Author Topic: Burning is Still Alive and Well  (Read 10016 times)

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Offline Riverhead

How do we communicate that there are 3.7B coins. No inflation, no burning. Fixed supply but controlled circulation.

I think the problem is that this is not what a lot of us want.  We want there to be less than 3B coins and decreasing.  The value proposition of BTS is that when it becomes successful, it can burn more coins than are added, being deflationary, thus paying a dividend to holders.

The perception of future inflation is a huge factor in the value of BTS.  At 2.5B BTS and decreasing, each BTS is going to be a lot more valuable than at 3.7B and not decreasing.  And the more valuable the BTS are, the more the workers can get paid out of the BTS that are created.

It amounts to the same thing just at a different rate. Since BTS is used to short assets into existence the higher demand for the assets the more BTS is taken out of circulation as collateral. The effective reduced supply increases the value of BTS; the dividend you mention. While true also burning BTS supply would hasten this it would just be increasing the rate of what would already be happening in a growing market.

Offline BTSdac

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what is the benefit of being a BTS holder again ? I fail to see that yet in this model .

Growth...right ..... but even if you bring 10 million people in the system , there is still a question : which form of dividend  is given to every shareholder ?

If you are betting on tons of people buy fixed amount of share resulted in the rise of price .... then XRP could claim the same thing .
you can use bts to create bitusd.
if it is become a 100000tps system , if the fee is 1cent per tx, it would been1000$ per second,3.600,000 per hour, 31.5 B $ per year? 
am I wrong?
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Offline tonyk

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I get the opposite point of view in this thread...well kind of.

The big problem is - Lesson NOT learned from 1.0 - Perceived inflation is worse than actual inflation.

How do we communicate that there are 3.7B coins. No inflation, no burning. Fixed supply but controlled circulation.

In a Stan moment it reminds me of how airships control altitude. Helium is only lighter than air at near atmospheric pressure. Compress it into tanks and it is not lighter than air. By controlling the portion of helium in the gas bags vs what's in the tanks the buoyancy of the ship can be tightly controlled.

Continuing the Stan style... keep in mind that we in the early stages of flying [blockchains in this case] and we are still using hydrogen...highly flammable!
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline Ander

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How do we communicate that there are 3.7B coins. No inflation, no burning. Fixed supply but controlled circulation.

I think the problem is that this is not what a lot of us want.  We want there to be less than 3B coins and decreasing.  The value proposition of BTS is that when it becomes successful, it can burn more coins than are added, being deflationary, thus paying a dividend to holders.

The perception of future inflation is a huge factor in the value of BTS.  At 2.5B BTS and decreasing, each BTS is going to be a lot more valuable than at 3.7B and not decreasing.  And the more valuable the BTS are, the more the workers can get paid out of the BTS that are created.
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Offline Riverhead

I get the opposite point of view in this thread...well kind of.

The big problem is - Lesson NOT learned from 1.0 - Perceived inflation is worse than actual inflation.

How do we communicate that there are 3.7B coins. No inflation, no burning. Fixed supply but controlled circulation.

In a Stan moment it reminds me of how airships control altitude. Helium is only lighter than air at near atmospheric pressure. Compress it into tanks and it is not lighter than air. By controlling the portion of helium in the gas bags vs what's in the tanks the buoyancy of the ship can be tightly controlled.
« Last Edit: June 09, 2015, 05:26:18 pm by Riverhead »

Offline Ander

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BTS holders are in complete control over how fast things are burnt.   Their is a max daily spending limit hard coded and unchangeable.   

Sustainability and "fixed supply" makes accounting checks easy.

The max daily spending limit being hard coded is important.

Burning feels a lot better than putting BTS in the reserve pool.  When it is burned, it can never exist again, but with the reserve pool, it could. 

The goal of BTS is to reach a state where the supply is decreasing, thus providing dividends and showing a profit. 


In the BTS 0.x system, the spending limit was going to be cut in half every 4 years.  Is that still the case in BTS 2.0?   
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Offline tonyk

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I get the opposite point of view in this thread...well kind of.

The big problem is - Lesson NOT learned from 1.0 - Perceived and possible inflation is worse than actual inflation.
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline Riverhead

BTS holders are in complete control over how fast things are burnt.   Their is a max daily spending limit hard coded and unchangeable.   

Sustainability and "fixed supply" makes accounting checks easy.

So if the fees are sufficient to pay the workers the max allowed pay what happens when the pool is full? Do the funds that are normally redirected to the pool go elsewhere? Or does it just keep building and building until it reaches an equilibrium of spendable supply?

Offline fav

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I am with svk and many others. Recycling for reuse is not burning. And it is not just semantics.

