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Offline MarkoPaasila

Should my future service run atop bitshares instead of bitcoin?
« on: November 20, 2014, 10:54:10 AM »

Hi everybody!

I just registered in order to post this. Until now I have been mostly a passive observer, but I hope to be able to do something for the community.

It's an new kind of funding model for software projects, and will make people make use of blockchain technology without exposing them to the consept of cryptocurrencies. As a side effect it will add buying pressure to the chosen cryptocurrency. It's all explained in my draft website grati.fi/dokuwiki/doku.php?id=start.
Bitcoin has the strong network of services, but it has its drawbacks, like high fees compared to bitshares, and volatility (vs bit???).
Please give me any constructive feedback!
Here's the full description from the website without any links:

grati.fi

A funding model for free software projects

Short description

This proposed model will try to address problems and shortcomings of existing funding models for free software projects. There exists many business models that work for big enough and professional projects, but really none that help small projects, even important ones like security related software projects. The result is that many projects stagnate, the perceived quality stays poor and popularity low. Some good projects die, and lots of effort is wasted.

We are not trying to replace any of the other models, but rather complement them. We hope to make developing free software more viable and sustainable by making it as easy as possible to both donate and receive money. This will create a positive feedback loop: Easier to donate → more donations → more resources for development → better software → more users → more donations → competition between similar software projects → better software…

We are going to raise funds for creating the software, improving the model and attracting partners (roadmap). We beleive there are lots of people who can see the benefit this concept could bring to the free software community and ultimately the whole society.

How it works

Blockchain technology makes it possible to make payments automatically and very securely with no middle-man or third party who has to be trusted. There is only the donator and receiver. In addition it makes very small payments possible and viable, which in turn makes it reasonable to split the donation into quite small pieces. Here are some thoughts on choosing the right cryptocurrency.

On GNU/Linux distributions

    The gratifi -software will come bundled in any GNU/Linux distribution.
    Each piece of software can can be provided with a bitcoin-address (for example in the .conf -file), if they want to get their fair share of each donation.
    The donation can be initiated manually, regularly or by the package-manager when installing/upgrading. It will check the balance. If balance is 0, it will suggest loading some money and spend them the next time.
    When the donation is initiated, the software checks for each donation-address and shares the amount equally between the addresses. This might mean hundreds of recipents.
    Each recipent will get lots and lots of very small donations, which will gradually sum up to a meaningful amount.
    The software developers can ship different receiving addresses with different distros, for extra data.

On Windows

    A standalone application (gratifi) can be installed separately or bundled with any free software program.
    The gratifi -application will regularly (annually) check for installed free software and check the wallet balance. If balance is 0, it will suggest loading the wallet with some money.
    gratifi will ask for confirmation and then automatically send out the donation spread between each recipent.
    recipents will receive the donations the same way as from GNU/linux systems. They can provide a different address to monitor how much windows users donate.

Other

We will provide a library that contains the essential functionality, so it can be integrated into different platforms and software.

What is grati.fi not

    It is not a crowdfunding system in the typical sense. It will not help create new software like some Kickstarter or indiegogo.
    It is not a centralised payment gateway or -processor.
    A profit making machine for me
    A system for making payments to websites, either donations of micropayments. One will still have to separetely donate to Wikipedia and alternativeto.net.
    A payments system for freeware or other closed source software, even though technically possible. They have the sourcecode closed, so they can force users to pay.

Why will people adopt this system?
End users / donators

    It lowers the cognitive barrier of donating, because it doesn't require pro-activity from the user.
    Donators will like the fact that they support all and only the projects they benefit from with just one donation. This will make grati.fi their donation-system of choise.
    It will not neccessarily expose the user to bitcoin at all, but they will be able to donate their own currency.
    Smart end-users will understand that in return they will get better software

Developers

    It doesn't compete with any existing model, but actually works well in conjunction with them.
    Depending on the implementation it encourages donating, which means more revenue.
    It takes almost no effort for developers to reap the benefits of the system. It will actually require deliberate discarding to not benefit.
    Creates a new method to estimate number of users.

