Hello,
I've written a short essay on the Truthcoin forum (I am the designer of Truthcoin, if you didn't know) which takes the probably-unpopular position that DACs are actually inferior to firms.
I'm positing here to get some feedback from (who I assume will be) my harshest critics, and refine these initial ideas.
http://forum.truthcoin.info/index.php/topic,90.msg195.html
I guess I'm hoping the conversation will take place there, as the forum is new and needs more posts, but I'll take whatever I can get.
To me a true DAC is not controlled or owned by any legal entity. It is owned and controlled by voted delegates. Delegates in turn are incentivized to do what is expected of them, and even punished if they do what isn't expected.
+Invictus/Bytemaster/Stan stated several times that invictus is a part of the bitshares ecosystemTo me a true DAC is not controlled or owned by any legal entity. It is owned and controlled by voted delegates. Delegates in turn are incentivized to do what is expected of them, and even punished if they do what isn't expected.
If I am correct (and obviously I think I am :P), Invictus is a Central entity that formed to create the DAC toolkits and develop their own DACs to start and compete in the market. I do not recall them ever saying anything about being a DAC themselves, though.
+Invictus/Bytemaster/Stan stated several times that invictus is a part of the bitshares ecosystemTo me a true DAC is not controlled or owned by any legal entity. It is owned and controlled by voted delegates. Delegates in turn are incentivized to do what is expected of them, and even punished if they do what isn't expected.
If I am correct (and obviously I think I am :P), Invictus is a Central entity that formed to create the DAC toolkits and develop their own DACs to start and compete in the market. I do not recall them ever saying anything about being a DAC themselves, though.
+AGS/PTS is just their way of distributing initial shares, legal issues have nothing to do with DACs in general but with invictus holding the keys for the Angel addresses!
Hello,
I've written a short essay on the Truthcoin forum (I am the designer of Truthcoin, if you didn't know) which takes the probably-unpopular position that DACs are actually inferior to firms.
I'm positing here to get some feedback from (who I assume will be) my harshest critics, and refine these initial ideas.
http://forum.truthcoin.info/index.php/topic,90.msg195.html
I guess I'm hoping the conversation will take place there, as the forum is new and needs more posts, but I'll take whatever I can get.
Good write up! I believe that DACs have not evolved yet. Tools will become better, new systems will be tested/proven. It will take a much longer time than people expected.
I found it quite bizarre that Invictus would preach DACs, yet they have 2 legal entities and complain about "regulatory issues around making AGS liquid".
To me a true DAC is not controlled or owned by any legal entity. It is owned and controlled by voted delegates. Delegates in turn are incentivized to do what is expected of them, and even punished if they do what isn't expected.
I think DACs are superior for virtual entities which have to operate across multiple jurisdiction. The law just cannot keep up with technology. So why would you want to artificially slow the rate of innovation by going with a firm when you can build a DAC without permission and apologize later on?That was my point - even Invictus the "champions" of DAC, had to create entities, and then deal with complications. I'm not judging, just pointing out that a true DAC was not their first choice for their operation.
Innovate and then apologize rather than fear to innovate and have the species go possibly extinct as a result. No one needs permission to make a DAC and it can run independent of human operators someday while a firm will never be able to do that.Correct. However Stan recently made a post stating the opposite, saying that "better to ask for forgiveness, than permission" was a bad idea.
DPoS isn't the only possible design for a DAC. I also don't think every DAC has to have a blockchain. MaidSafe may actually be a DAC too if they can get it running properly and it doesn't have a blockchain.
It all depends on if you take the strict definition of a DAC or a loose definition. In the strictest definition MaidSafe lacks transparency because we cannot see all the transactions but it fits everything else.
+Invictus/Bytemaster/Stan stated several times that invictus is a part of the bitshares ecosystemTo me a true DAC is not controlled or owned by any legal entity. It is owned and controlled by voted delegates. Delegates in turn are incentivized to do what is expected of them, and even punished if they do what isn't expected.
If I am correct (and obviously I think I am :P), Invictus is a Central entity that formed to create the DAC toolkits and develop their own DACs to start and compete in the market. I do not recall them ever saying anything about being a DAC themselves, though.
+AGS/PTS is just their way of distributing initial shares, legal issues have nothing to do with DACs in general but with invictus holding the keys for the Angel addresses!
I'd like to see a system in which the keys of a DAC don't need to be held by a centralized entity. That's all.
What Invictus is doing is good, but not great. Things can be improved 10x. But anytime I raise the questions I'm tagged as a "non-believer" and a FUD spreader. I'm just looking at the natural progression of the space. Nothing wrong with expecting more, especially, when I see it is possible.
I'm not in a position to go work on these ideas full time at the moment. But may be I should. So far every experiment I did for fun is showing promising progress. I even have a prototype for a quantum computing resistant coin.
I'm curious about your quantum computing resistant coin. Any details on how you achieved it ?One can make use of so call Lamport Signatures which are quantum proof but large!
You don't really go into the problems with "firms".The paper is about DACs relative to firms. I only examine the differences. Perhaps is you who is the hack reader?
You should write a paper first about all the problems with centralized entities and then you would have your own critique of your work.
I think DACs are superior for virtual entities which have to operate across multiple jurisdiction. The law just cannot keep up with technology. So why would you want to artificially slow the rate of innovation by going with a firm when you can build a DAC without permission and apologize later on?SilkRoad was a firm, not a DAC. Legal compliance cannot explain the role of DACs.
Innovate and then apologize rather than fear to innovate and have the species go possibly extinct as a result. No one needs permission to make a DACSee above, you are being illogical.
and it can run independent of human operators someday while a firm will never be able to do that.This is simply false. As I wrote, Bitcoin is supported by human owner-operators who enjoy the use of the software and economic benefits of money. The employees look and act different but they still directly fulfill that role.
Simplify the thesis and the argument you are trying to make.Bitcoin's success may never be replicated. It may have qualities/advantages which uniquely apply to money.
This is off-topic, but did you know that, as long as you don't re-use addresses, Bitcoin is already quantum-computing proof.II even have a prototype for a quantum computing resistant coin.I'm curious about your quantum computing resistant coin.
This is off-topic, but did you know that, as long as you don't re-use addresses, Bitcoin is already quantum-computing proof.
To me it seems like you are contradicting yourself because you say "DACs are useless" and then describe how and when DACs are not useless. I think you think that we think of DACs as "normal company + blockchain". Reading from the past (now that I read it I realize I excluded the most important part of all three examples there which is *corruption* of the centralized entity): https://bitsharestalk.org/index.php?topic=3488.msg43785#msg43785
> The prediction market concept is flexible enough to contain functions for gambling, insurance, and portfolio replication (currency exchange), as well as other functions.
Right, and if I can have lower fees than Truthcoin for my currency exchange by having a special-purpose blockchain (delegates would have lower bandwidth/storage requirements), shouldn't I make my own blockchain and out-compete truthcoin on that one particular area?
I'm curious about your quantum computing resistant coin. Any details on how you achieved it ?One can make use of so call Lamport Signatures which are quantum proof but large!
To me it seems like you are contradicting yourself because you say "DACs are useless" and then describe how and when DACs are not useless.You're right...I wanted an attention-grabber and lost control of the thesis for a moment. It should really say "Are OTHER DACs useless?". I just thought that, since I was posting it here on BitsharesTalk, the inferred meaning would be accurate. The one on my forum has a different title.
I actually have no expertise in this area, but someone told me that because Bitcoin uses the hash of a public key, it dodges this quantum computing bullet somehow. Moreover, he said q-r algorithms already existed, which could easily be swapped in.This is off-topic, but did you know that, as long as you don't re-use addresses, Bitcoin is already quantum-computing proof.
