BitShares Forum
Main => General Discussion => Topic started by: Empirical1.1 on October 04, 2014, 09:15:08 pm
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While useful as consensus mechanism for a DAC this thread has revealed that DPOS may be flawed for a crypto-currency use case. https://bitsharestalk.org/index.php?topic=9603.0
DPOS would allow users to come to a consensus about changing the rules on which the crypto-currency itself was founded.
Previously a majority that wanted something different in the short term would have to change currencies or fork but with DPOS, if the group that wants to hold the fundamental rules and principles of the currency is in the minority then they are the ones forced to change or fork.
It is therefore likely A DPOS crypto-currency use case will always succumb to the fate & flaws of all currencies and democracies that have preceded it.
Only some sought of limited consensus model that somehow realistically removes the ability to change those initial rules and principals on which a crypto-currency was founded is able to be a trusted long term store of value and more importantly a benefit to society if history is a guide.
DPOS only allows for a digital company share while a limited consensus model allows for digital gold.
If so will users looking for a crypto-currency choose a digital gold or a digital company share?
Will users choose a BitAsset system that is backed by digital gold or digital company shares?
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Yep. It's exactly flawed as humanity is flawed.
This is like watching the wheel be reinvented.
But it is very astute of you to look further into the future. When all the founders are gone and the leaders have changed the only thing left will be the apathetic will of the majority, easily coerced and mislead by elaborate delegate campaigns. And in this new "democracy" there's not even a constitution to violate!
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My concern with DPOS since the beginning was the introduction of politics into what I feel should be a democracy free zone. Ultimately what I have come to understand (with great help for Bytemaster) is that this problem exists in all cryptocurrencies. If the majority of bitcoin miners and users decided that rather than cut new coin generation in half every four years they would double it, that is what would happen. This would require a fork, and majority consensus. If the majority of BitsharesX users decided that they wanted an inflationary scheme to bring in more users, then it would require a fork and majority consensus.
It is concerning that crypto. Our chance to free ourselves from the shackles of oppression. Ultimately is a form of democracy, with all of the evil that entails.
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I do not understand what sort of argument could make this hold more true for DPOS over other consensus algorithms. We can point to empirical observations about resources required for blockchain attacks but they are all anecdotal. I do not understand how DPOS could be different from other consensus mechanisms ??
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My concern with DPOS since the beginning was the introduction of politics into what I feel should be a democracy free zone. Ultimately what I have come to understand (with great help for Bytemaster) is that this problem exists in all cryptocurrencies. If the majority of bitcoin miners and users decided that rather than cut new coin generation in half every four years they would double it, that is what would happen. This would require a fork, and majority consensus. If the majority of BitsharesX users decided that they wanted an inflationary scheme to bring in more users, then it would require a fork and majority consensus.
It is concerning that crypto. Our chance to free ourselves from the shackles of oppression. Ultimately is a form of democracy, with all of the evil that entails.
''The market is a democracy in which every penny gives a right to vote'' - Ludwig von Mises.
A democracy that is voluntary, like a DAC, is fine in my opinion. If you don't like what a DAC is doing, you can withdraw economic consent. Democracy is only a problem when its politcally imposed on people.
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You cannot avoid politics in any consensus system. We can just design the system to be smarter about how the politics are handled.
Previously a majority that wanted something different in the short term would have to change currencies or fork but with DPOS, if the group that wants to hold the fundamental rules and principles of the currency is in the minority then they are the ones forced to change or fork.
With POW, if the majority of hash power reached a consensus to change Bitcoin's inflation schedule, it would change and everyone would be forced to go along with it or move their money to a competing currency. The majority still rules in DPOS, except now it requires the majority of the delegates (who are controlled through the votes of the shareholders) to come to a consensus on a decision. This is a more sensible political strategy than depending on the majority consensus of unelected miners.
Only some sought of limited consensus model that somehow realistically removes the ability to change those initial rules and principals on which a crypto-currency was founded is able to be a trusted long term store of value and more importantly a benefit to society if history is a guide.
This is either impossible or actually exists in every system depending on your point of view. The rules (encoded in software) of the system define the cryptocurrency. If you change the rules, you change the cryptocurrency. You can create a cryptocurrency that follows a set of rules and those rules NEVER change. But you need to keep in mind that you may end up being the ONLY PERSON IN THE WORLD who uses that particular cryptocurrency (therefore it is totally worthless). You cannot force your will (a particular set of rules for a cryptocurrency) on other people. By the way the same is true of a physical system like gold. We cannot change the physical properties of gold (that would violate the laws of physics) but we can change our human perception of its value. If everyone stopped valuing gold (thus it experienced severe price inflation), would you say that people unfairly changed the inflation rules of gold? Ultimately, all of these systems require people to come to a compromise (which means politics) so that we all use the same system and benefit from that network effect. That is just a fact that cannot be ignored no matter how much you may hate it because we are ultimately dependent on other people for our survival.
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While useful as consensus mechanism for a DAC this thread has revealed that DPOS may be flawed for a crypto-currency use case. https://bitsharestalk.org/index.php?topic=9603.0
DPOS would allow users to come to a consensus about changing the rules on which the crypto-currency itself was founded.
