BitShares Forum
Main => General Discussion => Topic started by: jakub on March 29, 2015, 12:26:38 pm
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If we look at BitShares as a company we can all agree that our end product is bitUSD (and other bit-assets). The product looks good as it does what it says on the tin: thanks to the embedded collateral it is secure and thanks to the market peg mechanism it closely tracks the value of USD. That's really cool but what I can do with it?
Can I buy anything with it? No, because nobody is selling anything for it.
Can I sell anything for it? Not really, because to pay my bills I would have to be able to convert bitUSD into fiat USD and at this stage it is both expensive and complicated (bitUSD -> BTC -> USD).
So it looks like we have designed and built a superior Tesla car but all we can do with it is keep it in garage because there is no infrastructure to charge the batteries once we try to use the car.
Imagine an internet service offering this:
A. Using a bank transfer or credit card I wire them USD 100.00 and they instantly send bitUSD 100.00 to my BitShares wallet (minus a small fee).
B. From my BitShares wallet I send them bitUSD 100.00 and they instantly transfer USD 100.00 to my bank account (minus a small fee).
I have these questions:
1. Would you agree that without the existence of such service bit-assets are doomed to be quite useless?
2. How difficult would it be to build such a service in each country? What are the main obstacles that are preventing this from happening?
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Gateways have been a huge issue for a long time. No one is willing to deal with all the regulation and legal stuff required to become a gateway...
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Im pretty sure they're are a few being worked on
Sent from my iPhone using Tapatalk
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Not yet.. but with the Bank of England looking seriously at digital GBP, I expect the context will change 6months+ from now. It's likely that BoE will back off owning the risk of hosting its own network. Other options like pegged assets such as BitShares offers will always be a good alternate to actual digital fiat.
The option that makes bitXYZ really useful, will be a debit card that can spend digital currency; and I suggested as much in my reply to the UK.gov call for information. Whether that is at the point of sale or a sale ahead of time crediting the card in whatever currency that debit card company prefers, won't matter; what matters is method that makes digital currencies useful.. once one exists, it'll be trivial to offer the option to all.
What BitShares offers right now and will continue to offer in the future, is a real simple option to play the differences in markets. If you have more confidence in USD than BTS you move across to bitUSD and the inverse when you consider BTS will rise. So, right now you can use any BitShares asset to draw a profit from the volatility in BTS. I'm no expert at this but apparently there are already bots available to play the exchanges and the more options that are real world assets, the more likely BitShares will attract those who do understand the skill of playing markets.
So, 1. No, obviously not. 2. is a fallacy that ye olde banks will have a necessary place in the new world. Those old banks will need to evolve too and be more flexible, otherwise they will become redundant. The big money will be the service that offers the debit card for digital currencies.
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you can purchase some English-----Chinese translation service from me :P :P
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The option that makes bitXYZ really useful, will be a debit card that can spend digital currency; and I suggested as much in my reply to the UK.gov call for information. Whether that is at the point of sale or a sale ahead of time crediting the card in whatever currency that debit card company prefers, won't matter; what matters is method that makes digital currencies useful.. once one exists, it'll be trivial to offer the option to all.
Spending bitXYZ has always been the easy part, the difficult part is to convince the sellers to accept it as payment. If they had an easy way to convert bitXYZ into fiat the problem would be solved.
What BitShares offers right now and will continue to offer in the future, is a real simple option to play the differences in markets. If you have more confidence in USD than BTS you move across to bitUSD and the inverse when you consider BTS will rise. So, right now you can use any BitShares asset to draw a profit from the volatility in BTS. I'm no expert at this but apparently there are already bots available to play the exchanges and the more options that are real world assets, the more likely BitShares will attract those who do understand the skill of playing markets.
The target group for this usage is very limited so it cannot be treated as a foundation for mass adoption.
2. is a fallacy that ye olde banks will have a necessary place in the new world. Those old banks will need to evolve too and be more flexible, otherwise they will become redundant. The big money will be the service that offers the debit card for digital currencies.
