Author Topic: BitAssets ... aren't a killer feature  (Read 8527 times)

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Offline Thom

When you put money to the bank you actually lend it to the bank. If bank fail to repay you then, you took the risk and lent money into risky bank, so who is suppose to take a hit? We love free market, don't we?

[rant on]
I've looked at banking from this perspective since my early twenties. That was decades ago and it still holds true now. I've gone through periods of no bank accounts, no credit cards, paying bills with money orders, trade, barter etc. It is an unfortunate fact of life today that you give up many opportunities with such active rebellion to the established economic status quo, and FINALLY people have found a way to push back by coming up with an alternative: blockchain technology.

But we're at war on several fronts, and they all won't be won in a single moment. The fight for financial freedom will not be won overnight, but it is worthy of our energies if nothing else, than to free posterity from the insanity of our greed in the here and now. We're eating our future! Think big picture, think virtue! take this work seriously and really pour yourself into helping I3 and this community to succeed.
[rant off]
Injustice anywhere is a threat to justice everywhere - MLK |  Verbaltech2 Witness Reports: https://bitsharestalk.org/index.php/topic,23902.0.html

Offline Riverhead

When you put money to the bank you actually lend it to the bank. If bank fail to repay you then, you took the risk and lent money into risky bank, so who is suppose to take a hit? We love free market, don't we?

Your description of the business model and the risks are quite correct. However, it is not marketed this way to the public. They market themselves as a trusted vault rather than a lending broker between private parties (where they keep almost 100% of the profit).

Offline aaaxn

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I just read about bail-in because I had never heard the term before. Holy crap >:( .

If bank is doing well customers get 0% or 0.1% interest and the shareholders get rich. If the bank starts to fail the customers are forced to buy the nearly worthless shares at market value and the very people that caused the failure get the cash.

I suppose this saves the bankers the hassle of physically robbing their own bank with ski masks and guns.
When you put money to the bank you actually lend it to the bank. If bank fail to repay you then, you took the risk and lent money into risky bank, so who is suppose to take a hit? We love free market, don't we?

Offline Riverhead

I just read about bail-in because I had never heard the term before. Holy crap >:( .

If bank is doing well customers get 0% or 0.1% interest and the shareholders get rich. If the bank starts to fail the customers are forced to buy the nearly worthless shares at market value and the very people that caused the failure get the cash.

I suppose this saves the bankers the hassle of physically robbing their own bank with ski masks and guns.

Offline fuzzy

E-Gold 2.0? The SEC will shut it down just like MtGox was shut down and Litecoinglobal.

There is a reason why everyone pushed to create decentralized exchanges. Newbies typically don't learn from history and have to experience it for themselves.

That's why scammers always gonna scam .. unfortunately ..

Ha!  I'm not a newbie.  And I'm sure I learned a more painful lesson with MtGox than you did.  Nevertheless MtGox is not the equivalent of Coinbase or Circle, and nothing at all like a big regulated US bank (which in will also offer such services in a few years).  When is the last time a big US bank failed and lost all its clients funds?  Regulation (e.g. FDIC) keeps you much safer than a brand new cryptocurrency which could have bugs, NSA encryption backdoors, or simply not be used *perfectly* which is how you need to use cryptocurrency for it to be safe (and with the recent announcement that there is an unfixable hole in the USB specification, it's not even clear that it's *possible* to use perfectly).  Even the MF Global victims mostly got their money back...

Centralization is not inherently more risky than decentralization.  Even after 5 years of development time, I bet more people will lose their BitUSD than lose their CircleUSD.

But libertarian cryptonerds only know how to hate the government and banks... so what is the point of even having the conversation?  I don't know.

All across the world legislation is being passed and very real discussions being had with specific regard to "Bail-Ins".  I'll tell you right now that as soon as investment "banks" start backing legislation to legalize this theft, the demographic to which decentralized currencies and services appeal grow far larger than "libertarian cryptonerds" and the occasional "tin-foil-hat" crowd. 


 +5% BitAsset Catalyst incoming

(Though I feel sorry for the people that will lose very much in the bail-ins.)

A Vault that protects you from all this...yeh.  Killer app. 

