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Offline Empirical1.2

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Short Version: The 101 delegate system + dilution isn't very effective in practice. Shareholders are unable to effectively manage dilution in a way that adds a lot of value & is viewed positively by the market.  Instead the blockchain should only have to hire  developers and block producers.

One possible idea is to use a transaction fee in the $0.02-0.05 range and split it with third parties and marketers. This way you have free market competition to bring in users or create third party services.

The merger is a problem. A competitor that didn't have that drain on their share price would be more successful and more marketable.

---------------------------------------------

BitAssets will be of value to millions of people all over the world and generate ENORMOUS wealth for shareholders of the most successful BitAsset vehicle. However for a variety of disputed reasons the current model has done the opposite. At the moment the market seems to be signalling that it is at the very least uncertain that the current BitShares is the vehicle that will bring BitAssets to the world.

Now is not the time to panic as there are a lot of great developments in the pipeline that will make it easier to attract new customers as well as initiatives like minebitshares which have shown success and could benefit from dilution to add clear value. So we could very well be nearing the bottom and about to turn a corner on the way to unprecedented success in a way that may in fact be largely thanks to dilution. 

At the same time, funding has run out and if BTS continues to fall, say down to the $10 million level, then it will be time ask some serious questions.

Are any BitAsset models more competitive or worth more than BitShares?

BitShares

Dilution Cost: circa $15000 per month
Merger Cost: circa $100 000 per month
Brand Image: Fairly Negative
Market Perfomance: Worst performing crypto in the top 10 since the suggestion of and implementation of the merger for a statistically significant period of 6 months+
 
Despite many people's belief to the contrary, dilution and the merger which add up to circa10% dilution as I predicted have proven to be fairly unpopular and costly.

On the day BTSX was at 0.000088 BTC & rising -


I know DAC's are businesses and dilution can be a standard tool but unfortunately the risk is more than the dilution by far. I love risk, if I think there's a 0.5% edge I'll put decent money down, hell if I'm bored I'll flip with reasonable sums for fun. The reason I'm highly skeptical is because I believe the risks are much greater. I've seen this kind of sales pitch from Invictus and within BitShares many times and variants of it tried all over crypto-land. This is just the same stuff in slightly different packaging.

A while ago Stan was pushing for taking the 1.6 million PTS and making it 2 million, giving it to Invictus and promising great marketing riches in return. We've guys like DA pushing the same approach as well as a decent share of this community.  Anyway you will get sold this all the time. In this case they've reached all the way out of crypto 10 years + back to a PayPal case study. They've told you to rest assured, we have KYC, everybody is unique etc. Then after the same fear and greed. 'Shit our competitors' and '10 000% plus gains, overnight bootstrapped network effect' etc.

Luckily BitShares has avoided those pitfalls and now has a no.3 in crypto-land DAC (ignore XRP) despite still being in a buggy, centralised risk stage. PTS in the top 10 and two/three other DACs have a lot of potential.

Make no mistake 10% inflation is a lot, you might look at the CAP and think how many users a bit of inflation buys, and that BTC has mining ( Actually a lot of investment has gone indirectly into BitCoin as well as free advertising that would have cost 10% this year.) but they don't realise BTSX may have its CAP because they don't have inflation.

Watch how fast the perception changes when the share price is dropping and people thinks it's others cashing in on their dime. The race for the exits will begin.


& Before the merger

Nothing is inevitable.

http://m.youtube.com/watch?v=x5m1A7zoIcc

Even if it doesn't change, if it doesn't work, I find in general developing talent tends to be weak on behavioural analysis so these kind of discussions help people understand where they might have gone wrong in retrospect and make better decisions for the future.


The way dilution is applied in a decentralised model is very ineffective. A group of largely apathetic shareholders can't be expected to manage up to 101 businesses and monitor their performance in much of a value adding way especially at this nascent stage of DPOS. It ends up being largely political, popularity contest. Ineffective delegates are often able stay employed once elected despite non-performance. Even many of our own core developers don't want to take part in this process.

You also have the problem that when the share price is constantly dropping that shareholders are obviously very unhappy. If they are being diluted in the process of the constant decline, no matter how negligible it may be, this emotion is amplified. With BTS it is hugely magnified because ineffective and poorly managed dilution coupled with a declining share price is a recipe for constant selling pressure and plus there is the unpopular, expensive merger to pay for.


