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General Discussion / Re: Are there other funding models to pay for development?
« on: June 17, 2015, 12:09:45 am »
On the further implications of the OP
Thinking out loud here.
Ideas 1. and 2. are really treating BTS as equity-type tokens in a startup business, rather than the more traditional view many might hold of BTS competing as a currency. These methods would not be appropriate to a currency at all, because of their [ed: potentially] dilutive effects, depending on the actual token structure, and whether market cap growth exceeds the growth in obligations.
[Edit: clarified with potentially dilutive, because they may not need to be dilutive if the value of BTS ends up rising more than the accumulated obligation]
But business equity could well be a more accurate vehicle to achieve the goals of BTS. We can debate the core purpose of BTS, but one justifiable view is that BTS aims to develop and own the technology and platform on which a profitable and free ecosystem will be built. That is inherently a business endeavour. We have already taken a tentative and controversial step in that direction through allowing some dilution to fund development. But we've done that within the bounds of what might be acceptable within the crypto-currency space, which imposes limits on funding as we know. Instead we could give ourselves the full flexibility of any traditional business as follows:
BTS = equity in the technology and infrastructure of the system, like any other business, but on a block-chain!
XCoin(s) = currency (to be developed) that will compete directly in the crypto-currency / fiat space (not pegged)
In other words, we give BTS the flexibility of any other business, and we don't have to give up creating our own superior currency (independent money) or many variations of such currency. We just create those as well! But the XCoin does not bear any development expenses (beyond covering network cost of transactions) or any equity reward. It could potentially be produced with little marginal cost as a byproduct of the bitShares protocol.
The full business flexibility in the BTS operational structure could also serve as a template for other businesses moving to the block-chain. (I'm thinking BTS owners should share with CNX in the reward from this to the extent they co-develop it.)
In this way, there would be no need for the community to split on this issue, because they could simply choose how much of BTS vs XCoin they desire to hold and use. [In general, offering user choice within the bitShares protocol is the best way to keep a united community].
Thinking out loud here.
Ideas 1. and 2. are really treating BTS as equity-type tokens in a startup business, rather than the more traditional view many might hold of BTS competing as a currency. These methods would not be appropriate to a currency at all, because of their [ed: potentially] dilutive effects, depending on the actual token structure, and whether market cap growth exceeds the growth in obligations.
[Edit: clarified with potentially dilutive, because they may not need to be dilutive if the value of BTS ends up rising more than the accumulated obligation]
But business equity could well be a more accurate vehicle to achieve the goals of BTS. We can debate the core purpose of BTS, but one justifiable view is that BTS aims to develop and own the technology and platform on which a profitable and free ecosystem will be built. That is inherently a business endeavour. We have already taken a tentative and controversial step in that direction through allowing some dilution to fund development. But we've done that within the bounds of what might be acceptable within the crypto-currency space, which imposes limits on funding as we know. Instead we could give ourselves the full flexibility of any traditional business as follows:
BTS = equity in the technology and infrastructure of the system, like any other business, but on a block-chain!
XCoin(s) = currency (to be developed) that will compete directly in the crypto-currency / fiat space (not pegged)
In other words, we give BTS the flexibility of any other business, and we don't have to give up creating our own superior currency (independent money) or many variations of such currency. We just create those as well! But the XCoin does not bear any development expenses (beyond covering network cost of transactions) or any equity reward. It could potentially be produced with little marginal cost as a byproduct of the bitShares protocol.
The full business flexibility in the BTS operational structure could also serve as a template for other businesses moving to the block-chain. (I'm thinking BTS owners should share with CNX in the reward from this to the extent they co-develop it.)
In this way, there would be no need for the community to split on this issue, because they could simply choose how much of BTS vs XCoin they desire to hold and use. [In general, offering user choice within the bitShares protocol is the best way to keep a united community].