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Topics - bytemaster

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271
General Discussion / Proposed Future DAC Delegate Pay Model
« on: September 28, 2014, 11:28:01 pm »
I have been working through the delegate pay model that I recomend for future DACs including VOTE, MUSIC, DNS, etc.

It works off of the principle that shareholders have a right to dilute to raise capital and that the ability to dilute to raise capital ultimately maximizes shareholder value by allowing rapid growth through many rounds of funding.

1) 100% of all fees are burned. 
2) Delegates can set any fee per block they like measured in XTS (BTSX, VOTES, etc)
3) The cost to register a delegate with a "high fee" is equal to 100x the fee-per-block they want to get paid. 

With this system a delegate must produce at least 100 blocks to break even.  It also naturally limit potential abuses because the cost of registering a HIGH PAY delegate will be VERY HIGH while the probability of getting elected will be very low.  The person registering the HIGH PAY delegate will also lose out on the ability of using their own shares to vote for themselves. 

For starters no one would be able to register a delegate that would pay 2 billion BTSX per block because the cost would be 200 billion BTSX (which don't exist).   This puts a limit to what one could attempt to register to be 20 million BTSX per block... assuming they owned all 2billion BTSX... if we assume the largest stakeholder owns 10% of BTSX and the use 100% of their stake to register a high paying delegate then the maximum pay per block would be 2 million and they would have no stake left to vote for themselves.   

Assume someone used 1% of the BTSX to register their delegate at a pay rate of 200K BTSX per block it would take them over 28 hours to break even during which the rest of the shareholders could coordinate their votes to get them ousted if they didn't consent.

With this setup the DACs can fund development in a decentralized manner for their entire lifetime. 

One thing I would like to mention is that there is a "HARD" limit on the share supply based upon limits of 64 bit numbers and the precision. 


272
General Discussion / Bitcointalk Censoring old posts of me exchanging messages with Satoshi
« on: September 28, 2014, 10:32:29 pm »
Quote from: Bitcoin Forum
A reply of yours, quoted below, was deleted by a Bitcoin Forum moderator. Posts are most frequently deleted because they are off-topic, though they can also be deleted for other reasons. In the future, please avoid posting things that need to be deleted.

Quote
I fully believe you and came to conclusion you did.   I read the snack machine post after posting by earlier comment.


I can't find the thread at the moment, but this post was made by me YEARS ago and was just deleted on September 14th 2014.   

273
General Discussion / Who let the DOGEs Out?
« on: September 26, 2014, 02:04:50 pm »
What does DOGE have that is driving it higher than Nxt?   

274
General Discussion / Delegates Please Publish Feeds More Often
« on: September 25, 2014, 07:54:46 pm »
When attempting to write a market maker the slow movement of the feed can be difficult.

I would recommend the following:

if  REAL_PRICE < MEDIAN and YOUR_PRICE > MEDIAN publish price
if  REAL_PRICE > MEDIAN  and  abs( YOUR_PRICE - REAL_PRICE ) / REAL_PRICE  > 0.005 publish price

The goal is to force the price down rapidly and allow it to creep up slowly.

By publishing prices more often it helps market makers maintain the peg and minimizes opportunity for shorts to sell USD below the peg that the market makers then have to absorb. 

If we can get updates flowing smoothly then we can gradually reduce the spread in the market maker bots. 

*note: all prices in USD per BTSX

275
DAC PLAY / Chess DAC
« on: September 22, 2014, 01:14:37 pm »
The Chess DAC is a large multi-player chess game where all players can play *both sides* of one large DAC-wide game.

Players bet on the winner (black or white) when they make a move.   Each "turn" is an auction where people pay to move a piece.   Which ever move has the largest balance is the move that is made.   All funds contributed go into a winnings pot and give the submitter either "white shares" or "black shares".   

When the game is "won" the pot is divided among the shares of the winning color.

This game as an interesting twist:  you can bid on both sides and thus attempt to cause the other side to "make a mistake".   

From a gambling perspective the outcome of the game is unpredictable and from a players perspective it poses new challenges.  People can create "chess bots" and join a "team".