"The old banks" might eventually fall but it is hard to imagine this to happen without having a bridge that people can use to cross from "old banks" and "new banks". And it's up to "new banks" to build this bridge.
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Yes, of course is all baby steps atm and a long way to go but as the momentum towards digital currencies increases and the critical mass making services viable, those will appear. Everyone overestimates how quick change can happen. Sellers will accept currency that is useful to them.. it's the same as is occurring with Bitcoin currently but the difference with a debit card it that would be the great equaliser.. value held in digital tokens would overnight become available to spend but it needs the legislation in place to allow that. Given the stresses on the economy, Governments will be keen to allow any route to new economy, it just takes them a while to do due diligence and make change. I expect another push in the UK will occur in the Autumn after the UK elections. Perhaps next year then we'll be able to spend BTS or GBP or any other without noticing the difference when a card is swiped.
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Gateways have been a huge issue for a long time. No one is willing to deal with all the regulation and legal stuff required to become a gateway...
If I was running an internet business of buying and selling tickets (in electronic form) for a music concert - that I guess would be perfectly legal.
Also, there are legal internet services performing instant exchange between fiat currencies (e.g. you wire them USD and they wire you EUR).
But in case of bitUSD for some reason it becomes gray area.
I am not trying to be a smart ass (I'm not even a lawyer), I'm trying to understand the core of the problem as in my opinion being able (or unable) to solve this issue has a massive impact on BitShares future.
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Gourl implementation would be a great start in terms of adoption /tools for merchants. https://bitsharestalk.org/index.php?topic=15191.0
We need a cryptothrift for bitusd, or better, make cryptothrift.com accept bitusd :)
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At the moment BitUSD is useful as a stable USD savings account that can't be seized or bailed-in which is great for a variety of use cases, and will become more appealing as the next financial crisis plays out. Unfortunately it requires further development or a higher yield to be very appealing even to existing BTS shareholders at this stage. https://bitsharestalk.org/index.php?topic=14831.msg192017#msg192017
The easiest way to gain traction though is to give it a use. So with BitShares Music people might use a BitUSD type product happily as a by-product of doing something else, same with BitShares PLAY. So I was keen on blockchain based BitAsset Gambling starting with simple games of chance as way to kickstart/bootstrap a BitAsset use case other than just savings etc.
https://bitsharestalk.org/index.php?topic=13788.0P
https://bitsharestalk.org/index.php?topic=13869.0
This was exciting to me because of the potential size of the market and the fact that it didn't require third parties just the skill of our existing developers. Unfortunately that's a no go for the Chinese market at this stage.
The more retailers that accept it and hold it the better too. It's particularlu appealling for those businesses that might struggle getting a standard account or for crypto projects that raise funds but don't want to be exposed to BTC volatilty. (Dash currently has a decent sized dark market niche already apparently and NXY has a strong Asset Exchange with 15 of the top 100 crypto CAP's being NXT based so I wouldn't be surprised to see them add a BitAsset in the coming year.)
The other thing I think is that BitAssets were better backed by a no inflation crypto-currency BTSX. So that BTS use would be seen as part of an entire financial ecosystem and movement as opposed to financial products backed by shares in a DAC. We'll have to see if people who have faith in the increased competitiveness of the current model are able to make it deliver in practice.
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Sellers will accept currency that is useful to them.. it's the same as is occurring with Bitcoin currently but the difference with a debit card it that would be the great equaliser..
The sea-change will come when mass consumers have a reason to hold and value bitUSD. When this becomes the case the merchants, seeking sales and profits, will find ways to make it easy for consumers to spend their value (bitUSD). It is not the merchants that drive adoption. The merchant adoption is simply a response to consumer adoption. No matter how inciting one makes it for merchant to use crypto, its use will not be popular unless consumers have a reason to use it for transactions in place of fiat. This is were Bitcoin is currently getting it wrong. It has merchant adoption greatly exceeding consumer adoption. This can not be sustained, and is currently being reflected in the stagnation of the bitcoin price.
