Economics on BTS 101 : Market cap is not our wealth to spend easily

[matt608]

OK Found it. (By searching for it. Not good...)

Added it. Voting for it from now on...with all of my uncollateralized stake!

Many thanks

[zerosum]

OK Found it. (By searching for it. Not good...)

Added it. Voting for it from now on...with all of my uncollateralized stake!

[matt608]

Hey Tonyk, you once said this:

Actually I am on quite the opposite opinion on this...
Let's hire 10x more people that we have now. It will be like 60 delegates @ 100% .
Let's not evaluate them after 3 mo., let's do it in 4.5 mo...


It costs us 6.5%*0.6*4.5/12 or about  1.4625% inflation....

Do you stand by your statement?  Will you vote for me?  My campaign is live and every vote and endorsement counts.

Thanks

-matt608

I stand by the statement, now even more than when posted.
I will also vote for both you and the  mobile wallet devs separately ( I really see no need to try for just one delegate combined).
And for the actual voting - I do not see your delegate in the GUI. Is it below #200 or what is the problem? Is it on my end?

I should be in there, a search function was added recently, I should show up in that.  I can't check I'm in there myself right now (different machine) but will be able to look later today.

[zerosum]

Hey Tonyk, you once said this:

Actually I am on quite the opposite opinion on this...
Let's hire 10x more people that we have now. It will be like 60 delegates @ 100% .
Let's not evaluate them after 3 mo., let's do it in 4.5 mo...


It costs us 6.5%*0.6*4.5/12 or about  1.4625% inflation....

Do you stand by your statement?  Will you vote for me?  My campaign is live and every vote and endorsement counts.

Thanks

-matt608

I stand by the statement, now even more than when posted.
I will also vote for both you and the  mobile wallet devs separately ( I really see no need to try for just one delegate combined).
And for the actual voting - I do not see your delegate in the GUI. Is it below #200 or what is the problem? Is it on my end?

[matt608]

Hey Tonyk, you once said this:

Actually I am on quite the opposite opinion on this...
Let's hire 10x more people that we have now. It will be like 60 delegates @ 100% .
Let's not evaluate them after 3 mo., let's do it in 4.5 mo...


It costs us 6.5%*0.6*4.5/12 or about  1.4625% inflation....

Do you stand by your statement?  Will you vote for me?  My campaign is live and every vote and endorsement counts.

Thanks

-matt608

[zerosum]

But if this hypothesis is true, I think it is important to reiterate it. I mean, bytemaster appears to be making that (IMO flawed) claim here:

In fact because of the collateral requirement every BitUSD sold and not returned is the moral equivalent of burning $3 USD worth of BTS.

This belief would make us think it is more valuable to bring in wealth into BitAssets rather than BTS. It might make us think it is worth having the yield on BitAssets as high as it possibly can be to attract people to hold BitAssets (rather than BTS). But if there is no advantage, then they can just hold BTS instead (with enough price stable BitUSD or other BitCurrencies for short-term needs). That means putting reasonable caps on BitAsset yields (say 5% p.a.) isn't a problem. You would still allow shorts to bid up the interest rates they pay as high as the market can bear, it's just that not all of that value would go to BitAsset yields. The rest could instead get distributed to BTS holders (or alternatively to delegate pay). Since there would likely be diminishing returns on the BitAsset yields (in fact after a certain yield rate it would have a negative effect since people would become incredibly suspicious), the rational strategy would be to take all profits from short interest (after paying the maximum BitAsset yield cap) and use it more effectively by paying for development and marketing.

I think we going into the territory of what is more valuable - to have high sales of the product (bitUSD) or to have high market Cap because people want to invest in our promising stock...And I tend to think that selling the product is the main goal after all. If we do not sell our product/service we will end with a company stock worth 0 sooner or later.


On a side note people think Bitshares is complicated...and they do not even consider the stuff we are talking about here...
I mean BTS is the currency when one shorts a bitAsset, but it is also the shares on the BTS company in the wider picture.

[arhag]

I do not see where we disagree. What I am saying is the end result of all that you described.
In short the demand for new bitAssets or new BTS will result in an increase of the BTS price.

The difference is that I am claiming that someone purchasing 1 BitUSD using USD does not ultimately cause the price of BTS to go up to account for a market cap increase by $3 (assuming everyone else's exposure to USD and BTS remains the same and their future expectations of BTS remain the same), but it does cause the price of BTS to go up enough to account for a market cap increase by $1. The reason is because the $2 worth of value that the BTS bull "locks up" in the short position has already been accounted for in the price of BTS since the bull had already purchased those $2 worth of BTS earlier and had no plans to sell it even if his short wasn't matched.

My statement was not meant to be a formula regarding the expected increase. It was just e statement that the price should increase ...eventually... with unspecified amount. Sorry if this was not clear.

Oh okay. I guess I misunderstood.

But if this hypothesis is true, I think it is important to reiterate it. I mean, bytemaster appears to be making that (IMO flawed) claim here:

In fact because of the collateral requirement every BitUSD sold and not returned is the moral equivalent of burning $3 USD worth of BTS.

This belief would make us think it is more valuable to bring in wealth into BitAssets rather than BTS. It might make us think it is worth having the yield on BitAssets as high as it possibly can be to attract people to hold BitAssets (rather than BTS). But if there is no advantage, then they can just hold BTS instead (with enough price stable BitUSD or other BitCurrencies for short-term needs). That means putting reasonable caps on BitAsset yields (say 5% p.a.) isn't a problem. You would still allow shorts to bid up the interest rates they pay as high as the market can bear, it's just that not all of that value would go to BitAsset yields. The rest could instead get distributed to BTS holders (or alternatively to delegate pay). Since there would likely be diminishing returns on the BitAsset yields (in fact after a certain yield rate it would have a negative effect since people would become incredibly suspicious), the rational strategy would be to take all profits from short interest (after paying the maximum BitAsset yield cap) and use it more effectively by paying for development and marketing.

[zerosum]

I do not see where we disagree. What I am saying is the end result of all that you described.
In short the demand for new bitAssets or new BTS will result in an increase of the BTS price.

The difference is that I am claiming that someone purchasing 1 BitUSD using USD does not ultimately cause the price of BTS to go up to account for a market cap increase by $3 (assuming everyone else's exposure to USD and BTS remains the same and their future expectations of BTS remain the same), but it does cause the price of BTS to go up enough to account for a market cap increase by $1. The reason is because the $2 worth of value that the BTS bull "locks up" in the short position has already been accounted for in the price of BTS since the bull had already purchased those $2 worth of BTS earlier and had no plans to sell it even if his short wasn't matched.

My statement was not meant to be a formula regarding the expected increase. It was just e statement that the price should increase ...eventually... with unspecified amount. Sorry if this was not clear.

On the other issue - I do not believe the 2x or 3x or Nx collateral have anything to do with the expected increase. The risk/reward is the same from the short exposure perspective as a total...in other words they will short substantially the same amount X of BTS total, at any given price and interest...up to the max allowed by the system...and if they should put 2x collateral (instead of 1x) they will just short twice less bitAssets.*

As well as offer about twice less interest, btw!

[arhag]

I do not see where we disagree. What I am saying is the end result of all that you described.
In short the demand for new bitAssets or new BTS will result in an increase of the BTS price.

The difference is that I am claiming that someone purchasing 1 BitUSD using USD does not ultimately cause the price of BTS to go up to account for a market cap increase by $3 (assuming everyone else's exposure to USD and BTS remains the same and their future expectations of BTS remain the same), but it does cause the price of BTS to go up enough to account for a market cap increase by $1. The reason is because the $2 worth of value that the BTS bull "locks up" in the short position has already been accounted for in the price of BTS since the bull had already purchased those $2 worth of BTS earlier and had no plans to sell it even if his short wasn't matched.