Possible Solutions

A DAC that uses fees to pay a small group of core developers and block producers. (The current BTS is generating over a million BTS per month in fees. A more utilised BTS could easily push that up to 2 million. At $0.025 that would be a $50 000 a month which could fund a small group of core developers especially if a few were based in SE Europe/Other which may be sufficient after 1.0) 

A DAC that has a market competitive transaction fee of between $0.02 and $0.05 but gives up to 50% in revenue sharing models.


Using this model, marketers and third parties can be rewarded based on the amount of business they bring to BitShares by getting a share of the fees the customers they bring in generate. While not necessarily a fan of MLM, a third party getting to keep 50% of all fees generated through their wallet should provide ample incentive. More importantly there is very little need for shareholders to manage or control 101 small companies which is very unrealistic. Instead we only have to mainly choose core developers and consistent, trustworthy block producers. The free market though the revenue sharing model may do the rest and reward them for the value they actually add. 

If a model like this can achieve a $50-100 million CAP it's possible to be self sustaining. As I've said previously, though I'm not sure if many agree. A well distributed DAC that starts with no dilution and sticks to that can be viewed as a form of digital money, perhaps the most optimal and as a result attain a large crypto-currency following, valuation and adoption in it's own right even if many of the users don't understand or use many of the other blockchain based products and services at first.   

Option 1:  Raise funds for 40-50% of a new competing DAC that gives 50% equity to existing BTS holders.

BitSapphire have no interest in creating a competitor but they have a large team & good acumen. They are able to make $ go much further because of their geographical location. I highly recommend watching their BitSharesTV episode, I was highly impressed, where previously I had a neutral to slightly negative initial perception of them.

With the dilution, merger and negative brand image, it's hard to imagine that a new group with $1 million+, not associated with the perceived mistakes of the past could not take this technology to the next level and compete with the $15000 per month BTS is using via dilution. Possibly hiring some of our great existing developers on a competitive wage and getting BitAssets to the point that they would be more popular & successful than BTS. Possibly even without the need for  dilution and therefore be viewed as a good crypto-currency in it's own right too.

Option 2:  BitShares PTS

Merger cost: Zero
Dilution cost: Zero
Brand Image: Fairly neutral, possible rebrand needed,
Market Price: Very Low

Negatives: Zero funding and few developers.

This community and core developers have value that they can bring to any DAC. The negativity is largely attributed to past decisions made by a small group and not the community or developers as a whole.
 
A strong breakaway group consisting of a few credible developers and some of the core community could rapidly increase PTS value to the $5-10 Million range. Without a merger to pay for and neutral brand image, it's possible it could compete with BitShares and rapidly overtake it, if BTS continues to decline.

Advantages: 1000%+ gains for people that get into or already have PTS below a $1 million CAP.
A growing & popular home for BitAssets as opposed to a declining and unpopular one.

Challenges: Getting PTS to a $50 millin CAP and the point where it's able to pay developers from revenue is going to be incredibly challenging.


Option 3: Make Big Changes to BTS (Only if share price drops below $8-10 million)

Cancel the merger.
Fire all non developers and raise developers salaries.
Raise fees and try to survive on revenue with a fee sharing model to incentivise marketers and third parties instead of shareholders trying to manage 101 salaried  delegates.


Other:

It's possible that the new BTS is just finding it's true value and we may be very close to the bottom. There are a lot  of good developments in the pipeline. I hope thinking about alternatives isn't too unpopular but a model that has lost money during it's suggestion phase, creation phase and for the following 5 months in a row, during a time when the average top 10 crypto has gained 60%+ vs. BTC, even though the underlying technology and potential is huge, make it worth considering other options imo.

Well done to all you working to make this model better instead of complaining like me.
« Last Edit: April 08, 2015, 08:32:33 AM by Empirical1.2 »
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Offline fuzzy

Way too early to call a DPoS inneffective, but these models seem relatively sound.
Only difference to me is that if we could I'd think we should give more than one delegate to minebitshares...as many as it takes to get that pool huge.   We could replace every single non developer delegate with a minebitshares delegate I think you'd see some big things.

« Last Edit: April 08, 2015, 09:55:29 AM by fuzzy »
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Offline luckybit

I sort of proposed something similar. I think so far the merger is a failure. I think dilution on the other hand may not have done us any harm.

