You see this is something that bothers me.

Sure if you want to separate out the yield from the instrument fine it's your prerogative.  I don't get a say here, but I'm going to say my peace on the matter.

Simply put this is NOT how it was done before and it's going to kill the market at a fundamental level.

Any new campfire will take some time to smolder, then kindle before fully igniting.
bitUSD was smoldering a long time, there were real technical problems with the built in exchange mechanism that were preventing it from kindling properly. But now it's kindled, we're suddenly talking about pissing on the fire so we can put it out and move camp.

I think that the campfire should be the goal here, not the campsite.  If we extinguish what is there now, we will not be able to restart it.  Put another way.  If we piss on the fire we do have, the wood will be wet and much harder to start burning again.

I'm in a position where I've spent months building a business around the entire bitUSD model.  Now that model changes.  I'm not happy about it and I don't see an upside for anyone here.  I can't bolt and even if I could, the market pegging mechanism used here is fundamentally more important than the yield. 

I've done the math, it's very hard for bitUSD to fail as long as people continue using it. 
BTS has issues because they're printing WAY too much of it, but bitUSD is what I'm building my business around.

If they are going to do something to change the economy, adding a way to shrink the currency supply of BTS might be the best thing.  Instead it looks like they're coming at the problem sideways by deconstructing the thing that drives adoption (market pegged assets), and killing off the incentive hold them.  The incentive now slips to the supply side while killing the demand side.

Let's put fires and everything else aside for a minute and look at this from an economics 101 perspective.

An economy is nothing more than a system of value transfers.  In the real world US Dollars are brought into and out of circulation by the Federal Reserve and the US Treasury dept who's job is to prevent deflation while keeping inflation in check and yet still leaving the economy enough breathing room that the USA is currently the worlds most powerful economic engine.

Every decision that these 2 entities make have repercussions that filter out globally because the US Dollar is the worlds choice for both value transfer and wealth storage.  The climb of the dollar against other currencies makes products Made in America more expensive in other countries, which causes a trade deficit.  It also makes foreign made products cheaper. 

US Dollars flow out of the economy and only return when the countries who are trying to keep their currency low (in order to support their export driven economy), give those dollars back to the US by purchasing T-Bills.  This is why China is the biggest holder of US "Debt".  But the interest on that debt doesn't match real inflation. 
It is effectively the same thing as negative interest rates.
The Chinese government is paying for part of your Chinese made products.

The US Dollar does not have a built in yield mechanism.  No currency does.  Yet it does have a shrinking mechanism.
The yield on TBills are tied to decision based on fundamental market forces and this yield is a money sink that sucks the US Dollar out of international circulation and filters it back into the economy via government run projects and services.

This means that the only thing the dollar really has going for it, is that it is a currency that everyone accepts in exchange for goods and services.  There is an effective yield, because the dollar generally rises against other currencies as long as the US economy is the major economic engine of the world. (Also a negative effective yield when their economy takes a dump)

bitUSD is a derivative.  It is a derivative of BTS that pegs a certain number of BTS against the US Dollar.  If BTS rises or falls against the US Dollar then the quantity of BTS that a single bitUSD represents also rises or falls.

This is genius.  Except it misses something.  BTS and bitUSD are effectively illiquid.  I cannot get into and out of bitUSD without paying some kind of fee.  That fee can range from as low a 1% to as high as 10%.  But when I want to buy bitUSD or spend bitUSD then there are fees that must be paid.  This is a complete disincentive to, acquisition, holding and of course acceptance.

The act of creating bitUSD has previously required a yield.  Why?  Because bitUSD is effectively illiquid or at least semi-illiquid.

Paying a interest was a disincentive to creating the derivative. 
It kept the supply low while demand was relatively fixed. 
This means bitUSD is an effective mop for excess BTS liquidity.

Now there is no more disincentive to creation.  In fact, quite the opposite there is now an incentive to creation. 
If there is no interest paid, why not just convert every BTS in circulation directly to bitUSD and derive all assets from that?

The reason is that it would kill demand.  Yet this is what will happen.  If people no longer have to pay interest to create it they will create more.  If they have an incentive to create it (by getting paid interest), they will make as much as they possibly can.  This will push supplies skyward faster than demand could reasonably be expected to increase.