Yes, SHA-2 are expected to be resistant to quantum computing… we will see what happens in practice… example: some people were aiming for GPU resistant coins… months later the GPUs were mining happily much faster than the CPUs… life is the best judge I guess…
> The prediction market concept is flexible enough to contain functions for gambling, insurance, and portfolio replication (currency exchange), as well as other functions.
Right, and if I can have lower fees than Truthcoin for my currency exchange by having a special-purpose blockchain (delegates would have lower bandwidth/storage requirements), shouldn't I make my own blockchain and out-compete truthcoin on that one particular area?
What I'm looking at in my design is to make the block chain obsolete. Once you do that, you can have millions of derivative coins all using the same infrastructure. Another thing I thought bitshares was going to implement but I see how that would've slowed them down.
Getting the network effect for each DAC is just too painful and could jeopardize a good DAC
What I'm looking at in my design is to make the block chain obsolete. Once you do that, you can have millions of derivative coins all using the same infrastructure. Another thing I thought bitshares was going to implement but I see how that would've slowed them down.
Getting the network effect for each DAC is just too painful and could jeopardize a good DAC
So if blockchain is obsolete what about all the auditing features we are given with a blockchain? Sure you could get rid of it, but you also will lose faith in the technology.
To me a true DAC is not controlled or owned by any legal entity. It is owned and controlled by voted delegates. Delegates in turn are incentivized to do what is expected of them, and even punished if they do what isn't expected.
If I am correct (and obviously I think I am :P), Invictus is a Central entity that formed to create the DAC toolkits and develop their own DACs to start and compete in the market. I do not recall them ever saying anything about being a DAC themselves, though.
All the nice features like stalking and spying? :)
I try to think what would the world look if we use only a digital currency. Well we would need to be able to process 2000 transactions per second. Bitcoin is nowhere near that. Then we would not want stalkers to be able to identify us. Say I bought a coffee, you sit in the coffee shop and observe, now you know where my money came from you can track me and my spending habits, that's not good.
You can still examine your transactions but they are private between you and the other parties involved.
All the nice features like stalking and spying? :)
I try to think what would the world look if we use only a digital currency. Well we would need to be able to process 2000 transactions per second. Bitcoin is nowhere near that. Then we would not want stalkers to be able to identify us. Say I bought a coffee, you sit in the coffee shop and observe, now you know where my money came from you can track me and my spending habits, that's not good.
You can still examine your transactions but they are private between you and the other parties involved.
As a person willing to put significant capital into a digital currency, I'd rather have a ledger of the process. A cloud holding balances where things break with no record to audit doesn't seem like an improvement. I agree privacy is a good thing, but you can fix that in other ways and maintain the blockchain.
I think adoption is hindered more by lack of trust than a fear of privacy.
Stan you continuously fail to see my point. What I'm proposing is not ONE organization ran by committee, but rather a PLATFORM in which MANY independent projects and organizations can be funded via the SAME currency. In other words you would still run your project however you would not be funded in BTC or PTS but rather in say BTS and you will be hugely incentivized to create value for BTS because if you don't you won't get paid.
The second point I was making was on how I would reduce risk for investors by only gathering a "pledge" 5% amount, which is like an option to buy the full when/if I feel confident in the product near it's release.
Again this is a brainstorm at this point. But please get it through your head that what I'm proposing is not a design by committee but rather a competitive environment where next to Invictus others could compete for the donated funds in a fair market. That said nothing is stopping people from competing since you are not even using your own currency for the donation.
Ok. Beaten it to death. I had different expectations. No need to justify what you do. You explained your plan and are sticking to it.
Also let me remind you that had I not started the whole argument about how one trustee is a horrible idea and proposed deposit paid positions were you even going to pursue DPOS? My point is I have my fair share of constructive criticism. Just some of my ideas are not doable within your structure. Doesn't mean I'm not going to bitch about it :)
Could you respond to this point?Quote> The prediction market concept is flexible enough to contain functions for gambling, insurance, and portfolio replication (currency exchange), as well as other functions.
Right, and if I can have lower fees than Truthcoin for my currency exchange by having a special-purpose blockchain (delegates would have lower bandwidth/storage requirements), shouldn't I make my own blockchain and out-compete truthcoin on that one particular area?
The only argument against one blockchain to rule them all is efficiency and resistance to centralizing forces. I think we disagree about the premise here, no?
I'm arguing FOR one blockchain to rule them all. If someone argued against it, I would expect them to (at a bare minimum) describe one hypothetical situation where a blockchain would be required that did NOT involve the storage of money (Bitcoin) or escrow of money (Truthcoin).
Why do you need to see all the transactions? In fact that's why it's the perfect solution - it solves privacy concerns as well. So long as you have proof that you own your amounts, why do you care to see other transactions?
Once a strong delegate network is established, many developers will want their DACs to join it and it will be up to the elected delegates authorize an upgrade to let them in.
Some will not get in for whatever reasons, and they will band together to form other such DACling nurseries.
From here on out, Invictus will have plenty of competition - as we have always intended. There is nothing stopping others right now from forming their own trust fund - except the courage to try and success at convincing others that the donations will be used faithfully and wisely.
I have nothing against someone defining a trust fund to be run under different rules. But, as others constantly remind us, you can't change the rules once the donations have begun. The BitShares Trust is based primarily on bytemaster's judgement, skills, philosophy and reputation. Other funds are free to compete based on their own better mix of these things.
It is this decentralization that protects us all from seduction or coercion at central points of attack.
Why do you need to see all the transactions? In fact that's why it's the perfect solution - it solves privacy concerns as well. So long as you have proof that you own your amounts, why do you care to see other transactions?
Transparency is the only way to defend against corruption and fraud in the real world. So while you do want privacy it's also important to be able to follow the money. The same technology which facilitates secret transactions will be used later to preserve the status quo of centralization and corruption.
In the crypto community this doesn't seem to matter as much because you can decentralize a lot of things but outside of the crypto community where people aren't so quick to adopt decentralized solutions what then? What do you think the result will be for juries who can now all be bribed secretly along with judges?
How would you have a system of justice? People who don't have any money will not have any justice and people with a lot of money will be able to be above the law. So for that reason a strong case can be made for a paper trail. The only problem with Bitcoin is that everyone could see every transaction all the time but if you can obfuscate it yet maintain a paper trail there are benefits to that which you're not realizing.
So I can conclude that used inappropriately Bitcoin isn't private enough. I can also say that it is possible to have something so private that using it at all makes you corrupt in the eyes of the media, the judge, the jury, and others. Too private and it becomes a mafia or black market currency.
Once a strong delegate network is established, many developers will want their DACs to join it and it will be up to the elected delegates authorize an upgrade to let them in.
Some will not get in for whatever reasons, and they will band together to form other such DACling nurseries.
From here on out, Invictus will have plenty of competition - as we have always intended. There is nothing stopping others right now from forming their own trust fund - except the courage to try and success at convincing others that the donations will be used faithfully and wisely.
I have nothing against someone defining a trust fund to be run under different rules. But, as others constantly remind us, you can't change the rules once the donations have begun. The BitShares Trust is based primarily on bytemaster's judgement, skills, philosophy and reputation. Other funds are free to compete based on their own better mix of these things.
It is this decentralization that protects us all from seduction or coercion at central points of attack.
Is it possible for a group of delegates to form a DAC to turn delegates into a " delegate firm" which can then operate multiple DACs?
What I mean is if we see delegates a similar to a board of directors and a delegate can serve on multiple boards (operate multiple DACs), then what would stop delegates from creating a decentralized firm which specifically functions to operate DACs? That firm could then standardize the whole process as the same group of delegates could provide the delegation service to dozens or even hundreds of DACs.
Also what would stop delegates from forming unions or other power structures? I would think if delegates are being paid even if they are voted in they may still acquire some power even if not directly over the DAC they deal with it could be social power across multiple DACs where the selection process of delegates becomes influenced.
