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Main => General Discussion => Topic started by: Rune on October 23, 2014, 06:51:40 pm

Title: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Rune on October 23, 2014, 06:51:40 pm
So I've been spamming the forum quite a bit, one second crying out against VOTE and calling I3 dishonest, the next whining for transparency, then insulting those who lost money to DNS while sucking up to BM, and in general just posting walls of text everywhere. Edit: I want to clarify that I don't actually think that I3 are dishonest, I was just pissed off in the moment.

Now is time for my huge wall of text about my thoughts of what BTS will become, and why I think it will grow a lot faster than anyone are expecting.

My premise is this: BTS is more than just a cryptocurrency and it is more than just shares 2.0. It is a completely new paradigm of human corporate organization and it solves some of the fundamental problems that have constrained companies, governments, armies and every other organizational structure for thousands of years.

Economic activity and value growth are the products of capital and labor. The point of trade and organization has always been to specialize labor into the activity that is most useful or valuable (i.e. division of labor), and to allocate capital to the place where it is most beneficial.

The free market blindly fights in an evolutionary game of survival of the fittest to figure out which specific allocation is most valuable for a given individual. As a competitive advantage organizations form within the free market as a method of leveraging the intellect of humans who specialize in leadership to control others into allocating their labor towards what will be most beneficial. This gives the benefit of allowing very specialized division of labor and more intelligent allocation of a combined pool of capital. Due to economies of scale there can be a huge advantage for a company to grow in size in order to leverage specific specialized areas of the capital and labor they control. One example could be marketing - if two factories make the same product it is better for them to unify under a single brand as they can then double their marketing effort for the products of both factories, rather than having two different brands and marketing separately. A more simple example is simply factory production, since when volume is scaled up capital and labor can increasingly specialize and thus give increasing returns. Anyway, using the simple logic of economies of scale, it would be logical for all human economic activity to unified under a single company. As we all know, that isn't the case...

Transaction costs, gatekeepers, imperfect information and diminishing returns on investment.

The reason why all humans are not unified under a single a company are numerous, but the most obvious one, is the reason we all know and hate: corrupt gatekeepers that take advantage of the lack of information to extract value from the company without other stakeholders in the organization knowing it. This means as an organization grows and its organizational structure becomes more convoluted and nested, the opportunity of middle managers or middlemen to loot and unfairly extract value from the organization increase. Because it is so universally rampant, the less severe forms of this are socially accepted; slacking off on the job instead of always seeking to apply yourself to the fullest within the organization technically also counts as looting, since you are essentially stealing the money you're getting paid when you're not working. You've entered a contract that pays you for work, and the organization honors it's own part of the contract by paying you, but you don't honor yours since you're not working. Even though this is clearly breach of contract, and thus essentially stealing private property, it is still socially accepted and even admired when people are able to slack off when they work for a corporate giant. These things are totally unavoidable in a traditional organizational structure because of the opaqueness and imperfect information. There are many economic papers that have tried to nail down the exact ratio with which the effectiveness of an employee decreases with each step of growth in the amount of employees, due to increasing opaqueness and decreasing access to information, and it is actually quite high. No matter the exact ratio we can all agree that the average amount of work done by someone working for a startup is a lot higher than the average amount of work done by, say, an Exxon Mobil employee, and this dimishing marginal return constrains Exxon Mobil's growth in some way. Interestingly, exxon mobil is still able to be huge because it employs another imperfection of the market to its own, unfair advantage: regulatory capture.

Bitshares solves these problems by having strong economic incentives for upholding total transparency across the board.

Bitshares employees are hired a different way than employees of a regular organization. Instead of being hired directly by a singular, trusted person or group of people within a seperated area of the organizational structure, new employees are nominated by these employees and then put to the vote by all stakeholders. It is done simply and frictionlessly simply by including them in their slate. This creates a nested structure of transparent trust where anyone trusting the upper level of an organizational structure is able to trace exactly how that trust is funneled down to employees at the lower levels. Should a stakeholder find proof of any employee being a bad apple, it is extremely easy to put forth this proof to the larger community of stakeholders and have them instantly voted out. Indeed an investigative organizational structure that specializes in analysing the work of other delegates and sound the alarm if an unprofitable, stealing or colluding employee is found could be implemented to have clear economic incentives for professionals to weed out the bad apples. If a bad apple is found the network of transparent trust that delegate slates creates can be used trace who originally nominated or appointed this employee, and they can be investigated to see if they are also malicious, or it was simply a mistake. This gives a strong economic incentive for all existing employees to only ever nominate new employees that they think are fully honest and profitable for the DAC.

