What BM is doing is on one hand try to convince people that the price of BTSX is going to be higher, on the other hand, try to convince people that it's better to sell btsx to bitUSD. Isn't this conflicting?
Absolutely agree. BitUSD should (eventually) be useful even without any interest/yield. The whole point of this great innovation called BitAssets was to get price stability so we can have an actual crypto
currency. Well that and traders speculating on short term price changes of various BitAssets and BTSX relative to one another. But I think most of the demand would come from people using it like a currency. Why would someone want price stability? So that their
purchasing power isn't reduced because of volatility. If you aren't purchasing anything in the short term, you don't really care about short-term volatility. If you are just holding for the medium/long term and you really believe in this technology, you would want to hold (or short if possible) BTSX for maximum gain.
Demand for BitUSD will increase once we have goods/services we can actually spend it on. This won't happen until we get some merchant adoption. Having a reasonable yield on top is a really nice addition because it is more than you would get holding that money in your bank savings account, making it more attractive for the regular person to hold their currency as BitUSD in BitShares X rather than as USD in a traditional bank. But BitUSD with yield is still not a substitute for savers holding the majority of their cryptowealth as the high growth BTSX in the medium/long term (at least, this is true in the growth phase of the DAC).
I think the idea is that it would kickstart adoption and bootstrap BitAssets and create a market third parties and merchants would want to interact with, so that when the promotional period ended, the BitAsset ecosystem would be self sustaining.
Yup. But if the promotion wasn't successful in increasing demand or merchant adoption (for other reasons such as bugs in the client, lack of usability for the average user, etc.), then it would be a big waste of money. It would just be a wealth transfer from the funder (either I3 if they are using their marketing fund or BTSX holders if they fund it through inflation) to the other members in our community who chose to hold BitAssets. I think it is way too premature to be thinking about this plan (and by the time it is not premature, hopefully the DAC revenue will be large enough that it can sustain 5% yields by itself). There are much bigger barriers to adoption right now that have nothing to do with the lack of high yields on BitUSD. We need a better client. We need a lightweight client. We need better cold storage methods with the ability to sign transactions offline. We need good multisig security so people don't have to even worry about losing the money in their hot client. We need more exchanges and on-ramps for easily getting fiat into (and also out of) the system. These are all orders of magnitude more important right now than an extra 4% yield.