Or we could, perhaps, go with a different Killer app called  "Follow My Vote"--where humanity can, for the first time in recorded history, vote in a completely transparent, granular and auditable way.  Direct Democracy = Killer App.

As far as risk...of course there is risk.  We are literally at the bleeding edge.  The entire internet was once in this stage and people said email would never catch on.  It didn't serve any real function beyond that which prior services could handle.  I mean doesn't the post office do well enough?  Who needs their messages in less than 15 seconds?

I look at bitshares as an ecosystem much like facebook...only with an entire DAC economy being built into it.  Oh...and that isn't to mention Invictus inherently understands the concept of privacy whereas Facebook syphons value from their "customers".  Killer apps...galore...
« Last Edit: October 08, 2014, 02:05:52 pm by theFu.. »
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Offline Empirical1.1

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E-Gold 2.0? The SEC will shut it down just like MtGox was shut down and Litecoinglobal.

There is a reason why everyone pushed to create decentralized exchanges. Newbies typically don't learn from history and have to experience it for themselves.

That's why scammers always gonna scam .. unfortunately ..

Ha!  I'm not a newbie.  And I'm sure I learned a more painful lesson with MtGox than you did.  Nevertheless MtGox is not the equivalent of Coinbase or Circle, and nothing at all like a big regulated US bank (which in will also offer such services in a few years).  When is the last time a big US bank failed and lost all its clients funds?  Regulation (e.g. FDIC) keeps you much safer than a brand new cryptocurrency which could have bugs, NSA encryption backdoors, or simply not be used *perfectly* which is how you need to use cryptocurrency for it to be safe (and with the recent announcement that there is an unfixable hole in the USB specification, it's not even clear that it's *possible* to use perfectly).  Even the MF Global victims mostly got their money back...

Centralization is not inherently more risky than decentralization.  Even after 5 years of development time, I bet more people will lose their BitUSD than lose their CircleUSD.

But libertarian cryptonerds only know how to hate the government and banks... so what is the point of even having the conversation?  I don't know.

All across the world legislation is being passed and very real discussions being had with specific regard to "Bail-Ins".  I'll tell you right now that as soon as investment "banks" start backing legislation to legalize this theft, the demographic to which decentralized currencies and services appeal grow far larger than "libertarian cryptonerds" and the occasional "tin-foil-hat" crowd. 


 +5% BitAsset Catalyst incoming

(Though I feel sorry for the people that will lose very much in the bail-ins.)

Offline fuzzy

E-Gold 2.0? The SEC will shut it down just like MtGox was shut down and Litecoinglobal.

There is a reason why everyone pushed to create decentralized exchanges. Newbies typically don't learn from history and have to experience it for themselves.

That's why scammers always gonna scam .. unfortunately ..

Ha!  I'm not a newbie.  And I'm sure I learned a more painful lesson with MtGox than you did.  Nevertheless MtGox is not the equivalent of Coinbase or Circle, and nothing at all like a big regulated US bank (which in will also offer such services in a few years).  When is the last time a big US bank failed and lost all its clients funds?  Regulation (e.g. FDIC) keeps you much safer than a brand new cryptocurrency which could have bugs, NSA encryption backdoors, or simply not be used *perfectly* which is how you need to use cryptocurrency for it to be safe (and with the recent announcement that there is an unfixable hole in the USB specification, it's not even clear that it's *possible* to use perfectly).  Even the MF Global victims mostly got their money back...

Centralization is not inherently more risky than decentralization.  Even after 5 years of development time, I bet more people will lose their BitUSD than lose their CircleUSD.

But libertarian cryptonerds only know how to hate the government and banks... so what is the point of even having the conversation?  I don't know.

All across the world legislation is being passed and very real discussions being had with specific regard to "Bail-Ins".  I'll tell you right now that as soon as investment "banks" start backing legislation to legalize this theft, the demographic to which decentralized currencies and services appeal grow far larger than "libertarian cryptonerds" and the occasional "tin-foil-hat" crowd. 

