I'm interested in all the AP DAC clones, and I think it's inevitable that "sharing economy" businesses like AirBnB, Lyft, and Uber will be replaced with DACs eventually to cut overhead.

Reserved.

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No offense luckybit, but you're not following the logic.  I want to make ROI as much as anyone else. I'm also not advocating that we delay bitshares X for this.

But keep in mind, companies do this because it works and it makes all the initial investors more money, you don't seem to be able to figure out why.

BTW: We can make you your very own copy of bitshares X that you own 100% and you can keep it all!!  Of course it will never be worth anything but rest assured you won't be diluted.

Anyway, I should probably stop because I don't know any other way to say this.  I suspect it will eventually be tried both ways and you can guess where my money will be going.

At best, companies do this because they (the management) hope it will work, and that it will make the initial investors more money.  You're acting like there's no risk involved, but of course there is.  The question is whether each should risk only his own stake, or the stake of others also.  I don't mind terribly if "freeloaders" also benefit from my contributions.  I invest for my own reasons, but I hope and expect that this technology will benefit a great many people whether they've invested or not.  Is it a punishment to contributors if non-contributors also benefit?  Don't the contributors also benefit?

As for how anyone could get taken advantage of, suppose the delegates determined that particular failing businesses based on use of the chain were in need of saving, and diluted the shares to revive them.  Suppose the delegates hired a shady marketing group in exchange for kickbacks.  A key part of the design is that even corrupted delegates could do little lasting damage to the system.  Even if they have access to all transaction fees for reinvestment, this is true, as loss of a few weeks profits before the delegate is caught and replaced is a relatively minor setback.  Dilution is permanent, and abuse would require consensus around a new fork to recover.  That's a major setback and terrible PR.

Quote from: xeroc on May 28, 2014, 10:39:24 am

Only thing that hurdles me is that the user needs to create 3 files. Much like signing offline txs with bitcoin using Armory :-)
But ... secure!

Yes, very similar.

Also the process could alternately be handled on a webpage similar to brainwallet so that no software need be installed -

Steps:

1. Enter public key(s) / upload file of public keys to web form
2. Generate unsigned transaction
3. copy/paste unsigned transaction into trusted client (eg PTS client)
4. copy/paste signed transaction back into web form

I think this is a good problem to solve with the toolkit.  The toolkit could have an associated standalone trusted tool that reads a new DAC's genesis block and the wallet generated for that DAC, then imports all snapshot wallets and creates signed transactions to move your stake to your new wallet.

Quote from: delulo on May 27, 2014, 05:50:26 pm

Quote from: StephenReed on May 27, 2014, 05:33:54 pm

Quote from: delulo on May 25, 2014, 09:59:26 am

From the Bitcointalk thread:

Quote

I introduced a new thought that is not in the whitepaper and that is that the block creation reward, in addition to funding infrastructure and developers, could also subsidize transactions to the extent of negative transaction fees, should the abuse problem be addressed. Imaging paying Amazon or any other global Internet retailer a week's worth of block creation rewards, i.e. $13 million to get them to accept bitcoins as payment. I call this notion paying for order flow.

Would negative tx fees allow anyone to send coins back and forth and make money this way? Would the increased demand for coins through this way of making money overcompensate Bitcoin holders (on the one site the price might increases and on the other side negative tx fees have to be paid through dilution by holders)?

Yes, paying for order flow invites abuse. Human organizations prevent this by audits of the paid organization by the paying organization. This could not be easily automated, but one can imagine in some possible world, a software agent that contracts with auditing companies to perform this role.

Do you mean that an auditing company would ban every address that abuses this. Can someone not write a script/program that generates a new address for every tx?

I would have an auditing company send humans to the payment processor site for a policy, procedures and software program audit to observe payments in action. Negative transaction fees are sufficiently high motivation for honest behavior.

Another issue is that an autonomous system may need to be a legal entity for the purpose of enforcing contracts. I suppose that you all have an alternative and I would like to know more about how an anonymous bitcoin network could negotiate contracts with human organizations.

Legally enforcing contracts is rather inefficient and unreliable.  Reducing dependence on this is a significant advantage of using a blockchain rather than a traditional ledger in the first place, so if there's a way to improve the design such that external enforcement is unnecessary, that's worth a lot.  Are you talking about limiting access to this network to large, publicly known organizations?  Using a new address for every receive is common practice, so if it's an open network then preventing fraud and having negative transaction fees is implausible, even if it would be desirable.

Quote from: Agent86 on May 26, 2014, 04:54:28 pm

Quote from: Troglodactyl on May 26, 2014, 04:10:27 am

Representation isn't equivalent to consent, and dilution with seignorage granted to someone else is just redistribution.... and shareholders have motivation to invest time and resources to grow the value of their investment voluntarily.

Quote from: Troglodactyl on May 25, 2014, 10:07:30 pm

If transaction fees are insufficient I'd suggest convincing shareholders to reinvest directly and voluntarily.  Allowing even a majority of stakeholders the discretion to dilute the stake of the minority without their consent is problematic.

I think you are worried about some kind of tyranny of the majority if elected employees were allowed to issue new shares.  I think what you have to keep in mind is that there is very little motivation for a majority to try to take advantage of a minority or "redistribute" money to themselves because there is just nothing keeping the minority there.  It's just too easy for them to take there support to a DAC that isn't majority owned by stupid A*holes.  And then those majority owners become majority owners of a whole lot of nothing.