Maybe I'm just thinking about this too much?
* We need a blockchain that can handle 1000x TC's transaction volume (bandwidth) at some given time for the purpose of currency exchange
* We need a blockchain that can handle 1000x TC's storage at a given time for the purpose of domain name record storage
So these two only work if resources available >> resources needed, but for any given resource bound there is a range where the specialized one can succeed and TC can't.
Are you claiming that all possible incentive structures that need control over their token can be somehow simulated with PMs?No.
Yes I'm referring to truthcoin.
* We need a blockchain that can handle 1000x TC's transaction volume (bandwidth) at some given time for the purpose of currency exchange
* We need a blockchain that can handle 1000x TC's storage at a given time for the purpose of domain name record storage
So these two only work if resources available >> resources needed, but for any given resource bound there is a range where the specialized one can succeed and TC can't.
When you say TC, are you referring to Truthcoin? If so, I don't know what you mean, becase it doesn't exist, nor does it (yet) have transaction volume or storage specifications.
Are you claiming that all possible incentive structures that need control over their token can be somehow simulated with PMs?No.
I think you're completely missing the point of what I am trying to say. I am saying that the use of a blockchain vs a piece of software depends on the idea of digital scarcity, so that there's no need to apply that technology (which could be designed in many different transaction volume / storage specifications) to anything else. Money and escrowed funds are digitally scarce. Probably, domain names are as well.
But if you'd want to attack the "must be digitally scarce" argument, you'd have to come up with a blockchain use that didn't involve digital scarcity. What you're doing now is like saying that we need more than 26 English characters because Shakespeare did not use the latest version of Microsoft Word.
Why do you need to see all the transactions? In fact that's why it's the perfect solution - it solves privacy concerns as well. So long as you have proof that you own your amounts, why do you care to see other transactions?
Transparency is the only way to defend against corruption and fraud in the real world. So while you do want privacy it's also important to be able to follow the money. The same technology which facilitates secret transactions will be used later to preserve the status quo of centralization and corruption.
In the crypto community this doesn't seem to matter as much because you can decentralize a lot of things but outside of the crypto community where people aren't so quick to adopt decentralized solutions what then? What do you think the result will be for juries who can now all be bribed secretly along with judges?
How would you have a system of justice? People who don't have any money will not have any justice and people with a lot of money will be able to be above the law. So for that reason a strong case can be made for a paper trail. The only problem with Bitcoin is that everyone could see every transaction all the time but if you can obfuscate it yet maintain a paper trail there are benefits to that which you're not realizing.
So I can conclude that used inappropriately Bitcoin isn't private enough. I can also say that it is possible to have something so private that using it at all makes you corrupt in the eyes of the media, the judge, the jury, and others. Too private and it becomes a mafia or black market currency.
My solution is to not have a block chain but a DHT. Basically something like MaidSafe. However it is more of a hybrid. A very thin block chain + bigger data in a sparse DHT. The problem is that in order to ensure the data is stored it needs to be incentivized. So the solution is to either store transaction details yourself or have transaction fees pay for the storage of the data. A bit like Vitalik's idea to have a "block chain that charges rent". We are already considering things like that for DPOS here.
So the bottom line is information is not hidden it just costs money to obtain it. So if there is something that needs investigation money can be spent to look into it. But it is cost prohibitive to automatically watch and spy on everyone. I think this is far better than having a completely public ledger. There is the other side to the coin too - people are not happy about every single move they make being recorded and over analyzed. Also I'm pretty sure most people prefer privacy over full blown spying.
Trust me automatic full transparency will make stalking a problem and prevent mass adoption. People know that all their credit card transactions are recorded. But if EVERYONE can see your transactions that's going to be hard to swallow.
I gave you the example with a stalker sitting in a coffee shop, waiting for you to pay to see where you spend the rest of your money.
I don't follow. I'm talking about the network being able to enforce rules about how and when you can transfer the token. If there is a mechanism which I cannot implement using truthcoin because the blockchain's rules are not flexible enough then we are talking about totally different assets, what does scarcity have to do with this? Gold was the original scarce asset, why not use gold instead of bitcoin or truthcoin? Because you can't send it over the internet / use it within prediction markets, right? As you just said, there are some mechanisms which can't be simulated with PMs, and if they happen to also need to operate in a decentralized network, they would need their own token-on-a-blockchain. Ethereum meta-protocols would also be sufficient, but notice even then it is not Ether but the embedded token that would have demand generated for it.
a2. All mechanisms where p1=p2=TRUE have p3=TRUE.I actually don't believe this, that's my bad - my argument is the same with "all" replaced by "at least some".
I don;'t know where you are going with p3, as there are already colored coins and multisig addresses.
I am saying there may be insufficient market demand for a DAC for services other than value storage / transfer (Bitcoin) and value-escrow (Truthcoin), because consumers only demand trustless digital scarcity in the context of those services.
But what else have you got? This community claims to be able to DAC everything, doesn't it?
I admit .p2p domains might need to be digitally scarce.
toast, I am confused about something. I had assumed (wrongly it seems) that, as you worked for I3, you endorsed all of the current I3 DAC ideas.
Instead, it seems that, like me, you think that most of them won't work (only BTS [if market peg works], .p2p, and [possibly] lotto). Is that a fair statement?
For example, "Insurance" and "Music" seem completely ridiculous.
I know you're very busy with BitsharesXT lanuch, but this just seems like "news", that such a key player at I3 doesn't believe in some of what is going on there. Or have I misunderstood?
ME: "social" version of counterparty. What's not to love?social?
toast, I am confused about something. I had assumed (wrongly it seems) that, as you worked for I3, you endorsed all of the current I3 DAC ideas.
Instead, it seems that, like me, you think that most of them won't work (only BTS [if market peg works], .p2p, and [possibly] lotto). Is that a fair statement?
For example, "Insurance" and "Music" seem completely ridiculous.
I know you're very busy with BitsharesXT lanuch, but this just seems like "news", that such a key player at I3 doesn't believe in some of what is going on there. Or have I misunderstood?
More like "firms", Useful because the industry needs transparent public ledgersI will search their forum sections and the internet for why these might need transparent public ledgers. If you can point me to any reading I'll take a look at it. My initial thoughts are that these industries are changing rapidly (bad for fixed blockchain model), and/or that colored coins can serve many investment-type functions.
Voting: Again not a "pure" DAC and semi-centralized, but solving a serious problem.
Music: not a "pure DAC" in my opinion, but the music guys' model is pretty clever and they are pretty much their own separate team so I won't argue.
"Insurance": More like "decentralized frats", lol
DACs that can stay competitive because it lives "outside" of any jurisdiction:These seem like you could melt and re-cast them as smart-contracts. Remember: SilkRoad was a firm, not a DAC. Illegal doesn't necessarily imply DAC.
Mental Poker on blockchain: If the only goal is that online poker is made legal and the DACs are out-competed then I'm ok with this.
Lotto: cheaper as a DAC because of regulation. 0% (or small constant) house edge is possible and attractive.
ME: "social" version of counterparty. What's not to love?
Excuse my non-ivy league education but what is really your point? Of course, truthcoun will work just fine if you make centralized entity with 2 kind of account: ‘voter account’ and ‘better account’… having public ledger would be nice but you are the one testing something on a blockchain (BTC being the one of the 2 blockchians necessary at all, according to you).I have completely explained "what I am trying to prove" (https://github.com/psztorc/Truthcoin/raw/master/docs/1_Purpose.pdf) (one big purpose of which is to directly challenge academia), and the software is as decentralized as Bitcoin (completely so). These points have been very clear to 100's of people who contacted me, and have only confused tonyk.
What are you exactly trying to prove/find with truthcoin, is pure mystery to me. Your disregard for any questions asked in non-ivy form definitely does not help and your paper does not address the issue.