GNU/Linux distributions

    More, or even much more revenue.
    Probably the first payment system that fits into the typical values of free software communities, and could thus be integrated.
    Developers can track which distro generates the most revenue, and accordingly adjust development resources.

Cryptocurrency exchanges

    They see the potential for more liquidity and turnover.
    They can gain visibility.

Cryptocurrency advocates

    It brings more fiat-money into cryptocurrencies, raising and helping stabilise the price. People buying bitcoin even unwittingly.
    It is one of the many envisioned applications of bitcoin
    It will increase the usability of bitcoin. One more use-case.

Everyone

    It lowers the cost of transfering the donations. More benefit for everyone.
    It works on an inherently borderless payment network, which makes it instantly international to both donators and recipents.
    It is a collective effort of all the participating parties. Everyone benefits from everyones contributions. No-one looses.
    It is an inclusive and flexible system, open to new use-cases, exchanges, currencies, cryptocurrencies, implementations.
    Everyone can see that there is no single entity that can control the system or benefit disproportionately.

« Last Edit: November 20, 2014, 11:02:58 AM by MarkoPaasila »

Offline xeroc

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Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #1 on: November 20, 2014, 11:09:40 AM »
We already started a discussion on reddit for those interested:
http://www.reddit.com/r/BitShares/comments/2muwzh/should_i_base_my_amazing_future_service_on/

Let me just add: bitUSD would fit perfectly over here because people recognize the 'value' they donate!
Give BitShares a try! Use the http://testnet.bitshares.eu provided by http://bitshares.eu powered by ChainSquad GmbH

Offline MarkoPaasila

Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #2 on: November 20, 2014, 11:19:14 AM »
Let me just add: bitUSD would fit perfectly over here because people recognize the 'value' they donate!

Yes, absolutely! I'm just wondering wether it can/could be purchased directly with fiat on some exchange?

Offline 天籁

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Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #3 on: November 20, 2014, 12:02:06 PM »
Let me just add: bitUSD would fit perfectly over here because people recognize the 'value' they donate!

Yes, absolutely! I'm just wondering wether it can/could be purchased directly with fiat on some exchange?
https://bter.com/trade/bitusd_usd
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Offline santaclause102

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Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #4 on: November 20, 2014, 12:14:26 PM »
I really like it! Also the name is great :)

It could also be extended to "donate to your favorite charity" (wikipedia, wikileaks, others)

Question: I understood that it would be a standard software application using crypto currencies as "money" to donate to the free software projects and having the "service run atop bitshares" would mean that it has bitUSD or other bitAssets as it's "money". Is that all correct? Or would "service run atop bitshares" mean that it is directly using the blockchain as an essential part of the software?

As for the fiat thing... I know that more sophisticated and easy to use fiat on ramps are in the making.

Offline MarkoPaasila

Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #5 on: November 20, 2014, 12:43:29 PM »
I really like it! Also the name is great :)

It could also be extended to "donate to your favorite charity" (wikipedia, wikileaks, others)

Question: I understood that it would be a standard software application using crypto currencies as "money" to donate to the free software projects and having the "service run atop bitshares" would mean that it has bitUSD or other bitAssets as it's "money". Is that all correct? Or would "service run atop bitshares" mean that it is directly using the blockchain as an essential part of the software?

As for the fiat thing... I know that more sophisticated and easy to use fiat on ramps are in the making.
The name thing was a nice coincidence. I had obtained the domain earlier for another project, but I hadn't used it.

The software would "contain" or invoke a bitshares (or any coin) wallet. It would use bitUSD as a currency, but not be a DAC in any way. If that's what you asked. It only needs to check the current balance and send the transaction.

I would like to integrate donations to charities and other online services like you mentioned. Just how to obtain and verify the addresses is a question, and also how to make sure the user wants to include them all. I want to keep it as simple and convenient as possible, because I beleive that's what will lower the threshold to donating.

