell the future, and the debate is not a debate at all as it is an objective matter and not a subjective one.  ::)

Just out of curiosity, I pose this question:

If 3% dilution is used to fund growth this year while the share price grows by 100%, what would your recommended investment rate be for the following year?

Just out of curiosity, I pose this question:

If dilution is proposed to fund growth this year & the share price drops by 50% partly in response to that, despite being on an uptrend, despite benefitting from a value adding merger, despite market knowledge of a big marketing push in the pipeline, what should the actual dilution rate be?

Or alternatively

If 3% dilution is used to fund growth this year while the share price grows by 100%, whereas the share price of your main competitor grows by 10 000% which is a BitAsset hard cap, what would your recommended investment rate be for the following year?

:) (I think BitShares as it stands needs dilution, I'd like to see it locked in, though it's seeming unlikely, and I'll also invest in a competitor with shares for development set aside, which will give it the same % access to funding as BTS for the first few years anyway.)

Offline Ander

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If BTSX grows to 100x is current size, then the amount of dilution needed in order to sustain development/marketing will be negligible - probably well under 1%.  There will also be a lot more shares being burned due to use (transaction fees, trading fees, etc).

At that point, burn rate will probably well exceed dilution.


The dilution is to get us to that point as fast as possible, so that we gain the network effect first, while competitors do not yet exist or are too small. 
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Offline toast

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The profit model is the same. At some point the amount of BTSX you can collect and burn from trade and transaction fees exceeds what you need to print to operate the DAC.
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