These incentives combine to form a system where every new employee added to the company, DO NOT have diminishing marginal returns due to an increasing lack of information, but rather have INCREASING returns because they are able to leverage their own output onto the entire network; a combination of economies of scale and metcalfes law. The result of this is that any currently existing organizational structure or company that is smaller than bitshares will ALWAYS benefit from integrating itself into the bitshares organizational structure, since it will be able to create higher value, leverage a larger network, and even have more efficient employee management due to the effective transparency and governance that the bitshares delegate system creates. For every person or organization that is integrated into bitshares, the speed and ability with which new organizations can be integrated and new employees can be hired will increase with no diminishing returns. If all this reasoning turns out to be fact, then the only logical conclusion is that bitshares will eventually integrate every single structure of currently existing human economic organization. It will be a company that does all economic activity, owns all assets and employs all employees on the entire planet, and is in turn jointly owned by all humans. I even think that it will take over the non-profitable duties of governments and charities, such as protecting the innocent, caring for the poor and misfortunate, funding basic research, supporting and protecting art and historical relics, protecting the environment and biodiversity, and space exploration. This is because most humans are willing to allocate a certain percentage of their spending power to altruistic measures, and will thus in some situations vote for things that are not profitable, but rather charitable. A organization-wide compromise will be reached between pure profits and pure charity, and i suspect that this consensus will eventually be much higher than the current charitable rate of even welfare states, since people will become increasingly generous once the indoctrinations of the incumbent system are gradually phased out.

Here's how I see the timeline playing out assuming absolutely best case scenario:

November: BTS is created, and we start to mess around with the funding of delegates and try to figure out the best practices for voting and oversight and such. Once we get that sorted out, the marketing push begins.

December: The on and offramps are revealed, and the big marketing push for bitUSD begins. A big push to hire every single developer in the crypto space that is currently working for free, and thus donating their labor, will begin autonomously. This includes things like bitcoin developers, the OB developers, wallet devs such as mycelium and darkwallet, and others. Some of the developers will be so strong in their beliefs that they will insist on refusing payment out of loyalty to the bitcoin blockchain, but some of them will invariably recognize the great advantage getting paid for their work will give them.

January/February: we begin talks with NXT and etherium to buy them and their userbase out, mainly to get our hands on their developers and to cause a huge scene in the crypto space and diversifying our stakeholder base. This integration will eventually happen no matter what, but the time it takes before it's done is hard to judge since it depends not on economic factors (which are 100% in favor of integration) but rather on pride, confusion and fear by the current NXT and ethereum stakeholders.

Spring 2015: We reach 101 profitable employees, with more employees looking to join. Stakeholders vote to increase the delegate cap rather than kicking out an incumbent profitable employee. This will continuously happen and the amount of delegates will eventually increase exponentially.

Summer 2015: We buy out a midsize bitcoin infrastructure company, such as skyhook. This newly acquired company will integrate all its employees directly as delegates in the bitshares organization, and it will change its business model to hire new employees as delegates that are responsible for maintaining internally owned ATM's in a specific area (ie they will no longer sell the ATMs to others, because it is more profitable to have them owned and applied by bitshares). Skyhook will then begin mass producing ATMs at highest capacity and the network will initally subsidize placing them EVERYWHERE, as this will be extremely profitable over time and will be a very profitable long term investment.

Winter 2015: We buy out bitpay, and probably surpass bitcoin in market cap. We've probably also hired all the current bitcoin and altcoin developers at this point, and integrated almost every altcoin into our system. The only blockchains we will be competing with at this point are clones of bitshares that are attempting to refine our organizational structure or strategy in some way, or specializing the blockchain to an extreme degree in some area where our scale work against us.