[zerosum]

Every $1 of bitAssets created are the  equivalent of buying $3 worth of shares of the company called BTS by itself. While this is not really a profit profit, but the effect on the market cap should be the same as stock-buyback for that amount.

Not really though, because you are assuming someone uses fiat to purchase $3X worth of BTS to short the BitAsset into existence (or rather the short seller purchases $2X worth of BTS with fiat to provide the margin for the short and the BitAsset holder purchases $X worth of BTS with fiat to trade for the BitAsset they want).

The BitAsset holder could trade $X of USD for $X of BTS to later trade the BTS on the decentralized exchange for $X of BitUSD shorted into existence at the price feed (or just go from fiat to BitUSD directly and let arbitrage take care of the rest), and this would result in $X worth of buy pressure on the price of BTS (not $3X) assuming there was latent short demand at the price feed. In this case the BitUSD buyers are not really changing their exposure to the US dollar, just converting it into a cryptocurrency version of it.

On the other side of the coin, the above assumption implies that the short seller needs to purchase $2X worth of BTS using fiat to short sell, but this would increase their exposure to BTS. They wouldn't do this unless their position on BTS changed (they become more bullish). Assuming the market participants views on BTS has not changed, the only reason I can see for why new shorts would be created is because of the short sellers who had been waiting to short at the price feed but had not been able to since there was not enough BitAsset buy demand at the price feed. These bulls were already holding BTS and not selling it, so whether they keep it in their wallet, in cold storage, in an open order, or locked as collateral in a short position, it shouldn't have an effect on the price of BTS.

My conclusion from this analysis (and the one in a little more detail here) is that for the price of BTS to go up (assuming the market participants' views haven't changed), there needs to be increasing outside demand for BitAssets purchased with fiat AND latent short demand limited by the price feed. Obviously, increasing buy pressure for BTS purchased with fiat in outside exchange as well as increasing buy pressure for BTS purchased with existing BitAssets in the decentralized exchange would also cause an increase in the price of BTS (the former directly, and the latter indirectly via arbitrage), but both of those cases require some market participants' views to change for them to want increased exposure to BTS. Furthermore, after taking arbitrage into account, it doesn't matter whether BitAssets or BTS are purchased with fiat in the outside exchange; $X worth of buy pressure for BTS or BitAssets in outside exchanges leads to $X worth of upward price pressure on BTS (not $2X or $3X, and it doesn't really depend on the collateral ratio requirement).

I do not see where we disagree. What I am saying is the end result of all that you described.
In short the demand for new bitAssets or new BTS will result in an increase of the BTS price.


PS
Yes, there is a possibility for somebody to be long and short at the same time and such amounts should be 'ideally' not included in the calculation... How to figure out such amounts ? I have no clue on a practical solution.

[zerosum]

Every $1 of bitAssets created are the  equivalent of buying $3 worth of shares of the company called BTS by itself. While this is not really a profit profit, but the effect on the market cap should be the same as stock-buyback for that amount.


As in (Increase in bitAssets * 3 - New issued BTS) is the delta of the available shares. And the earnings are the transaction fees that go to the BTS holder (or are destroyed for their benefit).

Stock buybacks do not increase market cap (there are fewer shares on issue) but they can lead to some increase in price if the market views the higher EPS per share (as earnings are now spread over a lower share base) as outweighing the increased risk of higher operational leverage (debt) in the business. The increase in price, if any, is subjectively determined by the market, and not linked formulaically to the number of shares bought back.

I argue that they effectively do. While the market cap per se might be the same, in reality every individual BTS in collateral is still tradable at the new higher price.



Likewise, if BTS in the collateral pool does not earn any transaction fee income (?), and this increases the share of income to each BTS outside the pool, this would be a benefit to un-collateralised BTS (but also an additional cost for shorts). However, the more shares that are in the pool, the less total transaction fee income that can be generated all else equal. I expect this would lead to no net benefit to BTS price.

I know you've argued before that with fewer shares outside the pool, scarcity would lead to a rise in price (and presumably transaction fees). Though I could not say this definitely won't happen, I don't think shares behave like commodities at all, because they are all substitutable, and market participants can switch between different security alternatives on a risk/return spectrum as one security becomes inappropriately priced relative to another. (e.g. Facebook has around 10% free float). I'll elaborate on this later also.

[arhag]

Every $1 of bitAssets created are the  equivalent of buying $3 worth of shares of the company called BTS by itself. While this is not really a profit profit, but the effect on the market cap should be the same as stock-buyback for that amount.

Not really though, because you are assuming someone uses fiat to purchase $3X worth of BTS to short the BitAsset into existence (or rather the short seller purchases $2X worth of BTS with fiat to provide the margin for the short and the BitAsset holder purchases $X worth of BTS with fiat to trade for the BitAsset they want).

The BitAsset holder could trade $X of USD for $X of BTS to later trade the BTS on the decentralized exchange for $X of BitUSD shorted into existence at the price feed (or just go from fiat to BitUSD directly and let arbitrage take care of the rest), and this would result in $X worth of buy pressure on the price of BTS (not $3X) assuming there was latent short demand at the price feed. In this case the BitUSD buyers are not really changing their exposure to the US dollar, just converting it into a cryptocurrency version of it.

On the other side of the coin, the above assumption implies that the short seller needs to purchase $2X worth of BTS using fiat to short sell, but this would increase their exposure to BTS. They wouldn't do this unless their position on BTS changed (they become more bullish). Assuming the market participants views on BTS has not changed, the only reason I can see for why new shorts would be created is because of the short sellers who had been waiting to short at the price feed but had not been able to since there was not enough BitAsset buy demand at the price feed. These bulls were already holding BTS and not selling it, so whether they keep it in their wallet, in cold storage, in an open order, or locked as collateral in a short position, it shouldn't have an effect on the price of BTS.

My conclusion from this analysis (and the one in a little more detail here) is that for the price of BTS to go up (assuming the market participants' views haven't changed), there needs to be increasing outside demand for BitAssets purchased with fiat AND latent short demand limited by the price feed. Obviously, increasing buy pressure for BTS purchased with fiat in outside exchange as well as increasing buy pressure for BTS purchased with existing BitAssets in the decentralized exchange would also cause an increase in the price of BTS (the former directly, and the latter indirectly via arbitrage), but both of those cases require some market participants' views to change for them to want increased exposure to BTS. Furthermore, after taking arbitrage into account, it doesn't matter whether BitAssets or BTS are purchased with fiat in the outside exchange; $X worth of buy pressure for BTS or BitAssets in outside exchanges leads to $X worth of upward price pressure on BTS (not $2X or $3X, and it doesn't really depend on the collateral ratio requirement).

[starspirit]

Every $1 of bitAssets created are the  equivalent of buying $3 worth of shares of the company called BTS by itself. While this is not really a profit profit, but the effect on the market cap should be the same as stock-buyback for that amount.


As in (Increase in bitAssets * 3 - New issued BTS) is the delta of the available shares. And the earnings are the transaction fees that go to the BTS holder (or are destroyed for their benefit).

Stock buybacks do not increase market cap (there are fewer shares on issue) but they can lead to some increase in price if the market views the higher EPS per share (as earnings are now spread over a lower share base) as outweighing the increased risk of higher operational leverage (debt) in the business. The increase in price, if any, is subjectively determined by the market, and not linked formulaically to the number of shares bought back.

Likewise, if BTS in the collateral pool does not earn any transaction fee income (?), and this increases the share of income to each BTS outside the pool, this would be a benefit to un-collateralised BTS (but also an additional cost for shorts). However, the more shares that are in the pool, the less total transaction fee income that can be generated all else equal. I expect this would lead to no net benefit to BTS price.

