klosure, on what grounds exactly is based your confidence that you are right?
I have already exposed the reasons why I think acquiring BTER is the right move but let me restate the reasons since you invite me to. Basically, we should acquire BTER because it's a good business opportunity and also because failing to do so is a serious risk. Here are the detailed reasons one more time:
Opportunity- BTER's user base = altcoiners community = our target market. Acquiring BTER would allow us to acquire our entire target market as a loyal user base, which is what Bitshares is missing the most desesperately. If you doubt about the value of a user base, look at social apps and social networks acquision prices.
- BTER's user base is captive: there aren't that many alt exchanges the size of BTER with that many assets listed so people will still be coming to BTER if the necessary steps are taken to clear worries about security (multisign cold wallet, decentralized management).
- BTER's user base is desperate and will welcome any solution that allow them not to lose their funds. There will be very low opposition to this move and Bitshares will effectively save the day.
- BTER management doesn't have much choice: either they take our offer, or they can file for bankruptcy so they won't be able to claim much more on top of what they owe to their users. Unless there are other offers, but then the problem becomes totally different.
- BTER's value as a business is liquely higher than the 2M USD they owe to their users, so by acquiring them at close to the bailout price, we are effectively acquiring a valuable business and it's the BTER founders who end up paying most the loss out of their own share of sweat equity. To convince yourself that the BTER business is worth more than the 2M USD we would pay to acquire it, the series A funding rounds of other large exchanges is one order of magnitude higher than that, and they only give away a part of their equity.
- Bitshares needs more visibility and buzz. At the moment it has a tiny mindshares. Bailing out BTER would be a huge marketing tour-de-force and yield more top quality advertizement than what 2M USD could buy.
Risk hedging- BTER represents 50% of our user base and about that proportion of the demand for our products. Alienating 50% of our user base will have a severe impact on the demand, which will affect the price and the market cap. The 2M required for a bail out represent 10% of our market cap. Although this is not exact science, it seems reasonable that the market cap will drop by much more than 10% should our demand decreases by 50%.
- There is a level under which the price of BTS can't go without entailing a meltdown of the network. Unlike other currencies where the price is more anecdotical to the proper functionning of the network, Bitshares is using a pegging mechanism that gives a central role to BTS as collateral. Should the price drop hard enough, this will entail a blackswan that will further discredit Bitshares, further decrease demand, and make it increasingly unlikely to get listed on other exchanges. Bitshares development using paid delegates is also very senstive to price as developers working for delegate pay would see a major drop in their revenue should the price of BTS decrease. Market pegged assets are a self-fulfilling prophecy. These work only because of the majority believes in them and require a critical mass of users.
Why do you claim to have a perfect insight of what the cryptocommunity wants?
I haven't claimed to have a perfect insight of what the cruptocommunity wants. I'm making a proposal for debate. That's what forums are for. Let's discuss about this opportunity, and see what the consensus is.
Have you at least spoken to anyone from BTER ?
Speaking to a target company about a possible acquisition is something that usually happens
after the prospective buyer company has decided internally that this was a route worth investigating. That's what we are doing here now. Let's not put the cart before the horses. If it turns out that there is interest among shareholders to investigate a possible acquisition, we will have to reach out to BTER using the normal communication channels between Bitshares and BTER. Anything else would be disorderly, unprofessional and engage only the individuals who are reaching out anyway. For the moment, I think we can safely assume that BTER will be considering offers to get them out of this situation, so that should be a good enough hypothesis to justify this debate.
BTER was a nice centralized exchange, but it certainly isn't bitshares. They were BitShares friendly, but they also asked an ignominious 1% withdrawal fee. Bitshares needs a secure on/off ramp, like kraken.com, and then it must perfect its UI until my grandpa can use it.
Have you closed a deal with Kraken? Have you developed the perfect UI?
If the answer to the above is no, what you are talking about is wishful thinking.
Wishful thinking isn't going to create demand for bitAsset.
That's all we need. BTER has been hacked 2 times. Why in the world would we want to help BTER pay their debts ?
Why in the world would you want to help out your horse across the desert after it has failed you twice?
It's a blow to BitShares, but it also shows that we are right in insisting on decentralization.
Xanadu was insisting on the semantical purity of hypertext. I'm sure they were right too.
Why should we lose more than BTC here ? There is no reason to die from this, the market peg will hold and we'll just keep losing some weak hands... till, at last, some big investors will understand why BitShares is a good solution.
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I just think it's misdirected.. our enthusiasm should be getting translated into well targeted messaging and invites to the rest of the world welcoming them to decentralization.
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