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Offline recci

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Somebody explain Protoshares to me in laymans terms
« on: December 04, 2013, 12:36:12 PM »

Ok first off I am not a technophobe, I work as a php developer and as such have a fairly good understanding of computers, the internet and all things geeky. I get the general concept behind bitcoins and remember hearing about them when they first started, only wish i had paid more attention to them now. I realise that I really missed the boat on that big time and spent 2 years helping [email protected] rather than mining bit coins (fool >:( ).  However, I know very little about economics and financial stuff so answer these questions as if you were talking to your average joe on the stree.

I started mining PTS as it was a new coin and it was supposed to be CPU only so I figured I would be able to get some before it got to difficult. But what I am not sure about is all this stuff with dividends, DAC's and Proof of stake?

So let me see if I am correct here:

For every pts I own I will get some form of new coin that derived from pts when they are released? If so how will this work? Will I need a new wallet, will I have some id? Is there a minimum amount of PTS I need to get this?

How do the dividends work? Will I get more pts for every transaction somebody else makes? is this based on the amount of pts I own?

What is a DAC  in layman’s terms?

What does proof of stake actually mean? and how will it change the mining game?

Offline pgbit

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #1 on: December 04, 2013, 01:33:28 PM »
Here's my take. Very unfortunately I am not a guru programmer, otherwise I would be coding fast, right about now...

DACs: decentralized autonomous online trading networks. DACs provide a way to seamlessly integrate service delivery and currency with the intermediary (i.e. the DAC) designed to be incorruptible, honest and fair.
Protoshares: one of the founding blocks of decentralized services, that gives you early access to BitShares.
Proof of stake: coins that stay in your wallet for a set period are rewarded by a certain percentage (not sure what the figures are, guess it might vary with each DAC).

Very simply, a DACs primary job is to work hard to increase any shareholding you have in that DAC. At present DACs are set to be designed by humans, run by 'robots'. A DAC follows its set of rules, and these rules are not able to be changed unless altered by shareholder vote. It might operate to provide decentralized services in any sphere that you could imagine. Without putting too fine a point on it, this is what may be not be fully appreciated yet. Decentralized media services? Already being planned... Decentralized global legal service? Decentralized postal service with automated robotic delivery? Check out the alternative DAC thread for a few thoughts here. DACs are by their nature set to be 'incorruptible' in their decision making, which has the potential to add levels of trust in public services in any economy.

The tools that a DAC has are limited to various things, like auctions and dividends but bolting these basics onto a coin network opens up quite a few possibilities. DACs created with the "social contract" then reward protoshareholders with c. 10% of their blockchain, and so immediately gain a following of interested supporters.

Your ID can be mined and I think its 10 pts to add. How shares are mined is up for discussion at present.

Be sure to read the Invictus white papers. There's a lot of detail, but it gives you more insight into how DACs work.

Offline recci

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #2 on: December 04, 2013, 01:40:01 PM »
Still not a whole lot wiser tbh

Offline pgbit

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #3 on: December 04, 2013, 01:49:47 PM »
Lol OK. I think its hard to explain. Take a look here, people are working on it:
http://bitsharestalk.org/protoshares/%28megabounty-thread%29-help-us-write-the-protoshares-copy/?topicseen

Offline devilfish

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #4 on: December 05, 2013, 08:30:03 AM »
Think of ProtoShares like coming up with the idea of having an idea and always being credited with any idea that is formed after that moment. So someone (Person 2) has the idea of the wheel. Because you were clever enough to think of ideas and share it with the world, the person who makes the wheel decides you should receive some of the credit because  you allowed him to have his idea. From there someone (Person 3) might come up with a way to improve the idea of the wheel, like adding spokes for instance, so Person 3 credits the idea of wheel. This means Person 2 receives credit as they came up with the idea but you also receive credit because Person 2 gave you credit for the idea of the wheel.
BTC: 1MqCxQ2qD7ZuS3ELFY43wfaBTbA2XkYwDP
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Offline bytemaster

Re: Somebody explain Protoshares to me in laymans terms
« Reply #5 on: December 05, 2013, 06:03:06 PM »
If you ignore all of the *extra* stuff we are using PTS for you can focus on this one simple thing:

PTS is a way to speculate on the value of BitShares when it is released.   It may be good for other things too like DomainShares, VoteShares, LuckyShares, and various other non Invicuts coins that I have been told will be honoring PTS as well.   Bottom line, PTS is a new way to crowd fund DACs and to speculate on the value of the DAC industry.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline recci

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #6 on: December 12, 2013, 04:53:52 PM »

Your ID can be mined and I think its 10 pts to add. How shares are mined is up for discussion at present.


