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Offline zyxxer

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Couple of newbie questions.
« on: December 25, 2013, 08:03:35 PM »

Hello!

I have a couple of general questions on PTS and Bitshares, maybe someone can help:

1. Since PTS are mined, how did the developers (i.e. Invictus) raise funds from starting PTS? By mining relatively early?
2. Its my understanding that Bitshares are mined as well. How then do PTS lead to a stake in Bitshares, given that these are mined?
3. Will there be different kinds of PTSs for given kind of DACs, and if so, will the current PTSs also also lead to ownership in new PTSs?
4. In the whitepaper I read that different BitAssets are supposed to follow the price of an underlying, e.g. gold. Its not quite clear to me what should make this happen. To me (I am a financial engineer), a BitAsset seems to resemble a financial futures (e.g. on a stock). In the financial world, the price of the future is ultimately tied to that of the underlying be a right to  physical delivery that the futures holder has. This does not seem to be the case for BitAssets, so I wonder what mechanism is supposed to steer the price.

Thanks!

Offline ruletheworld

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Re: Couple of newbie questions.
« Reply #1 on: December 25, 2013, 08:17:13 PM »
Hello!

I have a couple of general questions on PTS and Bitshares, maybe someone can help:

1. Since PTS are mined, how did the developers (i.e. Invictus) raise funds from starting PTS? By mining relatively early?
2. Its my understanding that Bitshares are mined as well. How then do PTS lead to a stake in Bitshares, given that these are mined?
3. Will there be different kinds of PTSs for given kind of DACs, and if so, will the current PTSs also also lead to ownership in new PTSs?
4. In the whitepaper I read that different BitAssets are supposed to follow the price of an underlying, e.g. gold. Its not quite clear to me what should make this happen. To me (I am a financial engineer), a BitAsset seems to resemble a financial futures (e.g. on a stock). In the financial world, the price of the future is ultimately tied to that of the underlying be a right to  physical delivery that the futures holder has. This does not seem to be the case for BitAssets, so I wonder what mechanism is supposed to steer the price.

Thanks!
1. Invictus had VC funding before the project, but yes, they do own a lot of PTS too, by
a) Mining early
b) Running an early PTS mine and taking a fee
c) Buying PTS on the open market
d) Selling a founder Keyhotee ID for 10PTS per id

2. BitShares will probably be Proof of Stake. However, the answer to your question is similar to what MemoryCoin 2.0 did, although hopefully a little bit easier (i.e. direct importing of PTS wallet.dat) in that when the genesis block is mined, it will contain the distribution information based on wallet addresses. If you hold the private keys to a given wallet address, then you'll automatically have a stake in BitShares because the genesis block was mined that way.

3. There will only be one PTS but different DACs from Invictus and your PTS will give you a share in all the DACs that honor PTS.

4. BitAssets are not really like financial futures, see <shamelessPlug>http://btcgeek.com/bitshares-guide/</shamelessPlug> - I discuss a lot of frequently asked questions about Bitshares/BitAssets

Hope this helps
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Offline zyxxer

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Re: Couple of newbie questions.
« Reply #2 on: December 25, 2013, 09:00:48 PM »
Hello!

I have a couple of general questions on PTS and Bitshares, maybe someone can help:

1. Since PTS are mined, how did the developers (i.e. Invictus) raise funds from starting PTS? By mining relatively early?
2. Its my understanding that Bitshares are mined as well. How then do PTS lead to a stake in Bitshares, given that these are mined?
3. Will there be different kinds of PTSs for given kind of DACs, and if so, will the current PTSs also also lead to ownership in new PTSs?
4. In the whitepaper I read that different BitAssets are supposed to follow the price of an underlying, e.g. gold. Its not quite clear to me what should make this happen. To me (I am a financial engineer), a BitAsset seems to resemble a financial futures (e.g. on a stock). In the financial world, the price of the future is ultimately tied to that of the underlying be a right to  physical delivery that the futures holder has. This does not seem to be the case for BitAssets, so I wonder what mechanism is supposed to steer the price.