If someone is gutsy enough they can pay enough to win every auction and "control the game"...  there can be many attempts to "game" the "game" and that all turns into user engagement.    The game will have a relatively high "rake" which will make it unprofitable to control both sides with high bids and thus forcing people to "pick a side" if they want to win.

The color with less bids (fewer white shares or black shares) has a higher payout-per-share and thus the risk/reward of joining a losing side balances out and keeps the game evenly matched.

I suspect you will have to "pre-purchase" white-shares or black-shares prior to the start of the game and then use those shares to bid on moves in-game.  This will prevent new bets from diluting old bets once the odds change. 


276
General Discussion / Proposal - Significant Enhancement to Market Engine
« on: September 17, 2014, 03:54:59 pm »
It has been discussed many times before that we should prioritize shorts based upon collateral rather than fee.   Agent86 has been visiting me this week in Virginia and we have had some serious debates and have identified a refinement that should drive the peg *AND* liquidity much tighter than we have today.

Lets start with some fundamental principles:
1) the more collateral there is behind BitUSD the less leverage there is in the system (and less profit to the short)
2) price fixing the collateral at 2x is bad because 2x may not be what the market needs
3) charging the shorts a "fee" means they start out under 2x collateral and requires us to place an artificial limit on valid short prices.
4) charging the shorts a "fee" means that market makers cannot operate while maintaining a BTSX bullish stance.  To be a market maker today requires that you sell BTSX and hold BitUSD which means that few players are willing to provide much liquidity due to the USD exposure.

Suppose we were to change things up as follows:

1) When you "short" you specify the following:  Number of dollars you want to sell,  BTSX per dollar you are willing to put in collateral, and the Maximum price ($ per BTSX) you are willing to short.
2) When the market executes, if there is a buyer of BitUSD at the feed price, then the short with the highest collateral per USD is chosen provided the feed is less than the maximum price ($ per BTSX) set by the short.
3) Delegates publish their feeds once per hour on average (but slightly randomized to get even distribution / steady updates)

What this would allow market makers to do is this:
1) Short USD with high collateral at the price feed.
2) Buy USD at .99 or more to cover their position.
3) Cover their shorts with lower-collateral speculators when the price falls (minimizing their downside risk)

Under this market the BTSX BULLS could safely play market maker and the market makers would be competing to offer the narrowest spread *AND* most collateral and thus increasing the backing/value of BitUSD.  We need the BULLS to play market maker because BTSX is risky and the bears (those who would rather hold dollars than BTSX) are not likely to see BitUSD as a dollar equivalent.  The result is that asking the BEARS to play market maker results is much wider spreads. 

Lastly as a result of people competing to be the "market makers" so they could have both "leverage" and "buy/sell spread" BitUSD will end up with far more than 2x collateral on average.

There are two primary states the market can be in:
1) Real Price > Price Feed
2) Real Price < Price Feed

And in each of these cases the market makers / shorts have to make a decision on what to do:

1) Real Price > Price Feed
When this is the case then those with BitUSD will be willing to pay more for BTSX than the price feed will allow the SHORTS to execute, thus the market sets the price without restriction.

2) Real Price < Price Feed
   - high collateral shorts and market makers will cancel/move their orders while covering (supporting the peg)
   - market markers that are "short" will be looking to cover (buy USD) to minimize losses from their leveraged position supporting the peg.
   - speculators who want to short "long-term" with higher leverage get an opportunity to be the most collateralized short.  They start out at a "small loss" like they do today, but they help sell to the market makers looking to cover.  Thus the speculators support the peg by providing market makers liquidity allowing market makers to operate with narrower spreads.

The result of this whole process is this:
1) market makers who want BTSX exposure with leverage risk and to earn money from the spread are able to operate safely with narrow spreads because speculators who want long-term leverage on BTSX price movements are there to provide market makers liquidity. 
2) If market makers can be liquid and earn a profit with narrow spreads then BitUSD will be liquid and there will be high confidence.

