Quote from: bytemaster on December 28, 2013, 06:48:58 am

Quote from: niclelin on December 28, 2013, 04:39:36 am

I don't know what exactly it is?

BitShares is a revolutionary new bank and exchange that could rival the value of the largest banks in the world such as JP Morgan and Bank of America in just a few years. How could this new upstart grow so quickly?  BitShares offers a bank account that earns 5% interest where funds can be transferred in minutes seconds anywhere in the world with more privacy and security than a Swiss bank account.  Your account can never be frozen, your funds cannot be seized, and the bank can never face collapse due to loan defaults or fraud.  All of this is made possible without requiring any employees, lawyers, regulatory compliance, vaults, buildings, and other infrastructure required by traditional banks.  Unlike existing banks, you can hold your balance denominated in gold, silver, oil, or other commodities in additional to national currencies while earning 5% interest. 

In addition to acting as a bank, BitShares also serves as an exchange where currencies, commodities, and stock derivatives can be traded with most of the features used by professional traders including shorts and options.     

If the largest banks can achieve deposits of over $1 trillion dollars with no meaningful interest, how many deposits could BitShares attract and what would that mean for the value of the bank?

  That is some great stuff! If that first paragraph was a short advert we could send to friends, colleagues with a click-through at the end 'want to learn more' I think that would spread quickly!

While not a guaranteed  , even the interest is do-able & self funding, https://bitsharestalk.org/index.php/topic,21641.0.html

Quote from: Empirical1.2 on March 01, 2016, 09:42:45 pm

I think a key difference is that they and the market are clear on what industry they will dominate in 'The New (Decentralized) World.'

Ethereum     - Decentralized Apps
MaidSafe     - Decentralized Data
Bitcoin          - Decentralized Gold   
Augur           - Decentralized PM (Gambling)     
BitShares    - Decentralized Bank & Exchange

This type of graphic is found on almost every Alt-coin forum... except subtract bitshares and insert other alt-coin.  I was just perusing the nxt forum and saw a very similar graphic.  It just shows that most people know what the top coins will be, but have some false hope that their alt fits in with them.

The Graphic itself is superfluous other than to highlight, that like the New World & The Internet in the early nineties, the decentralised landscape is yet unsettled but has the potential to create large fortunes in and disintermediate multiple existing industries

BitShares has often lacked clarity internally and externally on 'What is BitShares?' However as an investor/speculator I can confidently invest in REP, BTC, ETH & MAID because I and they have clarity which industry they are going to have a monopoly in & are 100% focused on dominating.

Ethereum is currently 60x bigger than BTS, by our own admission nearly every new DAPP will probably be released on there first. While we may like to think Ethereum is Android and we are iPhone, why is Bitcoin still the dominant crypto-currency for 7 years despite it being on an 'Android' blockchain when there are better 'iPhone' blockchains? While there may be multiple DAPPs and third party business frontends on BTS, I don't think at this stage it's credible that BTS is going to dominate the DAPP market or at the very least it won't have a monopoly. So investors/speculators have to ask the question, who will be the big winner in this race, Ethereum or BTS?

However if investors, speculators can say, 'What is the Banking and Exchange Industry worth? Is there a market need for a Decentralized Bank? Who is best suited to, is focusing on & will likely dominate that area?  Then suddenly you're in the mix of DACs that are going to be independently massively successful.

Most agree the potential for SmartCoins is massive, there has never been a greater time in history for them with our current financial and debt based system on the verge of collapse/major transition and we are best placed to dominate it. In fact with a yield subsidy (Self funding and fairly circular cost) and a small liquidity subsidy suddenly we'd become the market leader and clear favourite to dominate that industry virtually overnight.

I like that BTS has the potential for a a lot of third party apps to be built on top of it, some which could disintermediate existing industries in their own right. (Like Augur will disintermediate sports betting but is built on Ethereum.) However it's looking increasingly like ETH is becoming the DAPP market leader & we should at the core focus on delivering the best banking blockchain which our third party Apps and even Ethereum based Apps can inter-connect with.  It's likely imo that the best Banking/SmartCoin Blockchain will become the biggest of them of all. 

As you yourself said....

I'm just lost at what bitshares is and what we're focused on.  I cant explain it to anyone much less get them to buy something so complex.  I thought we were going to find a niche (like the decentralized exchange) and leverage and exploit that niche.... That is what successful businesses do. They don't go running after every new idea they have without completing their previous one.

