Non-Profit DACs?

[bytemaster]

I like the idea of a non profit DAC.
But it raises some questions: What is profit? Where's the profit in Bitcoin as a DAC?

I am a newbie, but if I get things right, the transaction fees are the profit.

When all the bitcoins will have been mined, miners will still run the whole bitcoin service, because they get the transaction fees (profit) as a reward.

Miners are share holders, they consume the entire profit in electric costs.  If a cheaper solution could be found then share holders can profit rather than paying out to a centralized cartel of miners.

[isza]

I like the idea of a non profit DAC.
But it raises some questions: What is profit? Where's the profit in Bitcoin as a DAC?

I am a newbie, but if I get things right, the transaction fees are the profit.

When all the bitcoins will have been mined, miners will still run the whole bitcoin service, because they get the transaction fees (profit) as a reward.

[isza]

If I wanted to make a 'free' message sending service where the users must do complex calculations (mine) to send messages, it wouldn't be free because the calculation costs money.

So let's say there is a messaging service that has a fee, and someone makes a copy with zero fee, it wouldn't become popular, because the people who want to send messages don't want to tackle with getting the mining equipment, they would rather pay for it.

I think I am starting to understand it now.

Actually I think that's not quite right. In your example, people would prefer the free one over the one with the transaction fee. Except it's not actually "free", it's just that each user can put in the resources necessary to sustain the network, so the "transaction fee" is hidden.

After all, BitMessage and Keyhotee are both free, right? =]

Well after seeing the success of WhatsApp, I wouldn't be so sure. People are actually willing to pay $1/year for an ad-free messaging service. Probably they would be willing to pay a similar amount for longer battery life (not having to calculate hashes on mobile devices).

You could create a paid version of Keyhotee, and let the market decide which one is better. If you actually do so, I want to be the first to invest/mine. :)

[toast]

However, if there were an alternative where users got PAID to relay messages, and other users paid to send messages, THAT would be more popular than the free one.

[toast]

Now I know what I don't understand. What kind of expenses can a DAC have? Can someone give me an example?

I think there are two kinds of costs invloved.
  -  There are meta-costs to people buing/renting equipment for its operation
  -  There are direct costs needed for the service of the DACS customers.

I do not have a quick example right now.

If I wanted to make a 'free' message sending service where the users must do complex calculations (mine) to send messages, it wouldn't be free because the calculation costs money.

So let's say there is a messaging service that has a fee, and someone makes a copy with zero fee, it wouldn't become popular, because the people who want to send messages don't want to tackle with getting the mining equipment, they would rather pay for it.

I think I am starting to understand it now.

Actually I think that's not quite right. In your example, people would prefer the free one over the one with the transaction fee. Except it's not actually "free", it's just that each user can put in the resources necessary to sustain the network, so the "transaction fee" is hidden.

After all, BitMessage and Keyhotee are both free, right? =]

[isza]

Now I know what I don't understand. What kind of expenses can a DAC have? Can someone give me an example?

I think there are two kinds of costs invloved.
  -  There are meta-costs to people buing/renting equipment for its operation
  -  There are direct costs needed for the service of the DACS customers.

I do not have a quick example right now.

If I wanted to make a 'free' message sending service where the users must do complex calculations (mine) to send messages, it wouldn't be free because the calculation costs money.

So let's say there is a messaging service that has a fee, and someone makes a copy with zero fee, it wouldn't become popular, because the people who want to send messages don't want to tackle with getting the mining equipment, they would rather pay for it.

I think I am starting to understand it now.

[arcke]

Block chain resources are scarce and people profits help the network grow


Sent from my iPhone using Tapatalk

Now I know what I don't understand. What kind of expenses can a DAC have? Can someone give me an example?

I think there are two kinds of costs invloved.
  -  There are meta-costs to people buing/renting equipment for its operation
  -  There are direct costs needed for the service of the DACS customers.

I do not have a quick example right now.

[isza]

If it is less than or equal to zero, nobody will put resources towards supporting the network, because they cannot be paid for it.

Thank you! Now this clears up a lot.

[isza]

Block chain resources are scarce and people profits help the network grow


Sent from my iPhone using Tapatalk

Now I know what I don't understand. What kind of expenses can a DAC have? Can someone give me an example?

[toast]

I don't get how the minimum possible operating budget can be greater than 0. Please tell me what I am missing.

If it is less than or equal to zero, nobody will put resources towards supporting the network, because they cannot be paid for it.

[bytemaster]

Block chain resources are scarce and people profits help the network grow


Sent from my iPhone using Tapatalk

[isza]

If someone creates a profitable DAC, what stops me from copying it and making a non-profit version?

Market forces and competition.

Thank you for the quick answer. I have read this in another topic:

Any DAC that operates with any degree of profitability above the bare minimum will likely find forked competition before too long who takes their work and turns a 10% fee into a 1% fee.  And then a 1% fee into a .01% fee, until whatever the minimum possible operating budget is found.

I don't get how the minimum possible operating budget can be greater than 0. Please tell me what I am missing.

Let's consider a distributed marketplace service. As far as I understand, all work is done by the miners. How could the minimum possible fee be positive? Can you give me a better example? Thank you.

[bytemaster]

I like the idea of a non profit DAC.
But it raises some questions: What is profit? Where's the profit in Bitcoin as a DAC?

Bitcoin as a DAC is a negative profit enterprise that manages to grow in value despite the huge consumption of resources required to maintain it.  The value proposition of crypto-equities is so strong that they grow in value using a business model that would put a centralized company out of business.

If someone creates a profitable DAC, what stops me from copying it and making a non-profit version?

Market forces and competition. 

[isza]

I like the idea of a non profit DAC.
But it raises some questions: What is profit? Where's the profit in Bitcoin as a DAC?

Bitcoin as a DAC is a negative profit enterprise that manages to grow in value despite the huge consumption of resources required to maintain it.  The value proposition of crypto-equities is so strong that they grow in value using a business model that would put a centralized company out of business.

If someone creates a profitable DAC, what stops me from copying it and making a non-profit version?

[naralda]

 8)