I know you've argued before that with fewer shares outside the pool, scarcity would lead to a rise in price (and presumably transaction fees). Though I could not say this definitely won't happen, I don't think shares behave like commodities at all, because they are all substitutable, and market participants can switch between different security alternatives on a risk/return spectrum as one security becomes inappropriately priced relative to another. (e.g. Facebook has around 10% free float). I'll elaborate on this later also.

[zerosum]

Every $1 of bitAssets created are the  equivalent of buying $3 worth of shares of the company called BTS by itself. While this is not really a profit profit, but the effect on the market cap should be the same as stock-buyback for that amount.


As in (Increase in bitAssets * 3 - New issued BTS) is the delta of the available shares. And the earnings are the transaction fees that go to the BTS holder (or are destroyed for their benefit).

[bytemaster]

Shares price only increase if earnings per share increase.

If I create a company with 0 earnings then book value is the share price.    If the share price is heavily based upon earnings per share then you are right that dilution will decrease the earnings per share.   This assumes that cash was kept on the books and did nothing to increase earnings (or earning potential).

In the case of BTS we have near 0 earnings and thus the book value is about all that matters.   We also spend most of the cash raised immediately on things that increase network effect and our technology base.   This in turn increases the "market value" of our "network effect and software".

It is safe to say that increasing usability will increase transaction volume by factors that exceed the percent dilution so earnings per share should also increase.

[starspirit]

How do we define revenue?  I have defined it in the past as transaction fees paid; however, that is a narrow view.    What is our product?  It is more than just transactions, it is BitAssets.   Every BitUSD sold and not returned (covered) is pure profit as far as shareholders are concerned.  In fact because of the collateral requirement every BitUSD sold and not returned is the moral equivalent of burning $3 USD worth of BTS.   If all of our product is returned and BitAssets go to 0 then we have massive losses, but if people hold and trade our product then that is pure profit.    So based upon these numbers we have $3M in "profit" on a $50M market cap or a PE ratio of 6 and that is just counting USD.     

So I think it would be reasonable to measure the profit/loss of BitShares based upon the outstanding value of all BitAssets. 

While technically a BitAsset is a loan and in theory gets paid off resulting in neither profit nor loss; it is merely a matter of perspective when you have a rotating and growing line of credit that is well collateralized.   

I hereby propose we account for BitAsset creation as "sales" and destruction as "returns" and therefore we have earned $3M in revenue in the last Quarter by this metric.

I think it is good to have new perspectives, and I agree that income can go beyond just receipts. I think what you are proposing though is like a broker or bank calling their segregated client cash accounts profit or capital of the business, when in fact it cannot be employed or distributed by the business without a major breach of trust. The BTS are not available for the block-chain to burn, because they belong to the bitAsset holders (as part of their backing) and the shorts (as their stored collateral).

[BldSwtTrs]

You are wrong.  If a company sells shares to raise capital the MarketCap would grow proportional to the increase of cash reserves on the balance sheet and the share price would stay flat (in a perfectly efficient market). 

I am afraid you are wrong on this one.
If a company sells shares to raise capital the book value would grow proportional to the increase of cash reserves on the balance sheet and the share price would decline (in a perfectly efficient market), and the market cap would remain the same.

Share price only increase if earnings per share increase. If they are more shares for the same earnings, share price drops.

[donkeypong]

Side note: I would like to ask, why Bytemaster, Stan, and Toast have 100% delegates? If I3 has a huge chunk of BTS, shouldn't this be divvied out as payment until it is exhausted and then start dilution for payment? I am not talking about the BTC, I am talking about the BTS acquired through the PTS donations. If you began to pay this out to those who want to be the "100%" delegates it would also help decentralize faster.  I know the 100 or 300 million you guys have looks nice for a bonus when price rises to $1.00 per, and it helps you vote the people you want in but if you are planning on just holding those forever, I think it's not such a good idea for the concept of decentralization. I am pretty sure you have not divvied these shares since you still pull a 7-9% weight in voting people in and out.

Your numbers are wrong:  I have 95M BTS of which 30M BTS is already earmarked for certain marketing milestones and thus cannot be touched until those milestones are not met by the deadline.   That leaves us with ~65M which ~30M will be paid to the core developers as end of year one time bonus and the remaining 35M will be retained to cover misc expenses such as accounting, lawyers, office space, and taxes.       

Starting next year the "Core Developers" will be taking the pay of a SINGLE delegate position which is about 20% of what they are worth.   You don't want us to hold out giving them their bonus because that would centralize trust and result in a large additional tax liability which wouldn't be good for anyone. 

We started wit a total of ~120M from the PTS Angel address.  ~25M has been divided between Chinese and US marketing teams for operation budget and incentives. 

The one thing a lot of you are confusing is that the crypto markets are in some way as efficient as Wall St. They are not and this is why the Market Cap is inflated with the dilution of new shares. If this market was as liquid and efficient as any stock traded on the NYSE, AMEX or NASDAQ, the share price would never go up and most likely continue to drop because shares are continually being created out of thin air in the form of dilution and market cap would stay the same. If you have ever seen a stock dilute shareholders, the market cap doesn't all of a sudden rise because you are adding more, it usually will stay the same and price per share will drop so the new share count equals the previous market cap.

You are wrong.  If a company sells shares to raise capital the MarketCap would grow proportional to the increase of cash reserves on the balance sheet and the share price would stay flat (in a perfectly efficient market). 

If the company burns the capital and produces nothing of value then the MarketCap will fall back to where it was to start with but the price per share will be down.
If the company uses the capital to produce something of greater value then the MarketCap will rise even more and the price per share will go up.

Conclusion:  Dilution that produces more value than the value of the diluted shares increases the Price Per Share. 

Challenge: Determine whether or not more value is being produced than the value of the diluted shares.   This is what the market is estimating/pricing.

BM, I'm confident that you're 110% honest, humble, and dedicated to BitShares' ultimate success.

Though I would give a BitUSD penny to know those target prices and deadline dates. 

[bytemaster]

Side note: I would like to ask, why Bytemaster, Stan, and Toast have 100% delegates? If I3 has a huge chunk of BTS, shouldn't this be divvied out as payment until it is exhausted and then start dilution for payment? I am not talking about the BTC, I am talking about the BTS acquired through the PTS donations. If you began to pay this out to those who want to be the "100%" delegates it would also help decentralize faster.  I know the 100 or 300 million you guys have looks nice for a bonus when price rises to $1.00 per, and it helps you vote the people you want in but if you are planning on just holding those forever, I think it's not such a good idea for the concept of decentralization. I am pretty sure you have not divvied these shares since you still pull a 7-9% weight in voting people in and out.

Your numbers are wrong:  I have 95M BTS of which 30M BTS is already earmarked for certain marketing milestones and thus cannot be touched until those milestones are not met by the deadline.   That leaves us with ~65M which ~30M will be paid to the core developers as end of year one time bonus and the remaining 35M will be retained to cover misc expenses such as accounting, lawyers, office space, and taxes.       

Starting next year the "Core Developers" will be taking the pay of a SINGLE delegate position which is about 20% of what they are worth.   You don't want us to hold out giving them their bonus because that would centralize trust and result in a large additional tax liability which wouldn't be good for anyone. 

We started wit a total of ~120M from the PTS Angel address.  ~25M has been divided between Chinese and US marketing teams for operation budget and incentives. 

The one thing a lot of you are confusing is that the crypto markets are in some way as efficient as Wall St. They are not and this is why the Market Cap is inflated with the dilution of new shares. If this market was as liquid and efficient as any stock traded on the NYSE, AMEX or NASDAQ, the share price would never go up and most likely continue to drop because shares are continually being created out of thin air in the form of dilution and market cap would stay the same. If you have ever seen a stock dilute shareholders, the market cap doesn't all of a sudden rise because you are adding more, it usually will stay the same and price per share will drop so the new share count equals the previous market cap.

