Author Topic: Sidechains should be a priority for bitshares.  (Read 17632 times)

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Offline fuzzy

But the truth is that bitcoin will be the collateral for the most commonly used USD derivative as it is the biggest most liquid and most trusted crypto.
Bitshares need to make btc the default collateral for bit assets or another USD derivative will take its place.
just saying.

Replace Bitcoin with USD  and USD derivative with Bitcoin and it describes almost every conversation I've had with people who have never heard of the crypto movement.

The Bitcoin user base, and crypto in general, is so tiny we are all about equal in network effect. Amazon.com has more outstanding gift card balances than all of crypto market cap combined.

Also, horse and buggy had massive network affect before the car came along  8)

“If I had asked people what they wanted, they would have said faster horses.”

Great news for jonnybitcoin though.. in 2.0 you can collateralize bitAssets with bitBTC! Fair compromise?

@starspirit.. Today we still use the term 'horse power', but we do not have horses under the hood anymore.



I will just state it simply...

We introduce something other that BTS as the collateralize.. we lose the rights and freedoms that come with the vote.

That is all there is too it. It's not an economic question in my opinion.

As far as network effect goes, we got the solution.. and the day after we introduce it here is someone asking to hitch BTC to this wagon... a sure sign of the success to come. :)

^ well stated data. Welll stated.
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Offline fuzzy

What I'm saying is bitcoin is not the best all singing all dancing cryptocurrency/blockchain.
However it has the network effect (metcalfe's law), it is the gold standard of cryptocoins, the internets reserve currency with huge infrastructure and public awareness. The default way to move crypto value around. The easiest way to buy any cryptocoin is with bitcoin.

The first kind of people to adopt a USD crypto derivative will be bitcoiners themselves and they will be more comfortable knowing they will receive bitcoins in the event of a black swan.
Most other 2.0 projects will add a bitcoin sidechain gateway eventually I just think bitshares should lead not follow.

nearly all CFDs and options are settled with USD because it is the worlds reserve currency they are not settled in shares, gold, copper or danish kroner.

Our bonus hangout series is beginning to reach "beyond crypto"....and some of them are going to bring in many new eyes who are looking for solutions to today's problems.  They will be taught that bitshares has separation of powers built in and that bitcoin is dangerously centralized and reliant on mining cartels.  They will also be taught at the same time that bitcoin cannot even find consensus on basic things (like changing block sizes) and that any changes made will have to be given to a technocracy who cannot be voted out by holders...tthe only option holders will have is to risk losing it all by leaving the system.

Now I love what bitcoin started, don't get me wrong, but this is to everyone here: bitcoin is going to change significantly or die (or fracture it's network effect into many other chains-likely new so miners can continue keeping their unnecessary operations afloat just a little longer as we have seen in the pow era from nearly the beginning).
Some will come here to try to get us to subjugate ourselves to bitcoin to help "protect bitshares" by using bitcoin.  Others will come to attack us and spread FUD. 
Now I'm not saying OP has that intention here, but I will say that BitShares keeps getting better and better.  As this happens bitcoiners who have always attacked us will keep watching bitcoin floundering in the wind--they will try in many ways to get us to sell out to their network effect...because that will be all they have left to hold onto...at least for awhile.

My team's jim willie hangout received almost 28,000 unique views from people who are not already in crypto...but would be open to the Right solution.  He will be on again someday...but I do not plan on stopping there.  Trust me on that.  BitShare's economic incentives have empowered me and the team to do this...for bitshares.  I don't have to kiss mining cartel butts. I just have to keep doing what the community has seen me doing from nearly day one.  Not only that, but BitShares' ability to process (conservatively) 100,000tps while bitcoin is still stuck at 7, enables me to continue approaching industries that require far more than 7tps. 

So if anyone thinks our network effect is going to always be inferior to bitcoin...or that we will need to partner with bitcoin or risk bitcoin stealing our work, I have news for you...Beyond Bitcoin is here for a reason.  We chose bitshares from the VERY BEGINNING for a reason.
...because we wanted to be accountable to all shareholders and not a technocrats regime of mining equipment manufacturers/networks.
...because we knew that bytemaster was severely unappreciated in the crypto space and would need backing of people who wanted to see his innovations disrupt the unacceptible status quo. 

I'm sure Alta Vista shareholders were not too happy about Google either when it started picking up steam.  I'm willing to bet some of them even wanted google to partner with them just to protect google...but ultimately we saw where that ended.

I'm all down for different chains, but give me DPOS 3.0 or I'm likely going to be too busy to be interested. 

We are in for one heck of a ride everyone.  This is just the beginning.  And that means that the highs are going to be higher....and the lows will feel lower. But that means we are succeeding. ;)



« Last Edit: June 10, 2015, 02:02:07 am by fuzzy »
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Offline starspirit

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But the truth is that bitcoin will be the collateral for the most commonly used USD derivative as it is the biggest most liquid and most trusted crypto.
Bitshares need to make btc the default collateral for bit assets or another USD derivative will take its place.