Furthermore if there is no interest paid to holders, they have a disincentive to accept bitUSD.

You guys are counting on people deciding to park their funds in a bond market in leui of receiving a yield payment. 
That won't work.  People aren't savvy enough to even understand what that means.  What they will do is see that they can acquire 1 bitUSD for 1.10 USD and say to themselves, "Time to break out the Visa Card" when it comes down to figuring out how to pay for their purchases.

If you guys had done this from the beginning it wouldn't be so bad. 

But it wasn't done that way, and now there are plans to make a fundamental change to the social contract. 
Change is scary, even if it's as you believe "for the better good", it's going to scare the hell out of people and they will avoid getting into an uncertain position.  This will further reduce demand.

It might not kill it, but it's going to cripple it.

Please for the love of God.  Turn off the BTS spigot or at least turn it way, way down. 

What is killing the BTS currency is supply and demand.  There is almost no demand as it is, the fundamental demand drivers that do exist are getting changed and demand will suffer if for no other reason than "change is scary". 

Yet supplies continue to increase.

Go buy an economics 101 textbook, open the page to supply and demand fundamentals and look at what happens when this occurs. Then decide if you really want to kill demand while continuing to increase supply.

Or someone please feel free to tear this posting apart and show me every place I'm wrong.  This is not meant to start a flamewar or be a troll.  You look at my posting history, I am doing what I can to increase bitUSD utility and acceptance, but it's a hard as hell sell already.  Make my job easier, prove me wrong, please.

Quote from: konelectric on July 19, 2015, 12:49:11 pm

I went to  http://simplicity.gemspace.net/. You have a good selections of gift cards. What's the clock/timer for?

It looks like an inactivity timer to return to the home screen to me.  It looks like there's a bug that adds 60 seconds to it every time there's any activity instead of resetting it to 60 or to max(current,60).  The clock button in the bottom right appears to be a "more time" button, but the timer is also not reset when clicking the home button.  This means that if one user repeatedly clicks "more time" and then clicks home and leaves, the following user may have an unreasonable timeout when starting a session.

Both of these should be super easy fixes and aren't that big a deal.

Ohh good catch!  I fixed that weeks ago.  I'll go through the code and see what changed.

Yes it's an inactivity timer to let the user know how much time they have before they will be shunted back to the mainscreen.  It can be disabled, I leave it there because when it does hit zero it sometimes throws console spam that I'm still trying to find the root cause of.  It doesn't always happen and it doesn't appear to effect anything when it does.  But warnings are always errors to me.

Quote from: bitcoin42 on May 24, 2015, 09:12:38 pm

It's core feature will be conversion of MPA to fiat and vice versa.

That's what I was hoping to hear. That's absolutely great.

Just to make sure I understand it correctly:
Case 1: pay-in
I insert some fiat banknotes into the ATM, enter my TITAN name and the machine sends MPA funds to my BitShares account (which I'll immediately see in my BitShares wallet on my mobile phone).
Case 2: pay-out
The ATM displays its TITAN name and I send some MPA funds to this name (using BitShares wallet on my mobile phone) and the machine pays out fiat banknotes in return.

Is this one of the possible workflows of your ATMs?

No but thank you for that.  I was trying to figure out the best way to close that loop and you gave me the simplest idea.  I'll work on that as soon as the bitshares wallet finishes syncing up.

Please read this before asking questions

FAQ

Q:  Where can I demo the ATM/Payment Kiosk?
A: 
You can visit one in person <maplink>
You can call a local distributor or reseller to arrange a demo in person <distributor list>
Or if you just want to see the software in action, go to our website and click the "demo" button, try to keep in mind that version is live.

Q: Why do I see a bunch of gift cards?  What if I don't want to dispense gift cards?
A:  We are an authorized reseller for gyft.  This is a value add and allows your machine to have more appeal than a straight crypto-currency ATM.  Nevertheless, gift cards are just a category of products, you can enable any product by group or by item, from the admin console <admin demo link>

Q: I tried to buy a $10,000 Amazon Card. Bitcoin reload, bitUSD reload etc.  It wouldn't let me. What's up with that?
A: There are few reasons.  The first is AML/KYC, by default we limit your max purchase on crypto reloads to $500 daily.  There is no limit on gift cards.  However we don't keep unlimited amounts of money on tap with Gyft.  So what you see as the max amount is either the limit of funds we have there, or the limit that Gyft applied for whatever reason.