PS
Your Idea is generally Bitshares Music – great as centralized entity, possibly doing even better as a DAC.
PPS
Do not get me wrong, as I have said before this is pretty doable DAC and I do not mind owning part of it; but you have an academic purpose with this project that is very foggy to me.
These seem like you could melt and re-cast them as smart-contracts.
I found it quite bizarre that Invictus would preach DACs, yet they have 2 legal entities and complain about "regulatory issues around making AGS liquid".
I found it quite bizarre that Invictus would preach DACs, yet they have 2 legal entities and complain about "regulatory issues around making AGS liquid".
Nothing is completely decentralized. Not even bitcoin. Yes, the protocols intent is to be decentralized within itself, but outside itself it is completely beholden to the governments wishes depending on where you live. For example, a government may not be able to stop the protocol from running but they can make it illegal to: use bitcoins, sell bitcoins, allow your ISP to interact with the blockchain, trade bitcoins, and so on.
Making a bitcoin useful and tangible unfortunately causes bitcoin to be centralized.
Bitcoin protocol is decentralized, it's usability and products are centralized.
It's a system within a system. Unfortunately Invictus is beholden to the same restraints as a newly minted bitcoin. They have to operate within the laws of the land where they reside.
I found it quite bizarre that Invictus would preach DACs, yet they have 2 legal entities and complain about "regulatory issues around making AGS liquid".
Nothing is completely decentralized. Not even bitcoin. Yes, the protocols intent is to be decentralized within itself, but outside itself it is completely beholden to the governments wishes depending on where you live. For example, a government may not be able to stop the protocol from running but they can make it illegal to: use bitcoins, sell bitcoins, allow your ISP to interact with the blockchain, trade bitcoins, and so on.
Making a bitcoin useful and tangible unfortunately causes bitcoin to be centralized.
Bitcoin protocol is decentralized, it's usability and products are centralized.
It's a system within a system. Unfortunately Invictus is beholden to the same restraints as a newly minted bitcoin. They have to operate within the laws of the land where they reside.
Very good answer! While DACs are sovereign in Free Space, we find ourselves still living in Fiat Space.
So the engineering problem is similar in each case.
When we are engineering DACs, we use decentralization as a tool to achieve incorruptibility and freedom from coercion.
When we are engineering an industry, we use decentralization the same way. From independent delegates to independent developers.
Thus it should be no surprise that we have two legal entities. You should expect us to incubate many more!
And we have, are, and will. We have said from the beginning we want to decentralize and help start other completely independent entrepreneurs at the individual and company level in many jurisdictions. This will continue. BitShares Music, BitShares Lotto, Lotto Shares, BitShares DNS, even BitShares PTS, are all independent entities that we are supporting whatever way we can. We will do the same with BitShares X and ME. This is not a problem, its a long-standing strategic promise!
If we have enough independent companies in enough independent jurisdictions each coordinating with their own authorities and doing what is perfectly legal where they live, the whole will be much greater than the sum of the parts.And we all benefit from whatever freedoms we are able to share with each other.
We are, above all, laying out a blueprint and creating dozens of worldwide opportunities for entrepreneurs to fill in whatever missing pieces they are able to do where they live.
Digital scarcity is not a feature it can be the consequence of:The Bitcoin blockchain (the unique longest valid chain starting with Satoshi's genesis block), had digital scarcity (by this, I mean a controllable quantity, with an unalterable limit of 21 million). Nothing like this had ever existed before without a centralized server, and this p2p scarcity existed before Bitcoin was useful (1) and even before it had an economic network at all, let alone network effects (2).
1) The usefulness of a service a DAC provides (compared to the usefulness of a service that uses a centralized ledger). The advantages over a centralized solution could be: Potentially cheaper fees (eg. lower rake with a gambling/poker service), anonymity, no corruption/transparent.
2) The network effect of one particular DAC (there may be many DACs providing a similar service). This network effect might in the first place be initiated by successful mass market marketing.
But saying other DACs are not legitimate because Bitcoin (or any other DAC) provides digital scarcity is wishful and moralized thinking.How is it wishful or moralized? Its unambiguously pessimistic, and (I think) makes no reference to morality at all.
As for the morality aspect of it: That was a bit confusing. I should have said: If someone goes ahead and states that Bitcoin SHOULD be the only chain to provides the service "transfer of tokens" (which becomes the transfer of value because this service is perceived as (potentially) useful (in the future) and the Bitcoin tokens are necessary to use this service) because it was the first one out there. Then this statement is wishful thinking and a moral statement.Digital scarcity is not a feature it can be the consequence of:The Bitcoin blockchain (the unique longest valid chain starting with Satoshi's genesis block), had digital scarcity (by this, I mean a controllable quantity, with an unalterable limit of 21 million). Nothing like this had ever existed before without a centralized server, and this p2p scarcity existed before Bitcoin was useful (1) and even before it had an economic network at all, let alone network effects (2).
1) The usefulness of a service a DAC provides (compared to the usefulness of a service that uses a centralized ledger). The advantages over a centralized solution could be: Potentially cheaper fees (eg. lower rake with a gambling/poker service), anonymity, no corruption/transparent.
2) The network effect of one particular DAC (there may be many DACs providing a similar service). This network effect might in the first place be initiated by successful mass market marketing.
So I don't see how you can be right about those.But saying other DACs are not legitimate because Bitcoin (or any other DAC) provides digital scarcity is wishful and moralized thinking.How is it wishful or moralized? Its unambiguously pessimistic, and (I think) makes no reference to morality at all.
had digital scarcity (by this, I mean a controllable quantity, with an unalterable limit of 21 million)What your definition of digital scarcity refers to is relative: As a fact you can copy the code and release a new chain (and maybe change an few symbolic parameters; altcoins). The Problem is that this has no advantages (equal regarding efficiency/features, see (1) above) but only downsides (worse in terms of network effect, see (2)).
Potentially cheaper fees (eg. lower rake with a gambling/poker service), anonymity, no corruption/transparent.There are also disadvantages but that is another topic again...
As for the morality aspect of it: That was a bit confusing. I should have said: If someone goes ahead and states that Bitcoin SHOULDWell I don't say that. In fact I never use the word "should" ever, if I can help it.
What your definition of digital scarcity refers to is relative: As a fact you can copy the code and release a new chain (and maybe change an few symbolic parameters; altcoins). The Problem is that this has no advantages (equal regarding efficiency/features, see (1) above) but only downsides (worse in terms of network effect, see (2))."New chain" does mean "new something", but by defintion it does NOT mean "new Bitcoins".
Therefore I think the two parameters above [(1) and (2)] are a better analytical tool to analyze whether the analyzed chain has the potential to create "perceived digital scarcity"
than to assume that Bitcoin defines digital scarcity.I don't.
Would you agree that it makes sense to say that chain xy has "Digital Scarcity" insofar it performs well in terms of (1) and (2) - respectively will have dig. scarc. in the future when the market confirms that it performs well with respect to (1) and (2)?No. Plenty of things are "good enough" (1) and "have network effects" (2), gmail, facebook, IRC, alternating current, writing-from-left-to-right. Its irrelevant. For value-storage, only scarcity matters.
"digital scarcity" if the word is understood in a traditional sense (= assumption that there can only be one DAC/chain to provide one type of a service which as a fact is not the case).Again, this isn't the definition I'm using. Bitcoin and Litecoin both have digital scarcity, but Bitcoin has a larger network effect, and is better designed.