It's just like if the US government tried to buy up half of bitshares X and then control it.  All they would do is put a bunch of money in peoples pockets who would then proceed to fork the DAC without the government stake honored.

A DAC is a FREE ASSOCIATION of people who's interests are aligned.

Our current representative government has problems and opportunities for abuse and corruption but a huge part of that is because of the barriers to entry/exit/participation.  If you have to take time off work to vote and then sometimes stand in line for hours and then someone makes a law you don't like, what can you do?  You can't say well "count me out" I'll not be following these laws and will just join this other group instead.

I think the larger a DAC became the more you would find how ineffective relying on volunteers to do things to boost everyone's value would become.  If you own 1 millionth of a DAC are you going to take time out of your day to grow the market cap of that DAC just so you can get 1 millionth of the fruits of your labor?

The key to decentralization is low barriers to entry and competition.   I fully suspect that if the majority went some stupid direction then the fall in the value of the shares could outweigh the benefits.   I think that all of these things are worth considering and as much as I hate 'inflation' in monetary systems backed by force, so long as there is competition the market will work things out.

Centralization isn't even really so much a problem with low barriers for competitor entry.  The issue is that this system needs to be designed for the long term, and as it succeeds and becomes more widespread, the barrier to entry increases due to the difficulty of achieving competitive network effect.  Because of this risk, I think great care should be taken before designing it in such a way that users may be forced to choose between enduring mild (or gradually increasing) oppression at the hands of the majority and abandoning the network and starting a new one.  The network will put down roots, and the the inertia that must be overcome to replace it will be significant.  Look at the current banking system, or even Bitcoin.  The fact that other solutions are technically superior isn't enough to replace an entrenched network.  It can still be done, but not until the disparity is quite wide and obvious it seems.

Also, particularly earlier on, and to those who don't spend hours debating these issues on the internet, splitting the network, or even a discussion of possibly needing to split it can shake confidence in the system.  Deliberately programming in potential exploits requires significant justification in my opinion.  Would anyone here support allowing delegates to confiscate funds selectively from particular addresses?  I think most of the same supportive arguments apply.

Once the DAC is too large to rely on volunteers (including initial AGS startup funding that's already being provided), I think transaction fees should be sufficient to cover expenses.  Transaction fees are the cost payed by customers.  If the business is too large and established to attract voluntary investors for growth, and too unprofitable to sustain its operations on what customers are willing to pay for service, I think we should either accept failure gracefully and try again, or try to convince the shareholders to deliberately engage to save the business.  Looking for murky semi-coercive alternate revenue streams seems like a bad answer.

Quote from: Troglodactyl on May 25, 2014, 11:19:31 pm

That's right, the majority doesn't have to open their wallets.  They can take no action.  They don't have any more right to force the minority to open their wallets than the minority has to force the majority to open their wallets.  The default state is that each is free to use his own resources as he sees fit, but none are free to use the resources of others without their consent.  If I choose to do something that I claim will also benefit you, that does not entitle me to use your money to pay for it unless you agree to contribute.

Snapshotting to split a network by strategy is an interesting idea, but it sacrifices network effect for purity.  It might be necessary if the main network is headed for collapse and can't be turned, but it's a sacrifice technique.

Talking about "they don't have a right" as if it's a moral question is missing the point.  By not allowing dilution on some kind of philosophical ground you are just limiting the options and tying the hands of the company.  I believe that a company that refuses under all circumstances to allow dilution would be out competed in the market by a company that can do this.

Virtually no large successful companies could ever have made it without being able to raise capital and/or bring in new stakeholders by issuing new shares.

These DACs can be quickly hiring developers/marketers/lawyers/executives making deals companies like Coinbase...  While you sit around waiting for enough transaction fees to come in so you can finally do something, and/or appealing to the charitable nature of some of the stakeholders while others profit more from inaction.

It's not a moral issue, you know the rules going in, if you don't like the way the rules are written you don't have to buy in to the DAC or you can sell your shares.  If you don't like to go along with what a majority want than don't buy shares of a company, because that's what you have to do.

Tying the hands of "the company"?  Who exactly do you mean by this?  The only hands we're tying are the ones otherwise headed for their neighbor's pockets.  Designing the company such that the majority stakeholders can confiscate the stake of the minority undermines trust in the company.  The more power you give the delegates to take from the shareholders, the more corruption you invite.

Dilution is just redistribution.  The only difference is opacity.  If delegates can collect seignorage in addition to transaction fees, the likelihood of long term social engineering attack vectors increases significantly.  There are certainly differences because it's a company with voluntary participation, but some lessons from central banking are still applicable.

In the short term, it may seem that redistributing property in order to stimulate growth is catalytic and beneficial, but in the long run I think efficiency will win out, and forced redistribution is inherently inefficient and destabilizing.

You say that you know the rules going in, but the rules to which you're referring are the rules for changing the rules.  People should read the fine print and see this, but if they do, do you think they would still invest?  I would hate to see the "decentralized solutions to centralized problems" goal die here and the project become just another tool some people use to dominate others.

There are lots of philosophical and moral issues here, and to deny them I think would be shortsighted.  They're part of the product, and sacrificing them for apparent expediency could alienate potential customers and investors.