You are wrong.  If a company sells shares to raise capital the MarketCap would grow proportional to the increase of cash reserves on the balance sheet and the share price would stay flat (in a perfectly efficient market). 

If the company burns the capital and produces nothing of value then the MarketCap will fall back to where it was to start with but the price per share will be down.
If the company uses the capital to produce something of greater value then the MarketCap will rise even more and the price per share will go up.

Conclusion:  Dilution that produces more value than the value of the diluted shares increases the Price Per Share. 

Challenge: Determine whether or not more value is being produced than the value of the diluted shares.   This is what the market is estimating/pricing.

[Shentist]

Market Cap or not - this is not a bitshares only problem, but a problem with every asset in the world.

only purpose of the bitshares ecosystem with bitAssets will give everyone to sell in big junks BTS, but this is the reason we are all here?

why would i want to sell now? i don't see a reason and the daily trading volume is high enough - compared to other top 10 crypto coins/shares.

[NewMine]

The one thing a lot of you are confusing is that the crypto markets are in some way as efficient as Wall St. They are not and this is why the Market Cap is inflated with the dilution of new shares. If this market was as liquid and efficient as any stock traded on the NYSE, AMEX or NASDAQ, the share price would never go up and most likely continue to drop because shares are continually being created out of thin air in the form of dilution and market cap would stay the same. If you have ever seen a stock dilute shareholders, the market cap doesn't all of a sudden rise because you are adding more, it usually will stay the same and price per share will drop so the new share count equals the previous market cap.

Side note: I would like to ask, why Bytemaster, Stan, and Toast have 100% delegates? If I3 has a huge chunk of BTS, shouldn't this be divvied out as payment until it is exhausted and then start dilution for payment? I am not talking about the BTC, I am talking about the BTS acquired through the PTS donations. If you began to pay this out to those who want to be the "100%" delegates it would also help decentralize faster.  I know the 100 or 300 million you guys have looks nice for a bonus when price rises to $1.00 per, and it helps you vote the people you want in but if you are planning on just holding those forever, I think it's not such a good idea for the concept of decentralization. I am pretty sure you have not divvied these shares since you still pull a 7-9% weight in voting people in and out.

[arhag]

Every BitUSD sold and not returned (covered) is pure profit as far as shareholders are concerned. 

Yes. Unlike starspirit, I agree with this statement.

In fact because of the collateral requirement every BitUSD sold and not returned is the moral equivalent of burning $3 USD worth of BTS.

No. Like starspirit, I disagree with this argument based on collateral requirements that says buying and holding BitAssets leads to 3x growth in BTS compared to buying and holding an equivalent value of BTS. The 2x margin provided by the BTS bull who went short on BitUSD already was effectively locked up (as in not selling for fiat) because the bull liked their exposure to BTS and wouldn't want to reduce it. Whether people hodl it as a BTS long or lock it as part of the collateral in a BitUSD short position (which they can exit whenever they want), that choice shouldn't have an effect on the price of BTS. So, my opinion is that the collateral ratio requirements are irrelevant to how outside demand for BitAssets affects the growth in the price of BTS other than changing the leverage for shorts and thus their propensity to short. If anything increasing the collateral ratio requirements could hinder growth because the lower leverage may lead to less shorts and thus less BitAssets lent into existence at the price feed (which according to my analysis produces the asymmetry in which outside demand for BitAssets purchased with fiat leads to an increase in the price of BTS after arbitrage).

[bytemaster]

All value is perceived value.  Our spending limit is the average daily buy volume not market cap.   More specifically the amount of money flowing in. 

A rising market cap indicates an inflow of capital and thus the creation of value. 

Increasing revenues 4x should result in more than 4x gain in cap. 

Speculators average in all market data including revenue and adoption

Market cap does not represent the cash value of the system.   If we were to assume 100% shareholder approval to auction off a 90% dilution over 3 months you better believe we would raise more than 10 million at this stage.

So , you're saying if a start up company can access to big funding , they will always do well on the market and earn big money ?
Because I saw a lot of these examples , not many of them do well in the end . They burnt though the VC money , and , the end .

It's dangerous to think you can always get what you want by spending what you feel right .
That's also the reason why credit cards don't allow you to spend the credit on investment even if you feel like it's a solid one .

As long as the expected future value continues to grow you can tap new capital.  The market prices the future into the present.    So if todays workers cause the expected future value to grow by more than the expected future value of their pay then I think we can say it was profitable.   Fortunately the market prices that into changes in the PRESENT VALUE of the shares.

How do we define revenue?  I have defined it in the past as transaction fees paid; however, that is a narrow view.    What is our product?  It is more than just transactions, it is BitAssets.   Every BitUSD sold and not returned (covered) is pure profit as far as shareholders are concerned.  In fact because of the collateral requirement every BitUSD sold and not returned is the moral equivalent of burning $3 USD worth of BTS.   If all of our product is returned and BitAssets go to 0 then we have massive losses, but if people hold and trade our product then that is pure profit.    So based upon these numbers we have $3M in "profit" on a $50M market cap or a PE ratio of 6 and that is just counting USD.     

So I think it would be reasonable to measure the profit/loss of BitShares based upon the outstanding value of all BitAssets. 

While technically a BitAsset is a loan and in theory gets paid off resulting in neither profit nor loss; it is merely a matter of perspective when you have a rotating and growing line of credit that is well collateralized.   

I hereby propose we account for BitAsset creation as "sales" and destruction as "returns" and therefore we have earned $3M in revenue in the last Quarter by this metric.   

[btswildpig]

All value is perceived value.  Our spending limit is the average daily buy volume not market cap.   More specifically the amount of money flowing in. 

A rising market cap indicates an inflow of capital and thus the creation of value. 

Increasing revenues 4x should result in more than 4x gain in cap. 

Speculators average in all market data including revenue and adoption

Market cap does not represent the cash value of the system.   If we were to assume 100% shareholder approval to auction off a 90% dilution over 3 months you better believe we would raise more than 10 million at this stage.

So , you're saying if a start up company can access to big funding , they will always do well on the market and earn big money ?
Because I saw a lot of these examples , not many of them do well in the end . They burnt though the VC money , and , the end .

It's dangerous to think you can always get what you want by spending what you feel right .
That's also the reason why credit cards don't allow you to spend the credit on investment even if you feel like it's a solid one .

[xeroc]

If we were to assume 100% shareholder approval to auction off a 90% dilution over 3 months you better believe we would raise more than 10 million at this stage.

Bytemaster said "if". 
This is a hypothetical, pedagogical example for illustrative, educational edification only!
   

However, that example comes with the requirement that shareholders approve and this requires a set of published goals and methods.
This would certainly fail with a closed behind-the-doors approach .. wouldn't it?

[bytemaster]

All value is perceived value.  Our spending limit is the average daily buy volume not market cap.   More specifically the amount of money flowing in. 

A rising market cap indicates an inflow of capital and thus the creation of value. 

Increasing revenues 4x should result in more than 4x gain in cap. 

Speculators average in all market data including revenue and adoption

Market cap does not represent the cash value of the system.   If we were to assume 100% shareholder approval to auction off a 90% dilution over 3 months you better believe we would raise more than 10 million at this stage. 

[cass]

svk

 

[Ben Mason]

  svk

[btswildpig]

I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.

I do not know how to explain this but it is 'that the minimalistic (conservative) view is not the way to go.'
I am pretty  sure that if we vote 70 possibly good choices, we will have 5 delegates that produce 100x the value... and this will way outweigh the 10 bad actors, that we will vote out in 3 mo. or less.