Right, you didn't say that. Many, for example in the discussion about side chains, understand digital scarcity in a moral sense guided probably by their investment bias. I was wrong to imply that.As for the morality aspect of it: That was a bit confusing. I should have said: If someone goes ahead and states that Bitcoin SHOULDWell I don't say that. In fact I never use the word "should" ever, if I can help it.
a] its digital (not existing outside computers/the internet), and b] its scarce (there is a limited supply, in Bitcoin's case 21 million units)how does this definition help us to evaluate and understand the nature of open source software based tx ledgers with native tokens? Intuitively it would make sense to assume that digital scarcity is what gives Bitcoin it's value. but if the evaluation stops there people miss halve the picture and might be turned off as soon as they discover "altcoins".
Consider that my formula is relative. You could say: 5 x [combined measure for network effect: Market cap, accepting merchants, mind share, marketing to be deployed]) x 1 x [measure for efficiency (security per cost to the overall network)] - left out "features" (e.g. integrated shareholder voting to control and incentive further development/marketing) because that complicates the to be compared DACs.Would you agree that it makes sense to say that chain xy has "Digital Scarcity" insofar it performs well in terms of (1) and (2) - respectively will have dig. scarc. in the future when the market confirms that it performs well with respect to (1) and (2)?No. Plenty of things are "good enough" (1) and "have network effects" (2), gmail, facebook, IRC, alternating current, writing-from-left-to-right. Its irrelevant. For value-storage, only scarcity matters.
What's scarce is the stock of a particular company. A Microsoft share has value depending on the profitability and perceived future profitabilty of Microsoft. Similarly a DAC share will have a value depending on its current and perceived future profitability.I agree in general. But it takes no effort to fork a DAC. Forking microsoft and making it work like the original is difficult. This lowers the value of a DAC. On the other side network effect might be more important than with pretty much all firms except with microsoft :)
DAC's vs. Firms. DACs win! They can have nearly all the advantages with none of the disadvantages -Basically a DAC is only a decentralized ledger plus X. X can be data feeds, prediction markets or (other) centralized add ons. There is a fluent transition between pure DACs (as toast would say) and Firms which make use of decentralized ledgers.
Price - DAC's have the potential to undercut the market considerably in many areas. Lotteries - twice the odds of winning vs. conventional, Finance - 1/10th the price?Don't believe it will be that extreme. Lottery: ATM maybe 7 (?) out of 10 USD (10 USD is the turnover of the lottery company) is paid out. So the odds on average are 70% -> double it -> 140%. Not profitable....
Trust - Does Fort Knox have the gold?How would you suggest for Fort Knox to proof that they have it using blockchain techn.? AFAIK you can only be proven that someone else has something or sent you something for sure if that something is the token that defines the tx ledger.
I haven't read this whole thread or the article but I'll ignorantly comment anywayI admire your honesty.
DAC's vs. Firms. DACs win! They can have nearly all the advantages with none of the disadvantages -You have it backwards. Any entrepreneur can copy any DAC. DACs are expensive to create, debug, run, and maintain. DACs are impersonal and inflexible.
Price - DAC's have the potential to undercut the market considerably in many areas. Lotteries - twice the odds of winning vs. conventional, Finance - 1/10th the price?Once they exist, yes. Consumer demand is volatile, however. Building a DAC is too expensive.
Trust - Does Fort Knox have the gold? Is Lehman Brothers really solvent? Are Madoff investment securities accounting statements correct? Are those Cdft stock certificates real? (The main benefit of decentralised ledger technology for me is Accounting Trust.)Matters for a bank (value-storage). Doesn't matter for a DAC (no "storage", sale is nearly-instantaneous).
DACs also provide tax, confiscation & privacy benefits & have the advantage of being border/'jurisdiction-less'Wrong again. SilkRoad was a firm, not a DAC.
DACs also provide tax, confiscation & privacy benefits & have the advantage of being border/'jurisdiction-less'Wrong again. SilkRoad was a firm, not a DAC.
You missed the part where dozens of replacement firms appeared near-instantly. There is still no SilkRoad DAC. If DACs are so good, where are they?I never said SilkRoad was a DAC? If you're under the illusion firms offer the same advantages, maybe you missed the part where SilkRoad was shut down and the owner arrested?DACs also provide tax, confiscation & privacy benefits & have the advantage of being border/'jurisdiction-less'Wrong again. SilkRoad was a firm, not a DAC.
I will try reply to the rest of your comments when I come back but at first glance they look pretty weak.Your comments actually are weak, unlike mine, and I actually have responded to them, unlike you. You didn't even read where I posted them the first time.
You missed the part where dozens of replacement firms appeared near-instantly. There is still no SilkRoad DAC. If DACs are so good, where are they?I never said SilkRoad was a DAC? If you're under the illusion firms offer the same advantages, maybe you missed the part where SilkRoad was shut down and the owner arrested?DACs also provide tax, confiscation & privacy benefits & have the advantage of being border/'jurisdiction-less'Wrong again. SilkRoad was a firm, not a DAC.I will try reply to the rest of your comments when I come back but at first glance they look pretty weak.Your comments actually are weak, unlike mine, and I actually have responded to them, unlike you. You didn't even read where I posted them the first time.
QuoteWhat's scarce is the stock of a particular company. A Microsoft share has value depending on the profitability and perceived future profitabilty of Microsoft. Similarly a DAC share will have a value depending on its current and perceived future profitability.I agree in general. But it takes no effort to fork a DAC. Forking microsoft and making it work like the original is difficult. This lowers the value of a DAC. On the other side network effect might be more important than with pretty much all firms except with microsoft :)
QuoteDAC's vs. Firms. DACs win! They can have nearly all the advantages with none of the disadvantages -Basically a DAC is only a decentralized ledger plus X. X can be data feeds, prediction markets or (other) centralized add ons. There is a fluent transition between pure DACs (as toast would say) and Firms which make use of decentralized ledgers.
So comparing the two that directly is not that easy.
DACs (especially the pures ones) are limited to simple services.
There are disadvantages: e.g. a decentralized bookkeeping in itself is always more expensive than on a centralized server.
QuotePrice - DAC's have the potential to undercut the market considerably in many areas. Lotteries - twice the odds of winning vs. conventional, Finance - 1/10th the price?Don't believe it will be that extreme. Lottery: ATM maybe 7 (?) out of 10 USD (10 USD is the turnover of the lottery company) is paid out. So the odds on average are 70% -> double it -> 140%. Not profitable....
"Twice as profitable" would make sense -> 85% Odds
QuoteTrust - Does Fort Knox have the gold?How would you suggest for Fort Knox to proof that they have it using blockchain techn.? AFAIK you can only be proven that someone else has something or sent you something for sure if that something is the token that defines the tx ledger.
You have it backwards. Any entrepreneur can copy any DAC. DACs are expensive to create, debug, run, and maintain. DACs are impersonal and inflexible.
DAC's vs. Firms. DACs win! They can have nearly all the advantages with none of the disadvantages -
Any entrepreneur can copy any DAC
DACs are expensive to create, debug, run, and maintain.
DACs are impersonal and inflexible.
Price - DAC's have the potential to undercut the market considerably in many areas. Lotteries - twice the odds of winning vs. conventional, Finance - 1/10th the price?Once they exist, yes. Consumer demand is volatile, however. Building a DAC is too expensive.
Building a DAC is too expensive
Trust - Does Fort Knox have the gold? Is Lehman Brothers really solvent? Are Madoff investment securities accounting statements correct? Are those Cdft stock certificates real? (The main benefit of decentralised ledger technology for me is Accounting Trust.)Matters for a bank (value-storage). Doesn't matter for a DAC (no "storage", sale is nearly-instantaneous).
You missed the part where dozens of replacement firms appeared near-instantly. There is still no SilkRoad DAC. If DACs are so good, where are they?I never said SilkRoad was a DAC? If you're under the illusion firms offer the same advantages, maybe you missed the part where SilkRoad was shut down and the owner arrested?DACs also provide tax, confiscation & privacy benefits & have the advantage of being border/'jurisdiction-less'Wrong again. SilkRoad was a firm, not a DAC.I will try reply to the rest of your comments when I come back but at first glance they look pretty weak.Your comments actually are weak, unlike mine, and I actually have responded to them, unlike you. You didn't even read where I posted them the first time.
