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Offline bytemaster

Privatizing BitAssets
« on: April 16, 2015, 04:30:14 AM »

It has been suggested before that BitAssets with feeds produced by private parties would enable greater variety of BitAssets to be created.   I would like to explore this idea further from the perspective of growing adoption.   

Today there is little incentive to market BitUSD because 100% of the profits of marketing BitUSD go to USD holders via yield or BTS holders via trading fees.  If BitUSD were a privately owned asset then the manager of that asset (responsible for publishing the price feed) could make money directly proportional to adoption.  Assume the manager got to set the market trading fees/transfer fees just like they can with any other user issued asset.

The end result would be a financial incentive to get a pegged asset released, marketed, and adopted.   The BTS network would profit by having the asset trading against BTS and other assets.   Initially this would result in a handful of attempts, but market competition would result in the best promoted and adopted variant having the highest usage and deepest markets.   Ultimately the market would settle on one or two variants and the rest would die off or be special purpose.   

1) Assume anyone could create a BitAsset and publish a feed for it.
2) Assume that "anyone" could be a group of 100+ individuals which are unlikely to collude and they must agree on the feed via multi-sig.
3) Assume that this group got to set the trading fees (%) on all trading volume with the asset.

So the question is, are delegates inherently more trustworthy than any other group of individuals collaborating to publish a trusted feed?   Sure they are elected, but an election is not the only or even the best way to establish trust.   

So I contend that a market full of private market pegged assets with profit motive for a near "winner takes all" on the team that can provide the highest liquidity and best marketed variant will produce better results than relying on socialized funding of the BitAssets produced by delegates. 

Thoughts?

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 rgcrypto

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Re: Privatizing BitAssets
« Reply #1 on: April 16, 2015, 04:52:29 AM »
Just to be sure.

Do you mean that MineBitShares could create it's own bitUSD, set the trading fee and profit from the movement of those bitusd inside the system?

Would this allow multiple "versions" of bitUSD for example?

zerosum

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Re: Privatizing BitAssets
« Reply #2 on: April 16, 2015, 05:00:17 AM »
 I bet my shirt that arhag and theoretical drltec will love it!  If by 'they publish a feed', you mean 'they determine who provides the feed'.

I personally, do not find this proposal earth shattering and/or extremely good, but not too many objections on my side either. Also I like that it seems not so hard to implement, so why not.
« Last Edit: April 16, 2015, 05:05:12 AM by tonyk2 »

Offline sparkles

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Re: Privatizing BitAssets
« Reply #3 on: April 16, 2015, 05:01:23 AM »
Just to be sure.

Do you mean that MineBitShares could create it's own bitUSD, set the trading fee and profit from the movement of those bitusd inside the system?

Would this allow multiple "versions" of bitUSD for example?

This is a good idea. If you could use your project to gain adoption of your BtiUSD which would have more liquidity than the delegate provided BitUSD then you would profit more and you can turn those profits into growing your operation.   

Offline bytemaster

Re: Privatizing BitAssets
« Reply #4 on: April 16, 2015, 05:05:31 AM »
I bet my shirt that arhag will love it!  If by 'they publish a feed', you mean 'they determine who provides the feed'.

I personally, do not find this proposal earth shattering and/or extremely good, but not too many objections on my side either. Also I like that it seems not so hard to implement, so why not.

You are correct, it is not hard to implement.  I was just curious about the relative value of "elected feed producers" vs "self-appointed" producers operating at a profit.   This is the equivalent to someone offering the service of being a judge of a prediction market.  Is it "decentralized enough" if the judge is a panel and unable to do anything other than publish a result?    They could cheat *once* and lose a lifetime of trading fees and it would require massive collusion.   

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 bytemaster

Re: Privatizing BitAssets
« Reply #5 on: April 16, 2015, 05:06:12 AM »
Just to be sure.

Do you mean that MineBitShares could create it's own bitUSD, set the trading fee and profit from the movement of those bitusd inside the system?

Would this allow multiple "versions" of bitUSD for example?