This is the best of the best of the best case scenario imaginable. It's probably not gonna happen but I don't consider it completely outside the realm of possibility. Interestingly, only the first few months actually depend on I3, the rest will be done in a decentralized manner due to the independent alignment of economic incentives, however I3 will probably lead the effort in whichever way they consider more profitable. The important thing is that this train will run on its own once it gets the tiniest bit of momentum, and our fortunes will be pretty much secured.

Does this sound scary to you? It's definitely scary to me. When I first started to draw these conclusions I panicked because I thought of the massive danger if this system somehow gets corrupted along the way, just like every other large human organization that has ever existed. It will be like the nuclear bomb, once this thing is invented and unleashed on the world there is no taking it back, even by the creators. However, corruption doesn't arise spontanously in a system, it either exists at it's creation, or it enters later on. And that is the KEY, because WE are this seed, and I choose to believe that every person on this forum is a good human being, in fact more than just a good human being, I believe the vast majority here are EXTREMELY committed to fight corruption and evil in all its forms, because my impression is that the majority of people were brought here exactly because of that, rather than profit.

Because our system is completely transparent, and because we are the early adopters and majority owners, we can trust each other to always be on the lookout should any corruption attempt to enter the system. If a bank attempts to buy us out, we will revolt and it will never happen. If a delegate attempts to argue that transparency isn't needed we will refuse them. If a group of delegates collude to attempt to turn the voting process into a political shitshow, we will see through their deceit and kick them out.

Okay, now you have it, this is why I'm honored to be an early adopter, and this is why I'm honored to be here with you all - because from the short time I've known you all on this forum, I have overwhelmingly seen the desire to do good be prioritized over everything else, even profits. It's as if running this thing in a way that benefits humanity is more than just our collective desire, it's our purpose.

And that is why I now believe, contrary to what I wrote earlier, that we not only are the right people to take this amazingly scary and wonderful project off the ground, we deserve it.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: kisa on October 23, 2014, 06:54:14 pm
Thanks Rune, great thesis!
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: xeroc on October 23, 2014, 07:01:30 pm
So the question is ...

Are we still playing in the Bitcoin 2.0 regime?
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Rune on October 23, 2014, 07:07:04 pm
Quote from: xeroc on October 23, 2014, 07:01:30 pm
So the question is ...

Are we still playing in the Bitcoin 2.0 regime?

If my crazy theories come to pass, humans will move beyond even the very notion of markets. We will go from competing in a free market to collaborating in a free organisation.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Ander on October 23, 2014, 07:12:41 pm
I had thought that Bitshares had hit upon something with the ability to hire paid delegates by a vote - a potential new corporate structure.  A distributed corporation.


Is this the future of the blockchain technology?

Will the blockchain not only revolutionize money and finance but also revolutionize THE ENTIRE STRUCTURE OF OUR CORPORATE WORLD?



2009-2014: Bitcoin, the first big application of the blockchain technology revolutionizes money.
2014-20??: Bitshares, the second big applicaiton of the blockchain technology, revolutionizes the nature of corporations.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: matt608 on October 23, 2014, 07:14:02 pm
Wow that is some vision!  And this is awesome sales copy (among other things), good stuff  +5%

Quote from: Rune on October 23, 2014, 06:51:40 pm
These incentives combine to form a system where every new employee added to the company, DO NOT have diminishing marginal returns due to an increasing lack of information.

There is a limited amount of time stakeholders have to perform research on delegates as it will take a lot of time to read all the stuff they transparently reveal about their work and keeping up with the discussion among stakeholders about delegates could easily become a full time job for those with large enough stake to make it worth their time.

How efficiently this discussion + research takes place will be crucial.  Some kind of social platform will be needed for delegates to showcase their work and propose plans for fund spending.  This forum may become over run soon, we'll need a more advanced platform where individual comments can be voted up reddit style to help sort though the junk (maybe it should require a small stake to do an upvote/downvote).

Anyway I like this kind of thinking, it's good to have a long term vision for BTS. 
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Rune on October 23, 2014, 07:15:14 pm
Quote from: Ander on October 23, 2014, 07:12:41 pm
I had thought that Bitshares had hit upon something with the ability to hire paid delegates by a vote - a potential new corporate structure.  A distributed corporation.


