Quote from: onceuponatime on December 10, 2015, 12:12:46 am

Quote from: bytemaster on December 09, 2015, 02:45:14 pm

Since @onceuponatime is paying we will do things how he wants.

I just wanted to chime in on the regulatory issue. Those who have followed us for a long time know I am very careful and have become increasingly so.  That said, based upon the SWARM working paper (http://www.scribd.com/doc/255347578/SWARM-Working-Paper-Distributed-Networks-and-the-Law)  produced by Members of policy group Coin Center, law firm Perkins Coie as well as Harvard and MIT we now have a much clearer idea on what constitutes a security and high risk. 

My proposed solution of implementing the feature and giving onceuponatime 100% of the STEALTH asset that gets bought back by the network over time.  If he is the only owner, then it is clearly not a security. It just gives him a different way to claim the fees to his account (by order) as well as a way of dividing up control (by dividing his STEALTH among multiple accounts).  So from the perspective of the law, no security has been offered to the public and everything is merely an accounting system on the blockchain for a single user. 

If onceuponatime wished to sell his revenue stream he could do so by transferring the stealth asset.  This is much more powerful than transferring control over an account and/or requiring a bot to automatically forward payments. It creates a far more trust free transfer of revenue (or fraction thereof) to a 3rd party.  Once again, this wouldn't be a security by any stretch of the imagination when selling to private parties because there was no PUBLIC offering. 

At this point I have believe I have demonstrated that we can design the feature to buy back a STEALTH asset while being so far away from regulatory issues that it wouldn't make sense to do it any other way.

All of that said, I believe that the STEALTH asset could be sold to the public AFTER the feature has been implemented and accepted by the network. This is based upon the Howey Test.

The tests for a security require *ALL* of the following properties:

1. Investment of money - token buyers pay money for their tokens.    80%
2. Common Enterprise - the funds received by the sale of STEALTH are not pooled, they become the private property of the seller.  Thus clearly not a common enterprise.  20% risk
3. Reasonable Expectation of Profit - buyers purchase it for speculative purposes in the belief that the value of the token will rise.  90% risk of being a security.
4. Derived Mainly from the Efforts of Others -  the value of STEALTH depends upon users of an existing system. No effort is required nor promised of other individuals for the token to receive automatic repurchases from the use of the system. In other words, the value of the token does not depend upon onceuponatime to take further actions.   10% risk

The combined risk for STEALTH is therefore less than 2% chance of being classified as a security and that is with me over estimating and then rounding up. 
The penalty risk is $35,000 (what satoshi dice paid + disgorgement of profits).   When discounting the penalty for the risk you can price the cost at $500.  Any profits would be calculated after recovering his $45,000 investment.

The risk is so low (in my estimation) that CNX will probably use this model to fund future features. 

So I am going to argue strongly that we implement this feature as a STEALTH asset, and then leave it to onceuponatime to determine whether or not to SELL the asset except for the purpose of claiming fees from the automatic buyback.

@bytemaster

Could you please explain how/by whom the STEALTH asset is to be created?

I like the idea of being a modern day Prometheus and bringing to BitShares the equivalent of the fire it needs for combustion. But I do value what is left of my liver 

I am ready to go with your suggestion. I would just like to understand the mechanics a little better.

The STEALTH asset will be issued by the "management account" for this feature as part of the hard fork.  You will just be the initial owner of the issued asset (not the issuer).  This management account will have multi-sig authority assigned to the 5 largest STEALTH holders weighted proportional to stake and will have the power to set the fee.

Update:  So far we have 39 members of the Founder's Club.   We have only 61 remaining seats! 

1. @cass
2. @Pheonike
3. @void
4. @ebit
5. @DMo09
6. @puppies
7. @emailtooaj
8. @merockstar
9. @donkeypong
10. @roadscape
11. @Louis
12. @Tuck Fheman
13. @fav
14. @Ben Mason
15. @Bhuz
16. @Frodo
18. @spartako
19. @cube
20. @tonyk
21. @TravelAsia
22. @lafona
23. @testz
24. @rgcrypto
25. @Bunker Chain Labs
26. @EstefanTT
27. @Pairmike
28. @CalibiYau
29. @lovejoy
30. @fuzzy
31. @Akado
32. @bang-king
33. @xeroc
34. @38PTSWarrior
35. @konelectric
36. @hadrian
37. @carpet ride
38. @Chris4210X
39. @montpelerin

Thanks everyone and again.. welcome to the Founder's Club!

For the following: @jaran, @abit, @alt, @onceuponatime, @complexring,  who have posted questions or comments on this thread let me know if you're interested in being in the club!     
I'll include those that are interested in being in the club and believe in the spirit of our project.  Please let me know if I missed anyone!