Can someone explain the ID part? How do you receive the ID and is there a time limit to get your 10pts? Currently I have only managed to mine 2 and half pts.

Offline canuck

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #7 on: January 09, 2014, 07:55:40 PM »
I am also still working through the many different aspects. I think some are excellent others I am not sure.
But the direction and fresh ideas and something to actually 'back' a cryptocoin' seem to be plenty here. That is an important factor in my opinion.

Offline maqifrnswa

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #8 on: January 10, 2014, 04:24:13 PM »
My take:

Most cryptocurrencies are backed by the computational power required to generate a trustworthy chain of ownership. Invictus is trying to develop a cryptocurrency that is backed by actual services provided by something. Sort of like stocks on the stock market are backed by the assets and revenues of the underlying company, "bitshares" are backed by that as well (it gets complicated because it can be more general than just "stocks", but for now let's pretend like there are just "stocks")

Stocks raise capital via IPO where stock is sold to the public, and money is raised in exchange for equity. Bitshares platform is raising money via a two fold process (it's like the ipo):

1) PTS are mined using proof of work, like traditional cryptocurrencies. This creates an alt coin with value. 50% of bitshares and at least 10% of all future invictus projects are given to protoshares holders. That means they are backed by "something." People now are speculating on what that "something" is worth and are pricing accordingly. As the value goes up, the PTS held by invictus goes up. This also creates assets that can be traded for AngelShares (below).
2) PTS and BTS are exchanged for AngelShares (AGS). Rather than paying for a cloud miner, you pay to an donation address and your shares are allocated accordingly. 50% of bitshares and at least 10% of all additional projects will be allocated for AGS. AGS to PTS exchange rate is about 2:1, so you can double your holdings if you donate. Once you donate, invictus gives your donations to developers working on bounties to build the bitshares platform. This is just like an IPO, in a way.

Once the platform is developed, all bitshares will be allocated to PTS and AGS holders, just like in an IPO. Bitshares will then be backed by whatever services/revenue streams that they represent (just like stock).


Your questions:
>For every pts I own I will get some form of new coin that derived from pts when they are released?
yes

>If so how will this work?
The genesis block of the new coin will contain the value assigned to your address.

>Will I need a new wallet, will I have some id?
You will use an "import wallet" feature to import your PTS/BTC wallet to get access to your new assets.

>Is there a minimum amount of PTS I need to get this?
no

>How do the dividends work?
A little more complicated, this is still a work in progress - but dividends are priced in the value of the asset. e.g.,  if dividends worth 10% of the company are given out in a distribution, then everyone's assets increase by 10% (they are generated like miners generate coins).

>Will I get more pts for every transaction somebody else makes?
I don't think so, I believe miners get transaction fees.

>is this based on the amount of pts I own?
I think you're thinking of bitshares, there everyone gets transaction fees (it's basically dividends). protoshares miners do (please correct me if wrong!)

>What is a DAC  in layman’s terms?
DAC = some stock representing work, but not necessarily interest in a company. If I code something for a project, you can pay me in DACs for the project. People can buy shares of the DAC, like stock, that represent profits from the project. As the project succeeds, it becomes more valuable (as it pays dividends), and people will want it more - raising the price.