It's kind of like when you see an alternate, federal "homeland security" force built up to rival the military, start purchasing billions of Hollow Point rounds (that are specifically against LOAC).  Then its like listening to them saying that these ammunition, which cost on average multiples of target rounds per round, are only for target practice while at the very same time running "news" (opinion pieces) calling Oath Keepers potential domestic terrorists...

Or it's like spending Trillions of dollars to fight a "war on terrorism" that is designed to be self-perpetuating, yet represents less of a threat to the average world citizen than slipping and dying in the shower or honey bee stings.  Two competing threats that receive nowhere near the funding...

Some people prefer to live in bizarro world in the belief that if they look at outliers as "nuts", then their normalcy is validated.  But they fail to recognize that in bizarro world...being an outlier makes you more likely the normal one. 

Of course, network effects exist in bizarro world too...
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Offline fussyhands

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Stocks and the like have an advantage being centralized since they can pay dividends anyway. The "killer app" feature of bitAssets is bitUSD. It's cryptocurrency without the volatility downside and it is secure in a verifiable way (and not a ponzi like nubits). BitAssets also provide an incredibly convenient way for local cryptocurrency trade, localbitcoins style (spread/fee will be a lot more transparent for even a noob user)

+5% The OP is basically arguing against crypto as a concept. The reason Bitcoin became so massive is because we all see a financial shitstorm brewing on the horizon. When that happens, crypto will be there to step in and take over.

Nonsense.  There are plenty of things crypto does better than any other system, for now.  Fast, inexpensive, fraud resistant, international, semi-anonymous, programmable transactions to anyone without rules.  That is what crypto means to me.  That is the innovation and the revolution.  Decentralization as in spreading the power *is* important because it allows for reliable provision of the above attributes, but you ideologues take it too far.  The way I see decentralization as a plus is that an Apple coin or an Amazon coin would probably ultimately be abused.  Similarly the world is wary of USD even as it depends on it.  A single currency that the whole world could use and know will not be abused by the issuer is revolutionary.

That is Bitcoin.

But does decentralization mean that nobody will ever park their money at a company for safe keeping?  That's just libertarian cryptonerd masturbation.

I'm not arguing against crypto coins.  I'm merely arguing that BitUSD is not a killer app.  BitShares is a technically superior system compared to Bitcoin, but it needs a killer app to make it stand out.  BitUSD isn't it.


In the mean time, we still have massive utility for BitUSD.
  • Interest on BitUSD
  • Blackmarket
  • Remittances
  • Money laundering
Anything Bitcoin can do, BitUSD can do better.

Interesting.  BitUSD for *blackmarket*!!  There is a place it might actually be useful.  It takes time to deliver drugs and launder your cryptocoin so having it denominated in dollars during the weeks it is unavailable could be very useful.  On the other hand, I think the Silk Road offered a USD pegging service... but decentralized versions of the Silk Road such as Open Bazaar (which seem like the future of internet black market trade) may not be able to offer that, so if it could be built into the currency itself...

Ah hah!  Perhaps this could be BitShares killer application.  If OpenBazaar was perfected it could end up replacing most street level drug trade over the course of a decade.  We're talking hundreds of billions of dollars... the extremely slow velocity of money for internet drug trading would mean HUGE coin price.  With BitUSD, BitShares should have a lock on the decentralized black market compared to Bitcoin.  Unfortunately I doubt anyone is working on an OpenBazaar equivalent using BitShares.

Note that OpenBazaar is a TOTALLY different situation compared to legitimate transactions where payment processing companies like BitPay and Coinbase can instantly and freely transform the bitcoin you receive into USD, so you aren't expose to any volatility.  Black market internet drug dealers have to deal with *weeks* of volatility so the BitUSD might actually be useful.  And if the black market is really moving towards decentralized solutions they won't be able to depend on a centralized service to insure against the volatility...

I found BitShares killer app!  The black market.  Now someone needs to make it happen.
« Last Edit: October 08, 2014, 02:07:35 pm by fussyhands »

Offline fussyhands

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E-Gold 2.0? The SEC will shut it down just like MtGox was shut down and Litecoinglobal.

There is a reason why everyone pushed to create decentralized exchanges. Newbies typically don't learn from history and have to experience it for themselves.

That's why scammers always gonna scam .. unfortunately ..