70 full paid delegates ? It's a wishful thinking , esp. if the price go up like stan expected by 4X .
Then you'll have 3000USD*4*70=0.84 million USD in salary a month .

You think if the price goes up 4X , the revenue in the system will go up 4X ?  Nope , the salary will still be taking out of the the market cap by the factor of 20X . Unless those 70 full paid delegates can raise the revenue by 4X their salary , 4 months later , we'll still having this conversation .

25-30 full paid delegates is what stan expected if the inflation rate maintain at 1-2% a year .

btswildpig can I check my understanding....if we have many fully paid delegates but demand fails to grow straight away, then we may have too much BTS coming onto the market due to salary collection.  Therefore we should balance the need for value creating delegates that are paid against the growth potential / demand for BTS that would pay for them and also think hard about the mix of delegate type (marketing vs coding etc.)  Delegates can't collect value that isn't there.

So we need a strategy that can be suggested to the community to help guide our voting practices or we could end up taking out too much value from the network before the delegates actions have had a chance to increase the value of the network. 

Delegates could commit to holding their BTS (is this proovable?) which would limit the role to those that didn't need the income.....

I for one have no intention of "cashing out" the BTS I'm earning. While I will be making regular withdrawals in order to limit the effects of someone somehow hacking my delegate server and gaining access to the funds, I will not cash out for fiat. I will use those funds for bounties and paying for services relative to my projects, and am also considering converting parts of it to a bitasset, USD/GOLD/EUR.

But I'd like to reiterate that I will not be taking value out of the system in any way nor adding selling pressure relative to fiat.

[svk]

I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.

I do not know how to explain this but it is 'that the minimalistic (conservative) view is not the way to go.'
I am pretty  sure that if we vote 70 possibly good choices, we will have 5 delegates that produce 100x the value... and this will way outweigh the 10 bad actors, that we will vote out in 3 mo. or less.

70 full paid delegates ? It's a wishful thinking , esp. if the price go up like stan expected by 4X .
Then you'll have 3000USD*4*70=0.84 million USD in salary a month .

You think if the price goes up 4X , the revenue in the system will go up 4X ?  Nope , the salary will still be taking out of the the market cap by the factor of 20X . Unless those 70 full paid delegates can raise the revenue by 4X their salary , 4 months later , we'll still having this conversation .

25-30 full paid delegates is what stan expected if the inflation rate maintain at 1-2% a year .

btswildpig can I check my understanding....if we have many fully paid delegates but demand fails to grow straight away, then we may have too much BTS coming onto the market due to salary collection.  Therefore we should balance the need for value creating delegates that are paid against the growth potential / demand for BTS that would pay for them and also think hard about the mix of delegate type (marketing vs coding etc.)  Delegates can't collect value that isn't there.

So we need a strategy that can be suggested to the community to help guide our voting practices or we could end up taking out too much value from the network before the delegates actions have had a chance to increase the value of the network. 

Delegates could commit to holding their BTS (is this proovable?) which would limit the role to those that didn't need the income.....

I for one have no intention of "cashing out" the BTS I'm earning. While I will be making regular withdrawals in order to limit the effects of someone somehow hacking my delegate server and gaining access to the funds, I will not cash out for fiat. I will use those funds for bounties and paying for services relative to my projects, and am also considering converting parts of it to a bitasset, USD/GOLD/EUR.

But I'd like to reiterate that I will not be taking value out of the system in any way nor adding selling pressure relative to fiat.

[Ben Mason]

I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.

I do not know how to explain this but it is 'that the minimalistic (conservative) view is not the way to go.'
I am pretty  sure that if we vote 70 possibly good choices, we will have 5 delegates that produce 100x the value... and this will way outweigh the 10 bad actors, that we will vote out in 3 mo. or less.

70 full paid delegates ? It's a wishful thinking , esp. if the price go up like stan expected by 4X .
Then you'll have 3000USD*4*70=0.84 million USD in salary a month .

You think if the price goes up 4X , the revenue in the system will go up 4X ?  Nope , the salary will still be taking out of the the market cap by the factor of 20X . Unless those 70 full paid delegates can raise the revenue by 4X their salary , 4 months later , we'll still having this conversation .

25-30 full paid delegates is what stan expected if the inflation rate maintain at 1-2% a year .

btswildpig can I check my understanding....if we have many fully paid delegates but demand fails to grow straight away, then we may have too much BTS coming onto the market due to salary collection.  Therefore we should balance the need for value creating delegates that are paid against the growth potential / demand for BTS that would pay for them and also think hard about the mix of delegate type (marketing vs coding etc.)  Delegates can't collect value that isn't there.

So we need a strategy that can be suggested to the community to help guide our voting practices or we could end up taking out too much value from the network before the delegates actions have had a chance to increase the value of the network. 

Delegates could commit to holding their BTS (is this proovable?) which would limit the role to those that didn't need the income.....

[davidpbrown]

Good points from OP. Some clones seem to run on the idea that you can create X Billion coins, sell one to yourself for a dollar and become a billionaire overnight. Selling a large fraction of coins to the market can have real effect; I think Mastercoin perhaps suffered that mistake. The same goes for any currency; the whole is only valid while there is consensus that each part has utility and value. People like to look to best case but better to plan for worst case and enjoy the positives. Until there is utility for mainstream, it's a waiting game.

Perhaps one useful metric relative to market cap is the total coins in markets? Again, it's only a rough indicator and worse in small markets.

[btswildpig]

I think there should be 4 : if I agree with the value proposition the delegate proposes , do I need him right here , right now ?

We actually have limited funding space though inflation , how to spend it wisely (not just on the right people , but the right project ) is a important matter . Of course we can take baby steps by falling over and over again and learn from it . But why should we do that when we can think harder and harder ten steps ahead . If it turns out after ten times of hard thinking and we still makes the same mistake , then at least we can tell the world :  That failure is out of our hand , because we did though it through .

I agree 100%. 

For the question 'do I need him right now', I say preparation time is needed right now for the certain propositions to come into fruition in time for maximum cost-efficieny.  The market cap argument goes both ways.  It's easier to lower it when its small, but its also easier for marketing to increase it.  $1000 well spent while the market cap is tiny has much more impact than $1000 well spent when the market cap is larger.

A final factor I would actually add, is:
What is the cost of voting against?  (not voting)

Yes . That's the right factor for me to voted for BM and Toast in the first place . Because I don't see any possible scenario the project can success without this two for a long time .

[matt608]

I think there should be 4 : if I agree with the value proposition the delegate proposes , do I need him right here , right now ?

We actually have limited funding space though inflation , how to spend it wisely (not just on the right people , but the right project ) is a important matter . Of course we can take baby steps by falling over and over again and learn from it . But why should we do that when we can think harder and harder ten steps ahead . If it turns out after ten times of hard thinking and we still makes the same mistake , then at least we can tell the world :  That failure is out of our hand , because we did though it through .

I agree 100%. 

For the question 'do I need him right now', I say preparation time is needed right now for the certain propositions to come into fruition in time for maximum cost-efficieny.  The market cap argument goes both ways.  It's easier to lower it when its small, but its also easier for marketing to increase it.  $1000 well spent while the market cap is tiny has much more impact than $1000 well spent when the market cap is larger.

A final factor I would actually add, is:
What is the cost of voting against?  (not voting)

[btswildpig]

Right now I'm in favor of voting in anyone with any demonstrable coding or marketing skills.

Then whether they should stay in depends on if we see any results from them.


When the market cap goes up and the pay is worth more, and we have more people trying for spots, then its time to make it more competitive.

Well , if you want competition , I can easily put up several hundred teams to aim for it . (3000USD alone is like the top income in third world countries , you can hire many capable people with that price , even rocket scientists ) . Be careful what you wish for , because that may happen over night ......