>What does proof of stake actually mean?
rather than doing really hard computer math to verify transactions, you instead have blocks mined proportional to the ownership of the asset. If i own 10% of an asset, I will mine 10% of the blocks.
http://bitcoin.stackexchange.com/questions/9082/what-is-proof-of-stake
https://en.bitcoin.it/wiki/Proof_of_Stake

>and how will it change the mining game?
hard to say, no widespread implementations have been employed. It should reduce the possibility of a 51% attack and lower transaction fees. It also acts like dividends (proceeds are proportional to holdings).
« Last Edit: January 10, 2014, 04:29:50 PM by maqifrnswa »
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Offline Stan

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #9 on: January 10, 2014, 05:31:37 PM »
My take:

Most cryptocurrencies are backed by the computational power required to generate a trustworthy chain of ownership. Invictus is trying to develop a cryptocurrency that is backed by actual services provided by something. Sort of like stocks on the stock market are backed by the assets and revenues of the underlying company, "bitshares" are backed by that as well (it gets complicated because it can be more general than just "stocks", but for now let's pretend like there are just "stocks")

Stocks raise capital via IPO where stock is sold to the public, and money is raised in exchange for equity. Bitshares platform is raising money via a two fold process (it's like the ipo):

1) PTS are mined using proof of work, like traditional cryptocurrencies. This creates an alt coin with value. 50% of bitshares and at least 10% of all future invictus projects are given to protoshares holders. That means they are backed by "something." People now are speculating on what that "something" is worth and are pricing accordingly. As the value goes up, the PTS held by invictus goes up. This also creates assets that can be traded for AngelShares (below).
2) PTS and BTS are exchanged for AngelShares (AGS). Rather than paying for a cloud miner, you pay to an donation address and your shares are allocated accordingly. 50% of bitshares and at least 10% of all additional projects will be allocated for AGS. AGS to PTS exchange rate is about 2:1, so you can double your holdings if you donate. Once you donate, invictus gives your donations to developers working on bounties to build the bitshares platform. This is just like an IPO, in a way.

Once the platform is developed, all bitshares will be allocated to PTS and AGS holders, just like in an IPO. Bitshares will then be backed by whatever services/revenue streams that they represent (just like stock).


Your questions:
>For every pts I own I will get some form of new coin that derived from pts when they are released?
yes

>If so how will this work?
The genesis block of the new coin will contain the value assigned to your address.

>Will I need a new wallet, will I have some id?
You will use an "import wallet" feature to import your PTS/BTC wallet to get access to your new assets.

>Is there a minimum amount of PTS I need to get this?
no

>How do the dividends work?
A little more complicated, this is still a work in progress - but dividends are priced in the value of the asset. e.g.,  if dividends worth 10% of the company are given out in a distribution, then everyone's assets increase by 10% (they are generated like miners generate coins).

>Will I get more pts for every transaction somebody else makes?
I don't think so, I believe miners get transaction fees.

>is this based on the amount of pts I own?
I think you're thinking of bitshares, there everyone gets transaction fees (it's basically dividends). protoshares miners do (please correct me if wrong!)

>What is a DAC  in layman’s terms?
DAC = some stock representing work, but not necessarily interest in a company. If I code something for a project, you can pay me in DACs for the project. People can buy shares of the DAC, like stock, that represent profits from the project. As the project succeeds, it becomes more valuable (as it pays dividends), and people will want it more - raising the price.

>What does proof of stake actually mean?
rather than doing really hard computer math to verify transactions, you instead have blocks mined proportional to the ownership of the asset. If i own 10% of an asset, I will mine 10% of the blocks.
http://bitcoin.stackexchange.com/questions/9082/what-is-proof-of-stake
https://en.bitcoin.it/wiki/Proof_of_Stake

>and how will it change the mining game?
hard to say, no widespread implementations have been employed. It should reduce the possibility of a 51% attack and lower transaction fees. It also acts like dividends (proceeds are proportional to holdings).

Thanks for answering these questions! 
Some fine points:

A DAC is a Decentralized Unmanned Company.  A DAC is not a stock, a DAC has stock which is its own internal currency. You can think of the DAC metaphorically as a currency or a company.  You can think of bitcoins as stock in Bitcoin the DAC.  Generally, DACs can provide a lot more services than just transmitting its stock/currency like Bitcoin.  They can implement anything from a bank to a stock exchange to a casino and unlike Bitcoin, they can make a profit and share that profit with holders of its stock/currency.