This is a good idea. If you could use your project to gain adoption of your BtiUSD which would have more liquidity than the delegate provided BitUSD then you would profit more and you can turn those profits into growing your operation.

Yes, and the best marketed/supported one would emerge the winner and gain huge profits from trading fees.
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 luckybit

Re: Privatizing BitAssets
« Reply #6 on: April 16, 2015, 05:07:50 AM »
This is a great idea. Multisig can solve the trust issue and we don't need delegates if it's done right.

But you do need some well known trusted individuals holding signatures, and you need a way to confirm that for example Bytemaster holds a key, and a bunch of other trusted people. I would say we can trust our community overall but at the same time we should be able to rate different groups of individuals based on previous performance on this. Perhaps we could use the power of collaborative filtering.

« Last Edit: April 16, 2015, 05:14:47 AM by luckybit »
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Offline luckybit

Re: Privatizing BitAssets
« Reply #7 on: April 16, 2015, 05:13:59 AM »
How about starting a distributed collaborative organization similar to what SwarmFund is doing?

We could then use that legal organization to issue anything we want in a trusted manner.

http://www.financemagnates.com/cryptocurrency/news/swarm-advised-that-crowdsale-model-falls-under-securities-laws-launches-distributed-collaborative-organizations/
http://bollier.org/sites/default/files/misc-file-upload/files/DistributedNetworksandtheLaw%20report,%20Swarm-Coin%20Center-Berkman.pdf
http://www.scienceofteamscience.org/2011-sessions-virtual

Woodshares is testing out the DCO model: http://www.woodshares.co/

It has been checked by some of the top legal minds in the country.

Quote
Hypothetical Token D: Distributed Collaborative Organization
The purpose and utility of a token in this category is a “membership” in some sort of organization with some rights that are unique to those members. This may or may not include some set of financial incentives that are attached to this membership.

So we could form Bitshares DCO. Start accepting memberships in the DCO. And then we can use the DCO.

Quote
Investment of Money: ​Token buyers are purchasing the membership with a token of some value.

Common Enterprise: ​Money raised is pooled but may not be managed by a single entity. Likely horizontalcommonality but not vertical commonality.

Reasonable Expectation of Profit: ​Purchasers of tokens of this type may or may not purchase in expectation ofprofit, depending on the value of the information.

Derived Mainly from the Efforts of Others: ​It could be the case where the operators of the entity have total control over fund utilization and direction of the entity, such that full control over the entity is exercisable by those putting up the funds, making them effectively managers and/or partners in the success of the entity.

This would necessarily include enough control to fundamentally impact the value of their tokens or the enterprise.

Generally speaking an organization of this type requires some sort of voting mechanism, presumably programmatically enforced via a smart contract system.

​Depending on the nature of the organization and the actual control held by people who have
committed capital, “shares” organizations which are structured on the blockchain (commonly referred to as Decentralized Autonomous Organizations) are likely not to be considered as securities.

« Last Edit: April 16, 2015, 05:25:40 AM by luckybit »
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zerosum

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Re: Privatizing BitAssets
« Reply #8 on: April 16, 2015, 05:15:08 AM »
I bet my shirt that arhag will love it!  If by 'they publish a feed', you mean 'they determine who provides the feed'.

I personally, do not find this proposal earth shattering and/or extremely good, but not too many objections on my side either. Also I like that it seems not so hard to implement, so why not.

You are correct, it is not hard to implement.  I was just curious about the relative value of "elected feed producers" vs "self-appointed" producers operating at a profit.  This is the equivalent to someone offering the service of being a judge of a prediction market. Is it "decentralized enough" if the judge is a panel and unable to do anything other than publish a result?    They could cheat *once* and lose a lifetime of trading fees and it would require massive collusion.

I do not have any strong opinion if this[part in bold] is the heart of the question you want answers to.