What did we get from the merger though? I don't see the voting features, I don't see the DNS features, I don't see that we got anything at all.
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I don't see any value in vote either BUT do we really need to discuss this in each and every thread and make even more threads on top of it? It's important to talk about it, but it's time to move on. Imagine what could be done if some people would use their time for positive things instead :)

Offline fuzzy

I don't see any value in vote either BUT do we really need to discuss this in each and every thread and make even more threads on top of it? It's important to talk about it, but it's time to move on. Imagine what could be done if some people would use their time for positive things instead :)

Well some of our community has really been getting the minebitshares thing figured out so while most people were writing complaint threads a couple of the non developer delegates were working on that and getting the right people on board. 
Just because value is hard to measure doesn't mean there isn't any there.

I agree with lucky.
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Offline Empirical1.2

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I don't see any value in vote either BUT do we really need to discuss this in each and every thread and make even more threads on top of it? It's important to talk about it, but it's time to move on. Imagine what could be done if some people would use their time for positive things instead :)

You can't build anything substantial on shaky foundations.

It may be that BTS is the best model out there and it just needed to find a hook, like mining real gold. (Which I admit is a fantastic hook)

At the same time if BTS falls further people might start making knee-jerk reactions, so discussing the foundational issues is key.
Perhaps as ruthless shareholders we even need to consider no longer honouring the merger if BTS falls further. It certainly hasn't added much value.

There is A LOT of money to be made with BitAssets, but only if you're on the right ship. 

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Well some of our community has really been getting the minebitshares thing figured out so while most people were writing complaint threads a couple of the non developer delegates were working on that and getting the right people on board. 
Just because value is hard to measure doesn't mean there isn't any there.


This. Minebitshares is probably our best bet in terms of marketing at the moment. The time to measure value will come, but I think it's still too early to see a trend.

Offline carpet ride

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Are any BitAsset models more competitive or worth more than BitShares?
« Reply #7 on: April 08, 2015, 11:05:03 AM »
Enough with the price anxiety.  If the Devs have salary covered for the next three years, then IMO we're golden.

Industrial grade clients and blockchain + on/off ramps + referral marketing + 2 to 3 years = revolutionary success


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Offline carpet ride

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Are any BitAsset models more competitive or worth more than BitShares?
« Reply #8 on: April 08, 2015, 11:24:37 AM »
Analyzing your proposal, what you're really suggesting is price pumping without long term vision for a sustainable DAC.  Your proposed changes are shortsighted like bring in more community members with new slogans like "no dilution" and a new flashy brand, and without consideration for things that matter more, like dev resources, sustainable consensus mechanisms, and launching BitAsset markets.  I don't appreciate the proposed pumping and fear mongering because it detracts from those who are here to actually make this a success with the time and diligence required.  Your proposal shows clear impatience.  Luckily, there is a stop coming up in five minutes, you are welcome to get off and board the next train.


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« Last Edit: April 08, 2015, 11:29:32 AM by Carpet Ride »
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Offline Empirical1.2

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Analyzing your proposal, what you're really suggesting is price pumping without long term vision for a sustainable DAC.  Your proposed changes are shortsighted like bring in more community members with new slogans like "no dilution" and a new flashy brand, and without consideration for things that matter more, like dev resources, sustainable consensus mechanisms, and launching BitAsset markets.  I don't appreciate the proposed pumping and fear mongering because it detracts from those who are here to actually make this a success with the time and diligence required.  Your proposal shows clear impatience.  Luckily, there is a stop coming up in five minutes, you are welcome to get off and board the next train.


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Yes,  just advising people to get off is very popular round here.


All is swell. 
If not, sell.

Now that actually turned out to be fantastic investment advice.

Thanks for the feedback though.

Option 1: Unfortunately development costs money, we've largely run out of it.  A team with $1 million+ in development funds and low overheads developing a BitAsset competitor could potentially be much more competitive than BTS accessing 15k a month via dilution that has a merger draining value too. I think that's the most likely competitor. I don't think there's any price pumping there, it's just maths, business and common sense.