PTS and AGS do have a role in launching new companies, but they are not IPOs.  Both are ways to bootstrap the infrastructure of an industry so that developers can quickly launch their own DACs.  To use the infrastructure provided by PTS and AGS stakeholders, DACs are obligated to give each of those stakeholders groups at least 10% of their DAC's stock/currency.

Invictus' role in AngelShares is to guide the use of donations toward building and promoting the industry infrastructure and to support and promote DACs that honor the Social Consensus Software License (SCSL).

Thus, PTS and AGS serve to document who founded the industry so that developers know who to honor under the license.  PTS are tradable like a currency or a stock on 3rd Party exchanges.  AGS are just a public record of who donated the foundation used by all DACs.

Most of our DAC designs will not use mining, freeing up the profits used to pay miners to be paid to shareholders instead.

Invictus is a DAC designer, and industry promoter, and a supporter of DAC developers.


Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline maqifrnswa

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #10 on: January 10, 2014, 06:36:59 PM »
Invictus is a DAC designer, and industry promoter, and a supporter of DAC developers.

How does Invictus make money doing that? I think they've been great and innovative; I'm just trying to understand what the sustainable steady state ecosystem will look like.
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Offline Giga

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #11 on: January 10, 2014, 06:55:07 PM »
I found protoshares and DACs kinda confusing too, steep learning curve but i'm getting there.

To put it simply, so far what i understood is that by buying protoshares you're investing into the DAC idea, it may fail and it may be very very successful. Once Bitshares is launched by owning protoshares you also received a slice of bitshares, it all depends on the success and events leading to Bitshares.

It's a big risk but can also be very rewarding.


Offline Stan

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #12 on: January 10, 2014, 07:00:18 PM »
Invictus is a DAC designer, and industry promoter, and a supporter of DAC developers.

How does Invictus make money doing that? I think they've been great and innovative; I'm just trying to understand what the sustainable steady state ecosystem will look like.

By owning a small piece of everything we help to get started, just like everyone else.

Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline Stan

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #13 on: January 10, 2014, 07:02:47 PM »
I found protoshares and DACs kinda confusing too, steep learning curve but i'm getting there.

To put it simply, so far what i understood is that by buying protoshares you're investing into the DAC idea, it may fail and it may be very very successful. Once Bitshares is launched by owning protoshares you also received a slice of bitshares, it all depends on the success and events leading to Bitshares.

It's a big risk but can also be very rewarding.

The risks are mitigated by the fact that you get ownership in multiple new DACs from hopefully multiple developers.  If only one succeeds you've done better than picking a single alt-coin at random.


Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline santaclause102

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Re: Somebody explain Protoshares to me in laymans terms
« Reply #14 on: January 11, 2014, 03:06:11 AM »
If one wants to use the least amount of words to explain Protoshares (PTS) my take would be this:

All PTS holders together get at least 10% of each DAC (precisely 10% of the tokens (coins) the DAC uses) Invictus will ever release (with Bitshares it will be 50%). This 10% slice will be proportional in distribution to the distribution of PTS. Apart from that other developers can do the same and give a certain percentage of their coins to PTS holders. The advantage for them would be that the DAC they release will immediately have the attention of all the PTS holders. And every person that owns a coin has an incentive to promote it or contribute to its development in whatever way so that the price of the coins this person owns increases. This audience (PTS holders) in addition is one that understands the potential and functioning of DACs well - it's an advantage to have such an initial user base instead of random miners. This is perfect for Proof of Work based DACs. Proof of stake DACs are missing out on the initial funding they would get... But they can waive a part of it to still have the support and attention from PTS holders. Furthermore DACs of non invictus developers will give the full 10% or more of their DAC tokens to PTS holders if Invictus assists the development or if the DAC is build based on Invictus Software/DACs. Did I miss something?   

Actually it's gotten quite a few words :D But I think it is at least easy to understand...
« Last Edit: January 11, 2014, 03:10:31 AM by delulo »

 

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