$3000 a month doesn't pay for the rocket the rocket scientist is working on, that would just be his salary.  Paying for a rocket scientist with all their equipment would cost more like 100 x that.

I certainly encourage scepticism as the starting point in all analysis, I'm glad we have critical thinkers like you on board.

For delegates entrusted with spending responsibilities I will base my votes on the following 3 factors:

1.  Do I agree with the value proposition the delegate proposes? (is their spending plan cost-effective)
2.  Is he capable of getting it done?
3.  Do I trust the delegate to honstly spend on what he says?

If the answer is yes to all three, he/she gets my vote.

I think there should be 4 : if I agree with the value proposition the delegate proposes , do I need him right here , right now ?

The reason I'm bring this 4th question up is I suddenly though of KeyHotee . The project that wasted a lot of money on it then did not get result . Of course the failure was due to development difficulty . But even if KeyHotee was done , would that cost pay off with it's original task ?

We actually have limited funding space though inflation , how to spend it wisely (not just on the right people , but the right project ) is a important matter . Of course we can take baby steps by falling over and over again and learn from it . But why should we do that when we can think harder and harder ten steps ahead . If it turns out after ten times of hard thinking and we still makes the same mistake , then at least we can tell the world :  That failure is out of our hand , because we did though it through .

[matt608]

Right now I'm in favor of voting in anyone with any demonstrable coding or marketing skills.

Then whether they should stay in depends on if we see any results from them.


When the market cap goes up and the pay is worth more, and we have more people trying for spots, then its time to make it more competitive.

Well , if you want competition , I can easily put up several hundred teams to aim for it . (3000USD alone is like the top income in third world countries , you can hire many capable people with that price , even rocket scientists ) . Be careful what you wish for , because that may happen over night ......

$3000 a month doesn't pay for the rocket the rocket scientist is working on, that would just be his salary.  Paying for a rocket scientist with all their equipment would cost more like 100 x that.

I certainly encourage scepticism as the starting point in all analysis, I'm glad we have critical thinkers like you on board.

For delegates entrusted with spending responsibilities I will base my votes on the following 3 factors:

1.  Do I agree with the value proposition the delegate proposes? (is their spending plan cost-effective)
2.  Is he capable of getting it done?
3.  Do I trust the delegate to honstly spend on what he says?

If the answer is yes to all three, he/she gets my vote. 

[gamey]

70 full paid delegates ? It's a wishful thinking , esp. if the price go up like stan expected by 4X .
Then you'll have 3000USD*4*70=0.84 million USD in salary a month .

You think if the price goes up 4X , the revenue in the system will go up 4X ?  Nope , the salary will still be taking out of the the market cap by the factor of 20X . Unless those 70 full paid delegates can raise the revenue by 4X their salary , 4 months later , we'll still having this conversation .

25-30 full paid delegates is what stan expected if the inflation rate maintain at 1-2% a year .

There is a whole different issue about expectation of pay going forward.  This is why I've been for transparent burning that is integrated into all this stuff.  That way a delegate can say "I cap my pay at X BitUSD or X CNY" and then burn the excess.  This really shouldn't be an issue. 

[btswildpig]

I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.

I do not know how to explain this but it is 'that the minimalistic (conservative) view is not the way to go.'
I am pretty  sure that if we vote 70 possibly good choices, we will have 5 delegates that produce 100x the value... and this will way outweigh the 10 bad actors, that we will vote out in 3 mo. or less.

70 full paid delegates ? It's a wishful thinking , esp. if the price go up like stan expected by 4X .
Then you'll have 3000USD*4*70=0.84 million USD in salary a month .

You think if the price goes up 4X , the revenue in the system will go up 4X ?  Nope , the salary will still be taking out of the the market cap by the factor of 20X . Unless those 70 full paid delegates can raise the revenue by 4X their salary , 4 months later , we'll still having this conversation .

25-30 full paid delegates is what stan expected if the inflation rate maintain at 1-2% a year .

[Ander]

I do not know how to explain this but it is 'that the minimalistic (conservative) view is not the way to go.'
I am pretty  sure that if we vote 70 possibly good choices, we will have 5 delegates that produce 100x the value... and this will way outweigh the 10 bad actors, that we will vote out in 3 mo. or less.

And we can also vote out the ones that dont do much.

[zerosum]

I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.

I do not know how to explain this but it is 'that the minimalistic (conservative) view is not the way to go.'
I am pretty  sure that if we vote 70 possibly good choices, we will have 5 delegates that produce 100x the value... and this will way outweigh the 10 bad actors, that we will vote out in 3 mo. or less.

[btswildpig]

I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.

What I'm talking about is not a specific person .
Because mark my words , you'll have hundreds of people to vote for in a short term .

By then , you'll know why preparing the community for education in economical thinking are necessary . It's the basic steps for active voting .

Because if people don't know what their votes can do and what kind of affect the votes will have for the eco-system , they would not want to vote actively .

[gamey]

I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.

[btswildpig]

Right now I'm in favor of voting in anyone with any demonstrable coding or marketing skills.

Then whether they should stay in depends on if we see any results from them.


When the market cap goes up and the pay is worth more, and we have more people trying for spots, then its time to make it more competitive.

Well , if you want competition , I can easily put up several hundred teams to aim for it . (3000USD alone is like the top income in third world countries , you can hire many capable people with that price , even rocket scientists ) . Be careful what you wish for , because that may happen over night ......

But what income will the system to pay to these capable people ?  Because if capable people can only bring in price rise in market cap by speculative money instead of revenue income , then the cash would burn out eventually , just like those start up companies which burn out all the venture capital .

That's what I'm talking about . We laughed at Bitcoin for being costing more than it's earning , we don't want to be another Bitcoin . If we just wan increment at market cap , we don't need to hire people at all , just keep talking about great news .

We used to think about these things rationally , but after the crazy pump 6x in August , we tend to forget how poor we actually are .
That was a perfect example why money in terms of market cap can not be views as money of ours to spend .

[Ander]

Right now I'm in favor of voting in anyone with any demonstrable coding or marketing skills.

Then whether they should stay in depends on if we see any results from them.


When the market cap goes up and the pay is worth more, and we have more people trying for spots, then its time to make it more competitive.

[btswildpig]

The right move for every delegate is to ease the doubt and gain trust and vote , if someone is doubting you , ask them why , listen to them , try to change their mind by reasoning . Do not feel it's ok to tell them stop doubting . Because if the voters are not doubting you , they might not doubt somebody else in the future , sooner or later , you'll be pushed out by some actors or some good guy but has no value for the system just because people don't know how to doubt any more .  Always remember , there are only 101 delegates seats , to limit at the 1-2% inflation there will only be 30 100% delegate seats , those who got elected by simply blind faith may easily be replaced by other people who voted in with blind faith .

Doubting for the delegate-to-be may be the solid shield for the delegate himself to gain long term position in the system .

[zerosum]

Actually I am on quite the opposite opinion on this...
Let's hire 10x more people that we have now. It will be like 60 delegates @ 100% .
Let's not evaluate them after 3 mo., let's do it in 4.5 mo...


It costs us 6.5%*0.6*4.5/12 or about  1.4625% inflation....

[btswildpig]

I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

[gamey]

I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

[btswildpig]

If this is viewed as any kind of real problem, I would guess that some kind of vesting program can be instituted.

Obviously, some delegates will require instant access when the funds are purposed to be used immediately - but other delegates may want to campaign to voluntary accept a vesting payment schedule to demonstrate their long-term belief and commitment to BTS.

It was a little slow at first but people seem to be stepping up to take delegate roles and provide value along with lots of proposals for a variety of systems.  I'm actually quite happy with how it has been turning out lately.  For the past few weeks that definitely has not been the case, so we took the hit for dilution but then were not taking advantage of it. I'm in a better mood about how things are going.