Q: Are you going to place similar limits on my own inventory items?
A: No, what you do with your inventory is your business, remember that settlement occurs in bitUSD only.

Q: What did that last guy mean by inventory?  Do I have to buy cards from you and then be stuck trying to resell them?
A: No, not at all.  There are public and private inventories available.  The public inventory includes the gift cards from Gyft, we make these available to you for resale.  You are not required to purchase them ahead of time.  In addition to that, you may add items of your own choosing and elect to make them either public or private.  If they are private they will only be visible on machines you own.  If they are public everyone will have access to sell them, when they do you will receive bitUSD

Q: Why bitUSD?
A: A reliable market pegged crypto currency, with fungibility and an interest yield.  Why would we use anything else?

Q: So do you have plans to support. NXT, DOGE, MYFavorite Alt?
A: If there is enough demand, we may support some other alt coins, but they are not on the table right now.  The cost for us to add a custom altcoin to the back end is currently $3,000 bitUSD.  This barely covers our development & maintenance costs and the coin must support multisig wallets to even be considered.  The only exception to this rule is people who are purchasing or leasing more than 10 units.  Larger purchases have their own isolated backend and can be customized quite a bit on request.

Q: Is there any other way to support an altcoin?
A: Yes, if you want to provide a wrapper that is compliant with our API, then you can just add it like any other inventory item.

Q: What's the difference if I do it as inventory vs paying you for integration?
A: If it's integrated it will be useful as a payment mechanism, i.e. you and possibly others will be able to accept it as a method of payment and not just as something you dispense.  Also if it's integrated we guarantee full settlement.  Inventory settlement is up to you <link to api docs>

Q: Is this product opensource?
A: The back end is source available, but to master distributors only. 
Purchasers and Leaseholders can obtain access to the full source code by signing an NDA. 

The front end is opensource, you can in fact make your own front end to replace it if you like.  The source is available by right clicking on the demo page and doing a "view source".  Or you can screen scrape it.  It is very likely we'll put it up on github soon, the only thing holding that up right now is time and other projects we have going on.  There are API docs available <api doc link> feel free to build your own, but keep in mind you need to have an account with us before the back-end will credit you with sales.

Q: What languages did you use to write this?
A: Backend is golang, front end is HTML5, CSS & AngularJS.  Database is postgres and the blockchain.

Q: How does the bill acceptor/recycler work?  Couldn't someone just hack the webpage and make it think payment had been tendered, thereby robbing the owners?

A: Unlikely, the part you actually see and interact with is just a view that represents a stream of data coming from the back end.  Each bill acceptor has a unique signing key embedded in it and it communicates directly to the backend to update state.  The backend pushes these state messages to the app which then displays whatever the backend tells it to.  However the backend keeps control of the situation at all times.

Q: Can't someone just compromise the backend server and get at the funds?
A: Funds are not kept on the back end server.  Keys are not kept on the back end server.  The back end works by firing a callback to an activity server.  The activity server is on a private network, only talks to the backend and the wallets.  Furthermore, no more than 1% of funds are kept in any crypto wallet.  Anything beyond that requires manual intervention.  When you add an inventory item to your own machines using our API, what you are essentially doing is creating your own activity server. 

Q: What happens if my personal inventory/activity server goes offline?
A: If your activity server goes offline the product(s) assigned to it will disappear until such time as it regains uptime integrity.  If this happens in the middle of a transaction, you will be responsible for fulfillment and this can result in a "delayed fulfillment" message being presented to the user.  Taking the server offline is not the preferred way to disable inventory, but it does work.

Q: What is "delayed fulfillment"
A: This means that the transaction exceeded the hotwallet balance and will need to be manually reviewed.  Or if it's a user issued item, it means that the user's activity or inventory server went offline or encountered some other issue.  Basically the user will now have your contact details presented to them in order to help them complete the transaction.  Or ours if it's one of our products.

