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Offline Rune

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"Bribing" bitpay and other processors to accept bitassets
« on: November 27, 2014, 10:19:45 PM »

Fees used to have two functions: Prevent spam and pay delegates for their services. With BTS delegates now inflate their salary into existence to ensure they can get a competetive pay, meaning that fees only really exist for spam prevention now.

I think it could be interesting if we experimented with using our fees as a way of making our bitassets more attractive to accept and support. If big payment processors could somehow get a special master key from which they could derive other private keys with a special attribute: Payments sent to the addresses of these private keys will have their fees going to the master key instead of being burned.

This would give the big processors a very concrete value proposition that shows them why they want to support our blockchain, and why they should help us make sure our blockchain gets big, because it will be able to offer them something no one else can, even if we're currently tiny.

The price we will pay for this will be essentially nothing. If money goes to payment processors it means they're able to spend those funds on marketing their services (and thus marketing our blockchain) more aggressively, and provide better service to their customers (which are also our customers). Once we have absorbed the entire crypto market we might elect to remove these special keys again since they will no longer give us a competetive advantage over other blockchains, or we can keep them if we determine they are still profitable to have since they empower trade.

This is just a random suggestion, I would love to hear input. :)
« Last Edit: November 27, 2014, 10:23:51 PM by Rune »

Offline toast

Re: "Bribing" bitpay and other processors to accept bitassets
« Reply #1 on: November 27, 2014, 10:25:30 PM »
Disagree.

Fees have a third function:  "DAC" income, which doesn't have to be spent on delegates. This is why BTS is valuable to begin with. Without fees to make it a long-term deflationary value store there's no reason I'd prefer BTS over BTC. We can't eliminate fees, we should always be trying to increase fees collected so that they outpace delegate pay.

Second, there is absolutely no reason to get centralized institutions used to special treatment by the BTS blockchain if they can make money from working with it as is.

If you really want to subsidize bitpay, give them a delegate and make it explicit.
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Offline Rune

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Re: "Bribing" bitpay and other processors to accept bitassets
« Reply #2 on: November 27, 2014, 10:39:46 PM »
Disagree.

Fees have a third function:  "DAC" income, which doesn't have to be spent on delegates. This is why BTS is valuable to begin with. Without fees to make it a long-term deflationary value store there's no reason I'd prefer BTS over BTC. We can't eliminate fees, we should always be trying to increase fees collected so that they outpace delegate pay.

Second, there is absolutely no reason to get centralized institutions used to special treatment by the BTS blockchain if they can make money from working with it as is.

If you really want to subsidize bitpay, give them a delegate and make it explicit.

Actually offering them a delegate is not a bad idea. The insane amount of value it would bring us having bitpay as a BTS delegate and having all their merchants accept bitUSD would easily outweigh the 120000 BTS per month it would cost us. They'd be incentivized by this because the value of their delegate pay would increase greatly as BTS price went up. Once there's no competition left we can vote them out again, and everyone will come out of the deal better off. I still guess it would be pretty difficult to convince them to do this, though...

Offline matt608

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Re: "Bribing" bitpay and other processors to accept bitassets
« Reply #3 on: November 27, 2014, 10:48:07 PM »
Why limit it to just big payment processors?  Keep it deflationary by paying a 50% of the fees, not 100%.

Step 1
Generate a referral link from within the Bitshares client.   
Step 2
Earn the 50% of the fees of whoever signs up via your link.

Instant viral madness.

E.g. if bitpay signs up 1000 merchants to accept bitUSD, the merchants can keep the bitUSD in the wallet and not use bitpay to sell it back into fiat immidiately, but bitpay can make money by being paid 50% of the fees of all bitUSD sent to that merchant, because the merchant downloaded the wallet from bitpays affiliate URL.

Or just offer them a delegate, but expect them to do what in return? They're not going to change their business model for 1 delegate spot.

Offline Rune

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Re: "Bribing" bitpay and other processors to accept bitassets
« Reply #4 on: November 27, 2014, 11:03:27 PM »
Why limit it to just big payment processors?  Keep it deflationary by paying a 50% of the fees, not 100%.

Step 1
Generate a referral link from within the Bitshares client.   
Step 2
Earn the 50% of the fees of whoever signs up via your link.

Instant viral madness.

E.g. if bitpay signs up 1000 merchants to accept bitUSD, the merchants can keep the bitUSD in the wallet and not use bitpay to sell it back into fiat immidiately, but bitpay can make money by being paid 50% of the fees of all bitUSD sent to that merchant, because the merchant downloaded the wallet from bitpays affiliate URL.

Or just offer them a delegate, but expect them to do what in return? They're not going to change their business model for 1 delegate spot.