Is this the future of the blockchain technology?

Will the blockchain not only revolutionize money and finance but also revolutionize THE ENTIRE STRUCTURE OF OUR CORPORATE WORLD?



2009-2014: Bitcoin, the first big application of the blockchain technology revolutionizes money.
2014-20??: Bitshares, the second big applicaiton of the blockchain technology, revolutionizes the nature of corporations.

The Final Blockchain.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Rune on October 23, 2014, 07:20:03 pm
Quote from: matt608 on October 23, 2014, 07:14:02 pm
Wow that is some vision!  And this is awesome sales copy (among other things), good stuff  +5%

Quote from: Rune on October 23, 2014, 06:51:40 pm
These incentives combine to form a system where every new employee added to the company, DO NOT have diminishing marginal returns due to an increasing lack of information.

There is a limited amount of time stakeholders have to perform research on delegates as it will take a lot of time to read all the stuff they transparently reveal about their work and keeping up with the discussion among stakeholders about delegates could easily become a full time job for those with large enough stake to make it worth their time.

How efficiently this discussion + research takes place will be crucial.  Some kind of social platform will be needed for delegates to showcase their work and propose plans for fund spending.  This forum may become over run soon, we'll need a more advanced platform where individual comments can be voted up reddit style to help sort though the junk (maybe it should require a small stake to do an upvote/downvote).

Anyway I like this kind of thinking, it's good to have a long term vision for BTS.

There will be massive economic incentives for the system to innovate a system that allows stakeholders to make decisions as efficiently as possible, and leverage the decisions of similar minded stakeholders. Think of some sort of distributed artificial semi-intelligence that is able to talk to you and ask you questions that can be transformed into specific vote behaviour on your behalf. As long as the system is implemented transparently on the blockchain itself it will be secure.

Also remember as market cap grows, so does individual stakeholders. New stakeholders can specialize themselves in whatever niche they have any knowledge or interest in. Perhaps there will even be some way to incentivize good voting behaviour economically - which would basically make the system immune to failure. I'm not totally sure if that is possible though.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Ander on October 23, 2014, 07:24:16 pm
I wonder if this thread will be absolutely epic in a year...
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: instructor2121 on October 23, 2014, 07:26:41 pm
Good stuff Rune!

Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Rune on October 23, 2014, 07:29:23 pm
Quote from: Ander on October 23, 2014, 07:24:16 pm
I wonder if this thread will be absolutely epic in a year...

Actually I've probably jinxed it now :P
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Chuckone on October 23, 2014, 07:30:52 pm
Quote from: Ander on October 23, 2014, 07:24:16 pm
I wonder if this thread will be absolutely epic in a year...

Honestly, I would want to be able to stay away from the forum and the exchanges and not even take a look back, then come back in a couple of years from now and see what happened with Bitshares... (won't happen though, I'm addicted)

It'll be either dead or freakingly huge. I tend toward the latter.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: kisa on October 23, 2014, 07:31:04 pm
Quote from: Rune on October 23, 2014, 07:29:23 pm
Quote from: Ander on October 23, 2014, 07:24:16 pm
I wonder if this thread will be absolutely epic in a year...

Actually I've probably jinxed it now :P

and let's not forget possible biological evolution of the human brain structure as a result of adaptation to network knowledge.... might take a few generations though?
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: tonyk on October 23, 2014, 07:34:21 pm
So, this is the official Bitshares manifesto?
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Rune on October 23, 2014, 07:38:32 pm
Quote from: kisa0145 on October 23, 2014, 07:31:04 pm
Quote from: Rune on October 23, 2014, 07:29:23 pm
Quote from: Ander on October 23, 2014, 07:24:16 pm
I wonder if this thread will be absolutely epic in a year...

Actually I've probably jinxed it now :P

and let's not forget possible biological evolution of the human brain structures as a result of adaptation to network knowledge.... might take a few generations though?