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Sellers will accept currency that is useful to them.. it's the same as is occurring with Bitcoin currently but the difference with a debit card it that would be the great equaliser..
The sea-change will come when mass consumers have a reason to hold and value bitUSD. When this becomes the case the merchants, seeking sales and profits, will find ways to make it easy for consumers to spend their value (bitUSD). It is not the merchants that drive adoption. The merchant adoption is simply a response to consumer adoption. No matter how inciting one makes it for merchant to use crypto, its use will not be popular unless consumers have a reason to use it for transactions in place of fiat. This is were Bitcoin is currently getting it wrong. It has merchant adoption greatly exceeding consumer adoption. This can not be sustained, and is currently being reflected in the stagnation of the bitcoin price.
I agree that is a factor in Bitcoin's stagnation but I believe there are possible tax benefits using stable BitAssets for merchants especially as well as businesses that might have difficulty getting a standard account. So while customer adoption is usually the main route to merchant adoption, I think if BitAssets were further developed some merchants might find value in using them in their own right, not just because their potential customers are. Darkcoin/Dash already has a bit of that market, so they might be best placed currently to add a DRKUSD to their blockchain.
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(http://i2.tietuku.com/bb664aebb0349972.jpg)
It can do anything you want , just have imagination and patience ......
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So it looks like a bit of chicken-and-egg problem: there are few bitUSD consumers because there are no bitUSD retailers and there are no retailers because there are not enough consumers.
I can see two things:
1. The reasons for consumers to keep their funds in bitUSD are quite limited (hedging/speculation and safe storage of value) and the process of adding more incentives (music, gambling) will slowly continue.
2. The reasons for retailers NOT to accept bitUSD are quite obvious (inconvenience and high cost of conversion) and there is a clear solution to alleviate this: create a direct gateway between fiat and bit-assets.
If Bitstamp/Bter can legally operate serving as a gateway between BTC and fiat - why can't we use our own company resources (i.e. BitShares) and build a similar gateway between bit-assets and fiat? It would be even easier as it could work on a fixed spread basis, just like https://metaexchange.info/ (https://metaexchange.info/).
I am aware that there was an attempt to create the bitUSD/USD pair on Bter and it failed due to low liquidity which can be easily explained: Bter did not care about it because it was not as vital for them as it should be for us.
So why don't we create our own non-profit gateway and artificially (i.e. using bots) maintain liquidity there in the initial phase? There will be no profits from it in terms of money but huge benefits in terms of infrastructure support for bit-asset retailers. It would be just like Tesla investing its resources in building charging stations for their cars.
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If we look at BitShares as a company we can all agree that our end product is bitUSD (and other bit-assets). The product looks good as it does what it says on the tin: thanks to the embedded collateral it is secure and thanks to the market peg mechanism it closely tracks the value of USD. That's really cool but what I can do with it?
Can I buy anything with it? No, because nobody is selling anything for it.
Can I sell anything for it? Not really, because to pay my bills I would have to be able to convert bitUSD into fiat USD and at this stage it is both expensive and complicated (bitUSD -> BTC -> USD).
So it looks like we have designed and built a superior Tesla car but all we can do with it is keep it in garage because there is no infrastructure to charge the batteries once we try to use the car.
Imagine an internet service offering this:
A. Using a bank transfer or credit card I wire them USD 100.00 and they instantly send bitUSD 100.00 to my BitShares wallet (minus a small fee).
B. From my BitShares wallet I send them bitUSD 100.00 and they instantly transfer USD 100.00 to my bank account (minus a small fee).
I have these questions:
1. Would you agree that without the existence of such service bit-assets are doomed to be quite useless?
2. How difficult would it be to build such a service in each country? What are the main obstacles that are preventing this from happening?