Thanks!
1. Invictus had VC funding before the project, but yes, they do own a lot of PTS too, by
a) Mining early
b) Running an early PTS mine and taking a fee
c) Buying PTS on the open market
d) Selling a founder Keyhotee ID for 10PTS per id

2. BitShares will probably be Proof of Stake. However, the answer to your question is similar to what MemoryCoin 2.0 did, although hopefully a little bit easier (i.e. direct importing of PTS wallet.dat) in that when the genesis block is mined, it will contain the distribution information based on wallet addresses. If you hold the private keys to a given wallet address, then you'll automatically have a stake in BitShares because the genesis block was mined that way.

3. There will only be one PTS but different DACs from Invictus and your PTS will give you a share in all the DACs that honor PTS.

4. BitAssets are not really like financial futures, see <shamelessPlug>http://btcgeek.com/bitshares-guide/</shamelessPlug> - I discuss a lot of frequently asked questions about Bitshares/BitAssets

Hope this helps

Thats super helpful, thanks vm. As a follow up to 2.: Does that mean that all BitShares will go to PTS holders? I.e. if I own 1% of all PTS, will I also end up owning 1% of all BitShares? Cheers!

Offline ruletheworld

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Re: Couple of newbie questions.
« Reply #3 on: December 25, 2013, 09:04:37 PM »
Hello!

I have a couple of general questions on PTS and Bitshares, maybe someone can help:

1. Since PTS are mined, how did the developers (i.e. Invictus) raise funds from starting PTS? By mining relatively early?
2. Its my understanding that Bitshares are mined as well. How then do PTS lead to a stake in Bitshares, given that these are mined?
3. Will there be different kinds of PTSs for given kind of DACs, and if so, will the current PTSs also also lead to ownership in new PTSs?
4. In the whitepaper I read that different BitAssets are supposed to follow the price of an underlying, e.g. gold. Its not quite clear to me what should make this happen. To me (I am a financial engineer), a BitAsset seems to resemble a financial futures (e.g. on a stock). In the financial world, the price of the future is ultimately tied to that of the underlying be a right to  physical delivery that the futures holder has. This does not seem to be the case for BitAssets, so I wonder what mechanism is supposed to steer the price.

Thanks!
1. Invictus had VC funding before the project, but yes, they do own a lot of PTS too, by
a) Mining early
b) Running an early PTS mine and taking a fee
c) Buying PTS on the open market
d) Selling a founder Keyhotee ID for 10PTS per id

2. BitShares will probably be Proof of Stake. However, the answer to your question is similar to what MemoryCoin 2.0 did, although hopefully a little bit easier (i.e. direct importing of PTS wallet.dat) in that when the genesis block is mined, it will contain the distribution information based on wallet addresses. If you hold the private keys to a given wallet address, then you'll automatically have a stake in BitShares because the genesis block was mined that way.

3. There will only be one PTS but different DACs from Invictus and your PTS will give you a share in all the DACs that honor PTS.

4. BitAssets are not really like financial futures, see <shamelessPlug>http://btcgeek.com/bitshares-guide/</shamelessPlug> - I discuss a lot of frequently asked questions about Bitshares/BitAssets

Hope this helps

Thats super helpful, thanks vm. As a follow up to 2.: Does that mean that all BitShares will go to PTS holders? I.e. if I own 1% of all PTS, will I also end up owning 1% of all BitShares? Cheers!
The original promise was that PTS holders will get 10% of Bitshares when they are released, i.e. if you hold 1% of all PTS, you'll hold 0.1% of all BTS when they come out. Bytemaster proposed getting this up to 50% somewhere but not sure what the status of that proposal is.
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Offline zyxxer

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Re: Couple of newbie questions.
« Reply #4 on: December 25, 2013, 10:05:50 PM »
Mhh, that makes quite some difference to the value of Protoshares (factor 5), strange that this is left unclear. Do you know who gets the rest (i.e. 90% or 50%), given that its proof of stake?