I vote that we should wait until Nubits does it first (they should be launching soon):

https://bitcointalk.org/index.php?topic=1033773.msg11153629#msg11153629

"The Basics:

B&C Exchange will be an open-source decentralized exchange that completes cryptocurrency trades between users by utilizing multisig signers that compete for blockchain rewards based on their effectiveness and honesty. Trades will occur using real cryptocurrencies such as Bitcoin and NuBits, as opposed to artificial proxy cryptoassets like those found in BitShares."

Face it fellas, the game is over, and you lost.  You gave bitUSD to Nubits and now you are giving the DEX away, when all you had to do to become a "real crypto" in the eyes of the crypto masses was to have your miners simply run 2 chains instead of 1. Just go and build your bond market, that nobody cares about right now, and leave the spoils of victory of becoming the "first real DEX on planet earth" to the real players.

I'm not sure how soon they'll be launching, the latest update is that their most optimistic guideline is middle of the year which hinges on the work of two developers yet to be hired.

B&C Exchange is hiring two full time C++ developers.

Progress has been slower than expected because developers (most of whom had agreed to work about half time) haven't put in the quantity of hours that were discussed when the project began. Fortunately, this means little funding has been consumed, so we get another chance without needing any additional funding. The best way to resolve the issue is to simply require full time developers, so they don't have any other work competing for their time and attention. Additionally, these two full time developers won't be working on the NuBit project at all. There has been a dynamic where the shared team for B&C Exchange and NuBits tends to put more time than expected on NuBits because it is a live and operational network, which means issues tend to seem more urgent than they do for the not yet operational B&C Exchange.

Previously, the strategy had been to use the same team members that had accomplished the amazing technical feats we see in the NuBits project. This approach hasn't worked. During NuBit development, we had a team of 5 or 6 people working full time. The NuBit budget experienced an 80% reduction in funding before B&C Exchange funding was successfully obtained. So, the team was mostly disbanded. Getting funding for B&C Exchange was not sufficient to pull the team back together for a second project.

With two full time developers, a full time QA resource, most of my attention going to my architect role, and a number of veteran part time developers, the project should be well positioned to be completed the middle of this year.

I am still very confident the design of B&C Exchange is practical and viable. Major progress has been made, particularly in the form of our 4.0 RC2 build, which contains a large percentage of the features needed in B&C Exchange. The change in direction toward new full time developers is likely to bring the core software to completion in a timely manner. While there is still a good chance we will be able to complete non-core infrastructure such as a web interface with our current budget, the chances appear lower than they did a number of months ago.

Much will hinge on the quality and devotion of the developers who have yet to be hired. Active shareholders should do their best to encourage excellent candidates to reach out to me.

It's just too bad that the rest of the community is blind to the millions of dollars looking for the world's first "real" DEX

BlockShares only raised a few hundred thousand and are short of funds so I wouldn't say it's a case of people throwing money at them atm. I am in favour of anything that strengthens the DEX though as I anticipate the SmartCoin leader could easily be the overall crypto market leader in a few years.

The world is looking for a decentralized place to store the value of USD/Gold/Other that won't have negative interest rates/bail-ins/capital controls/KYC etc.

There has never been a greater time in the history of the world for what the DEX & SmartCoins can potentially offer.

So liquidity subsidy, yield subsidy (Self funding), bond market, sidechains, get BTS SmartCoins to market leader position now and stay there.

Quote from: Empirical1.2 on February 29, 2016, 10:15:43 pm

In Polo, it seems that if you have at least the maintenance collateral amount you're safe unless the price moves against you, in this model it seems you can be margin called based on orders moving around/being removed from the book. Is it the same on polo, if not could this put of borrowers off or not really in your opinion?

Imo we should replicate the polo system as much as possible, as it is proven to work.  (In a year, there has not been a black swan big enough to cause a failure, even with some wild swings in prices). 

In the polo system, lets say that you go long BTS, to the maximum allowed 40% margin requirement.  (2.5x
long).  Polo doesnt actually check against the last price that the coin was traded at to see if your margin is okay, it checks against the buy orders that are on the books.  So if the last price of a trade was 900 sats, but there is no buy orders down until 850 sats, it actually looks at the 850 sats to calculate your margin.  And if that 850 sat buy order is not big enough to cover your position (your long is more BTS), then it will look down the order book further until it gets to the point where it sees how you can cover all of your position. 

The amount of BTC you could get by market selling your position onto the books is how much poloniex actually considers your position to be worth.

From what I understand of bytemasters proposed system, it works the same.