Option 2: Is a lot about brand image, correct. Believe it or not, it's critical for a successful business.  There's also the fact that a DAC accessing 15k via dilution per month and with up to a 100k per month drain on the share price is not much more competitive than a no dilution DAC & less popular. A new brand may have a higher chance of long term success as well as the potential for lucrative short term gains. I believe a no dilution DAC, valued at $80 million like BTSX was with fees in the $0.02-0.05 can certainly be self sustaining, competitive and not some sort of price pump.

Option 3: Is about discussing a range of big changes to BTS. The time to do that is not when BTS falls to $10 million and everyone is panicking but before. If the merger doesn't add value and is overly expensive and we're below $10 million, yes I'd consider cancelling it. If dilution for non developers is not adding value, getting the share supply below 2.5 Billion and only employing developers (& paying them more) may be worth a try. If there are options like revenue sharing that could lighten the burden on shareholders and introduce genuine free market competition into BTS as opposed to who is the best at getting votes, then yes consider that too . All of these could potentially improve BTS at a foundational level and would not be price pumping imo.

The new BTS may well be successful just as it is. Well done to all the people who believe  in the fundamentals and are working diligently to make it a long term success and make positive contributions even in the face of up to 80% losses. Apologies for investors like me that tend to be overly critical in a long and sustained price decline.   


« Last Edit: April 08, 2015, 12:42:51 PM by Empirical1.2 »
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Offline carpet ride

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Are any BitAsset models more competitive or worth more than BitShares?
« Reply #10 on: April 08, 2015, 01:45:22 PM »
Analyzing your proposal, what you're really suggesting is price pumping without long term vision for a sustainable DAC.  Your proposed changes are shortsighted like bring in more community members with new slogans like "no dilution" and a new flashy brand, and without consideration for things that matter more, like dev resources, sustainable consensus mechanisms, and launching BitAsset markets.  I don't appreciate the proposed pumping and fear mongering because it detracts from those who are here to actually make this a success with the time and diligence required.  Your proposal shows clear impatience.  Luckily, there is a stop coming up in five minutes, you are welcome to get off and board the next train.


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Yes,  just advising people to get off is very popular round here.


All is swell. 
If not, sell.

Now that actually turned out to be fantastic investment advice.

Thanks for the feedback though.

Option 1: Unfortunately development costs money, we've largely run out of it.  A team with $1 million+ in development funds and low overheads developing a BitAsset competitor could potentially be much more competitive than BTS accessing 15k a month via dilution that has a merger draining value too. I think that's the most likely competitor. I don't think there's any price pumping there, it's just maths, business and common sense.

Option 2: Is a lot about brand image, correct. Believe it or not, it's critical for a successful business.  There's also the fact that a DAC accessing 15k via dilution per month and with up to a 100k per month drain on the share price is not much more competitive than a no dilution DAC & less popular. A new brand may have a higher chance of long term success as well as the potential for lucrative short term gains. I believe a no dilution DAC, valued at $80 million like BTSX was with fees in the $0.02-0.05 can certainly be self sustaining, competitive and not some sort of price pump.

Option 3: Is about discussing a range of big changes to BTS. The time to do that is not when BTS falls to $10 million and everyone is panicking but before. If the merger doesn't add value and is overly expensive and we're below $10 million, yes I'd consider cancelling it. If dilution for non developers is not adding value, getting the share supply below 2.5 Billion and only employing developers (& paying them more) may be worth a try. If there are options like revenue sharing that could lighten the burden on shareholders and introduce genuine free market competition into BTS as opposed to who is the best at getting votes, then yes consider that too . All of these could potentially improve BTS at a foundational level and would not be price pumping imo.

The new BTS may well be successful just as it is. Well done to all the people who believe  in the fundamentals and are working diligently to make it a long term success and make positive contributions even in the face of up to 80% losses. Apologies for investors like me that tend to be overly critical in a long and sustained price decline.

Thought leaders in this space are beginning to talk about how native b/ch token value is only correlated with community.  (B/chs with bitassets shake that up a bit, but not completely). 

If it's true that value comes community, then a fork with more money will need to buy their own community, which will be extremely expensive.  It's possible to do, but community builds from other things than money, such as 3rd party businesses.  Because of the cost of community, bitshares will be very difficult to compete against via forking and VC funding, esp considering further difficulty in setting up BitAsset markets, copying existing UIA markets and cloning 3rd party businesses.