Offline phoenix

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Re: Couple of newbie questions.
« Reply #5 on: December 25, 2013, 10:14:39 PM »
Mhh, that makes quite some difference to the value of Protoshares (factor 5), strange that this is left unclear. Do you know who gets the rest (i.e. 90% or 50%), given that its proof of stake?

This is a subject that has been heavily debated on the forum the past few weeks. There are a lot of different ideas, so you can't be sure until they finalize everything.
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Offline Stan

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Re: Couple of newbie questions.
« Reply #6 on: December 25, 2013, 10:22:16 PM »
Mhh, that makes quite some difference to the value of Protoshares (factor 5), strange that this is left unclear. Do you know who gets the rest (i.e. 90% or 50%), given that its proof of stake?

This is a subject that has been heavily debated on the forum the past few weeks. There are a lot of different ideas, so you can't be sure until they finalize everything.

BitShares is under development and we let everyone watch our thinking unfold in broad daylight.  Sharing our thinking with everyone does not constitute a Social Contract.  We always state that formally as we did for ProtoShares.

Visit invictus-innovations.com to see our latest thinking.  We hope this constitutes a simple, fair blend of all the great ideas we have heard from this forum.

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 bytemaster

Re: Couple of newbie questions.
« Reply #7 on: December 26, 2013, 12:32:02 AM »
1) PTS mining was done fairly with equal opportunity for all.  A someone unassociated with Invictus mined the first block.  We have since hired him (Super3), but at the time he did not work for us.

2) Invictus mined like everyone else early on, but the competition was fierce with all of the cloud mining.  Invictus did not mine secretly with 0 competition.

3) Invictus earned PTS in two ways, our mining pool which we ran for the first couple of weeks and through selling Keyhotee Founder IDs.

4) Invictus purchased some PTS

All told, Invictus is probably in the top 5 holders of PTS but we have no idea how much anyone else has.   At the time MMC was released there were a few addresses that had over 30K PTS and I do not believe we have that much PTS sitting at any one address, though I can confirm that we have over 30K PTS.   At the present moment we have about 5% of all PTS mined to date and thus hardly a controlling interest.

5) Invictus was funded with a promise of $575K over 9 months and we have received $200K which has been used to get us to where we are now. The remaining $375K will come in over the months ahead.    While we have almost $1 million worth of PTS they are not very liquid and are the primary way that we can personally profit from the success of our efforts.

6) We have just launched AngelShares which represents our new funding strategy which should allow us to accelerate our development schedule.   


 
« Last Edit: December 26, 2013, 12:34:05 AM by bytemaster »
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Offline dacer

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Re: Couple of newbie questions.
« Reply #8 on: December 26, 2013, 01:56:30 AM »
bytemaster, you said you've just launched AngelShares, where is the official announcement?

Offline bytemaster

Re: Couple of newbie questions.
« Reply #9 on: December 26, 2013, 02:05:05 AM »
bytemaster, you said you've just launched AngelShares, where is the official announcement?
https://bitsharestalk.org/index.php?topic=1631.0
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Offline zyxxer

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Re: Couple of newbie questions.
« Reply #10 on: December 26, 2013, 12:27:49 PM »
1) PTS mining was done fairly with equal opportunity for all.  A someone unassociated with Invictus mined the first block.  We have since hired him (Super3), but at the time he did not work for us.

2) Invictus mined like everyone else early on, but the competition was fierce with all of the cloud mining.  Invictus did not mine secretly with 0 competition.

3) Invictus earned PTS in two ways, our mining pool which we ran for the first couple of weeks and through selling Keyhotee Founder IDs.