Cringe to say it, but this is a good idea. We could theoretically use any crypto as collateral, and the fact is that BTC does have qualities that make it desirable to be used as such.
I could easily imagine such a feature existing in BTS 3 or 4. It's just a matter of priorities and dev resources.

What's the point?  Why not use bitBTC instead since it'd have the same value as BTC but it'd be more efficient and less expensive?
There are 3 differences I can think of:

1. bitBTC backed by BTS is limited by the availability of BTS. bitBTC backed by BTC is only limited by the availability of BTC.
2. bitBTC backed by BTS will have wider spreads than backed by BTC, because of underlying liquidity.
3. The wider market is more familiar with BTC than BTS and so may be more comfortable with it.

Having said that, if doable, I would lean to a flexible collateral system rather than one backed solely by BTC, which would be more flexible and less controversial. See for example...https://bitsharestalk.org/index.php/topic,16326.msg208798.html#msg208798

Offline yellowecho

But the truth is that bitcoin will be the collateral for the most commonly used USD derivative as it is the biggest most liquid and most trusted crypto.
Bitshares need to make btc the default collateral for bit assets or another USD derivative will take its place.

Cringe to say it, but this is a good idea. We could theoretically use any crypto as collateral, and the fact is that BTC does have qualities that make it desirable to be used as such.
I could easily imagine such a feature existing in BTS 3 or 4. It's just a matter of priorities and dev resources.

What's the point?  Why not use bitBTC instead since it'd have the same value as BTC but it'd be more efficient and less expensive?
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Offline roadscape

But the truth is that bitcoin will be the collateral for the most commonly used USD derivative as it is the biggest most liquid and most trusted crypto.
Bitshares need to make btc the default collateral for bit assets or another USD derivative will take its place.

Cringe to say it, but this is a good idea. We could theoretically use any crypto as collateral, and the fact is that BTC does have qualities that make it desirable to be used as such.
I could easily imagine such a feature existing in BTS 3 or 4. It's just a matter of priorities and dev resources.
http://cryptofresh.com  |  witness: roadscape

Offline starspirit

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We all perceive the same things differently. Somebody could view the product of bitShares as bitAssets. Somebody else could view the product of bitShares as an open architecture platform for finance. I don't see that either of these necessarily destroys our rights and freedoms...

Offline BunkerChainLabs-DataSecurityNode

But the truth is that bitcoin will be the collateral for the most commonly used USD derivative as it is the biggest most liquid and most trusted crypto.
Bitshares need to make btc the default collateral for bit assets or another USD derivative will take its place.
just saying.

Replace Bitcoin with USD  and USD derivative with Bitcoin and it describes almost every conversation I've had with people who have never heard of the crypto movement.

The Bitcoin user base, and crypto in general, is so tiny we are all about equal in network effect. Amazon.com has more outstanding gift card balances than all of crypto market cap combined.

Also, horse and buggy had massive network affect before the car came along  8)

“If I had asked people what they wanted, they would have said faster horses.”

Great news for jonnybitcoin though.. in 2.0 you can collateralize bitAssets with bitBTC! Fair compromise?

@starspirit.. Today we still use the term 'horse power', but we do not have horses under the hood anymore.



I will just state it simply...

We introduce something other that BTS as the collateralize.. we lose the rights and freedoms that come with the vote.

That is all there is too it. It's not an economic question in my opinion.

As far as network effect goes, we got the solution.. and the day after we introduce it here is someone asking to hitch BTC to this wagon... a sure sign of the success to come. :)
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Offline Riverhead


As always a well thought out post, Starspirit.

I think it important to clarify that I do not consider BTC, Etherium, NXT, or any of the other "coins" the enemy. What I want is for the crypto movement to have a wide variety of offerings. While like most other BTS holders I want it to do well but I am after a much bigger prize than just a sustainable business model to make some money.

It's true that BTC has many detractors here and in the non clone space but I'm not one of them. An analogy to my thinking would be proposing Apple just run Windows on all their hardware because of the huge percentage of the market Microsoft Windows already controls. Apple may do well by switching to Windows (as they did Intel from PPC) but that's not really the point. They are doing their own thing in their own way and it serves a specific market well.

Offline starspirit

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I understand why there is a heavy reluctance to consider a bitShares product with a BTC underlying. It seems like we are "supporting the enemy". Being dirty. And throwing away our capital gain potential. But if we get past the initial moral disgust, we might see that none of these things are actually true.

Who made BTC our enemy? What is the point of even having an enemy? BTC is really just the industry benchmark that we are seeking to exceed. It need be no more emotional than that. Using it as a form of collateral does not take any credibility from bitShares, nor add any to BTC. It is merely a statement that BTC is by far the most commonly held form of available collateral at this time.

There is also much scope to challenge the idea that BTS derives its growth potential by backing bitAssets.