The downside of this process:
1) A slightly higher reliance on the price feed.  The more accurate/responsive the feed is at all times the better the market will function.
2) High reliance on the feed means that delegates will need to have many safe guards in place against feed manipulation by centralized exchanges and that delegates should not source their data from the same places:
      a) price movements more than a certain percent should be *manually confirmed* by the delegates.
      b) some delegates should operate at slower rates than other delegates
      c) some delegates should be "completely manual" and set the price based upon the "buy walls" or "sell walls" on various exchanges rather than "last feed".
      d) it is generally better for the price feed to be "low" than "high" because that will result in the BitUSD longs setting the price rather than the feed.
      e) based upon this the feed should be "slow to rise" and "quick to fall"
      f) with lagging price feed there will exist arbitrage opportunities for USD longs to maintain the peg by selling at a profit until the shorts (following the feed) can catch up.
      g) all of these guidelines need not be coded into the blockchain, but delegates can compete, debate, and publish feeds that produce the most effective price peg.
      h) shorts can minimize harm from feed manipulation by having tight limits on their order range.
3) Yield on BitUSD will be slightly lower because overlap from short orders will no longer go into the yield funds, but they still get overlap on Long/Long orders.

All things considered I think this will dramatically help the peg because all of us BULLS can make the market with minimal risk and thus make it a safe place for the bears (BitUSD holders).

Thoughts?

277
General Discussion / "insufficient funds" Help Thread
« on: September 15, 2014, 01:48:53 pm »
This thread is dedicated to tracking down the bugs people have reported with insufficient funds for transfer. 

After looking over the code it appears that the most likely candidate is a pending transaction that is holding up funds.   If you are unable to transfer funds please post the following:

First for BTSX:
1) Output of "balance" command
2) Output of "wallet_transfer" command.
3) Attempt to "vote" and report the balance after voting as well as the vote transaction.

For BitAssets:
1) Does the account you are sending form have BTSX (to pay fees)

Lastly what does this report?
blockchain_list_pending_transactions

If you don't want to reveal your balance you may scale all values by the *SAME* constant amount.

278
General Discussion / Web of Trust + Account Feedback
« on: September 12, 2014, 04:11:17 pm »
We are preparing to add some new features to help reduce fraud / errors from accounts that look like bter. 

1) You can now "burn" shares for or against an account while posting an optionally signed message on the "wall" of the account. 
2) You can now link two accounts with arbitrary meta data, ie:  the account "bytemaster" can link to "bter-com" and define various properties such as trust-level.

So now users have a way of flagging accounts for both good/bad behavior, leaving anonymous or signed messages on accounts, and build an arbitrary web-of-trust among the accounts.

These features also provide the basis of future features including:
1) Allowing Overstock to issue shares
2) Paying dividends on User Issued Assets
3) Identity authorities for voting

The purpose of this thread is to discuss these features and their implications.

279
General Discussion / BitUSD Market Maker Live
« on: September 11, 2014, 08:32:08 pm »
We have produced a python script that can be used by anyone who wants to help make the BitUSD market and are looking for developers to help make it better!

https://github.com/BitShares/bitshares_toolkit/tree/develop/programs/market_maker

It is a tad crude right now, but we have plans to make this kind of script configurable for anyone who wants to perform this function. 

The rules are simple:
1) Buy BitUSD cheap (a few percent discount)
2) Sell BitUSD at the median price feed (or the latest feed from BTER) which ever is higher (in dollars per BTSX)
3) Adjust orders anytime they deviate from what the new orders would be by more than some tolerance.

Under this plan no *NEW* bitUSD will be created until the peg is hit *AND* everyone buying BitUSD can expect liquidity within just a few percent.   Meanwhile profits can be made every time someone switches sides of the market.

We are providing the script for others so that we can increase liquidity and decrease the spread (as our bots compete against each other ;) )

Users can now purchase BitUSD with confidence that they can sell it when they need to.   