Q: How can I limit the products?  How can I add products?
A: There are two ways.  The first is through the admin panel under add/remove products.
The other way is via our API.

Q: I want to place this in a coffee shop / bar / retail establishment and I would like to offer them the ability to sell their own giftcards as a deal sweetener.  What's the best way to do this?
A: There are 2 ways to do this, the way you do it is up to you.  If it's a pre-provisioned product that the store will be fulfilling, then the easiest way is to upload an inventory CSV file to the admin panel.  Codes will be selected from inventory and emailed to the customer upon order completion.  When you run out of inventory, the product will no longer be available to customers.  The other way is to add an activity server that responds to our RESTful API and then you can manage inventory however you want.

Q: I sold a public product that was issued by another user, it was sold for cash deposit.  How do I settle up with the user?

A: You should have bitUSD sitting in your reserve account at all times to manage this type of thing.  There is no minimum or maximum and reserves pay interest.  We use bitUSD for settlement and settlement is automatic once the sale confirms.  If your balance is insufficient to cover it, then the product should not have sold.  It is possible if you have enough machines in operation that your reserve can drop below the required threshold to complete the sale settlement procedure.  When this happens we offer cash deposit options that allow you to go to a local bank or even a gas station in some areas and deposit cash to increase your reserves.  You must do this, your machine will not continue to operate until this is done.  If you have more than 10 machines in operation or you find you are frequently in this position, you should consider a business line of credit to increase your reserves.
If the reverse happened, meaning someone sold your public product, then we guarantee settlement, you as an owner or operator bear 0 risk.

Q: I have way too much bitUSD in my reserve account, what can I do with it?
A: Draw down your balance to your own wallet then trade it at your favorite exchange.  Keep in mind that bitUSD pays interest and is rapidly gaining acceptance.

Q: What do these cost?
A: We don't resell individual units in areas where we have distributorships already.  Our MSRP is $1200 bitUSD for 1-way models and we expect the 2-way models to come in around $1500 bitUSD.  Your local distributor can get you better pricing information.

Q: Can I buy a 1-way model and upgrade to a 2-way model later?
A: Yes, see your distributor for more details on the specifics for your locale.

Q: I already have a Skyhook, why do I want to buy a Simplicity?
A: We designed these to be footprint and hardware compatible with Skyhooks.  You can upgrade your Skyhook software directly to the Simplicity software stack and enjoy all the benefits (except 2-way functionality) right away.  Contact a local reseller for more details.  If there isn't one in your area email info@gemspace.net

Q: I already have a Skyhook, the uptime is terrible!  But I only want a crypto ATM so why would I want to buy a Simplicity?
A: We've actually fixed most of the problems that Skyhooks usually have most of that was software.  You should at least consider upgrading because of that alone.  With our software there is no bag holder risk.  No matter the price of the currency, you aren't holding them so you have no risk from price changes.  You set the spread to whatever you want and make your profit without the foreign exchange risk you would otherwise be facing.

Q: I already have a Skyhook, my Country, State, City, Overlords said they're illegal here now.
A: There has been a real effort by banks and other financial institutions to try and raise the barriers to entry on all things crypto lately.  We cannot advise you on the law.  In most cases though, there are settings you can set that will make you compliant again.  Your local distributor can walk you through this process.  If more is needed it will be up to you unfortunately.

Q: How can I become a distributor/reseller?
A: Each country has a master distributor, or will soon.  Their job is to assign distributor/reseller licenses and they make a profit for doing so.  The cost to become a master distributor varies from country to country, but on average you can expect that it will be around $250,000 USD.

The cost to become a regional distributor is around $50,000 USD but the master distributor gets to collect and keep 80% of that.  The remaining 20% is converted to bitUSD and applied to the regional distributor's reserve account he/she may then provision that into accounts for local resellers.  Regional distributors may charge a fee to resellers if they wish.

Q: Why did you structure it that way?
A: We've seen a lot of companies come and go since the time we first envisioned a desktop sized two way payment kiosk.
The one thing they all had in common were the lack of proper supply, distribution and support chains. 
In a word, planning.  If you fail to plan then you're planning to fail.
We are aiming for longevity for both the product and the market.
 