I've demonstrated previously that bitAssets can be issued via self-creation, with funds raised from the sale of the bitAsset being used for any general purpose the borrower desires. In fact, my view is that using these funds to arbitrage against the real asset is the preferred motivator for issuers. This merely requires participating BTS users to move their existing tokens to the collateral pool. It does not require anybody to increase demand for BTS - BTS leverage is just one potential application of the borrowed funds.

I've also argued (without convincing many people yet!) that the market value of BTS is determined by supply and demand at any time, irrespective of any prior market trades that may have been initiated by new purchases of bitAsset. That is, the market needs to be convinced that any price BTS is forcibly bid up to is a reasonable price given its future return prospects, or it will simply realign the price at a lower level again.

This then gets to the essence of what really does drive the BTS price. In my opinion, its the utility that BTS can provide to owners through the prospect of income, or the potential utility of being able to access opportunities to earn income within the bitShares system. If there is real value there, does it really matter if a source of credit growth is removed?

So if we did offer a product to the market that had much greater demand potential and capacity (BTC>100x the market cap of BTS at this point) in the medium term, and we structured it so as to earn an income stream for BTS owners from that product, that could actually be a very good thing for owners of BTS. This would seem a lot more robust as a business model to me - earn income from a product, rather than the product concept merely being to compound the credit available to BTS bulls.

I believe the theoretically optimal model is to actually offer flexible collateral, where BTS, BTC or other digital collateral can be held as a mix to back bitAssets. Perhaps that will be more palatable to bitshares because its not seen as directly supporting any specific "competing" token and offers maximum flexibility.

Now this is a big shift for many given the previous paradigms held in bitShares, and everyone will have a different opinion on it. So what's to stop us doing both? With privatised bitAssets, the purists can still have BTS backed bitAssets, and there can be a parallel market for bitAssets backed by BTC or other combinations of collateral. Better us earning the reward than a competitor. And to be truly self-funding, bitShares ultimately needs to earn reward by delivering value to the market and meeting its needs.



Offline JonnyB

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Let each market decide which chain works best for them.
[/quote]

But bitcoin can be moved on to the bitshares blockchain. You can still use the superior features and built in exchange the bitbitshares blockchain offers.

And then yes let the market decide by letting allowing both bitshares and bitcoin to be used as collateral.
I run the @bitshares twitter handle
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Offline Riverhead

The first kind of people to adopt a USD crypto derivative will be bitcoiners themselves and they will be more comfortable knowing they will receive bitcoins in the event of a black swan.
Most other 2.0 projects will add a bitcoin sidechain gateway eventually I just think bitshares should lead not follow.

I say let the other 2.0's stay tied to Bitcoin; they will probably do well by it. However, to truly innovate and move crypto forward someone at some point needs to cut the shackles and do something different.

Bitcoin will be around for a long time and will also do very well as crypto grows but like we have BMW, Mercedes, Fiat, etc. there is plenty of room for all of us. Let each market decide which chain works best for them.

Offline Riverhead

But the truth is that bitcoin will be the collateral for the most commonly used USD derivative as it is the biggest most liquid and most trusted crypto.
Bitshares need to make btc the default collateral for bit assets or another USD derivative will take its place.
just saying.

Replace Bitcoin with USD  and USD derivative with Bitcoin and it describes almost every conversation I've had with people who have never heard of the crypto movement.

The Bitcoin user base, and crypto in general, is so tiny we are all about equal in network effect. Amazon.com has more outstanding gift card balances than all of crypto market cap combined.

Also, horse and buggy had massive network affect before the car came along  8)
« Last Edit: June 10, 2015, 12:14:59 am by Riverhead »

Offline JonnyB

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What I'm saying is bitcoin is not the best all singing all dancing cryptocurrency/blockchain.
However it has the network effect (metcalfe's law), it is the gold standard of cryptocoins, the internets reserve currency with huge infrastructure and public awareness. The default way to move crypto value around. The easiest way to buy any cryptocoin is with bitcoin.

The first kind of people to adopt a USD crypto derivative will be bitcoiners themselves and they will be more comfortable knowing they will receive bitcoins in the event of a black swan.
Most other 2.0 projects will add a bitcoin sidechain gateway eventually I just think bitshares should lead not follow.

nearly all CFDs and options are settled with USD because it is the worlds reserve currency they are not settled in shares, gold, copper or danish kroner.
I run the @bitshares twitter handle
twitter.com/bitshares

Offline Ander

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Someone else will make a bitcoin collateralised BitUSD if bitshares doesn't.
That will be the one people use.

So you are saying that everything this community has been trying to do since day 1 is pointless, because bitcoin is the one true chain and its useless to make any other cryptocurrency.  Everyone should do everything with bitcoin instead because it was first.

Some of us arent bitcoin maximalists.  Some of us want to see something accomplished while bitcoin has been debating for an eternity how to deal with its blocksize and TPS issue.


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Offline JonnyB

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Someone else will make a bitcoin collateralised BitUSD if bitshares doesn't.
That will be the one people use.
I run the @bitshares twitter handle
twitter.com/bitshares