Problem with the affiliate system is that people will make wallets that abuse it and make everyone their own affiliates, with the end result simply being that fees have now been reduced by 50% across the board.

One delegate alone will not be enough, but maybe it will nudge them in the right direction. Kinda like an OEM partnership deal to kickstart business... On second thought you're probably right. If they decide to accept bitUSD a delegate won't make a difference. Then I still think some variant of the original idea is the best because I think that's something they'll be able to see the value of, and will make them consider changing their business model. Maybe special unpaid delegates get the option to make these referral addresses, and we can vote bitpay, coinbase, coinify in as payment delegates?

Offline hpenvy

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Re: "Bribing" bitpay and other processors to accept bitassets
« Reply #5 on: November 27, 2014, 11:51:49 PM »
Based on in-person conversations with payment processors, Bitpay has no interest in anything outside of Bitcoin. That could change, just not the low hanging fruit. Once Coinbase adds Litecoin, there might be opportunity. Gocoin already accepts alts, that's the lower hanging fruit in my opinion. 
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Offline xeroc

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Re: "Bribing" bitpay and other processors to accept bitassets
« Reply #6 on: November 28, 2014, 08:23:29 AM »
Why limit it to just big payment processors?  Keep it deflationary by paying a 50% of the fees, not 100%.

Step 1
Generate a referral link from within the Bitshares client.   
Step 2
Earn the 50% of the fees of whoever signs up via your link.

Instant viral madness.

E.g. if bitpay signs up 1000 merchants to accept bitUSD, the merchants can keep the bitUSD in the wallet and not use bitpay to sell it back into fiat immidiately, but bitpay can make money by being paid 50% of the fees of all bitUSD sent to that merchant, because the merchant downloaded the wallet from bitpays affiliate URL.

Or just offer them a delegate, but expect them to do what in return? They're not going to change their business model for 1 delegate spot.

Problem with the affiliate system is that people will make wallets that abuse it and make everyone their own affiliates, with the end result simply being that fees have now been reduced by 50% across the board.
IMHO there is no real abuse .. because they won't get paid for registration or anything one-time .. they will get 50% of the fees that the guy PAYS .. so if you make socket puppet accounts you will not gain anything unless you use your accounts and pay fees .. but then you will lose 50% of the fees to the DAC :)
I acctually like the idea ... not sure about the implementation though .. I think the devs will be against that idea because of very "specific code"
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Offline Rune

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Re: "Bribing" bitpay and other processors to accept bitassets
« Reply #7 on: November 28, 2014, 08:36:15 AM »
Why limit it to just big payment processors?  Keep it deflationary by paying a 50% of the fees, not 100%.

Step 1
Generate a referral link from within the Bitshares client.   
Step 2
Earn the 50% of the fees of whoever signs up via your link.

Instant viral madness.

E.g. if bitpay signs up 1000 merchants to accept bitUSD, the merchants can keep the bitUSD in the wallet and not use bitpay to sell it back into fiat immidiately, but bitpay can make money by being paid 50% of the fees of all bitUSD sent to that merchant, because the merchant downloaded the wallet from bitpays affiliate URL.

Or just offer them a delegate, but expect them to do what in return? They're not going to change their business model for 1 delegate spot.

Problem with the affiliate system is that people will make wallets that abuse it and make everyone their own affiliates, with the end result simply being that fees have now been reduced by 50% across the board.
IMHO there is no real abuse .. because they won't get paid for registration or anything one-time .. they will get 50% of the fees that the guy PAYS .. so if you make socket puppet accounts you will not gain anything unless you use your accounts and pay fees .. but then you will lose 50% of the fees to the DAC :)
I acctually like the idea ... not sure about the implementation though .. I think the devs will be against that idea because of very "specific code"

Right, but doesn't that just result in wallets that reduce all fees by half? Maybe I'm overestimating how far people are willing to go to save tiny amounts of money..

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Re: "Bribing" bitpay and other processors to accept bitassets
« Reply #8 on: November 28, 2014, 08:43:20 AM »
Right, but doesn't that just result in wallets that reduce all fees by half? Maybe I'm overestimating how far people are willing to go to save tiny amounts of money..
I wouldn't implement into the wallet .. but the blockchain .. so .. users will have to pay the fee in any way .. it's the tx fee (currently 0.1-0.5BTS).. 50% of that can be transferred to someone else .. but that has to be implemented into the blockchain so that the client accepts those transactions with 1/2 traditional fee and 1/2 referral gift ..

The drawback obvisouly IS that the DAC is less profitable .. (read: the burned about is (at most) halved) and thus the delution is higher than the burned fees for longer time ..

But I like the idea very much .. though we should restrict this for some time .. say 1yr or so ..
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