To do that we needed to first build a supply chain that would be reliable and provide us with high quality source materials. 
That is taken care of and now we are building a global distribution chain. 
This way parts and service are always immediately available to all owners and no one is stuck with a "broken box of useless junk that costs more to ship than to replace".

Admittedly the model introduces some extra costs that wouldn't be there if sales were direct to the public. 
But the size of operations at this level also allow us to make customizations which support local markets that would simply be unaffordable for individual owners or even a small group of owners. 

For example if Greece suddenly did exit the Euro, the distributor in Greece could request a firmware upgrade to Drachmas and a software update to support Drachma as a currency, then make sure to get it out to all the operators right away. 

It's a lot easier for us to provide attention at that level, than to try and service individual owners all by ourselves. 
Resellers make their money not only reselling, but providing service and support options that are attractive to their niche audience. 

Regional distributors make money servicing resellers and master distributors make money supplying and servicing regional ones.

The other reason is also a very practical one. 
There are real economies of scale from mass production. 
Yet each production run needs to be customized for each customer and each market.
Things like bill acceptors need more than just a firmware flash to switch from currencies, in many cases they need to be specific to the currency (width of the bills is often an issue).
 
By handling production runs on a per country basis, we can speed up the delivery and time to market while handling the national customizations on our end in bulk.

You don't have to wait and hope to be in the next batch, you just contact your local reseller and buy a unit. 
There are also individual customizations, things like loading the signing keys, configuring the default language settings etc.
These must be performed per user and per unit. 

By allowing others to provide the end-user services as a profitable business model, we can focus our attention on driving down the production costs while still maintaining the highest levels of quality.  Also owners who are savvy can still make their own customizations, while those who aren't so technically savvy can rely on someone local for everything from upgrades to adapters.

Q: What countries already have a master distributor?
A: Canada, USA & Mexico are taken already.  Greece is under talks, everything else is available at the time of this writing.
 
Q:  I'm very interested in becoming a master distributor for my country.  I don't see that we have one, what do I need to do?
A:  Your master distributor arrangement allows you to purchase units at a significant volume discount that is barely above our own costs.  You are essentially paying for the cost of customizing the product for your entire country and then committing to buy out the entire production run in order to secure your position as the only company in your country with that right.  This allows you to set pricing however you want.  You are acquiring monopoly provider power in your country, and as such you have certain obligations such as warranty service and RMA that apply to the entire country.  We back you up on everything, buy you're the one who deals with your country and we deal exclusively with you.  If you feel like this is something you're ready for then we should probably talk.  info@gemspace.net

Q; I have questions that are not addressed in this FAQ, who can I ask?
A: Just email us, info@gemspace.net

Could set up a swap market like bitfinex that loans to traders and and settles interest payments daily.

I like this idea.  What do we need to make it happen?

You're welcome.

We've been having some problems that are pretty much all my fault in getting this thing stood up properly.
Development and testing was done entirely on virtual machines, and it's looking like the VMs were setup different than the production boxes (this is my fault I own it, just trying to sort it now).

There is a bit of a delay.  30 mins to launch, I've got a working backend and a front-end that refuses to load.  I'm trying right now to convert the VM to a docker container and deploy that way.  But it's a slow process.  I apologize for the delay.

We are getting close though!

In the meantime, please enjoy this amusing video of someone else who had a similar issue...
https://www.youtube.com/watch?v=IW7Rqwwth84

Sorry but isn't it more likely that BTS would be re-implemented in NXT?  Not trying to start a flamewar here, just saying they DO have this...   http://nxt.org/about/monetary-system/

The main reason I prefer BTS to NXT is the solid pegging mechanism and yield interest on bitUSD.
I know more than a handful of others that feel pretty much the same way.

If bitUSD is changing, then it changes the whole value proposition in my mind.  Nevertheless that pegging mechanism is essential to widespread adoption.  The yield is admittedly secondary, but I would hold a whole lot less bitUSD if there wasn't a good yield.

Thanks for the info guys, it's helpful!