On a side note - 'determining who [provides the feed]' is inclusive of  'determine/selecting yourself to [provide the feed]', so why not  implement the wider and leave the particular choice to the party proposing/paying for the asset?
« Last Edit: April 16, 2015, 05:21:58 AM by tonyk2 »

Offline Shentist

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Re: Privatizing BitAssets
« Reply #9 on: April 16, 2015, 05:22:08 AM »
in general i like the idea!

- i see the pegged assets as one of the key features of bitshares, but at the moment we are crippled by lagging feedprices and not to be able to
introduce new ones.
- we could provide much faster new assets in the exchange without consensus (good - consensus needs time!)
- we need a way to help the user to get rid of the "bad" feed providers - something like a reputation system or so (could come later, if this would mean to change a lot in the background)

question:

- so 100 bitUSD can exist in parallel? how will this be possible?

Offline btswildpig

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Re: Privatizing BitAssets
« Reply #10 on: April 16, 2015, 05:26:47 AM »
in general i like the idea!

- i see the pegged assets as one of the key features of bitshares, but at the moment we are crippled by lagging feedprices and not to be able to
introduce new ones.
- we could provide much faster new assets in the exchange without consensus (good - consensus needs time!)
- we need a way to help the user to get rid of the "bad" feed providers - something like a reputation system or so (could come later, if this would mean to change a lot in the background)

question:

- so 100 bitUSD can exist in parallel? how will this be possible?

they shouldn't be allowed to named "BitUSD" .
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Offline roadscape

Re: Privatizing BitAssets
« Reply #11 on: April 16, 2015, 05:27:24 AM »
 - It would still use median price from the 1..n feed publishers, right?
 - I like that in the current system, I'm supporting the whole network and not a specific private party when I use bitusd
 - I think a referral program would provide incentive to promote a single/public MPA
 - Multiple competing MPAs could be confusing for storefronts and UX in general
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Offline luckybit

Re: Privatizing BitAssets
« Reply #12 on: April 16, 2015, 05:28:36 AM »
0
- we need a way to help the user to get rid of the "bad" feed providers - something like a reputation system or so (could come later, if this would mean to change a lot in the background)

Collaborative filtering would solve that problem.
A DCO would solve all the possible legal problems issuers could face. Simply let all issuers could face. Also it would provide legal cover in case anything does go wrong (not that anything would).
- It would still use median price from the 1..n feed publishers, right?
 - I like that in the current system, I'm supporting the whole network and not a specific private party when I use bitusd
 - I think a referral program would provide incentive to promote a single/public MPA
 - Multiple competing MPAs could be confusing for storefronts and UX in general

You could have multiple DCO's as well. Depending on how profitable it is to do it.

Overall I think Bytemaster is onto something but the idea needs more thought.  What is strategically speaking the best way of doing it?
« Last Edit: April 16, 2015, 05:31:31 AM by luckybit »
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Offline maqifrnswa

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Re: Privatizing BitAssets
« Reply #13 on: April 16, 2015, 05:38:31 AM »
I never liked the mixing of platform and asset roles (delegates both doing block verification and price feeds). Theoretically, the roles being performed by the same people centralizes the system (delegates have extra power/responsibility, and little incentive to think creatively about generating diversified feeds, and the market itself was just responding to external inputs the delegates didn't have a direct incentive to perform).

I'd like bitshares to eventually be asset agnostic, thus just a platform of rules people can use however they see fit. It is a blockchain with a specific and powerful set of features. At this point, demonstration of bitUSD and other bitassets are important, but allowing others to implement their own may be the future.

I guess I think of bitshares as http. You can do a lot over http besides websites, and html (bitasset) is separate from but is served over http (bitshares)
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Offline rnglab

Re: Privatizing BitAssets
« Reply #14 on: April 16, 2015, 05:53:37 AM »
How about starting a distributed collaborative organization similar to what SwarmFund is doing?
.

I had a dream where some delegates were already working on something similar, even bigger.
Witness: rmglab /// [old BTS 1.0 chain] Delegate bitshares-argentina (ex argentina-marketing-matt608) Thread https://bitsharestalk.org/index.php/topic,15781.0.html

 

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