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Offline plunder

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Would love your thoughts on my recent post in Bitcointalk:
https://bitcointalk.org/index.php?topic=1032927.0

Offline onceuponatime

Would love your thoughts on my recent post in Bitcointalk:
https://bitcointalk.org/index.php?topic=1032927.0
Could you please explain this part about BitShares delegates:

"Most likely these entities would pay a dividend to voting accounts"

Offline plunder

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Could you please explain this part about BitShares delegates:

"Most likely these entities would pay a dividend to voting accounts"

Sure: all else being equal, selfish stakeholders would rather vote for a 100% delegate that kicks back their profits (or a portion thereof) to voters than to vote for a 0% delegate.

zerosum

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Could you please explain this part about BitShares delegates:

"Most likely these entities would pay a dividend to voting accounts"

Sure: all else being equal, selfish stakeholders would rather vote for a 100% delegate that kicks back their profits (or a portion thereof) to voters than to vote for a 0% delegate.
That is quite a novice approach indeed. In most economic models it is assumed that the actors behave rationally. In most models it will be assumed that everybody will vote for the delegate producing the most value... In your theory though all actors will NOT find delegates producing value, so they will vote for the next 'best' thing - the delegate giving them more coins/shares in the enterprise with ever reducing total valuation...

BTW this logic is failing at one more point -  instead of voting the way you expect they  will do, they will be better off just selling (instead of voting).

Offline plunder

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That is quite a novice approach indeed. In most economic models it is assumed that the actors behave rationally. In most models it will be assumed that everybody will vote for the delegate producing the most value... In your theory though all actors will NOT find delegates producing value, so they will vote for the next 'best' thing - the delegate giving them more coins/shares in the enterprise with ever reducing total valuation...

BTW this logic is failing at one more point -  instead of voting the way you expect they  will do, they will be better off just selling (instead of voting).

You are both factually incorrect and missing the point:

Sure: all else being equal, selfish stakeholders would rather vote for a 100% delegate that kicks back their profits (or a portion thereof) to voters than to vote for a 0% delegate.


Offline svk

That is quite a novice approach indeed. In most economic models it is assumed that the actors behave rationally. In most models it will be assumed that everybody will vote for the delegate producing the most value... In your theory though all actors will NOT find delegates producing value, so they will vote for the next 'best' thing - the delegate giving them more coins/shares in the enterprise with ever reducing total valuation...

BTW this logic is failing at one more point -  instead of voting the way you expect they  will do, they will be better off just selling (instead of voting).

You are both factually incorrect and missing the point:

Sure: all else being equal, selfish stakeholders would rather vote for a 100% delegate that kicks back their profits (or a portion thereof) to voters than to vote for a 0% delegate.

You are missing reality though, we've been running Bitshares for nearly a year now and no delegates are running kick-back programs and the ones that tried never got any traction..
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Offline plunder

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That is quite a novice approach indeed. In most economic models it is assumed that the actors behave rationally. In most models it will be assumed that everybody will vote for the delegate producing the most value... In your theory though all actors will NOT find delegates producing value, so they will vote for the next 'best' thing - the delegate giving them more coins/shares in the enterprise with ever reducing total valuation...

BTW this logic is failing at one more point -  instead of voting the way you expect they  will do, they will be better off just selling (instead of voting).

You are both factually incorrect and missing the point:

Sure: all else being equal, selfish stakeholders would rather vote for a 100% delegate that kicks back their profits (or a portion thereof) to voters than to vote for a 0% delegate.

You are missing reality though, we've been running Bitshares for nearly a year now and no delegates are running kick-back programs and the ones that tried never got any traction..

Again, this was not the central point of my post, but I will say one thing about your argument: things happen differently at scale.

Offline fuzzy

That is quite a novice approach indeed. In most economic models it is assumed that the actors behave rationally. In most models it will be assumed that everybody will vote for the delegate producing the most value... In your theory though all actors will NOT find delegates producing value, so they will vote for the next 'best' thing - the delegate giving them more coins/shares in the enterprise with ever reducing total valuation...