Ha!  I'm not a newbie.  And I'm sure I learned a more painful lesson with MtGox than you did.  Nevertheless MtGox is not the equivalent of Coinbase or Circle, and nothing at all like a big regulated US bank (which in will also offer such services in a few years).  When is the last time a big US bank lost all its clients funds?  Bear Stearns depositors (as distinguished from equity holders) got all their money back and even the MF Global victims mostly got their money back...  Regulation (e.g. FDIC) keeps you much safer than a brand new cryptocurrency which could have bugs, NSA encryption backdoors, or simply not be used *perfectly* which is how you need to use cryptocurrency for it to be safe (and with the recent announcement that there is an unfixable hole in the USB specification, it's not even clear that it's *possible* to use cryptocurrency safely perfectly, even with cold storage). 

Centralization is not inherently more risky than decentralization.  Even after 5 years of development time, I bet more people will lose their BitUSD than lose their CircleUSD.

But libertarian cryptonerds only know how to hate the government and banks... so what is the point of even having the conversation?  I don't know.
« Last Edit: October 08, 2014, 01:49:49 pm by fussyhands »

Offline Thom

None taken. I'm just saying that's probably what will happen in the short-term whether we like it or not. Bitcoins best usecases so far have been drugs and day trading. Not saying I like that, but it's the reality of the situation.

That's the 1 time out of 10 I guess  :P
Injustice anywhere is a threat to justice everywhere - MLK |  Verbaltech2 Witness Reports: https://bitsharestalk.org/index.php/topic,23902.0.html

Offline carpet ride

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You cannot arb yield difference.  That is like claiming the interest rate at two banks will be arb away.
You can arbitrage yield. You have money and face with two possibilities. You can park it in bank or in bitusd. If bank and bitusd have same risk you choose bitusd as long as it gives better yield. Every time such decision is made bitusd supply is increased until yields are equal. Better yet, you can actually borrow new usd and park it bitusd and bank yield difference.

Of course this is unlikely that bitusd risk would be treated equal to usd in bank, but you get the idea.
Any extra yield earned by bitusd will be compensation for additional risk of holding bitusd over usd.

You should take trader and usage funds to parked funds ratio into account since transactions over total supply determines total yield


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Offline Method-X

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Totally agreed. xeroc also thought similarly as I see it. No disrespect to MeTHoDx, but we MUST stick to the underlying principles and not go off half cocked chasing market share anywhere we see money or interest. So many people don't seem to get WHY crypto has value; so many are preoccupied with convenience.

None taken. I'm just saying that's probably what will happen in the short-term whether we like it or not. Bitcoins best usecases so far have been drugs and day trading. Not saying I like that, but it's the reality of the situation.

I hear you. Spoken with a truly rational tongue. MeTHoDx,  I find your posts to be excellent. I don't have many marketing skills, but I find myself agreeing with your posts 9 times out of 10.

Thank you! I may have been wrong about the debit card program though. My understanding of it may have been flawed.

Offline Shentist

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the real beauty will be revealed in a time off a crisis. just ask the cypres people how they felt as they couldn't take out their money and
in the press you could read 10% haircut on each account are neccesary!

for the next crisis
- we need easy access ramps like the debit card etc. to be a really alternative for the money to stored

- would also be good to can use this money already to buy needed stuff

Offline aaaxn

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You cannot arb yield difference.  That is like claiming the interest rate at two banks will be arb away.
You can arbitrage yield. You have money and face with two possibilities. You can park it in bank or in bitusd. If bank and bitusd have same risk you choose bitusd as long as it gives better yield. Every time such decision is made bitusd supply is increased until yields are equal. Better yet, you can actually borrow new usd and park it bitusd and bank yield difference.

Of course this is unlikely that bitusd risk would be treated equal to usd in bank, but you get the idea.
Any extra yield earned by bitusd will be compensation for additional risk of holding bitusd over usd.
« Last Edit: October 07, 2014, 05:51:24 pm by aaaxn »

Offline roadscape

I hear you. Spoken with a truly rational tongue. MeTHoDx,  I find your posts to be excellent. I don't have many marketing skills, but I find myself agreeing with your posts 9 times out of 10.

+5%
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