Hold it.
The idea was it was supposed to be 5% interest but something went wrong with that plan.
If interest were higher I think more people would hold BitUSD.
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First of all I wanted to say hi to everyone here and thank you for your insight. Second, a little disclaimer, as I and Jakub are good friends, together in business, and we talk/argue a lot about anything IT/crypto etc ;)
That said, Jakub, I second your observations.
From a trader's perspective (closest to "my perspective" I think), bitUSD is nothing more than a BTS derivative, and although clever, it realistically has little to do with perceived safety of holding onto fiat USD. I might be stating the obvious, but lets not forget that bitUSD is not backed by U.S. military power, IRS, NSA or other shady actors working to preserve fiat USD integrity. These guys couldn’t care less about bitUSD, or worse, if stakes become high, could turn aggressive towards bit assets as means od bypassing their banking system.
So as long as BTS's rubber is still touching the road, bitUSD is actually tied to USD. However if things get shaky, and liquidity falls below a workable threshold, the "USD" part of bitUSD could as well be labelled "Donald Duck” or “princess Kenny", and it wouldn't make much difference - the dollar sign in bitUSD is a consensus thing and nothing more. I know its hardly revealing, but it brings us to what I understand is Jakub’s main point, that it's liqudity and resulting adoption that makes BitShares and bitUSD stand a chance in the market.
As of yet, the whole in-out process of dealing with Bitshares is quite geeky and complicated (we went through it a number of times), can be nerve wrecking (mailing chinese exchanges about evaporated BTC transfers using google translate :o ) and for now, serves little purpose, except gambling on BTS valuation by using its internal derivatives, otherwise untradable with the outside world.
So I second Jakub's question, about how hard would it be to establish a service exchanging USD to bitUSD (even at a slightly skewed rate, given additional BTS collateral risk)? And do you guys agree that it is the only way out of the ditch we seem to have got stuck in?
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Have you checked this out?
https://bitsharestalk.org/index.php?topic=12794.msg195422#msg195422
Good news guys!
We have an agreement with the bank and now we can move forward with the development.
Our goals:
- Enable bitUSD deposits
- Have On/Off ramp with Bitcoin and supported cryptocurrencies
- Have On/Off ramp with EUR
Then 50% funds will be used to give a signup bonus (10 bitUSD) for all new customers who make their first bitUSD or bitcoin purchase.
As soon as our delegate will be approved, we will dedicate a full time developer to it.
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You can use bitUSD anywhere bitcoin is accepted with shapeshift, blocktrade.us, metaexchange.
The other day the rate on circle was $268, and on blocktrade.us it was also $268, so the spread doesn't seem to be that much of an issue.
What can't you do with bitusd?
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First of all I wanted to say hi to everyone here and thank you for your insight. Second, a little disclaimer, as I and Jakub are good friends, together in business, and we talk/argue a lot about anything IT/crypto etc ;)
That said, Jakub, I second your observations.
From a trader's perspective (closest to "my perspective" I think), bitUSD is nothing more than a BTS derivative, and although clever, it realistically has little to do with perceived safety of holding onto fiat USD. I might be stating the obvious, but lets not forget that bitUSD is not backed by U.S. military power, IRS, NSA or other shady actors working to preserve fiat USD integrity. These guys couldn’t care less about bitUSD, or worse, if stakes become high, could turn aggressive towards bit assets as means od bypassing their banking system.
So as long as BTS's rubber is still touching the road, bitUSD is actually tied to USD. However if things get shaky, and liquidity falls below a workable threshold, the "USD" part of bitUSD could as well be labelled "Donald Duck” or “princess Kenny", and it wouldn't make much difference - the dollar sign in bitUSD is a consensus thing and nothing more. I know its hardly revealing, but it brings us to what I understand is Jakub’s main point, that it's liqudity and resulting adoption that makes BitShares and bitUSD stand a chance in the market.
