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Offline Empirical1.1

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BitShares = CPOS + inflation ?
« on: October 01, 2014, 10:00:56 AM »

Believe it or not the following actually comes from a place of love for the BitShares and what it is trying to achieve. I'm also sure BM can probably describe succinctly why my paranoia is wrong but if I really don't like an idea, I come out strong. (I should also mention I did the same thing when AGS was announced which actually turned out to be great.)

While there's no doubt whatever BM & team's stake is, it's far too small relative to all the work they put in. However...

-BitSharesX is CPOS in practice not DPOS.

-BDNS's developers combo stake will probably make it CPOS in practice. (Majority of active voting stake.)

- The Music DAC proposal last week was originally CPOS I'm not sure what the final allocation will be.

BDNS already includes a measure that sets aside an unnecessary amount of shares for development.
(Merger deals can be discussed separately.) But at least that method limits the amount you can get diluted by CPOS.

However, the inflation described here enhances CPOS further.  https://bitsharestalk.org/index.php?topic=9452.0

While you may be told inflation will decentralise the DAC by diluting the initial group. Rest assured if anything like CPOS is in place, the CPOS stake will not get diluted, yours will.

With CPOS + inflation, rather than leaving the company they built or doing a violent fork, the CPOS 'developer-combo' stake  can dilute others down, often subtly if required, which will happen, especially if the DAC no longer needs to be decentralised. (This will still happen with some shares set aside initially but at least the potential dilution from 1 company is not unlimited.)

So are all the DACs really designed to be centralised and ultimately dilute the initial investors?

The Facebook dilution scene... http://www.youtube.com/watch?v=mOMUe26X3mo
« Last Edit: October 01, 2014, 10:03:38 AM by Empirical1.1 »

Offline santaclause102

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Re: BitShares = CPOS + inflation ?
« Reply #1 on: October 01, 2014, 11:37:29 AM »
Could you please define how you understand CPOS? And in ho far this "-BitSharesX is CPOS in practice not DPOS." is true?

Offline bytemaster

Re: BitShares = CPOS + inflation ?
« Reply #2 on: October 01, 2014, 11:45:31 AM »
He means shareholder apathy gives developers control as the largest voting block.  With this control they have a blank check.

The free market is decentralized, everything else is centralized to some extent. 

Developers with a large stake can lose more via the market response to   Waistful issuance and the abandonment of their shares for a competitor. .
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Offline santaclause102

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Re: BitShares = CPOS + inflation ?
« Reply #3 on: October 01, 2014, 11:52:52 AM »
The content didnt really fit the word CPOS as used here https://bitsharestalk.org/index.php?topic=4713.0  https://bitcointalk.org/index.php?topic=584719.0

I'd agree with the OP that too much centralization in whatever way is bad. What is worse though is low voting participation.
« Last Edit: October 01, 2014, 11:54:51 AM by delulo »

Offline Empirical1.1

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Re: BitShares = CPOS + inflation ?
« Reply #4 on: October 01, 2014, 11:56:20 AM »
Could you please define how you understand CPOS? And in ho far this "-BitSharesX is CPOS in practice not DPOS." is true?

The active voting stake majority (due to voter apathy mainly as BM said) gives the developer voting block control over delegates. This is actually very useful right now, but that system would be more C(entralised)POS in my eyes than DPOS.

I have mentioned a concerted effort before for a move towards more DPOS including encouraging less BTSX to be left on BTC38. (Edit - an easier way to register first account would help like I think one of the other exchanges offers.) (Edit 2, I'm also in favour of a big voting push, someone came up with election week that fizzled out but something like that every 4 months to focus on big decisions too could be useful.)

Of course we all trust BM and BitShares & BTSX is essentially nothing without him & everything with him.

But the recommendation for inflation in other DAC's, especially the way it's suggested, as a routine, everyday event would exacerbate the issue I am calling CPOS imo

Developers with a large stake can lose more via the market response to   Waistful issuance and the abandonment of their shares for a competitor. .

But it could allow self issuance up to the maximum amount allowed by the market.

- If you design a DAC that relies too heavily on your set up. Then CPOS + inflation allows you to issue more shares to your set up and the market will have to accept it to a point. (This may change optimal strategy from developers creating a world beating decentralised company, to making a centralised company that relies heavily on them and their set-up.)

- Also if the developers or a major stakeholder is compromised, shareholders now have to not only try bring enough stake to bear, but also compete against all of the stake they will have self issued before people realised they were compromised.

« Last Edit: October 01, 2014, 12:35:36 PM by Empirical1.1 »

Offline arhag

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Re: BitShares = CPOS + inflation ?
« Reply #5 on: October 01, 2014, 12:41:47 PM »
Inflation should be capped at a rate r. The inflation rate cap can be set to r at time t = t0 when more than x% of BTSX votes in favor of this proposal. The inflation rate cap should automatically go back to zero after time t = t0 + T unless the inflation rate cap was renewed with another proposal at time t = t1 < t0 + T, in which case the inflation rate cap would be set to that new value and expire at time t = t1 + T.

Fill in your desired values for constants x and T. I prefer T = 1 year and x = 50%, although I think x >= 35% could be acceptable.

My 0.02 BitUSD.


Also, the inflated share supply should be going to the people adding value to the system not necessarily the people with the largest amount of stake. In other words, it is not necessarily a situation of the rich getting richer and the whales diluting everyone else for their exclusive benefit. If this is happening (meaning shareholders see that despite their best attempts to use their voting stake to direct the inflated share supply to delegates/workers who will grow the DAC, the inflated shares somehow end up going to the whales' hoard instead), then they will refuse to renew the inflation cap and the inflation can stop in less than a year. And, if the shareholders were less apathetic they can get the necessary x% votes to end the inflation immediately.

 

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