In the early days, bad actors will be known and voted out fairly rapidly.  People worrying about their money being spent at this stage are not thinking rationally.

Correction : Only rational minds can think of the upside and downside of every move the system makes . It's the one way thinking that's irrational.  When enough people tells you " you shouldn't be worried " , then you should be worried .

Again, I would say go look up "loss aversion".  Look at how that relates to the amount of money you may lose versus to what you may gain.  Think of what a coin with only a handful of features gives us allowing other coins a much easier time to catch up. 

A person can make a completely rational choice and it will be 100% rational within the limitations of  their thinking.  That doesn't mean it will be equally rational to everyone else.

I'm not saying accept anyone, but I'm saying that the quality of delegates you guys are getting for the price at this point shouldn't have to you terribly concerned.  Didn't someone post volume and dilution #s to see how big of a role dilution could actually play in depressing the price ?

A side note , the dilution hit is not yet manifest . Many people are still thinking dilution means 2 billion to 2.5 billion .... because the low price cost them the interest to read news .

[gamey]

If this is viewed as any kind of real problem, I would guess that some kind of vesting program can be instituted.

Obviously, some delegates will require instant access when the funds are purposed to be used immediately - but other delegates may want to campaign to voluntary accept a vesting payment schedule to demonstrate their long-term belief and commitment to BTS.

It was a little slow at first but people seem to be stepping up to take delegate roles and provide value along with lots of proposals for a variety of systems.  I'm actually quite happy with how it has been turning out lately.  For the past few weeks that definitely has not been the case, so we took the hit for dilution but then were not taking advantage of it. I'm in a better mood about how things are going.

In the early days, bad actors will be known and voted out fairly rapidly.  People worrying about their money being spent at this stage are not thinking rationally.

Correction : Only rational minds can think of the upside and downside of every move the system makes . It's the one way thinking that's irrational.  When enough people tells you " you shouldn't be worried " , then you should be worried .

Again, I would say go look up "loss aversion".  Look at how that relates to the amount of money you may lose versus to what you may gain.  Think of what a coin with only a handful of features gives us allowing other coins a much easier time to catch up. 

A person can make a completely rational choice and it will be 100% rational within the limitations of  their thinking.  That doesn't mean it will be equally rational to everyone else.

I'm not saying accept anyone, but I'm saying that the quality of delegates you guys are getting for the price at this point shouldn't have to you terribly concerned.  Didn't someone post volume and dilution #s to see how big of a role dilution could actually play in depressing the price ?

[btswildpig]

If this is viewed as any kind of real problem, I would guess that some kind of vesting program can be instituted.

Obviously, some delegates will require instant access when the funds are purposed to be used immediately - but other delegates may want to campaign to voluntary accept a vesting payment schedule to demonstrate their long-term belief and commitment to BTS.

It was a little slow at first but people seem to be stepping up to take delegate roles and provide value along with lots of proposals for a variety of systems.  I'm actually quite happy with how it has been turning out lately.  For the past few weeks that definitely has not been the case, so we took the hit for dilution but then were not taking advantage of it. I'm in a better mood about how things are going.

In the early days, bad actors will be known and voted out fairly rapidly.  People worrying about their money being spent at this stage are not thinking rationally.

Correction : Only rational minds can think of the upside and downside of every move the system makes . It's the one way thinking that's irrational.  When enough people tells you " you shouldn't be worried " , then you should be worried .

[gamey]

If this is viewed as any kind of real problem, I would guess that some kind of vesting program can be instituted.

Obviously, some delegates will require instant access when the funds are purposed to be used immediately - but other delegates may want to campaign to voluntary accept a vesting payment schedule to demonstrate their long-term belief and commitment to BTS.

It was a little slow at first but people seem to be stepping up to take delegate roles and provide value along with lots of proposals for a variety of systems.  I'm actually quite happy with how it has been turning out lately.  For the past few weeks that definitely has not been the case, so we took the hit for dilution but then were not taking advantage of it. I'm in a better mood about how things are going.

In the early days, bad actors will be known and voted out fairly rapidly.  People worrying about their money being spent at this stage are not thinking rationally.

[btswildpig]

Some people often view increasing in market cap as "gained value for the system" , well , it's not .

If you can not measure value for the system by market cap, what measurement do you use ?

revenues , market depth , investor's confidence , sustainability of the economic model ....
That's all that matters . Market cap can easily be faked .

It would be unwise to think any increment in market cap in short term can off set dilution in the same effect as increasing in revenues .

I thought the whole point is market cap.  What are revenues these days?  I'm confused.

Market depth will grow with market cap as will investor's confidence.

Market cap can't be easily faked for long.  I don't understand how you would believe this.  If market cap is too high, people will sell for value.  If it is too low, people will buy.  Liquidity problems adds variance to this process, but that should never be confused resulting in dismissing the value of market cap.

you can already see ripple's market cap over Litecoin . That should tell you something .
Ripple's price (= market cap) went up 300% with roughly the same cash that pumped BTS for 30% .

" If market cap is too high, people will sell for value"   that's a false anticipation because big whale can not sell even if they want to due to market depth .

I'm not talking about dismissing the value of market cap , but stressing the point that any increment in market cap can not be viewed as "money" to be easily spend because it's "insignificant comparing to the increment in market cap".

Personally I just think it is a case of loss aversion. 

Whales will be able to sell for value until the market corrects.

IMO nothing is as important as market cap.  What you have a hard time with is likely variance and it is a rare day to meet a person who intuitively understands it.  Everything else is just a little part of what makes up the market cap.

The money not in circulation shouldn't be dismissed.  It should mean the owners do not find the current value to be worth selling at.

If the inflow of speculator money are the only "income" that the system has for a long time , then yes , "The money not in circulation" should be dismissed because there was no money there to begin with .

Also , I'm familiar with this subject because I know the person responsable for the price drop even before the merger . He took out over 1.1 million from the system by convincing some of the big holders to withdraw the money to invest in other highly speculative market , which cost roughly 22 million USD drop in market cap .

[bobmaloney]

If this is viewed as any kind of real problem, I would guess that some kind of vesting program can be instituted.

Obviously, some delegates will require instant access when the funds are purposed to be used immediately - but other delegates may want to campaign to voluntary accept a vesting payment schedule to demonstrate their long-term belief and commitment to BTS.

[gamey]

Some people often view increasing in market cap as "gained value for the system" , well , it's not .

If you can not measure value for the system by market cap, what measurement do you use ?

revenues , market depth , investor's confidence , sustainability of the economic model ....
That's all that matters . Market cap can easily be faked .

It would be unwise to think any increment in market cap in short term can off set dilution in the same effect as increasing in revenues .

I thought the whole point is market cap.  What are revenues these days?  I'm confused.

Market depth will grow with market cap as will investor's confidence.

Market cap can't be easily faked for long.  I don't understand how you would believe this.  If market cap is too high, people will sell for value.  If it is too low, people will buy.  Liquidity problems adds variance to this process, but that should never be confused resulting in dismissing the value of market cap.

you can already see ripple's market cap over Litecoin . That should tell you something .
Ripple's price (= market cap) went up 300% with roughly the same cash that pumped BTS for 30% .

" If market cap is too high, people will sell for value"   that's a false anticipation because big whale can not sell even if they want to due to market depth .

I'm not talking about dismissing the value of market cap , but stressing the point that any increment in market cap can not be viewed as "money" to be easily spend because it's "insignificant comparing to the increment in market cap".

Personally I just think it is a case of loss aversion. 

Whales will be able to sell for value until the market corrects.

IMO nothing is as important as market cap.  What you have a hard time with is likely variance and it is a rare day to meet a person who intuitively understands it.  Everything else is just a little part of what makes up the market cap.