Lets say that the person with the buy wall at 850 sats in our example cancelled his order.  Now, polo recalculates how much you could sell your BTS for. Lets say that the 850 wall was a big wall and you were relying on its existence.  Without it, poloniex sees that you would have to dump all the way down to 400 sats in a liquidation!   It recalculates your margin and determines that you are below the 20% liquidation level and are no longer safe. Therefore it autoliquidates your position, and crashes the price to 400 sats.


So the removal of an order from the books on polo can trigger forced liquidations.  Bitshares would need to do the same thing.  Its necessary in order to protect lenders.


I might suggest that for robustness sake, that if this scenario occurs that what Bitshares should do is to not allow the order to be cancelled but instead to liquidate the position into it, when the person tried to cancel the order.  Essentially, when the buy wall owner submits the order to cancel to the blockchain, the blockchain responds 'oh no, if you pull that order then it will cause forced liquidations.  Therefore you cannot pull the order, and the forced liquidations are happening now instead'. 


What will happen as a result of this is that people are going to put in big buywalls, and others are goign to take margin positions in front of them, and then the buywall placers are going to pull their walls in order to get cheap (whatever theyre buying).  This happens on polo.  Its what happened when Bitshares crashed after the 2.0 release, the price would start to drop, a whale would remove a buy order, and it would trigger liquidations.

But there isnt any way to avoid this if we want to protect lenders, and imo we NEED to protect lenders.  Lending needs to be safe.  The margin traders take all the risk.  After all, everyone knows margin trading is risky.

   Thanks for the detailed response & explanation Ander

Imo we should replicate the polo system as much as possible, as it is proven to work. 

  I agree, I'm always in favour in using what has already proven to work, is popular and with the settings people are familiar with.

I might suggest that for robustness sake, that if this scenario occurs that what Bitshares should do is to not allow the order to be cancelled but instead to liquidate the position into it, when the person tried to cancel the order.  Essentially, when the buy wall owner submits the order to cancel to the blockchain, the blockchain responds 'oh no, if you pull that order then it will cause forced liquidations.  Therefore you cannot pull the order, and the forced liquidations are happening now instead'. 

It looks like this proposal already has that feature too?

1. If canceling an open order would result in insufficient orders on the books to buy back the debt with the collateral, then a margin call is executed first, then the order is canceled (if it wasn’t used as part of the margin call).

To BM/Devs, I know this might not be the next feature, but  what would be a ballpark development time and cost for it be?

  Thanks for integrating BTS, good luck

When betting on future sporting events with crypto, you are taking a position on both the outcome of that sporting event and the direction of that crypto in that time frame. (For example you might take a bet on a favourite with a small edge and be right but the crypto you bet with might have gone down 20% in that time.) It's this reason that few believed crypto sports betting would take off.

As you know BTS has BitUSD which solves this problem. If it was more popular and liquid is that something you'd consider integrating as well in future?

Quote from: Empirical1.2 on February 29, 2016, 07:25:51 am

Quote from: JonnyBitcoin on February 29, 2016, 07:08:17 am

Quote from: tbone on February 29, 2016, 01:08:20 am

Quote from: JonnyBitcoin on February 28, 2016, 03:40:37 pm

Quote from: xeroc on February 26, 2016, 02:08:58 pm

Quote from: Xeldal on February 26, 2016, 02:03:27 pm

Quote from: xeroc on February 26, 2016, 01:00:14 pm

Settlement has nothing to do with liquidity (in core smartcoins like USD, EUR, CNY, etc..) IMHO

maybe I misunderstand what you're saying.
Settlement has everything to do with liquidity.  That's its only purpose. 
It guarantees up to 2% (or whatever it's set to) of daily smartcoin supply is liquid at the settlement price.

It is in effect a standing order to buy that smartcoin. (with 24 hr delay)

sure .. for that direction there is everything fine and we do have 2% of supply in instant buy orders for smartcoins ..
the liquidity issues are on the other side .. no one wants to sell his smartcoins .. not even for a 5-10% premium (depending on the actual asset) ..
simply because we don't have a big on/off ramp for bitassets ..

Forced settlement is guaranteed buy side liquidity at the peg.

I think we need some sort of guaranteed sell side liquidity at the peg+10%. This would have to come from the rerserve pool imo.

One of the benefits of @Empirical1.2's idea is that yield can be directed not only to BitUSD longs, but also to BitUSD shorts.  Also, it stands to reason that a subset of the people buying BitAssets for yield would also be interested in participating in a liquidity pool to gain additional yield.  Funds from such a pool can then be used in conjunction with funds from the reserve pool to create liquidity on both sides of the peg.