As neuroscience student this is what I'm hoping to work on. I'd like to see a system that allows the decentralized network to interface and establish trust neurally, rather than through clunky text, screens and passwords.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: James212 on October 23, 2014, 08:18:46 pm
 +5% Great stuff Rune!  Thanks for enlightening me on the concept of the delegate-dev/employee.  This is something I never considered.  Very powerful idea!
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: matt608 on October 23, 2014, 08:57:18 pm
Worth translating this into Chinese and posting in the Chinese forum to help everyone see the bigger picture!  I'd tip 100BTSX to whomever does that.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: donkeypong on October 23, 2014, 09:11:24 pm
The potential is there for this vision to occur, no question. The scariest thing for me is governance. With all the great work that I3 and the independent DAC developers have done, there hasn't been much of a focus yet (at least not a visible one!) on delegates and decision-making. I'm not saying they haven't thought of this, but most efforts have been in other areas, understandably.

Obviously, the worst case scenario is that some bad interest gains enough voting power to take over the whole thing.

Another really lousy scenario is that delegate campaigning ends up as a money race. Building name recognition requires advertising, etc., and it all gets out of hand. In other words, becoming a delegate becomes out-of-reach for the average person, rather like getting elected to the U.S. Congress. Try as we might, can we develop something that functions better than a U.S. election, where (I think most of us believe) the politicians say whatever we want to hear, but are bought-and-paid-for by moneyed interests?

Keeping things free and open is good. Restrictions should be minimal. I am absolutely opposed to any term limits, for instance, which have turned out to be the best friend of special interest groups. And there's no way I'd automatically fire (term out) a dedicated developer who has chosen to make this a career. Delegates, whether they be individuals or someday become FOrtune 500 companies that employ armies of devs, marketers, and the like, will only get my vote if they remember this is a public service.

What we really need is a good place for decision-making. Maybe that's the forum or maybe not. Are we comfortable using these threads to advance a proposition? For example, Delegate 68 proposes that we buy a large insurance company and turn it into a DAC. Does Delegate 68 just start a new thread with that proposal? Is that good enough for us? Maybe so.

Are we going to get spammed with proposals from delegates? Would it make sense to limit a delegate to a certain # of new election propositions each year?

If we build it, will they vote? In the current beta version of BitShares X, the voting mechanism is terrible. I'm sure it has taken a lot of thought and work so far, and I thank those who have created it. This thing really is revolutionary. But it's clunky and it needs to be far more functional.

Voting should be a high priority with the user interface. If we're making decisions, we'll need more than 9.5% support, 8% of which is probably AGS and I3 shares. Currently, that's enough to elect a delegate. I know it's a poor example, because delegate votes are so split; what I really need to use is participation/turnout rate, but I don't have access to that (though I've heard secondhand that it's quite low). I also wonder if there should be a dialog box that opens to announce a new proposition for voting or a running ticker with governance news, etc., somewhere in there.

Going forward, the governance will only work and we'll only be able to sell this idea, if there is strong participation in voting and governance. This has been a great start. There's far more work to be done in that area. Very exciting...and scary.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: santaclause102 on October 23, 2014, 09:30:57 pm
That (OP) was a  bit a crazy but I liked it :)
There are a few things which also apply here why companies do not get infinitely big you did not mention:
1) The most obvious one is: competition. If barriers to entry are not infinitely high a second company can always form and offer lower prices / better quality if the one big company begins to offer low quality products are high prices to increase profits.
2) Innovation and diversity: There is never only one way to do things. A different basic structure of an organization might make it more effective to serve certain markets better than the one big company. Not every innovation can be copied since it might contradict the fundamentals. Example: You can just either do approval voting OR delegation voting...(not a perfect example...)
3) Complexity leading to inefficiency: Although slate voting and specialized slate formation agents make hiring and firing pretty efficient it will still be pretty complex at scale.
4) At scale network effect might not be really big if the services provided by the DAC do not rely on each other or do not have overlapping user bases.

