Author Topic: Dividends?  (Read 5767 times)

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Offline etherbroker

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If you split the stock all the time, you will totally remove the point of having a dividend at all, and it could affect the psychology of the market and the share price.


You probably shouldn't have any plan to split it at all, and only do it like 5 years from now when everyone is crying about it.

Offline joele

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There should be one page summary of everything.

Offline mint chocolate chip

https://bitsharestalk.org/index.php?topic=1306.15

I think the quote, requote thing got messed up, bytemaster is the one who brings up the idea of 'stock split'.

How are dividends paid?

What currency are they paid in, where do dividends go (to your wallet?) and how often are they paid out?

Every transaction destroys currency which increases your cut when displayed as a percentage of remaining BTS.

I am having trouble understanding this, so the number of BTS (4 million) actually decreases over time? until (there are no more BTS???)?

The response:
How are dividends paid?

What currency are they paid in, where do dividends go (to your wallet?) and how often are they paid out?

Every transaction destroys currency which increases your cut when displayed as a percentage of remaining BTS.

BTS are infinitely divisible and at any time the network could perform a 'stock split'

I am having trouble understanding this, so the number of BTS (4 million) actually decreases over time? until (there are no more BTS???)?

Offline biophil

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There is no explicit "stock split". You just have a bigger fraction after the rest is destroyed.

Bytemaster has suggested just displaying things as shares-of-the-whole so people don't get confused.

Bytemaster did say something about a stock split, but he's actually referencing an idea that currencydebt brought up. I don't think bytemaster himself ever actually said there will be splits.

But I'm curious - would a split be hard to implement? It seems like it shouldn't be hard: say, once a month, just increase all balances proportionally by the amount that would bring the XTS supply back to 4M. I'm worried that dividends-as-destroyed-fees will be too opaque for most people; splits like this would help alleviate confusion.

There's a lot of psychology in this - it's like how your average joe actually prefers to get a tax refund at the end of the year rather than just pay less taxes throughout the year. It's not rational, but rational isn't the point. I think that if it's not too technically challenging to do the split, it would really help people "get it."
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Offline toast

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There is no explicit "stock split". You just have a bigger fraction after the rest is destroyed.

Bytemaster has suggested just displaying things as shares-of-the-whole so people don't get confused.
Do not use this post as information for making any important decisions. The only agreements I ever make are informal and non-binding. Take the same precautions as when dealing with a compromised account, scammer, sockpuppet, etc.

Offline fuzzy

For the sake of the average Joe (of which I am one) please help me run through the math:


I initially hold 4000 BTS and there are 4,000,000 total BTS:

(4000 / 4,000,000) * 100 = 0.1% of total BTS.


At some later point transactions have destroyed 2,000,000 BTS and there are now only 2,000,000 total BTS:

(4000 / 2,000,000) * 100 = 0.2% of total BTS


A 2:1 forward split is implemented, granting shareholders one BTS for each BTS held:

4000 BTS (original holding) + 4000 BTS (granted by split) = 8000 BTS.


The post-split total number of BTS has now increased to 4,000,000:

(8000 / 4,000,000) * 100 = 0.2% of total BTS


Thus the 'dividend' is paid to the shareholder: holdings increase from 4000 BTS to 8000 BTS or alternatively from 0.1% to 0.2% of total market share.

BTS is saved from death by zero.


Assuming the foregoing is correct I have the following questions:

1. What is the mechanism for the split? Does the Bitshares X DAC create/distribute the BTS?

2. Can the splits occur on a daily/biweekly/monthly cycle? This would be extremely desirable in terms of investor familiarity and adoption.


Thank you for your help - I think this an extremely important concept but also a potential stumbling block.

It will be crucial for marketing to communicate the dividend mechanism in clearly and simply.

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Offline oldman

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For the sake of the average Joe (of which I am one) please help me run through the math:


I initially hold 4000 BTS and there are 4,000,000 total BTS:

(4000 / 4,000,000) * 100 = 0.1% of total BTS.


At some later point transactions have destroyed 2,000,000 BTS and there are now only 2,000,000 total BTS:

(4000 / 2,000,000) * 100 = 0.2% of total BTS


A 2:1 forward split is implemented, granting shareholders one BTS for each BTS held:

4000 BTS (original holding) + 4000 BTS (granted by split) = 8000 BTS.


The post-split total number of BTS has now increased to 4,000,000:

(8000 / 4,000,000) * 100 = 0.2% of total BTS


Thus the 'dividend' is paid to the shareholder: holdings increase from 4000 BTS to 8000 BTS or alternatively from 0.1% to 0.2% of total market share.

BTS is saved from death by zero.


Assuming the foregoing is correct I have the following questions:

1. What is the mechanism for the split? Does the Bitshares X DAC create/distribute the BTS?

2. Can the splits occur on a daily/biweekly/monthly cycle? This would be extremely desirable in terms of investor familiarity and adoption.


Thank you for your help - I think this an extremely important concept but also a potential stumbling block.

It will be crucial for marketing to communicate the dividend mechanism clearly and simply.




« Last Edit: March 21, 2014, 10:07:37 pm by OldMan »

Offline mint chocolate chip

I consider your question a great question, I had the same one...
How are dividends paid?

What currency are they paid in, where do dividends go (to your wallet?) and how often are they paid out?

Every transaction destroys currency which increases your cut when displayed as a percentage of remaining BTS.

BTS are infinitely divisible and at any time the network could perform a 'stock split'

I am having trouble understanding this, so the number of BTS (4 million) actually decreases over time? until (there are no more BTS???)?
The money supply is infinitely divisible, so losing supply is not a problem.
Bitshares will have the bitcoin quality of being highly divisible.

Instead of having a complicated method of transferring dividends and taking away fees, Invictus has thought of the simple and elegant solution of simply destroying BitShares as a way of charging fees. Less Bitshares in existence means that the remaining shares become more valuable (akin to that of a listed company buying back its own shares to increase shareholder value).

For the stock splitting I'm assuming that this would mean for example: if the number of bitshares is reduced to say 2million, then a stock split could reward share holders by giving them a free bitshare for every bitshare they have. This will bring the total number of bitshares back to 4million.
Brilliant. This whole idea as it rolls out is going to be exciting and a lot of fun. godspeed

Offline toast

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It does approach 0. Think of all transactions in terms of %
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Offline oldman

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Could someone please explain how, if dividends are 'paid' by destroying BTS, the number of BTS does not eventually approach zero?

Perhaps a dumb question, apologies if I am missing something obvious.

Thank you!