What about BMS concerns about being long and short at the same time. It artificially increases supply but not liqidity? Also there's no need for reserve pool subsidies of the buy side because of forced settlement.

Increasing BitUSD supply via yield harvesting is still a positive imo because...
 
- It removes BTS supply from centralized exchanges
- Converts many BTS holders in Smartcoin holders (the product we are trying to bootstrap)
- Converts many BTS holders into longer term yield seeking holders vs. speculators http://bytemaster.github.io/article/2016/01/04/The-Benefits-of-Proof-of-Work/
- Makes us the Crypto USD market leader by value and numbers of holders thereby making us the most lucrative market for merchants.
>70% of BTC is illiquid and hasn't moved in >6 months, but the number of holders and value of their holdings is the most lucrative crypto market and has attracted over 100 000 merchants. This utility increases liquidity and usage. http://www.ofnumbers.com/2014/11/22/approximately-70-of-all-bitcoins-have-not-moved-in-6-or-more-months/
(Whereas why would a lot of merchants want to make the effort to offer their product and services in a much smaller market with fewer users? Let's become the USD crypto market leader fast.)

Nearly all other promotions and developments cause the BTS price to fall in the short term in the hopes of creating demand in the future, dilution for yield should increase the BTS price (via increase BitUSD (BTS) demand in the short and medium term) https://bitsharestalk.org/index.php/topic,21641.0.html

Incentivizing liquidity, incurs a constant cost but not necessarily constant net new demand for BTS. (Without yield many seek crypto USD only temporarily during BTC/Crypto declines.) By offering yield we will bootstrap BitUSD (in a way that should actually increase the value of BTS from the outset and be a cost that can be mitigated by shareholders if they engage in the network beneficial behaviour of yield harvesting.) 

So personally I think we should offer dilution for yield during the growth phase of the DEX as well as conservative liquidity subsidies.

I think this method may help but will likely be too expensive. It doesn't guarantee liquidity either. I much prefer the idea of providing guaranteed sell side liquidity at feed +20% funded by the reserve pool.

(I don't think the cost is high as it creates more demand that it costs from the outset and can be phased out if it doesn't and the cost can be easily mitigated by yield harvesting.)  I don't mind using the reserve pool for things, but I'm not a big fan of making it the buyer of last resort and hence over-exposing BTS to risk. So it should have limits imo. I suppose 20% is pretty wide though.

I don't know if the following is true, but given most agree yield harvesting would create millions of BitUSD,  it may make liquidity easier as with all that BitUSD already created and only a small amount needed for liquidity operations we may be able to incentivize a good amount of daily liquidity participation in a tight range for a low cost like NuBits liquidity pools? http://cybnate.github.io/index-liquidbits.html (Vs. now where we're trying to incentivize the creation of initial BitUSD as opposed to the buying and selling of already created BitUSD?)

  It's pretty impressive that you can create a model with no risk to lenders.

The only thing I wonder is whether we would be better off introducing the widely popular, currently used model but with more conservative initial and maintenance collateral settings? (Rather than a more complex, unfamiliar and also perhaps less favourable/uncertain for borrowers model.)

The lending prices you see on Poloniex and BitFinex are probably taking into account an exchange failure risk of >20% per annum. So while our Black Swan risk to lenders might be higher, our DEX failure rate is much lower so prices may end up being fairly similar to exchanges.

They do bear risk of leaving an order on the book.  No different than a bank taking risk of you mailing in the keys rather than payment. 

If even one person is left holding the bag for a default it makes the entire block chain look bad. Block chains must have higher standards.

It appears to be setting higher standards for one party in the trade at the expense of the other (poorer terms for borrowers) which might make it hard to create a successful market.

Similar to BitAssets forced settlement at 1-1. While great for providing 100% certainty for the longs, the burden & uncertainty this creates to shorts is part of the reason we see such a high BitAsset premium? Lowering forced settlement considerably and introducing a maintenance collateral requirement level above which you couldn't be force settled would still provide the majority of the benefits but create a more successful, active market imo. (The current setting also allows longs to profit when the market moves slightly in their favour at the expense of shorts or even gain a few % by manipulating BTS price fairly cheaply at forced settlement time.)

Excluding Bitcoin, the Crypto Market is valued at >$1.2 Billion today  (Even more once Augur officially begins trading)

Only for 1 week in December 2013 (When Bitcoin was valued at >$1000) was the Alt/DAC market valued higher.

http://coinmarketcap.com/historical/20131201/