4) Invictus purchased some PTS

All told, Invictus is probably in the top 5 holders of PTS but we have no idea how much anyone else has.   At the time MMC was released there were a few addresses that had over 30K PTS and I do not believe we have that much PTS sitting at any one address, though I can confirm that we have over 30K PTS.   At the present moment we have about 5% of all PTS mined to date and thus hardly a controlling interest.

5) Invictus was funded with a promise of $575K over 9 months and we have received $200K which has been used to get us to where we are now. The remaining $375K will come in over the months ahead.    While we have almost $1 million worth of PTS they are not very liquid and are the primary way that we can personally profit from the success of our efforts.

6) We have just launched AngelShares which represents our new funding strategy which should allow us to accelerate our development schedule.   

Thanks for that. I did not intend to imply that Invictus has an unfair share, just wanted to understand how things work.

Offline zyxxer

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Re: Couple of newbie questions.
« Reply #11 on: December 26, 2013, 02:46:26 PM »
Hello!

I have a couple of general questions on PTS and Bitshares, maybe someone can help:

1. Since PTS are mined, how did the developers (i.e. Invictus) raise funds from starting PTS? By mining relatively early?
2. Its my understanding that Bitshares are mined as well. How then do PTS lead to a stake in Bitshares, given that these are mined?
3. Will there be different kinds of PTSs for given kind of DACs, and if so, will the current PTSs also also lead to ownership in new PTSs?
4. In the whitepaper I read that different BitAssets are supposed to follow the price of an underlying, e.g. gold. Its not quite clear to me what should make this happen. To me (I am a financial engineer), a BitAsset seems to resemble a financial futures (e.g. on a stock). In the financial world, the price of the future is ultimately tied to that of the underlying be a right to  physical delivery that the futures holder has. This does not seem to be the case for BitAssets, so I wonder what mechanism is supposed to steer the price.

Thanks!
1. Invictus had VC funding before the project, but yes, they do own a lot of PTS too, by
a) Mining early
b) Running an early PTS mine and taking a fee
c) Buying PTS on the open market
d) Selling a founder Keyhotee ID for 10PTS per id

2. BitShares will probably be Proof of Stake. However, the answer to your question is similar to what MemoryCoin 2.0 did, although hopefully a little bit easier (i.e. direct importing of PTS wallet.dat) in that when the genesis block is mined, it will contain the distribution information based on wallet addresses. If you hold the private keys to a given wallet address, then you'll automatically have a stake in BitShares because the genesis block was mined that way.

3. There will only be one PTS but different DACs from Invictus and your PTS will give you a share in all the DACs that honor PTS.

4. BitAssets are not really like financial futures, see <shamelessPlug>http://btcgeek.com/bitshares-guide/</shamelessPlug> - I discuss a lot of frequently asked questions about Bitshares/BitAssets

Hope this helps

Having read the link you listed in 4., I must point out that this does not really make it clear how the price of the BitAsset is supposed to be tied to the underlying (in the critical part of the paper a book is referred). From what I have seen elsewhere (and I do this for a living), there always is some kind of arbitrage opportunity between a derivative and the underlying. In the case of an American option, for example, you can buy the option, exercise it and thus obtain the underlying, if said option is too cheap. In the case of a futures, its the same thing (with the difference that delivery is possible only at maturity, but thats not critical). I think what resembles BitAssets more closely is a prediction market we e.g. see in sports betting, say Betfair.com. Here, you can trade the probability of a particular event occuring, say that Manchester wins against Arsenal. If the traded probability is say too low, you buy the market at say 0.2 and then obtain 1.0 at the end of the match if Manchester really wins. Thats the arbitrage. In the case of BitShares, I do not see that. I am not 100% sure what will happen without such a mechanism, but there would surely be a big opportunity for market manipulation, e.g. driving up the price of the BitAsset to force a short squeeze, thereby inducing more buys, etc.
« Last Edit: December 26, 2013, 03:31:53 PM by zyxxer »

Offline bytemaster

Re: Couple of newbie questions.
« Reply #12 on: December 26, 2013, 03:48:19 PM »
It does work on the same principle as a prediction market.  Whether that can be manipulated successfully is something we shall find out and work  to counter. 