BTW this logic is failing at one more point -  instead of voting the way you expect they  will do, they will be better off just selling (instead of voting).

You are both factually incorrect and missing the point:

Sure: all else being equal, selfish stakeholders would rather vote for a 100% delegate that kicks back their profits (or a portion thereof) to voters than to vote for a 0% delegate.

You are missing reality though, we've been running Bitshares for nearly a year now and no delegates are running kick-back programs and the ones that tried never got any traction..

Again, this was not the central point of my post, but I will say one thing about your argument: things happen differently at scale.

At scale, if the large majority choose this over delegates that add to the codebase, then it will be the consensus of the system and  not necessarily a terrible thing. Not sure why this would be a problem because in the current system with other cryptos holders have no choice at all.  The only time this becomes a problem is when said delegates choose to not publish blocks...which will get them voted out because they will not get the  block rewards to pay said voters....and even if they dip into their own coffer for these payouts once users recognize it is becoming dangerous to the  value of the shares they hold, you will see this change quite quickly (remember, bitshares voting is far more fluid than that of gov elections).  BitShares utilizes the most valuable resource available to networks...people.   Add transparency and the ability to audit power players, and add the ability for co.petition to offer a better deal (more value) and you gain significant pressure to motivate actors to act in the long term self interest.

Not seeing the problem honestly...BitShares might stumble at times, but that just means it will become even more adaptive and resilient over time.  Best practices are already emerging..
« Last Edit: April 21, 2015, 11:33:04 PM by fuzzy »
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Offline merivercap

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It's good to use the Bitshares as a 'company' metaphor to ease people's concerns.  The structure of proof-of-stake is exactly how almost all companies work today. 

I look at it from a corporate governance perspective.   In a typical company shareholders elect the Board of Directors based on voting stake.   The Board of Directors subsequently hire management.   Sure this system is not perfect.  There is potential for favoritism, shenanigans etc in hiring the Board as well as when the Board hires management, but these issues usually are not a major problem because companies must stay competitive and maintain or increase value.  The incentive for the shareholders is to increase the companies value to increase everyone's stake, especially those that have the most on the line.  I would expect wasting resources on a bad delegate for kick-backs would have a far greater chance of decreasing the total value of a large stakeholder's value compared to the value of any kick-backs they may receive.  Imagine what even the perception of wrongdoing would do to stakeholder value.   It's the same with companies.  That being said it's always good to have controls in place just like most companies do and with greater transparency & controls the value of the company or DACs should increase.  The DAC model creates more transparency and decentralization in corporate governance compared to typical private & public companies so shenanigans will be harder to sustain. 
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Offline plunder

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Re: Non-PoW consensus protocols (Ethereum, Bitshares, Stellar/Ripple, etc)
« Reply #10 on: April 22, 2015, 05:00:33 AM »
At scale, if the large majority choose this over delegates that add to the codebase, then it will be the consensus of the system and  not necessarily a terrible thing. Not sure why this would be a problem ...

Never said it was a problem, just a likely outcome of rational actors in a free market. Somebody else latched onto this as a "problem" and proceeded to argue against. I think my prediction, if true, would be quite positive for Bitshares.

Offline fuzzy

Re: Non-PoW consensus protocols (Ethereum, Bitshares, Stellar/Ripple, etc)
« Reply #11 on: April 22, 2015, 01:12:18 PM »
"Again, this was not the central point of my post" 

Got ya :)
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Offline merivercap

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Re: Non-PoW consensus protocols (Ethereum, Bitshares, Stellar/Ripple, etc)
« Reply #12 on: April 23, 2015, 12:39:55 AM »
Would love your thoughts on my recent post in Bitcointalk:
https://bitcointalk.org/index.php?topic=1032927.0

It's a good perspective and post.  I think this thread got off course quite a bit.

I agree there is no need to alter the stake to trust relationship.  BTW did Ethereum finalize its POS algorithm?
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