Usage:
Code: [Select]
python main.py USER PASS PORT REAL_NETWORK
Example:
Code: [Select]
  python main.py user pass 8000 true
You can tweak the parameters by editing:
  main.py

Code: [Select]
SPREAD_PERCENT = 0.05  # 5%
TOLERANCE = 0.01 # should be less than SPREAD_PERCENT / 2, the closer the tolerance the more often orders are canceled/updated

MIN_USD_BALANCE = 10  #make sure you retain enough USD to pay fees to update your orders
MIN_BTSX_BALANCE = 100  # make sure you retain enough BTSX to pay fees to update your orders
MIN_USD_ORDER_SIZE = 2  # prevent dust orders
MIN_BTSX_ORDER_SIZE = 100  # minimum order size to prevent dust

MEDIAN_EDGE_MULTIPLE = 1.001 # how far in front of the median price feed do you want to sell.

280
General Discussion / MOVED: 5 millions of gmail accouns on a russian forum
« on: September 11, 2014, 02:59:20 pm »
This topic has been moved to Random Discussion.

https://bitsharestalk.org/index.php?topic=8768.0

281
General Discussion / BTSX Valuation based upon standard P/E ratio of 20.
« on: September 10, 2014, 04:05:08 am »
When attempting to value a company one of the primary metrics that can be used is the earnings per share and the resulting P/E ratio.   You can view BitShares systems as companies that earn revenue from transaction fees and have expenses paid to people providing resources to the company.

I have put together a basic chart that shows the earnings BTSX would see at various transaction rates and trading volumes and then assumes an industry average 20 P/E ratio to derive an expected market cap valuation for the network.


Based upon these numbers the valuation of BitShares X with 1 transaction per second and $500K volume per day on the internal exchange is $62 million dollars.   However, if the internal exchange volume reaches similar levels to the external exchanges today, then the expected transaction rate would yield a valuation of $300 million dollars.    Once the exchange volume hits $10 million per day, the resulting transaction volume of 10 transactions per second the valuation would be about $700 million dollars.   

These valuations are based entirely on P/E ratios which are clearly not sufficient for valuing a crypto-currency.   Bitcoin for example has huge negative earnings, a transaction rate of less than 5 TPS and a valuation over $5 billion.     Using Bitcoin as a metric we could claim that a network is worth about $1 billion per TPS.    The vast majority of Bitcoin transaction volume occurs on exchanges, with BTSX many of the on-exchange trades will move onto the protocol itself and thus BTSX should have on-network transaction volumes equal to Bitcoin in a much shorter period of time.


The assumed P/E ratio of 20 implies a 5% ROI; however, most banks these days give depositors less than 1% ROI.   If BTSX is able to maintain its peg by backing bitUSD with BTSX and can share the transaction fees with bitUSD holders, then the demand for bitUSD will be enormous.   Due to the collateral system that requires effectively 3x the value of all bitUSD deposits to be held as collateral in BTSX, we can estimate the value of BTSX to be about 3x the demand for USD deposits at 5% ROI.   Considering the vast sums of money currently tied up in low-yield treasuries, savings accounts, etc the demand for bitUSD will be enormous. 

Of course, the more bitUSD that is created and “held” without corresponding transaction volume, the lower the ROI will become until supply equals demand. 

All of this is to say that the fundamentals on BTSX are very strong when analyzed like a traditional business and even stronger when compared to other crypto-currency systems on the market.   




 




282
General Discussion / BTSX 0.4.13 was just posted by DAC Sun
« on: September 09, 2014, 07:01:49 pm »
https://github.com/dacsunlimited/bitsharesx/releases/tag/0.4.13-RC1
https://github.com/dacsunlimited/bitsharesx/releases/tag/v0.4.13

There are some major updates in this particular revision and it is once again mandatory with a hard fork scheduled in 24 hours (3 PM EST).

1) Fix short matching issue
2) Implement BitAsset Yield / Rewards / Interest
3) Groundwork for paying fees with BitAssets

I would recommend all delegates / seed nodes upgrade ASAP and publish your version. 


283
General Discussion / BitUSD vs BitBTC is Trading on chain...
« on: September 08, 2014, 05:57:58 pm »
Any premium / discount on BitUSD would apply equally to BitBTC which means that BitUSD / BitBTC should trade the same as all of the other (centralized) markets. 

Right now the spread is terrible and the order book thin... but I see a huge opportunity for arb here.   I figured many people may not know this is live.

