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.

Everything unrelated to value-storage will be outsourced to firms. This leaves only a few niches (Bitcoin, Truthcoin, possibly .p2p domain 'real estate' storage).

I was referring to customer's preferences, not price volatility. I mean that someday people may prefer to call a bank on the phone, the next day they may prefer online banking, then mobile banking. A firm can react quickly, but the blockchain's rules are far more permanent, introducing toxic inflexibility.

We'll see if that market cap lasts. I'm betting it won't.

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.

Delegates can certainly go to jail. They may for BtsX, they almost certainly would for BtsSilkRoad. It is irrelevant, my comments are about what the consumer wants, not what the producer wants. The producer always wants to retire, but no one makes a living by retiring immediately.

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.

@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.

I haven't read this whole thread or the article but I'll ignorantly comment anyway

I 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.


At least you were wise enough to predict your own ignorance.

For example, when user created assets are allowed, a global banana company might (possibly) decide to create BANANAS as a chain, and although they might intend for their pricing to match the global banana price in kg quite precisely, others may initially have trouble taking the asset seriously.

Indeed, this would be nearly as problematic as you or I writing "Banana" on a piece of paper and trying to sell it to someone who wants a banana, wouldn't it?

In that situation, as a unqualified trading noob, I would guess that digital bananas might be 'offloaded' or traded at a lower price, forcing the asset to trade at a lower price than the real value of bananas, as confidence grows in the process this might then be expected to more closely approximate the real price. Is this flawed logic?

You've assumed that people will respond to uncertainty by assuming the worst. At least one Nobel Paper agrees with you: http://en.wikipedia.org/wiki/The_Market_for_Lemons

Anyway, I was imagining that the convergence of asset values will surely depend, perhaps *initially* foremost, on Trust. Once systems are established and DACs are trusted, this issue I would expect to diminish rapidly.

Trusting the issuer of the assets, I think (not "systems and DACs"). Even if the DAC works perfectly, users may issue worthless assets, and/or traders may have no way of assessing the value of those assets.

EDIT: this is a useful link - http://wiki.bitshares.org/index.php/Market_Peg

I'm curious as to what you found useful about it. The link says:
[1] "...all traders in the blockchain expect BitUSD to peg to the dollar...",
[2] "...which leads them to trade in ways that reaffirm that expectation".
Therefore [3] "...the value of bitAssets will be equal to about the value of their real world counterparts".

But you've called the validity of 1 into question. That link just assumes 1, so either the link tricked your brain into forgetting about its concern, or it somehow inspired your brain into an amazing realization.

Digital scarcity is not a feature it can be the consequence of:
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.

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).

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.

More like "firms", Useful because the industry needs transparent public ledgers
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

I 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.

DACs that can stay competitive because it lives "outside" of any jurisdiction:
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?

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.

Looks like we agree that digital scarcity is important, implying finance/smart-contracts, and that software can make services cheaper, implying possibility of DACs where services are long-term-programmable.


Now, for this piece of nonsense:

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).

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.

I have completely explained "what I am trying to prove" (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.

If you'll visit his post on my forum, you'll see that he misunderstands the project to such a degree (not even knowing what Truthcoins are), and is so disrespectful to those who tried to help, that it was almost impossible for the conversation to continue. His claim that I "disregard any questions in non-ivy form" is false (I have generously taken time out of my day to answer all of everyone's standing questions, regardless of plant form), and (as always) extremely offensive as it insinuates elitism on my part.

These behaviors only bother me to a very small degree, because it is obvious that he is reacting defensively, which he would only do if he felt that I was correct. I interpret it as a very confused "I agree".

No new trades at all...seems that no one has any idea when BitsharesX will be released.

Probably much later than September, even, as Dan / Stan would have a reason to withhold trades to that effect.

Either that or this community is all talk, or very poor, or doesn't trust Fairlay.

We are still talking past each other. (Or one of us is, or something).

Let me try again:

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.

Allow me to restate your position:
p1. Some mechanisms can't be simulated with PMs.
p2. Some mechanisms operate on a decentralized network (which includes blockchain as well as non-blockchain).
p3. Some mechanisms need their own token-on-a-blockchain.
a2. All mechanisms where p1=p2=TRUE have p3=TRUE.
c1. "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"
a3. Some mechanisms where p3=TRUE will need a non-Bitcoin, non-Truthcoin blockchain.
c2. There will exist viable non-Bitcoin, non-Truthcoin blockchains.

I agree that p1 and p2 are relevant, and agree with a1. I don't agree with a2 (with, for example, 'seller activity among online auction-houses (ebay, Craigslist)', 'the FOREX market', and  'the season rules to a recreational softball league' being counterexamples), so I don't agree with c1. Even if I did, this post is mainly about arguing against a3, your assumption that new networks would require new blockchains. I don;'t know where you are going with p3, as there are already colored coins and multisig addresses.

I am talking about the most efficient way of providing a service to consumers. Improving the technical details of the Bitcoin blockchain (to make it faster or more reliable at doing what it already does, but NOT to provide new services), or copying the Truthcoin blockchain 100 times to reduce the load on each blockchain, wouldn't count as new blockchain designs, because they would not provide new services. 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.