Quote from: donkeypong on October 23, 2014, 09:11:24 pm
Another really lousy scenario is that delegate campaigning ends up as a money race.
That is why we as a community / we as shareholders should refuse any vote buying from the beginning so it doesn't sneak in over time and get a serious habit of what is appropriate for deciding who to vote for. Culture (a commonly shared basis of habits and thought patterns) / voting culture matters here because it is not super evident how to decide best for a delegate and shareholders decide like other shareholders decide (=are not always rational).
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Rune on October 24, 2014, 02:23:12 am
Quote from: delulo on October 23, 2014, 09:30:57 pm
That (OP) was a  bit a crazy but I liked it :)
There are a few things which also apply here why companies do not get infinitely big you did not mention:
1) The most obvious one is: competition. If barriers to entry are not infinitely high a second company can always form and offer lower prices / better quality if the one big company begins to offer low quality products are high prices to increase profits.
2) Innovation and diversity: There is never only one way to do things. A different basic structure of an organization might make it more effective to serve certain markets better than the one big company. Not every innovation can be copied since it might contradict the fundamentals. Example: You can just either do approval voting OR delegation voting...(not a perfect example...)
3) Complexity leading to inefficiency: Although slate voting and specialized slate formation agents make hiring and firing pretty efficient it will still be pretty complex at scale.
4) At scale network effect might not be really big if the services provided by the DAC do not rely on each other or do not have overlapping user bases.

Quote from: donkeypong on October 23, 2014, 09:11:24 pm
Another really lousy scenario is that delegate campaigning ends up as a money race.
That is why we as a community / we as shareholders should refuse any vote buying from the beginning so it doesn't sneak in over time and get a serious habit of what is appropriate for deciding who to vote for. Culture (a commonly shared basis of habits and thought patterns) / voting culture matters here because it is not super evident how to decide best for a delegate and shareholders decide like other shareholders decide (=are not always rational).

I like to see counter arguments against my crazy conclusion, but I actually think I have pretty good answers to these points.

1) open source as a requirement means that we can fork any innovative features, and metcalfes law means that anything applied to our network will have higher value than on its own. In the end a developer will have much higher economic incentives to join us rather than compete with us.

2) I've been thinking very hard about this because it would make sense for it to be true, but I literally cannot come up with any example other than the same one as you, the delegate voting mechanism, which I think is inconsequential.

3) the economic incentives to develop even further on the slate voting mechanism will be insane, there will very soon be millions of dollars up in their for anyone who will do that. I think that if the smartest developers in the entire crypto industry get together and work on this it will not really be a problem in the long run.

4) all services use money. We can take over a freaking bakery and it will be profitable for us, because it will continue to run as before but will now also be a POS for all bitshares financial services.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Stan on October 24, 2014, 02:43:03 am
Don't compete with us, join us! 
It's more profitable for everyone.
But if you choose to complete with us,
well,
we would be forced to compete with you,
to protect our stakeholders' hard-earned network effect.

So come,
add your biological and technological distinctiveness to our own.

:)
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: 天籁 on October 24, 2014, 03:19:53 am
Awesome!  +5% +5% +5% +5% +5%
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: BitshatKing on October 24, 2014, 04:41:23 am
Quote from: Stan on October 24, 2014, 02:43:03 am
Don't compete with us, join us! 
It's more profitable for everyone.
But if you choose to complete with us,
well,
we would be forced to compete with you,
to protect our stakeholders' hard-earned network effect.

So come,
add your biological and technological distinctiveness to our own.

:)

YOU IS HERRO!!!!!
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: jae208 on October 24, 2014, 05:45:04 am
I have no doubt that Bitshares will be very successful over the long term. We tend to overestimate what we can accomplish in a year and underestimate what we can accomplish over the course of many years.

If the SuperDAC can become a sort of monopoly in the crypto world much like Google is a monopoly in search perhaps we could do as Google does and buy up innovative start ups and developers.  8)


PS

If you can't tell I admire Google and I think as of right now they are probably the only company in the US maybe in the world with such bold visions for the future.

I'm still of the opinion that a secretive division of Google (GoogleX?) is responsible for the creation of Bitcoin. I read that they were interested in creating Google Bucks sometime during the Great Recession and obviously they didn't. Perhaps they didn't create Google bucks because of the regulatory hurdles and because they might have created an open source distributive alternative to Google bucks. They also have ties to the transhumanist community and Ray Kurzweil. Plus they understand the power of open source as the Android operating system had a late start compared to apple and it has completely eclipsed Apple now. Anyways, sorry about side tracking this thread and rambling.  :P
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: Method-X on October 24, 2014, 06:47:59 am
Quote from: matt608 on October 23, 2014, 08:57:18 pm
Worth translating this into Chinese and posting in the Chinese forum to help everyone see the bigger picture!  I'd tip 100BTSX to whomever does that.