Your post lead me to a different thought though.
BTS share are made of primarily carbon.
When they are recycled they are turned to.....Graphene of course. :)
--
this. however, we could just setup a worker dedicated to burning BTS.
--
No we cannot. All we can set up is a worker that recycles the BTS back to the fund for reissuance..

of course we can.

how about this setup:

I (or someone else) will setup a worker
x-funds
each month the funds will be vested.
worker will send bitshares to a multisig address
multi sig address holders will be:
4 trusted people from the forum + each will promise to create a random name and "forget" the private key (via webwallet or something) + 10 random names from recent registers

correct me if I'm wrong please.
« Last Edit: June 09, 2015, 05:18:50 pm by fav »

Offline bytemaster

BTS holders are in complete control over how fast things are burnt.   Their is a max daily spending limit hard coded and unchangeable.   

Sustainability and "fixed supply" makes accounting checks easy.
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Offline tonyk

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Burn means different things to different people I suppose. In the case of BTS Graphene a burnt share is one that is held by the blockchain for possible release later. In BTS 1.0, and I believe most other instances, it means transferring of value to an address for which the private key is not known.

It's just semantics.

In the case of BTS Graphene the pool is drawn on to cover the costs of running the network. In BTS 1.0 where a burn is the traditional understanding the share holders would have to decide to hard fork to increase supply if the number of BTS got too low. Both scenarios result in the same thing - enough BTS to allow the protocol to exist. The difference is BTS Graphine doesn't require the hard fork.

Since the pool cannot be spent by anyone but only metered out to workers I feel it is basically burnt. It cannot be used in commerce.

I am with svk and many others. Recycling for reuse is not burning. And it is not just semantics.

Your post lead me to a different thought though.
BTS share are made of primarily carbon.
When they are recycled they are turned to.....Graphene of course. :)

OK so I re-read the post on project funding and I see what I was missing:

https://bitshares.github.io/technology/stakeholder-approved-project-funding/

While it still doesn't qualify as what I consider burning, as long as the amount "burnt" or going into the reserve fund exceeds the amount being paid to witnesses and workers, the amount of freely available BTS will decrease. This will have the same effect as burning, as the shares will not be in circulation but held by the blockchain, however the funds may need to be released later on if the amount being "burnt" starts to decrease and falls below the sum of witness and worker pay.

In the end I think it's quite clever, it lets the blockchain build up a rainy-day fund of sorts that can be used to maintain witness and project funding in the case transaction volume falters for example.

Clever...as  self-chained bike


Burn means different things to different people I suppose. In the case of BTS Graphene a burnt share is one that is held by the blockchain for possible release later. In BTS 1.0, and I believe most other instances, it means transferring of value to an address for which the private key is not known.

It's just semantics.

In the case of BTS Graphene the pool is drawn on to cover the costs of running the network. In BTS 1.0 where a burn is the traditional understanding the share holders would have to decide to hard fork to increase supply if the number of BTS got too low. Both scenarios result in the same thing - enough BTS to allow the protocol to exist. The difference is BTS Graphine doesn't require the hard fork.

Since the pool cannot be spent by anyone but only metered out to workers I feel it is basically burnt. It cannot be used in commerce.

I am with svk and many others. Recycling for reuse is not burning. And it is not just semantics.

Your post lead me to a different thought though.
BTS share are made of primarily carbon.
When they are recycled they are turned to.....Graphene of course. :)

this. however, we could just setup a worker dedicated to burning BTS.

No we cannot. All we can set up is a worker that recycles the BTS back to the fund for reissuance..

Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline bytemaster

Under BitShares 2.0 the "reserve fund" is just another way of looking at "burned funds".    The maximum spending rate has not changed.   Therefore the "available supply" is technically unchanged.   Except perhaps we could claim 3.7 Billion shares and pump coin market cap ;)

No don't do that, everyone would think BTS had diluted again and would dump.

Right :)
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Offline clayop

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I think the basic burning structure of 1.0and 2.0 is the same. In the case of 2.0, dividened means increasing amount of reserved fund.
 
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Offline Ander

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Under BitShares 2.0 the "reserve fund" is just another way of looking at "burned funds".    The maximum spending rate has not changed.   Therefore the "available supply" is technically unchanged.   Except perhaps we could claim 3.7 Billion shares and pump coin market cap ;)

No don't do that, everyone would think BTS had diluted again and would dump.
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Offline fav

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Burn means different things to different people I suppose. In the case of BTS Graphene a burnt share is one that is held by the blockchain for possible release later. In BTS 1.0, and I believe most other instances, it means transferring of value to an address for which the private key is not known.

It's just semantics.

In the case of BTS Graphene the pool is drawn on to cover the costs of running the network. In BTS 1.0 where a burn is the traditional understanding the share holders would have to decide to hard fork to increase supply if the number of BTS got too low. Both scenarios result in the same thing - enough BTS to allow the protocol to exist. The difference is BTS Graphine doesn't require the hard fork.

Since the pool cannot be spent by anyone but only metered out to workers I feel it is basically burnt. It cannot be used in commerce.

I am with svk and many others. Recycling for reuse is not burning. And it is not just semantics.

Your post lead me to a different thought though.
BTS share are made of primarily carbon.
When they are recycled they are turned to.....Graphene of course. :)

this. however, we could just setup a worker dedicated to burning BTS.