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« Last Edit: April 08, 2015, 01:50:33 PM by Carpet Ride »
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Offline Stan

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I sort of proposed something similar. I think so far the merger is a failure. I think dilution on the other hand may not have done us any harm.

What did we get from the merger though? I don't see the voting features, I don't see the DNS features, I don't see that we got anything at all.

Guys.  You don't see those features yet because we have made the conscious decision to get the exchange rock solid first.  What you got was the team's ability to focus, rather than being obligated to work on the other things because of obligations to post 2/28 donors.  Those features are still on our roadmap with much more to come.  We just have to prioritize and focus our available resources.
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Offline yellowecho

Sell your fear to me.  I'm shorting bitUSD  8)
The fundamentals of BTS have never been stronger yet the price is back to the level it was during the IPO.  Think of where BTS is now compared to its initial release.. buying BTS at these levels is an absolute no-brainer as far as I'm concerned.  Weak hands are gonna regret their fears.
« Last Edit: April 08, 2015, 03:21:19 PM by yellowecho »
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Offline fuzzy

Re: Are any BitAsset models more competitive or worth more than BitShares?
« Reply #13 on: April 08, 2015, 03:17:14 PM »
Analyzing your proposal, what you're really suggesting is price pumping without long term vision for a sustainable DAC.  Your proposed changes are shortsighted like bring in more community members with new slogans like "no dilution" and a new flashy brand, and without consideration for things that matter more, like dev resources, sustainable consensus mechanisms, and launching BitAsset markets.  I don't appreciate the proposed pumping and fear mongering because it detracts from those who are here to actually make this a success with the time and diligence required.  Your proposal shows clear impatience.  Luckily, there is a stop coming up in five minutes, you are welcome to get off and board the next train.


Sent from my iPhone using Tapatalk

Yes,  just advising people to get off is very popular round here.


All is swell. 
If not, sell.

Now that actually turned out to be fantastic investment advice.

Thanks for the feedback though.

Option 1: Unfortunately development costs money, we've largely run out of it.  A team with $1 million+ in development funds and low overheads developing a BitAsset competitor could potentially be much more competitive than BTS accessing 15k a month via dilution that has a merger draining value too. I think that's the most likely competitor. I don't think there's any price pumping there, it's just maths, business and common sense.

Option 2: Is a lot about brand image, correct. Believe it or not, it's critical for a successful business.  There's also the fact that a DAC accessing 15k via dilution per month and with up to a 100k per month drain on the share price is not much more competitive than a no dilution DAC & less popular. A new brand may have a higher chance of long term success as well as the potential for lucrative short term gains. I believe a no dilution DAC, valued at $80 million like BTSX was with fees in the $0.02-0.05 can certainly be self sustaining, competitive and not some sort of price pump.

Option 3: Is about discussing a range of big changes to BTS. The time to do that is not when BTS falls to $10 million and everyone is panicking but before. If the merger doesn't add value and is overly expensive and we're below $10 million, yes I'd consider cancelling it. If dilution for non developers is not adding value, getting the share supply below 2.5 Billion and only employing developers (& paying them more) may be worth a try. If there are options like revenue sharing that could lighten the burden on shareholders and introduce genuine free market competition into BTS as opposed to who is the best at getting votes, then yes consider that too . All of these could potentially improve BTS at a foundational level and would not be price pumping imo.

The new BTS may well be successful just as it is. Well done to all the people who believe  in the fundamentals and are working diligently to make it a long term success and make positive contributions even in the face of up to 80% losses. Apologies for investors like me that tend to be overly critical in a long and sustained price decline.

I'm actually kind of glad that shareholders are a bit ruthless. What other crypto's give such power to the shareholders to have a voice? Bitshares is necessarily a more complex animal because of the early stage of growth, the volatility and the politics that comes from it.
I think it important.
But then again I prefer certain solutions to be proposed instead of simple complaints. Of course we are all human so we all complain from time to time.
« Last Edit: April 08, 2015, 03:19:07 PM by fuzzy »
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Offline liondani

Guys.  You don't see those features yet because we have made the conscious decision to get the exchange rock solid first.  What you got was the team's ability to focus, rather than being obligated to work on the other things because of obligations to post 2/28 donors.  Those features are still on our roadmap with much more to come.  We just have to prioritize and focus our available resources.

Hope that is true(?) despite the market-cap back on these levels ...   :-\
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