If DACs are so good, where are they?
@donkeypong: I, with complete honesty, look forward to seeing BitsharesX operate, and think its very exciting for commerce, just that people are trying new and crazy things. However, we actually do have a bit of a market test: This was promised to be working in March, and it is now mid-July. In contrast, a website can be started for $5 on digitalocean. This speaks to the cost of creating a DAC.
Quote@donkeypong: I, with complete honesty, look forward to seeing BitsharesX operate, and think its very exciting for commerce, just that people are trying new and crazy things. However, we actually do have a bit of a market test: This was promised to be working in March, and it is now mid-July. In contrast, a website can be started for $5 on digitalocean. This speaks to the cost of creating a DAC.
Produce a website that does what our DAC does for $5 and then lets talk.
Right. I didn't mean to imply that BitsharesX could be replicated for $5. In fact I'm nearly suggesting the reverse: that what you guys are doing is very, very, hard. So hard that I predict that like-minded entrepreneurs will actually decide that they don't want to try it anymore (except perhaps for the challenge, or for the public good), and will instead do the traditional thing, and set up shop and sell their labor.Quote@donkeypong: I, with complete honesty, look forward to seeing BitsharesX operate, and think its very exciting for commerce, just that people are trying new and crazy things. However, we actually do have a bit of a market test: This was promised to be working in March, and it is now mid-July. In contrast, a website can be started for $5 on digitalocean. This speaks to the cost of creating a DAC.
Produce a website that does what our DAC does for $5 and then lets talk.
I understood AsymmetricInformation to mean that all the time, effort, pain and innovation, and various and numerous costs, are what will give The DAC its value far above and beyond the $5. Not that you should be able to produce a DAC for $5.
Everything unrelated to value-storage will be outsourced to firms. This leaves only a few niches (Bitcoin, Truthcoin, possibly .p2p domain 'real estate' storage).
Right. I didn't mean to imply that BitsharesX could be replicated for $5. In fact I'm nearly suggesting the reverse: that what you guys are doing is very, very, hard. So hard that I predict that like-minded entrepreneurs will actually decide that they don't want to try it anymore (except perhaps for the challenge, or for the public good), and will instead do the traditional thing, and set up shop and sell their labor.
As I said before, Bitcoin is useful. This is because (to repeat it yet again): a blockchain is required to store value.
To disagree, you need to propose a blockchain service that would "be economically profitable" but would not "store value". The comments you made referencing Bitcoin are therefore irrelevant.
Just because no one specifically labeled an account "Bitcoin dev fund" and announced that to the world, doesn't mean that the development of Bitcoin didn't consume scare time and energy. Voorhees estimated that the establishment of Bitcoin cost at least 1 billion dollars.
Delegates can go to jail.
You missed the part where dozens of replacement firms appeared near-instantly. There is still no SilkRoad DAC. If DACs are so good, where are they?I never said SilkRoad was a DAC? If you're under the illusion firms offer the same advantages, maybe you missed the part where SilkRoad was shut down and the owner arrested?DACs also provide tax, confiscation & privacy benefits & have the advantage of being border/'jurisdiction-less'Wrong again. SilkRoad was a firm, not a DAC.
So what if dozens of firms replaced them near-instantly? The owner of the original is in jail.
That is what proves the point that firms don't offer owners & shareholders the same advantages DAC's do.
Its been shown in theory and in practice, that if the accounting isn't transparent, the shareholders actually benefit. It is the business which suffers, as it cannot prove it's legitimacy, and must fund-raise under great suspicion. Shareholders always have the option to sell, or not-buy. This effect sometimes bundled with the famous "Market for Lemons" Nobel paper.
If DACs are so good, where are they?
That's like popping up in 1993 and saying - 'If impersonal 'online stores' are so good. Where are they?'
It's easy to just say "new paradigm". Much harder to use logic to back up that claim. Many things were fads in the 90's, like Beanie Babies. What sorts a paradigm-shift from a fad are the economic fundamentals.
QuoteIts been shown in theory and in practice, that if the accounting isn't transparent, the shareholders actually benefit. It is the business which suffers, as it cannot prove it's legitimacy, and must fund-raise under great suspicion. Shareholders always have the option to sell, or not-buy. This effect sometimes bundled with the famous "Market for Lemons" Nobel paper.
Interesting. I see no evidence there that shareholders would choose a company with lesser/perceived lesser accounting transparency though. So the theory would simply say that over time traditional businesses would outperform DAC's because of their lower accounting transparency. OK. Even if it were true, it would have to be partly offset by the savings in fraud, embezzlement, and theft a DAC would enjoy.
The point is that shareholders do NOT choose a company with lesser accounting transparency. Those companies are forced to borrow at the high rates charged to actually-doomed companies, but occasionally there is a good egg in there (a still-breathing company which could not prove it would still be breathing a year from now). Investors receive a reward disproportionate to the risk they assumed, so they actually win. Its the managers that lose, not the owners.
So the majority of companies would be 'actually-doomed' companies that could exist a while longer thanks to lower borrowing rates for example, but ultimately fail.
The point is that shareholders do NOT choose a company with lesser accounting transparency. Those companies are forced to borrow at the high rates charged to actually-doomed companies, but occasionally there is a good egg in there (a still-breathing company which could not prove it would still be breathing a year from now). Investors receive a reward disproportionate to the risk they assumed, so they actually win. Its the managers that lose, not the owners.
& you're/theory is saying that outside shareholders benefit from this because without that they would have failed sooner or perhaps not got a shot to get out of the hole. However as you say - the majority are 'actually-doomed' which means shareholders within the company & people close to them would have this inside information and be able to sell as 'doomsday' becomes inevitable. This would leave the outside shareholders at a disadvantage, they would only learn of problems at a much lower price and in extreme cases experience a complete loss in the case of some bankruptcies.
Does the theory take that sort of idea into account and still find it is in outside shareholders interest over all?
Everything unrelated to value-storage will be outsourced to firms. This leaves only a few niches (Bitcoin, Truthcoin, possibly .p2p domain 'real estate' storage).
My mountain climbing friend asked me to keep an eye if you ever gonna come with explanation why and how truthcoin will be so valuable. Seems like a good time to ask.
Care to elaborate?
‘Why/how is truthcoin one of the only few niches worth developing for?
Right. I didn't mean to imply that BitsharesX could be replicated for $5. In fact I'm nearly suggesting the reverse: that what you guys are doing is very, very, hard. So hard that I predict that like-minded entrepreneurs will actually decide that they don't want to try it anymore (except perhaps for the challenge, or for the public good), and will instead do the traditional thing, and set up shop and sell their labor.
You do understand this is open source software, don't you? Now that the basic code is nearly complete, anyone can build their own DAC relatively easily; they will not be deterred by some great cost. I recently took a train ride up a mountainside in Alaska. It took a huge team of men many months and lots of black powder to blow apart the mountainside, at the cost of many lives. But today, I can buy a ticket and ride to the top comfortably in less than an hour. With the open source software toolkit that Invictus has created, anyone will be able to make their own DACs pretty easily. Does the price of my train ticket factor in how hard it was to blast that track out of the mountain? Does the simplicity with which anyone will be able to create a DAC factor in the difficulty and delays in getting the basic code built? Factor in that initial groundwork if your formulas and theories so demand, but don't be surprised if they don't quantify the relatively light burden remaining for anyone wishing to jump off from this platform.
Right. I didn't mean to imply that BitsharesX could be replicated for $5. In fact I'm nearly suggesting the reverse: that what you guys are doing is very, very, hard. So hard that I predict that like-minded entrepreneurs will actually decide that they don't want to try it anymore (except perhaps for the challenge, or for the public good), and will instead do the traditional thing, and set up shop and sell their labor.