As of yet, the whole in-out process of dealing with Bitshares is quite geeky and complicated (we went through it a number of times), can be nerve wrecking (mailing chinese exchanges about evaporated BTC transfers using google translate :o ) and for now, serves little purpose, except gambling on BTS valuation by using its internal derivatives, otherwise untradable with the outside world.
So I second Jakub's question, about how hard would it be to establish a service exchanging USD to bitUSD (even at a slightly skewed rate, given additional BTS collateral risk)? And do you guys agree that it is the only way out of the ditch we seem to have got stuck in?
BitUSD is quoted using feeds provided by delegates using data from exchanges and there is a band that bitUSD can be traded in relation to that price feed... It's far from the Donald Duck or Princess Kenny Analogy. BitUSD is functioning very well in this super low liquidity environment already and the peg has worked even as bts has fluctuated wildly.
And to Jakub's point earlier about fiat gateways. I believe there is a bounty being offered by the dev team for anyone who creates a gateway. It is extremely expensive and could cost into the millions of dollars to build an on/off ramp and obtain a money transmitters license. Forex brokers are regulated very heavily in the US as can be seen by the total of 9 that are allowed to operate. Other countries are different, but many of the big money countries have laws similar to the US. Look at how much VC funding some of the bitcoin exchanges have needed to attempt to get off the ground... millions.
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If we look at BitShares as a company we can all agree that our end product is bitUSD (and other bit-assets). The product looks good as it does what it says on the tin: thanks to the embedded collateral it is secure and thanks to the market peg mechanism it closely tracks the value of USD. That's really cool but what I can do with it?
Can I buy anything with it? No, because nobody is selling anything for it.
Can I sell anything for it? Not really, because to pay my bills I would have to be able to convert bitUSD into fiat USD and at this stage it is both expensive and complicated (bitUSD -> BTC -> USD).
So it looks like we have designed and built a superior Tesla car but all we can do with it is keep it in garage because there is no infrastructure to charge the batteries once we try to use the car.
Imagine an internet service offering this:
A. Using a bank transfer or credit card I wire them USD 100.00 and they instantly send bitUSD 100.00 to my BitShares wallet (minus a small fee).
B. From my BitShares wallet I send them bitUSD 100.00 and they instantly transfer USD 100.00 to my bank account (minus a small fee).
I have these questions:
1. Would you agree that without the existence of such service bit-assets are doomed to be quite useless?
2. How difficult would it be to build such a service in each country? What are the main obstacles that are preventing this from happening?
The only thing BitAssets need to do is act as a good store of value. But in order to do that people have to use the decentralized exchange to speculate on the stored value. As a design it could work but it requires lots of volume and speculating.
I don't think BitUSD matters all that much particularly. It's just a stablecoin or stable value storage. Many of us would rather use Gold but if enough people accept BitUSD then it can be useful. Also for something like micropayments I think BitUSD is ideal and far better than Bitcoin could ever be.
Minebitshares is a good test case. The payout is in BitUSD and it's far more useful to be paid in BitUSD from an accounting perspective, a tax perspective, etc.
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You can use bitUSD anywhere bitcoin is accepted with shapeshift, blocktrade.us, metaexchange.
The other day the rate on circle was $268, and on blocktrade.us it was also $268, so the spread doesn't seem to be that much of an issue.
What can't you do with bitusd?
Spending and obtaining BitUSD are still much too difficult. Only delegates and developers seem to have a reliable way of earning BitUSD. Only hardcore geeks know how to speculate or do anything with BitUSD.
So you have to spread BitUSD to miners at first. At least this way it gets into enough people's possession to become useful over time. The next thing you need to do is start accepting BitUSD.
I think getting paid in BitUSD is much better than getting paid in Bitcoin because you can be sure you'll keep your BitUSD. Bitcoin you have to cash out immediately or you could lose a lot of your value so from a businessman perspective holding BitUSD is far better.