The fiat part will be the most inconvenient part of the whole experience, so I hope to focus on it...



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Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #6 on: November 20, 2014, 01:01:28 PM »
Just how to obtain and verify the addresses is a question, and also how to make sure the user wants to include them all.
Devs need to publish a public key for ECC secp256k1 (BTS pubkey, BTS account name, but also a bitcoin pubkey/address) will work.
Anyway, the devs of the project have to publish and sign (GPG) a key/address

Quote
The fiat part will be the most inconvenient part of the whole experience, so I hope to focus on it...
USD fiat is on the way! No need for you to focus on it!
Give BitShares a try! Use the http://testnet.bitshares.eu provided by http://bitshares.eu powered by ChainSquad GmbH

Offline MarkoPaasila

Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #7 on: November 21, 2014, 09:50:09 AM »
Does buying bitUSD directly on BTER support the price of bitshares? I don't understand the mechanism yet.

Offline santaclause102

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Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #8 on: November 21, 2014, 11:18:59 AM »
Does buying bitUSD directly on BTER support the price of bitshares? I don't understand the mechanism yet.
Buying Bitusd on Bter supports the price of BitUSD, expecially on bter but also globally to a lesser degree. The bts client's internal market is much more liquid though than the one on bter.

As for buying bitusd in general: There will be quality on ramps (I guess end of this / beginning next year) where you can buy bitusd with sufficient liquidity.
« Last Edit: November 21, 2014, 11:21:14 AM by delulo »

Offline MarkoPaasila

Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #9 on: November 21, 2014, 11:27:21 AM »
So if there were 100'000'000'000 bitUSD, it would be irrelevant to the price of bitshares?

Offline santaclause102

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Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #10 on: November 21, 2014, 12:44:19 PM »
So if there were 100'000'000'000 bitUSD, it would be irrelevant to the price of bitshares?
In order for those bitusd to exist the price of bts would have to be very high! For every bitusd created there is bts worth 2 bitusd held as collateral so bts would have a much bigger value than today.
Not sure what happens if there are not enough bitusd to buy atm and what incentive bts holder would have to short it into existence for the potential buyer. They might have an incentive which is to short (and thereby create) bitusd since that would decrease the amount of liquid bts and therefore drive up the price of bts which would make them a profit. But I would let someone else look at this and maybe confirm my thought or not...

You could ask this and other questions that are important for your app in the mumble dev hangout today (friday) at 11 am eastern (5 pm central European time). The main dev (bytemaster) is taking questions here and it's great to get an update on what's going on...  login details and dl link https://bitsharestalk.org/index.php?topic=6146.0
« Last Edit: November 21, 2014, 12:52:12 PM by delulo »

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Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #11 on: November 21, 2014, 12:50:32 PM »
Collateral requirement is 3x!!
Give BitShares a try! Use the http://testnet.bitshares.eu provided by http://bitshares.eu powered by ChainSquad GmbH

Offline MarkoPaasila

Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #12 on: November 21, 2014, 03:46:27 PM »
Collateral requirement is 3x!!
So getting people to use bitUSD would be a good thing!

There doesn't seem to be any "light client" at the moment. I did some googling. Is there any in the works? A blockchain.info -type service offering an API to the blockchain would do also. The only features needed are creating the keys, checking the balance and making a transaction.
« Last Edit: November 21, 2014, 03:48:36 PM by MarkoPaasila »

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Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #13 on: November 21, 2014, 04:40:43 PM »
Thats in the making already .. theres going to be a javascript light client IIRC
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Offline toast

Re: Should my future service run atop bitshares instead of bitcoin?
« Reply #14 on: November 21, 2014, 07:17:10 PM »
Collateral requirement is 3x!!
So getting people to use bitUSD would be a good thing!

There doesn't seem to be any "light client" at the moment. I did some googling. Is there any in the works? A blockchain.info -type service offering an API to the blockchain would do also. The only features needed are creating the keys, checking the balance and making a transaction.

It's the next highest priority for the dev team
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