You do understand this is open source software, don't you? Now that the basic code is nearly complete, anyone can build their own DAC relatively easily; they will not be deterred by some great cost. I recently took a train ride up a mountainside in Alaska. It took a huge team of men many months and lots of black powder to blow apart the mountainside, at the cost of many lives. But today, I can buy a ticket and ride to the top comfortably in less than an hour. With the open source software toolkit that Invictus has created, anyone will be able to make their own DACs pretty easily. Does the price of my train ticket factor in how hard it was to blast that track out of the mountain? Does the simplicity with which anyone will be able to create a DAC factor in the difficulty and delays in getting the basic code built? Factor in that initial groundwork if your formulas and theories so demand, but don't be surprised if they don't quantify the relatively light burden remaining for anyone wishing to jump off from this platform.
The experienced software professionals I know (and I"m not saying that they are infallible) don't believe you. Instead, they believe in something called software rot (http://www.catb.org/jargon/html/S/software-rot.html), whereby the environment changes too quickly for the inputs of the software to remain relevant. Even though the mapping from inputs to outputs improves constantly, the benefit of performing that mapping at all falls quickly and unexpectedly.
This is why I wrote, in the OP (over a month ago): """Software development/maintenance requires a great deal of highly-skilled work, and then the software "rots" as it gradually becomes obsolete."""
Shareholders almost never have the inside information.
http://en.wikipedia.org/wiki/Agency_cost
'real estate' storage?
We'll see if that market cap lasts. I'm betting it won't.As you refered to BTS X. This falls into the same category as Bitcoin: value transfer. At least one side of it. Based on your assessment the market cap should not fall (in case it works).
Prediction markets will always be inefficient because the markets don't will never have the continuous "flow" of a traditional market place. Bts x will have "flow", giving it the advantage in the information consensus market space
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Prediction markets will always be inefficient because the markets don't will never have the continuous "flow" of a traditional market place. Bts x will have "flow", giving it the advantage in the information consensus market space
Sent from my iPhone using Tapatalk
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I read the OP and vastly agree with it. But where does it contradict with one of the DACs developed based on the Bitshares toolkit (lottery, me, music, dns, insurance)? With Bitshares Music I see your point. Not with the rest.Insurance I personally don't get. I think ME can be replaced with colored coins. Lottery I think is a little unambitious, actual prediction markets or legal gambling institutions (that you could sue if they cheated you) could replace. DNS I get although it might also be replaceable by colored coins.
What do you mean bySimply that .p2p is sort of like storing real estate instead of cash. Its a different asset (web namespace) where digital scarcity would be important. I can't think of any others.Quote'real estate' storage?
We'll see if that market cap lasts. I'm betting it won't.As you refered to BTS X. This falls into the same category as Bitcoin: value transfer. At least one side of it. Based on your assessment the market cap should not fall (in case it works).
Here is another proposition:I think that transparency is hard, even with software and blockchains. There are many businesses, even small ones with professional accountants, where even the people running the business don't know exactly where all of their money is. I can sign a message from an address, but what does that really accomplish? I could transfer the coins to my personal BTC account and keep signing messages, or I could build a plan to steal the coins in one quick moment. What's the difference between an inside/outside job?
Transparency for companies can (only) be enhanced if the respective company does ALL it's value transfer (receiving and spending) using crypto currency. A charity for example receives all it's money via a crypto currency which let's people see how much money the received. If they spend it all via a the same crypto currency then it is all traceable. If they have to exchange it to fiat and spend it then it is not tracable anymore.
What do you think? How else could a company enhance transparency (if the company is not a DAC itself)?
bb, I think you are referring to a difference between...
[1] " Yes/No the price of gold will be above $1000 on date D? "
and
[2] "The price of gold on date D".
...but even markets with [1] have "flow", if you define that as "a continuously changing price". Out of the money binary options still have a continuously changing price, which can be translated into an index.
Moreover, the Truthcoin markets I designed can allow you to "go long" or short continuously-priced assets such as [2].
I share toast's confusion, though. If the above guess was wrong I haven't the slightest idea what you are talking about! :)
That meme is fantastic.
Right. I didn't mean to imply that BitsharesX could be replicated for $5. In fact I'm nearly suggesting the reverse: that what you guys are doing is very, very, hard. So hard that I predict that like-minded entrepreneurs will actually decide that they don't want to try it anymore (except perhaps for the challenge, or for the public good), and will instead do the traditional thing, and set up shop and sell their labor.
You do understand this is open source software, don't you? Now that the basic code is nearly complete, anyone can build their own DAC relatively easily; they will not be deterred by some great cost. I recently took a train ride up a mountainside in Alaska. It took a huge team of men many months and lots of black powder to blow apart the mountainside, at the cost of many lives. But today, I can buy a ticket and ride to the top comfortably in less than an hour. With the open source software toolkit that Invictus has created, anyone will be able to make their own DACs pretty easily. Does the price of my train ticket factor in how hard it was to blast that track out of the mountain? Does the simplicity with which anyone will be able to create a DAC factor in the difficulty and delays in getting the basic code built? Factor in that initial groundwork if your formulas and theories so demand, but don't be surprised if they don't quantify the relatively light burden remaining for anyone wishing to jump off from this platform.
The experienced software professionals I know (and I"m not saying that they are infallible) don't believe you. Instead, they believe in something called software rot (http://www.catb.org/jargon/html/S/software-rot.html), whereby the environment changes too quickly for the inputs of the software to remain relevant. Even though the mapping from inputs to outputs improves constantly, the benefit of performing that mapping at all falls quickly and unexpectedly.
This is why I wrote, in the OP (over a month ago): """Software development/maintenance requires a great deal of highly-skilled work, and then the software "rots" as it gradually becomes obsolete."""
bb, I think you are referring to a difference between...
[1] " Yes/No the price of gold will be above $1000 on date D? "
and
[2] "The price of gold on date D".
...but even markets with [1] have "flow", if you define that as "a continuously changing price". Out of the money binary options still have a continuously changing price, which can be translated into an index.
Moreover, the Truthcoin markets I designed can allow you to "go long" or short continuously-priced assets such as [2].
I share toast's confusion, though. If the above guess was wrong I haven't the slightest idea what you are talking about! :)
That meme is fantastic.
AI, I did not realize the T-Coin market would have shorts and "longs" on continuously-priced assets. Would you expect these assets to become pegged to their real world counterpart?Check out this Excel sheet (https://github.com/psztorc/Truthcoin/raw/master/docs/LogMSR_Demo.xlsx), Scaled Claims tab, to get the general idea here. I absolutely would expect them to become pegged, through the magic of arbitrage. Especially if the markets matured very soon (low basis / technical risk), or if there were many evenly-spaced markets. I plan to build in a sort of "arbitrage viewer", which calculates the implied annual interest rate, to encourage this as much as possible.
is linux as a whole experiencing software rot?I don't see rot as "happening" to one thing or another. Any organism, including ourselves, would rot if we did not perform essential maintenance (food, exercise, rest, immune system, etc) on it. Linux is alive and not rotting. I'm simply trying to say that software has maintenance costs just like a firm has operating costs, so when people say "software will be cheaper long run" they aren't always right.
Please elaborate on [1] in regards to this: If some bets Yes/No, then that person will need to wait until the event occurs to receive payout. How will people deal with opportunity cost of betting Yes/No?I'm not sure opportunity cost was the phrase you meant to use. You might find this FAQ answer (https://github.com/psztorc/Truthcoin/tree/master/docs#in-some-of-your-notes-you-suggested-timelines-of-a-couple-of-weeks-for-voting-would-it-be-fair-to-say-this-wouldnt-be-suitable-to-horse-racing-etc-where-the-events-happen-very-fast-there-are-many-of-them-and-payouts-need-to-be-made-fairly-quickly) helpful.