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Offline ruletheworld

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Re: Couple of newbie questions.
« Reply #13 on: December 27, 2013, 12:33:37 AM »
Hello!

I have a couple of general questions on PTS and Bitshares, maybe someone can help:

1. Since PTS are mined, how did the developers (i.e. Invictus) raise funds from starting PTS? By mining relatively early?
2. Its my understanding that Bitshares are mined as well. How then do PTS lead to a stake in Bitshares, given that these are mined?
3. Will there be different kinds of PTSs for given kind of DACs, and if so, will the current PTSs also also lead to ownership in new PTSs?
4. In the whitepaper I read that different BitAssets are supposed to follow the price of an underlying, e.g. gold. Its not quite clear to me what should make this happen. To me (I am a financial engineer), a BitAsset seems to resemble a financial futures (e.g. on a stock). In the financial world, the price of the future is ultimately tied to that of the underlying be a right to  physical delivery that the futures holder has. This does not seem to be the case for BitAssets, so I wonder what mechanism is supposed to steer the price.

Thanks!
1. Invictus had VC funding before the project, but yes, they do own a lot of PTS too, by
a) Mining early
b) Running an early PTS mine and taking a fee
c) Buying PTS on the open market
d) Selling a founder Keyhotee ID for 10PTS per id

2. BitShares will probably be Proof of Stake. However, the answer to your question is similar to what MemoryCoin 2.0 did, although hopefully a little bit easier (i.e. direct importing of PTS wallet.dat) in that when the genesis block is mined, it will contain the distribution information based on wallet addresses. If you hold the private keys to a given wallet address, then you'll automatically have a stake in BitShares because the genesis block was mined that way.

3. There will only be one PTS but different DACs from Invictus and your PTS will give you a share in all the DACs that honor PTS.

4. BitAssets are not really like financial futures, see <shamelessPlug>http://btcgeek.com/bitshares-guide/</shamelessPlug> - I discuss a lot of frequently asked questions about Bitshares/BitAssets

Hope this helps

Having read the link you listed in 4., I must point out that this does not really make it clear how the price of the BitAsset is supposed to be tied to the underlying (in the critical part of the paper a book is referred). From what I have seen elsewhere (and I do this for a living), there always is some kind of arbitrage opportunity between a derivative and the underlying. In the case of an American option, for example, you can buy the option, exercise it and thus obtain the underlying, if said option is too cheap. In the case of a futures, its the same thing (with the difference that delivery is possible only at maturity, but thats not critical). I think what resembles BitAssets more closely is a prediction market we e.g. see in sports betting, say Betfair.com. Here, you can trade the probability of a particular event occuring, say that Manchester wins against Arsenal. If the traded probability is say too low, you buy the market at say 0.2 and then obtain 1.0 at the end of the match if Manchester really wins. Thats the arbitrage. In the case of BitShares, I do not see that. I am not 100% sure what will happen without such a mechanism, but there would surely be a big opportunity for market manipulation, e.g. driving up the price of the BitAsset to force a short squeeze, thereby inducing more buys, etc.

I added an additional paragraph in the original link about how the prediction market is supposed to work.
The basic idea is that if the price of a BitAsset deviates significantly from the market price of the underlying Asset, then there will be incentives to bring it back in line, by longs/shorts.

I am with you on your concern of a short squeeze. If people can corner a given market, short-squeeze might occur (this is automatically enforced by the protocol). If there are many independent market participants, it is unlikely to happen. This is another reason I'd like to see Bitshares spread to as many people as possible and the more independent players in the market, the better. Hopefully there will be no collusion at least in the initial stages when the system might be a bit more vulnerable to big players colluding. As Bitshares disseminate to more and more people, hopefully, the chances of this happening should go down significantly.
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