Quote from: Troglodactyl on November 28, 2014, 03:39:47 pm

This assumes they're mining regardless of cost.  The price is set by anticipated usefulness, and miners will only mine if that anticipated usefulness exceeds the cost of mining.

If the anticipated usefulness drops after they've mined some, they may sell at a loss to reduce their losses.

I see what you mean. In that case they're incentivised to take a loss 'now' to mitigate risk of holding and losing more... But the price is still bound to oscillate around the mining cost.

True, but not because mining cost determines price but price determines mining profitability and therefore difficulty.

A price drop for a GPU minable coin will result in miners switching to other coins. This leads to difficulty adjustment which makes it again profitable to mine. So regardless of actual price mining will always be exactly above break even. (from a purely economical standpoint; very similar to a Nash equilibrium) But as you see that doesn't mean that mining pushes the price up.

It get's more complicated once you have specialized hardware. So if BTC drops miners won't stop mining (as long as price is high enough to pay more than electricity cost) because they have to pay for their ASICs. Hence in this scenario it is very well possible that price is quite a bit lower than the price at which mining is break even. Which means, as Bytemaster said, they sell at a loss longterm.

* Bitcoin price is backed by mining electricity cost

I heard this argument often but it is simply wrong. The price of BTC is not determined by the resources used/wasted on mining but the other way around. Just the fact that miners burn electricity would not stop BTC price to go to zero. But declining price would stop miners.

Very simple example: I could create a bitcoin fork and rent a big mining farm to mine it. Would it gain any value by doing that? No. It just secures the network but that's it. I can do the same by using other consensus algorithms that don't waste real world resources.

* Speculators cause wild fluctuations around this price
* The actual usefulness* of bitcoin as a payment system adds extra value increasing the price

So, if you take away (or at least reduce the massively) the mining cost, what you're left with is the actual usefulness* of the currency backing the price and speculation around that value.

Therefore, POS (and by association DPOS) systems are valued almost solely on the usefulness of the currency.

This should be the same for every crypto. Value is based upon it's momentary "usefulness" + speculation. The fact that a crypto is POW does not increase the price by itself. It leads just to a different valuation because of speculation. (people believing in POW and not POS, DPOS etc.)

Quote from: jran on November 27, 2014, 08:09:27 pm

Quote from: Chuckone on November 27, 2014, 07:06:01 pm

I believe to have noteUSD in circulation you need to short them with NOTES as collateral, which in turns reduces the available supply of NOTES for trading, driving up the price... Is my logic right?

Correct but I think the concern, that others have pointed out, is that noteUSD in this system is probably short lived.  So the 3 times NOTES collateral is going to get released back into the traders hands as noteUSD is cashed out etc.  At least thats how i understand it.

There will be money flowing in (people buying noteUSD to buy songs) and out (artists cashing out) of the ecosystem. But what is preventing the artists to keep some of their income in noteUSD? Considering the biggest sellers don't necesseraly need the money ASAP and that it gives a yield just to keep it there, they have an incentive to keep part of their income in noteUSD and cash out only when they need it.

As long as PeerTracks is doing good, there will be a constant influx of fresh money. So at some point we might see an accumulation of noteUSD in existance, which will require to have significant collateral.

The problem is that at this point in time it is just speculation whether people will hold noteUSD long term or not. They could also trade for bitAssets on BTS chain  due to higher yield, liquidity, investment options etc. In general I tend to believe that this is going to be the case because a banking DAC is most likely to deliver better results in the field of banking than a music DAC.

IMO it would be a great prospect for NOTE holders to have some buy back mechanism, so that profitability grows with volume. And honestly in the field of music it probably wouldn't hurt too much to take like 1%.

Quote from: matt608 on November 25, 2014, 09:26:48 pm

  It could be a raging success and NOTE could still not be worth very much as artist coins are user-issued assets which don't drive up the price.

Well said thats my concern as well.  We need a more clear picture on how to make NOTES much more valuable than just being used to create short term bitUSD.

I thought about this too and I agree. At current presale price NOTES are probably still a very good investment though.

As a NOTE holder I like the idea of some reward proportional to volume for NOTE holders, but if we decide to take a cut it should be reasonably small. After all profitablity for artists is our number one goal.

So if 1 Beiber Coin would be burned as part of the buyback mechanism, instead have it so 50% of the coin is burned permanently and 50% of that coin is distributed to all NOTE holders. 

IMO it would be better to directly take a part of the noteUSD and buy+burn NOTES with it. This way you don't have the difficutly of distributing all the artist coins to NOTE holders. Furthermore NOTE holders don't end up with a negligible amount of every artist coin. It would basically just be dust.

I think this is a cool idea to bridge the gap between Bitcoin and BitShares. And now that the idea exists someone is probably going to create a coin like this either ways, so we can just be happy and pick this one as it has a good initial distribution.

Quote from: alt on November 19, 2014, 02:51:27 am

Quote from: Agent86 on November 19, 2014, 02:21:46 am

Quote from: alt on November 19, 2014, 02:00:20 am

before we support this new feature, we should change the price feed logic.
It should include volume from wallet market, and the  feed price should  relative to volume.

I'm not sure if you are misinterpreting the feature.  It should allow people to place orders with a floor price but also with the additional stipulation that it tracks the feed price +/- a fixed offset.

I don't think there is a current suggestion to make the blockchain into a market maker or source of liquidity.  This feature just gives people more control over placing their orders.  I am also not in favor of a blockchain controlled market maker.

I am also hoping that it will be added to do short orders that can be a fixed offset from feed (only above the feed price).

I think we should also reconsider the policy that margin calls can't force buys above the feed price.

thanks, I actually have misinterpreting the feature
So I think this feature is good, but still need to be very careful when we use this function.
the problem is feed price logic, now feed price just be controlled by outside.
if wallet market volume is too much, it will attract people to attack it through outside price control.
So I think the price feed should  include inside market and calculate with  volume,  right?

The point of this is to make the internal market more accurate because of the low volume. Once volume is higher the market will be more accurate.
I think the day we have high volume on the internal market and on/off ramps come on line then I'm assuming this feature will no longer be needed and it will be removed.

I can see another advantage of alt's proposal: When we remove the price feed there will probably happen some panic selling of bitAssets. This in conjunction with actually no rules on shorting price might absolutely crush confidence and therefore bitAsset markets. If we weight in the internal price into pricefeeds we get a very smooth transition from external feeds to effectively no feeds. I would really like that.

I would vote for a paid delegate that does this and summarizes discussions etc. (like a part time job...)

This will probably be the long term solution.
For now if there is enough interest it could be handled by three or four forum members. I for my part would be happy to help with it.

No, I would never take out a loan for an investment, no matter how good it may seem.

But yes, I think this is a good moment to buy, if your not planning on selling tomorrow.

Yes, definitely this.