+5% I'll match that tip as well.

Rune: check out http://nullstreet.com - I made that site as an outlet for obsessed Bitshares people.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: santaclause102 on October 24, 2014, 06:59:02 am
Quote from: Rune on October 24, 2014, 02:23:12 am
Quote from: delulo on October 23, 2014, 09:30:57 pm
That (OP) was a  bit a crazy but I liked it :)
There are a few things which also apply here why companies do not get infinitely big you did not mention:
1) The most obvious one is: competition. If barriers to entry are not infinitely high a second company can always form and offer lower prices / better quality if the one big company begins to offer low quality products are high prices to increase profits.
2) Innovation and diversity: There is never only one way to do things. A different basic structure of an organization might make it more effective to serve certain markets better than the one big company. Not every innovation can be copied since it might contradict the fundamentals. Example: You can just either do approval voting OR delegation voting...(not a perfect example...)
3) Complexity leading to inefficiency: Although slate voting and specialized slate formation agents make hiring and firing pretty efficient it will still be pretty complex at scale.
4) At scale network effect might not be really big if the services provided by the DAC do not rely on each other or do not have overlapping user bases.

Quote from: donkeypong on October 23, 2014, 09:11:24 pm
Another really lousy scenario is that delegate campaigning ends up as a money race.
That is why we as a community / we as shareholders should refuse any vote buying from the beginning so it doesn't sneak in over time and get a serious habit of what is appropriate for deciding who to vote for. Culture (a commonly shared basis of habits and thought patterns) / voting culture matters here because it is not super evident how to decide best for a delegate and shareholders decide like other shareholders decide (=are not always rational).

I like to see counter arguments against my crazy conclusion, but I actually think I have pretty good answers to these points.

1) open source as a requirement means that we can fork any innovative features, and metcalfes law means that anything applied to our network will have higher value than on its own. In the end a developer will have much higher economic incentives to join us rather than compete with us.

2) I've been thinking very hard about this because it would make sense for it to be true, but I literally cannot come up with any example other than the same one as you, the delegate voting mechanism, which I think is inconsequential.

3) the economic incentives to develop even further on the slate voting mechanism will be insane, there will very soon be millions of dollars up in their for anyone who will do that. I think that if the smartest developers in the entire crypto industry get together and work on this it will not really be a problem in the long run.

4) all services use money. We can take over a freaking bakery and it will be profitable for us, because it will continue to run as before but will now also be a POS for all bitshares financial services.
1) What I meant was that there will never be only 1 service provider since that one WOULD increase prices if it would be the only one.
Another argument in this direction is: If this organizational model is so vastly sucessfull there will be an insane amount of incentive to create a similarly big competitor, the rewards are extraordinary. So capital and innovators (partly from within the one big DAC) will form another one simply because they can gain more by building a competitor from the ground. The insiders will take their knowledge with them...
2) Also can't think of an example... But business reality teaches us that products and markets are vastly more diverse (which allows profits at all) than what text book economics say.
4) The backery is a good example. It would not make sense for a hughe DAC to buy up a backery. Because the DAC shareholders would have to be better in deciding who to employ than the current owner who knows the (local) bakery industry and its people.
Title: Re: The economic explanation for why I'm so ridiculously excited/scared about BTS
Post by: CLains on October 24, 2014, 12:35:34 pm
Love the timeline, we truly need to think big!

Even at a lousy 50 million market cap, 20% inflation gives us 10 million dollars to spend on development and marketing: Do people really think we can't raise market cap by 20% with 10 million dollars?

For better or worse, this seems to me the only way..

Quote from: CLains on August 04, 2014, 09:28:21 pm
Given that a DAC is a sort of organism..

Deflation-centric views center on conserving energy and trying to avoid spending. This refers to the internal dynamic of the DAC as an idealized, perfect balance sheet.

However DACs also have external conditions that determine its growth and death, such as competing DACs and core development. These are radically outside the scope of the idealized balance sheet.

Unless the DAC can dynamically spend resources to address such issues, it will not last in the marketplace.