I'm thinking about this is the context of bitshares = the future of banking.
BTS owners are like shareholders in "the bank".
bitAsset owners are like the depositors.
bitAsset shorts are like the borrowers.
(It should be recognised that none of these things are actually true, because all parties simply have different stakes in a decentralised platform. There is no entity and the terms are only used for comparison.)
Total deposits to total shareholder capital can build to a maximum of 1/3 (each deposit requires 3x backing), whereas traditional banks can be massively leveraged to say 20-30x (fractional reserving is incredibly dangerous, I'm against it, but just making a point of comparison).
Depositors get all the interest from the borrowers, there is no margin for the bank (traditional banks take an interest spread)
Depositors only pay transaction fees on the movements in their funds (and we really want these to be as minimal as possible because they are an economic friction or waste)
So here we have a bank that is capital intensive (limited deposit base) and much lower in margin (low cost-based transaction-only fees) than any traditional bank. Income on shareholder capital, even at a point of huge market penetration, looks to be very small on the "deposit" business alone, unless we believe there will be enormous trading volume in bitAssets.
So although bitshares is fantastic for the customer, in its current form can it create enough value for the BTS holder?
Should we be looking at ways to improve profitability from bitAssets, cross-sell the user base into higher margin services with less fixed capital commitment, monetise the network value in other ways, or something else?
I am a BTS holder so obviously I believe in the value that will be made manifest somehow. But I am finding it hard to believe that bitAssets as a stand-alone source of value can deliver that return, unless others can suggest some better numbers. So what's the path, and what's the next profit source to look forward to?
[Edit 18 Nov 2014:
A number of people have made the argument that at least a certain set of BTS traders, being arbitragers, make money from the bitAsset premium that exists when demand outstrips supply, and that this income potential motivates arbitragers to bid up BTS. Apart from the fact that the trade envisioned is not strictly an arbitrage (i.e. there is no guarantee of profit), as I discuss deeper in this thread, there is also an economic argument for why the level of potential income to BTS holders from such a trade only marginally improves the attractiveness of BTS.
When bitAsset users pay a premium this is just another direct cost to them, in the same way that transaction fees are. If bitShares is promoted as the future of banking, and being more-cost efficient that traditional banking, how much are users going to be willing to pay away in transaction fees, entry/exit spreads etc, in a typical year, just for the convenience of using the currency? A few percent of their capital perhaps? Now distribute this income over the BTS capital base that is three times as large. Now even with the potential for "arbitrage" income, BTS holders are in the same boat as before. The income potential that bitAsset users will allow (as a transactional cost to them) is unlikely to be enough to justify arbitragers bidding up BTS to do the trade***. And indeed it should be our mission to reduce these basic transactional costs to users.
None of this is to say that traders won't bid up BTS if bitAssets grow. In fact, judging by all the responses I've had to this issue, the overwhelming meme is "bitAssets growing = great for BTS price". So I'm sure BTS will indeed rise as a result of this self-fulfilling perspective. That may indeed be good for a while if it helps fund development in other areas. But ultimately I believe that those prices will only be justified by additional income sources to bitAssets.
***[technical point: I also questioned whether arbitragers might increase demand because they get all the arbitrage income, not other BTS holders, justifying an increased price for at least those traders. However this must reduce the income opportunity for non-arbitrage BTS holders further, justifying a decreased price for all those other holders. Net, net, same price result as if everyone did arbitrage.]