284
General Discussion / BitUSD Yield (aka Interest) Scheduled for Launch Wednesday
« on: September 07, 2014, 07:03:42 pm »
BitAssets will now yield a return for their owners from the transaction and market fees involving that asset.   This is a variable yield and not a guaranteed ROI.

Users will not have to do anything to benefit from this yield, it will automatically show up in their balance and transaction records as part of normal use.   Every time you make a transaction that withdraws from one of your balances it will pay any yield due back to that balance.     

The yield can be calculated as:

ACCOUNT_BALANCE / BIT_ASSET_SUPPLY  *  TOTAL_ACCUMULATED_FEES * PERCENT_OF_YEAR_HELD

After 1 year you hit the maximum yield percent.  Simply move your funds once per year and you can see the maximum benefit.

You can estimate the "current APR" as  TOTAL_ACCUMULATED_FEES / BIT_ASSET_SUPPLY.

The following things can reduce the current yield estimate:
   New BitUSD being created with a market fee less than  (TOTAL_ACCUMULATED_FEES / BIT_ASSET_SUPPLY)
   Someone cashing out some of their yield.

The following things can increase the current yield estimate:
   Market Transactions with more overlap than (TOTAL_ACCUMULATED_FEES / BIT_ASSET_SUPPLY)
   Transactions with BitUSD fees paid.


So what kind of yield can one expect to see?   $0.05 per transaction, 0.01% or more BitUSD trade volume.  Up to 10% on new BitUSD issuance based upon existing demand.. perhaps less.

Assume we get to 1 TPS in BitUSD the network would earn $1.5 million from transaction fees, if there were $15M BitUSD in circulation then that would be a 10% yield.   Every time someone submits / cancels a bid with BitUSD it counts as a transaction.    $15M BitUSD in circulation would mean $30M BTSX locked up as collateral.     

This will get very interesting :)

285
General Discussion / Interest on BitUSD - A Proposal for Review
« on: September 05, 2014, 03:40:08 pm »
BitUSD is incredibly useful as a trading instrument but the "sales pitch" for the average Joe is something like this:

1) Buy BitUSD today and you will be able to sell it back for 98% of what you paid for it (due to the spread)
2) Once you have BitUSD you get all of the benefits of Bitcoin, instant transfers, privacy, security.
3) As a merchant the "cost" of accepting BitUSD (at parity) is currently equal to the cost of a credit card (a few percent)

Initially demand from traders will to hedge against BTSX volatility will help the market grow, but what we *REALLY WANT* is for people to store their wealth in the system, not just their trading account.  To do this BitUSD needs to offer a return that is explicit.  IE: it shouldn't be done via the value deviating from the peg.

Right now the network earns USD via the market and via transaction fees (yes transaction fees can be paid in USD).  This income is saved for a "rainy day" which we don't actually expect to happen, but could.  The value as an insurance system could be better used to pay interest to USD holders.   If BitUSD were an interest bearing asset, then the interest would compensate for the risk of black swans in the same way that the insurance fund does today.

So far BitUSD has earned $1800 on $485,000 issuance in just 2 weeks of light trading.  This is about .4% yield every 2 weeks or about 10% per year.   I have no idea how this will play out over time, but I suspect that it will result in a significant yield for BitUSD holders.   The more people hold BitUSD the more BTSX is worth.   So it is in the best interest (No pun intended) of BTSX holders to pay interest on BitUSD from the fees collected.

I would like to implement it as follows:
1) If you hold a balance for less than 1 month, you earn nothing.
2) If you hold a balance for one year or more then you earn (YOURUSD / TOTAL_USD) * COLLECTED_FEES_BALANCE
3) If you hold a balance for less than one year then you earn a pro-rated amount.     (YOURUSD / TOTAL_USD) * COLLECTED_FEES_BALANCE * FRACTION_OF_YEAR_HELD^2

The result is that long-term holders of BitUSD earn much higher yields than short-term holders.  The yield should more than cover the cost of the spread and thus your pitch to the average Joe is much stronger:

1) Buy BitUSD and earn more (much more) on your dollars than you do at your bank.
2) Enjoy all the other benefits of crypto.

This feature would have a greater impact on adoption than just about anything else being discussed. 

Discuss.



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