And btw..... introducing the newest UIA........drumrollllllllll...........................................................GIFTS.BITCASH! 

...what are they?

The proposal and the initiative from onceuponatime  is 

My only proposal would be to adjust the fees in stealth transfers. We should have very low fees when visible transfers 10-30 bts irrespective of amounts as currently but when someone wants to make stealth transfers fees should be % and competitive to external exchanges. It doesn't make sense to make stealth transfer of 1 mil bts and pay a fee of 30 bts but it makes sense to have a fee of 0.1% i.e. 1000bts..

All over the news today in Canada was talk of the Bank of Canada's possibility of going to a negative interest rate of -0.5%.

Switzerland, Sweden, Denmark and the European Central Bank all have dipped into this negative interest stuff not to long ago.

They are only saying it's a possibility, not saying they are doing it.

Still.. Canary in the coal mine?

Would you endorse seeing this in Bitshares?

Quote from: onceuponatime on December 09, 2015, 04:25:11 am

Quote from: emailtooaj on December 09, 2015, 04:19:28 am

@onceuponatime I've always respected you and this proposal shows why.  I wish I had time to chime in on the conversation but, please re-think the multi sig threshold and increase it to something like 2 of 10 or 3 of 20.  When I was skimming through the proposal this was the one thing that I don't feel good about.
Otherwise, I'll vote on this knowing you've thoroughly thought this through and feel comfortable pushing this forward and putting your money on the line.

Can you tell me why it would be advantageous to do that? Since I plan on compensating my advisers (co-signatories) on the Maintenance Fund for their efforts and advice, increasing the number makes it both unwieldy to have meetings and expensive to run. What are the advantages?

My thinking was kind of what you've already mentioned, death, sickness, lost wallets or M.I.A persons.  I certainly agree with you when you say it'll be easier to maintain with fewer involved but, in the long term, I think having a few more names to call in the phone book as back ups will be beneficial should the need arise.

Quote from: onceuponatime on December 09, 2015, 02:16:08 am

There is no bs in my reasoning. If I wire $45,000 to Cryptnomex, first there is a mandatory report filed to a regulatory agency (anything over $10,000). If I broke it up into several payments, I would be reported by  my financial institution for possible "structuring" and my account frozen.

This part is true. The IRS will likely expect you to pay any sort of taxes and follow any sort of regulations. This is proven by the fact that the IRS has gone after people for that.

But you have to remember to actually find out the probability that an event will happen. Any event could happen but not every event is certain or likely to happen. Use a risk matrix to determine what the likely consequences are.

Don't use the word "severe" unless the risk includes fatalities. Don't use the word "certain" unless it is something which happens 100% of the time. Almost certain means it's an extremely frequent occurrence but you have to understand that regulators and law enforcement have limited resources. If they want to get you then they can get you on something, but it's unlikely they will come to get you in the current atmosphere.

Of course the political atmosphere can change.

Quote from: onceuponatime on December 09, 2015, 02:16:08 am

So, the payment to Cryptonomex automatically is under scrutiny. You can understand, can't you, that Privacy Mode is not going to be popular with those in power? If either Cryptonomex or I create an asset and offer it for sale to the public it may fall under the definition of "security" by some gung ho regulator. Cryptonomex or I then must expend resources on defending against any such allegations.

It's not that simple. Some of those in power will like privacy mode and some wont. The government is not a monolith. Tor was funded by the Navy and government operatives have used Tor.

Also the "security" risk is non-exisent. if it is a risk then the risk matrix would force you to conclude that it's low. There has never once been a case which claimed any UIA, or digital asset, is a "security" by how you're defining it. Of course it could happen but you're assuming that if it does happen that it would happen to you?

Until the SEC starts prosecuting hundreds of people, I doubt you'd be on the radar but even if you are among the first then if it does happen you'd still end up paying a fine but so would a lot of others. This is why perhaps you would want to share the risks with the others.

Quote from: onceuponatime on December 09, 2015, 02:16:08 am

If the feature is a success, there will be a pool of funds that may excite the jealous attention of many government authorities. That will be costly to counter.

If it's a success you'll have the money to counter. Right now the risk is low but the political climate can change depending on what happens and news coverage. In either case I doubt it's going to be treated as a security overnight.

Quote from: onceuponatime on December 09, 2015, 02:16:08 am

If either the feature or BTS overall is not a success, then some disgruntled investor in an asset might complain to Big Brother, and I am not willing to take on that risk.

Couldn't someone inform on you for taxes? It's the tax risk which is actually higher.

In any case, this is why a group of people would have to fund the development instead of just you. Why should you take on all the risk? At the same time the witnesses are talking risks too. We simply don't know how the political climate will be in the future.

Quote

What are you doing?

Not trying to get something for nothing.