AI, I did not realize the T-Coin market would have shorts and "longs" on continuously-priced assets. Would you expect these assets to become pegged to their real world counterpart?Check out this Excel sheet (https://github.com/psztorc/Truthcoin/raw/master/docs/LogMSR_Demo.xlsx), Scaled Claims tab, to get the general idea here. I absolutely would expect them to become pegged, through the magic of arbitrage. Especially if the markets matured very soon (low basis / technical risk), or if there were many evenly-spaced markets. I plan to build in a sort of "arbitrage viewer", which calculates the implied annual interest rate, to encourage this as much as possible.is linux as a whole experiencing software rot?I don't see rot as "happening" to one thing or another. Any organism, including ourselves, would rot if we did not perform essential maintenance (food, exercise, rest, immune system, etc) on it. Linux is alive and not rotting. I'm simply trying to say that software has maintenance costs just like a firm has operating costs, so when people say "software will be cheaper long run" they aren't always right.Please elaborate on [1] in regards to this: If some bets Yes/No, then that person will need to wait until the event occurs to receive payout. How will people deal with opportunity cost of betting Yes/No?I'm not sure opportunity cost was the phrase you meant to use. You might find this FAQ answer (https://github.com/psztorc/Truthcoin/tree/master/docs#in-some-of-your-notes-you-suggested-timelines-of-a-couple-of-weeks-for-voting-would-it-be-fair-to-say-this-wouldnt-be-suitable-to-horse-racing-etc-where-the-events-happen-very-fast-there-are-many-of-them-and-payouts-need-to-be-made-fairly-quickly) helpful.
An office that can't open an Excel spreadsheet! Not buying it! 8)
Upon reflection, my argument "requires digital scarcity", does allow for Quixote (sorry, I can't spell it your way). I have a question though, if we have an Identification-Blockchain, why do we need a new blockchain for .p2p addresses (can't they just be registered as a type of 'name'). In fact, all of the "names" could be registered in a.....Namecoin.
So I suppose there are room for 3 digital scarcities: value, escrowed-value, and names. They will probably all have first-mover-advantage network-effects, but it looks like Namecoin is ripe for a superior replacement.
If your goal is to create a new world-changing blockchain, I think you'll find the following questions essential to your quest:
Can I think of a new blockchain-use, which doesn't involve digital scarcity?
Can I think of a new market-need for digital scarcity?
If so, can this be built into one of the 3 chains above, or is there an opportunity for something new?
An office that can't open an Excel spreadsheet! Not buying it! 8)
Upon reflection, my argument "requires digital scarcity", does allow for Quixote (sorry, I can't spell it your way). I have a question though, if we have an Identification-Blockchain, why do we need a new blockchain for .p2p addresses (can't they just be registered as a type of 'name'). In fact, all of the "names" could be registered in a.....Namecoin.
So I suppose there are room for 3 digital scarcities: value, escrowed-value, and names. They will probably all have first-mover-advantage network-effects, but it looks like Namecoin is ripe for a superior replacement.
If your goal is to create a new world-changing blockchain, I think you'll find the following questions essential to your quest:
Can I think of a new blockchain-use, which doesn't involve digital scarcity?
Can I think of a new market-need for digital scarcity?
If so, can this be built into one of the 3 chains above, or is there an opportunity for something new?
It is quite early in the game, but the empirical evidence is piling up on my side. Many firms have sprung up to use/accept Bitcoin, yet still (to date) no other useable "DAC" or "Ethereum" has been born, let alone seen its first birthday (Bitcoin is 5 and a half). How long will it be until that changes? 6 months? 5 years? Forever?
It would indeed be literally wrong because I used the word "advantage" and provided an example where functionality would defeat the network effect.An office that can't open an Excel spreadsheet! Not buying it! 8)
Upon reflection, my argument "requires digital scarcity", does allow for Quixote (sorry, I can't spell it your way). I have a question though, if we have an Identification-Blockchain, why do we need a new blockchain for .p2p addresses (can't they just be registered as a type of 'name'). In fact, all of the "names" could be registered in a.....Namecoin.
So I suppose there are room for 3 digital scarcities: value, escrowed-value, and names. They will probably all have first-mover-advantage network-effects, but it looks like Namecoin is ripe for a superior replacement.
If your goal is to create a new world-changing blockchain, I think you'll find the following questions essential to your quest:
Can I think of a new blockchain-use, which doesn't involve digital scarcity?
Can I think of a new market-need for digital scarcity?
If so, can this be built into one of the 3 chains above, or is there an opportunity for something new?
Is it wrong that I feel you are neglecting to consider functionality? Network effect is the be all end all, is it?
Also it's not related to this conversation. But I noticed in the article, you linked to some other potential uses for TruthCoin/Prediction Markets, but you didn't mention social media applications? Not that I'd be an investor in it, but I've heard Andreas Antonopoulos talk about the potential to create a crypto-currency for social media and awarding it based on positive behaviour - behaviour that agreed with & pre-emptively anticipated the consensus of a sites users.It sounds like what he's talking about can already be done with Bitcoin, and an employee-scoring algo (which itself could be very similar to what I used in Truthcoin, or some audit lottery, Bayesian Truth Serum, managers, etc). So its cool to see those ideas combine, but I think that (contrary to what most people believe) it is actually very easy to think of a cool idea. As you mention, coding/testing, presenting, building support, re-testing, and all the other 'hard work' is what's actually valuable. Andreas should code a first version of his trustless-troll-police so we can all take a look.
http://www.youtube.com/watch?v=tgEDOBgYg-g 23:20 -27:00
What do you think about that idea? A currency & a prediction market that incentivizes truthful & consensus behaviour seems like a possible fit for TruthCoin or have I misunderstood it/you're not interested in that area?
Empirical1, thanks for reading.
It is true that I think that SR is an example of firm-superiority, and the existence of SR weakens the case for DACs. I think eventually (and soon) it will be possible for many people to easily set up their own anonymous website (MaidSafe / clearskies / whatever). Multisig I think will also become widespread, and then I think there will be an explosion of entrepreneurship in anonymous / illegal goods / tax-evasion. My forecast is that this will be done predominantly (if not exclusively) through firms, although they will almost certainly use Bitcoin and may use .p2p / Quixote ("Namecoin 2.0").
Also it's not related to this conversation. But I noticed in the article, you linked to some other potential uses for TruthCoin/Prediction Markets, but you didn't mention social media applications? Not that I'd be an investor in it, but I've heard Andreas Antonopoulos talk about the potential to create a crypto-currency for social media and awarding it based on positive behaviour - behaviour that agreed with & pre-emptively anticipated the consensus of a sites users.It sounds like what he's talking about can already be done with Bitcoin, and an employee-scoring algo (which itself could be very similar to what I used in Truthcoin, or some audit lottery, Bayesian Truth Serum, managers, etc). So its cool to see those ideas combine, but I think that (contrary to what most people believe) it is actually very easy to think of a cool idea. As you mention, coding/testing, presenting, building support, re-testing, and all the other 'hard work' is what's actually valuable. Andreas should code a first version of his trustless-troll-police so we can all take a look.
http://www.youtube.com/watch?v=tgEDOBgYg-g 23:20 -27:00
What do you think about that idea? A currency & a prediction market that incentivizes truthful & consensus behaviour seems like a possible fit for TruthCoin or have I misunderstood it/you're not interested in that area?
Sometimes I worry that Andreas is just so good at talking, and invited to talk so often, that he sort of burns out and then just runs with this vapid empty-suit stuff + Bitcoin jargon + populism. These days, I rarely learn anything when he talks. It is something I worry that might happen to myself one day.