The money not in circulation shouldn't be dismissed.  It should mean the owners do not find the current value to be worth selling at.

[btswildpig]

Some people often view increasing in market cap as "gained value for the system" , well , it's not .

If you can not measure value for the system by market cap, what measurement do you use ?

Compared with one month ago, or two month ago when stan said "there will be big thing soon", the current price and market cap of BTS is much lower, but actually, I think BTS system is constantly gaining value these days.

How to measure the value of a cryptocurrency is really a challenging topic, but market cap is definitely only one of all parameters.

Finally, I realized the meaning of "there will be big thing soon"- If you missed the early stage of BTS, we offer you a chance to get more BTS in a very cheap price.

Go back to the topic, I think we use market cap as a measurement factor isn't some big issue. In stock market, even in "Forbes list of billionaires", they do the same thing, use "market value of stock".

The Forbes billionaires spend the money in their company according to their "revenue" instead of "market value of stock" .

[consultant]

Some people often view increasing in market cap as "gained value for the system" , well , it's not .

If you can not measure value for the system by market cap, what measurement do you use ?

Compared with one month ago, or two month ago when stan said "there will be big thing soon", the current price and market cap of BTS is much lower, but actually, I think BTS system is constantly gaining value these days.

How to measure the value of a cryptocurrency is really a challenging topic, but market cap is definitely only one of all parameters.

Finally, I realized the meaning of "there will be big thing soon"- If you missed the early stage of BTS, we offer you a chance to get more BTS in a very cheap price.

Go back to the topic, I think we use market cap as a measurement factor isn't some big issue. In stock market, even in "Forbes list of billionaires", they do the same thing, use "market value of stock".

[btswildpig]

Some people often view increasing in market cap as "gained value for the system" , well , it's not .

If you can not measure value for the system by market cap, what measurement do you use ?

revenues , market depth , investor's confidence , sustainability of the economic model ....
That's all that matters . Market cap can easily be faked .

It would be unwise to think any increment in market cap in short term can off set dilution in the same effect as increasing in revenues .

I thought the whole point is market cap.  What are revenues these days?  I'm confused.

Market depth will grow with market cap as will investor's confidence.

Market cap can't be easily faked for long.  I don't understand how you would believe this.  If market cap is too high, people will sell for value.  If it is too low, people will buy.  Liquidity problems adds variance to this process, but that should never be confused resulting in dismissing the value of market cap.

you can already see ripple's market cap over Litecoin . That should tell you something .
Ripple's price (= market cap) went up 300% with roughly the same cash that pumped BTS for 30% .

" If market cap is too high, people will sell for value"   that's a false anticipation because big whale can not sell even if they want to due to market depth .

I'm not talking about dismissing the value of market cap , but stressing the point that any increment in market cap can not be viewed as "money" to be easily spend because it's "insignificant comparing to the increment in market cap".

[zerosum]

If the people earning the BTS are holding 80% and only selling 20% to live then it balances out some.

I expected a better response.

So did I!

Should I put one myself or wait for a better one by someone smarter than me?

[btswildpig]

If the people earning the BTS are holding 80% and only selling 20% to live then it balances out some.

That would be a big if , like if "the miners are holding 80% and only selling 20% to live" .

That being said , this should be an interest topic to show how the delegates should do if they want their future in the BTS system can be sustained .

[gamey]

Some people often view increasing in market cap as "gained value for the system" , well , it's not .

If you can not measure value for the system by market cap, what measurement do you use ?

revenues , market depth , investor's confidence , sustainability of the economic model ....
That's all that matters . Market cap can easily be faked .

It would be unwise to think any increment in market cap in short term can off set dilution in the same effect as increasing in revenues .

I thought the whole point is market cap.  What are revenues these days?  I'm confused.

Market depth will grow with market cap as will investor's confidence.

Market cap can't be easily faked for long.  I don't understand how you would believe this.  If market cap is too high, people will sell for value.  If it is too low, people will buy.  Liquidity problems adds variance to this process, but that should never be confused resulting in dismissing the value of market cap.

[Overthetop]

Market cap is just one of the indexes as to the BTS value evaluation.

The more important index are like : the maturity of products, real users, the scale of excellent developing teams , merchants adopting BitAs...

After the merger , I believe the value of BTS will grow steadily.

[bytemaster]

If the people earning the BTS are holding 80% and only selling 20% to live then it balances out some.

[ripplexiaoshan]

Some people often view increasing in market cap as "gained value for the system" , well , it's not .

If you can not measure value for the system by market cap, what measurement do you use ?

Compared with one month ago, or two month ago when stan said "there will be big thing soon", the current price and market cap of BTS is much lower, but actually, I think BTS system is constantly gaining value these days.

How to measure the value of a cryptocurrency is really a challenging topic, but market cap is definitely only one of all parameters.

[btswildpig]

Some people often view increasing in market cap as "gained value for the system" , well , it's not .

If you can not measure value for the system by market cap, what measurement do you use ?

revenues , market depth , investor's confidence , sustainability of the economic model ....
That's all that matters . Market cap can easily be faked .

It would be unwise to think any increment in market cap in short term can off set dilution in the same effect as increasing in revenues .

[gamey]

Some people often view increasing in market cap as "gained value for the system" , well , it's not .

If you can not measure value for the system by market cap, what measurement do you use ?

[Empirical1.1]

Some people often view increasing in market cap as "gained value for the system" , well , it's not .

Let me dumb this down for you . The whole idea of market cap is to calculate the total price of the available share supply at current price .

It would be accurate if the available share supply equals to the supply in circulation . But in reality , there are only 1/10 or even 1/20 shares in circulation . (some coins are even worse , because they can not even sell 1/50 or 1/100 out without  collapsing the price )

If we factor in the 1/20 ratio , then a system worth 47 million USD on market cap is only worth 2.35 million USD in the sense of real money .

When we want to expand the spending because we're felling rich by increasing in markep cap in short term , please always remembers that cold hard fact ---- We don't have that much to spend to begin with . Please do not feel any dilution is insignificant just because it's a "low percentage of total supply" , but also factor in "how much percentage of circulation " , you'll see the answer .

The latest pump increased 12.5 million USD in market cap with only 0.6 million USD in cash .  That's another example of how 1/20 becomes the pattern in the BTS eco-system .

So , please do not fell angry when the shareholders make it tough on some "only 3000USD a month income job" of a 100% pay rate delegate . No matter how much the market cap increases , the pattern is still the same , 1/20 , it's easy to lose sight on that .

  Good points.

[btswildpig]

Some people often view increasing in market cap as "gained value for the system" , well , it's not .

Let me dumb this down for you . The whole idea of market cap is to calculate the total price of the available share supply at current price .

It would be accurate if the available share supply equals to the supply in circulation . But in reality , there are only 1/10 or even 1/20 shares in circulation . (some coins are even worse , because they can not even sell 1/50 or 1/100 out without  collapsing the price )

If we factor in the 1/20 ratio , then a system worth 47 million USD on market cap is only worth 2.35 million USD in the sense of real money .

When we want to expand the spending because we're feeling rich by increasing in market cap in short term , please always remembers that cold hard fact ---- We don't have that much to spend to begin with . Please do not feel any dilution is insignificant just because it's a "low percentage of total supply" , but also factor in "how much percentage of circulation " , you'll see the answer .

The latest pump increased 12.5 million USD in market cap with only 0.6 million USD in cash .  That's another example of how 1/20 becomes the pattern in the BTS eco-system .

So , please do not feel angry when the shareholders make it tough on some "only 3000USD a month income job" of a 100% pay rate delegate . No matter how much the market cap increases , the pattern is still the same , 1/20 , it's easy to lose sight on that .