So market BitUSD to merchants, make it easier to earn, maybe get artists to accept BitUSD as well and let Bitshares Music BitUSD exchange for Bitshares BitUSD.
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With a real USD you can at least wipe your ass. LOL
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Have you checked this out?
https://bitsharestalk.org/index.php?topic=12794.msg195422#msg195422
Good news guys!
We have an agreement with the bank and now we can move forward with the development.
Our goals:
- Enable bitUSD deposits
- Have On/Off ramp with Bitcoin and supported cryptocurrencies
- Have On/Off ramp with EUR
Then 50% funds will be used to give a signup bonus (10 bitUSD) for all new customers who make their first bitUSD or bitcoin purchase.
As soon as our delegate will be approved, we will dedicate a full time developer to it.
This is the news I was hoping for. Thank you, onceuponatime, for bringing it up.
I try to follow the forum regularly but I must have missed it. This makes me much more bullish about BitShares future.
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From a trader's perspective (closest to "my perspective" I think), bitUSD is nothing more than a BTS derivative, and although clever, it realistically has little to do with perceived safety of holding onto fiat USD. I might be stating the obvious, but lets not forget that bitUSD is not backed by U.S. military power, IRS, NSA or other shady actors working to preserve fiat USD integrity. These guys couldn’t care less about bitUSD, or worse, if stakes become high, could turn aggressive towards bit assets as means od bypassing their banking system.
So as long as BTS's rubber is still touching the road, bitUSD is actually tied to USD. However if things get shaky, and liquidity falls below a workable threshold, the "USD" part of bitUSD could as well be labelled "Donald Duck” or “princess Kenny", and it wouldn't make much difference - the dollar sign in bitUSD is a consensus thing and nothing more. I know its hardly revealing, but it brings us to what I understand is Jakub’s main point, that it's liqudity and resulting adoption that makes BitShares and bitUSD stand a chance in the market.
As we are indeed friends and business partners, MartinZ and me differ in one respect: I would never say "the dollar sign in bitUSD is a consensus thing and nothing more". For me the collateral mechanism (combined with extremely low probability of total wipe-off of BitShares value) is a solid foundation which makes me perceive bitUSD on almost equal footing as fiat USD in terms of investment. I think bitUSD not being backed by U.S. government does not matter in this case.
The main difference for me is that for fiat USD I can buy things and for bitUSD I cannot. The existence of a fiat gateway would eliminate this deficiency and expose one big advantage of bitUSD: in 10 seconds I can transfer it anywhere in the world. And this would be a huge advantage and the whole point of the BitShares concept.
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What can't you do with bitusd?
It's quite simple: I cannot sell and buy things at market prices.
1. If I am a consumer and earn my income in fiat USD I would have to spend substantially more than USD 100.00 to purchase something priced at bitUSD 100.00.
2. If I am a merchant and pay my bills in fiat USD I would have to charge my customers substantially more than bitUSD 100.00 to sell something worth USD 100.00 (or alternatively I would have to give up some of my profits to keep up with the market prices)
If we had a fiat gateway offering very small spreads none of the above would be true and the bitUSD commerce would flourish.
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Because of sites like www.metaexchange.info blocktrades.us and shapeshift.io
what you can do with bitUSD is spend it anywhere that you can spend bitcoin.
AND, until you are ready to spend, you can a return on your holdings.
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Convert it to bitsilver or bitgold and redeem it for REAL gold and or silver http://cryptosmith.info/index.php (http://cryptosmith.info/index.php)
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What about this one?
http://tradebts.com/ (http://tradebts.com/)
Is it a working gateway between bitCNY and fiat CNY?
(it's a Chinese version only so I cannot verify myself)
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What about this one?
http://tradebts.com/ (http://tradebts.com/)
Is it a working gateway between bitCNY and fiat CNY?
(it's a Chinese version only so I cannot verify myself)
so it seems:
https://bitsharestalk.org/index.php?topic=13457.0