This isn't any different from other blockchains. If it's POW, then a group of miners could reach a consensus and fork the chain with a new rule. If it's POS, then a group of coinholders could do the same. It's impossible for any kind of a monetary system to protect the minority against the "tyranny of the majority," but that's part of what gives currency value - because by using the system you are giving up your right to make the monetary policy whatever you want it to be.
I suppose that you could have a different cryptocurrency for each person in existence, each with its own policies according to the preferences of its creator; however, that fundamentally defeats the purpose of what currency is supposed to be: A social contract by which people transmit value.
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Is the following statement true
Non DPOS crypto-currencies would have a harder time reaching or claiming to reach a democratic consensus about change.
If so then
The ideas, vision and principals on which a specific crypto-currency was founded are actually afforded much greater protection under a non DPOS crypto-currency.
(DPOS is good for most DAC use cases just not crypto-currency if that is the case.)
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If crypto currency/equity survives, DPOS being the superior choice to date, then so many things about people and our societies will change. The potential that will be unlocked across the planet is colossal.
Take education, the quality will go up over time (via the introduction of important truths) and therefore the quality of the decisions of those participating in consensus networks will go up, strengthening these networks.
Let's worry about the tyranny of the minority in the present before we assume stupidity and tyranny of the majority in the future.
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Let's worry about the tyranny of the minority in the present before we assume stupidity and tyranny of the majority in the future.
Unfortunately, we are already faced with a situation where the good intentioned majority may change the rules https://bitsharestalk.org/index.php?topic=9603.0
Crypto-currencies are not best as DACs they are best as DA's (Decentralised Autonomous...)
DACs will be popular for well, 'companies'
DAs will be popular as crypto-currency.
There is a difference between crypto equity and crypto money but BitShares has been interchanging them.
BTSX has some blurred lines.
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Yes, I've been following the discussion that Bytemaster began. I don't think it represents the majority of participants within the bitsharesX network wanting dilution. I hope that after the discussion, reason will prevail.
There are many ways of growing the BTSX network that we have not attempted and evaluated and many potential means of funding those efforts without resorting to dilution.
Dilution represents a critical move away from the key principals that original BTSX participants used to evaluate their investment. It also clearly sets a precedent within the BTSX network.
That said, If someone wants to fork the code to launch BTSXDilution, good luck to them. Conversely, if the BTSX equity holders in majority want to change BTSX to BTSXDilution, so be it. We can re-launch BTSXnodillution.
Network participants will put value where they think it should be....the overall network effect will continue to increase (based on utility) and eventually one network may become stronger than the other. There could be many versions of BTSX, all of which could keep changing the rules along with some that don't, it's all good as long as over time, more people are attracted to crypto in general and society benefits from the power of money being more widely distributed.
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Dilution represents a critical move away from the key principals that original BTSX participants used to evaluate their investment. It also clearly sets a precedent within the BTSX network.
That said, If someone wants to fork the code to launch BTSXDilution, good luck to them. Conversely, if the BTSX equity holders in majority want to change BTSX to BTSXDilution, so be it. We can re-launch BTSXnodillution.
Network participants will put value where they think it should be....the overall network effect will continue to increase (based on utility) and eventually one network may become stronger than the other. There could be many versions of BTSX, all of which could keep changing the rules along with some that don't, it's all good as long as over time, more people are attracted to crypto in general and society benefits from the power of money being more widely distributed.
I'm pretty confident the way BM has been viewing Bitcoin as a DAC is incorrect. I think some of the stuff he will say in Vegas, by thinking along those lines is incorrect too.
I've really had a Eureka moment, this is really fundamental to understand...
There is a difference between crypto equity and crypto money but BitShares has been interchanging them.
BTSX has some blurred lines.
It requires a small paradigm shift but once you understand that, the world becomes clear and everything makes sense again.
There will definitely be two chains. One for BitSharesX the digital money and one for BitSharesX the crypto equity. (The digital money will need an enshrined constitution of sorts.)
Both have amazing potential! But once you get the difference you will see that they are different.
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That said, If someone wants to fork the code to launch BTSXDilution, good luck to them. Conversely, if the BTSX equity holders in majority want to change BTSX to BTSXDilution, so be it. We can re-launch BTSXnodillution.
So here's the trillion dollar question: if Dan and I3 support BTSXDilution and reject providing any additional support to BTSXnodilution other than "our code is on GitHub," what would you do then?
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That said, If someone wants to fork the code to launch BTSXDilution, good luck to them. Conversely, if the BTSX equity holders in majority want to change BTSX to BTSXDilution, so be it. We can re-launch BTSXnodillution.
So here's the trillion dollar question: if Dan and I3 support BTSXDilution and reject providing any additional support to BTSXnodilution other than "our code is on GitHub," what would you do then?
Pfft, Do you know what I am capable of?
https://bitsharestalk.org/index.php?topic=8190.msg108164#msg108164
:P
No, I'm hoping BM will see the difference between ounces of gold and shares in a company, (DA's and DACs) and the conflict trying to combine the two creates.
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No, I'm hoping BM will see the difference between ounces of gold and shares in a company, (DA's and DACs) and the conflict trying to combine the two creates.
I don't understand what your concern is if you are interested in digital gold, or more generally a cryptocurrency (currencies should have price stability, which BTSX and BTC do not have). BitShares X already has what you want, it's called BitGLD. So, bytemaster already sees the difference between ounces of gold (BitGLD) and shares in a company (BTSX). Even if BitShares X implements dilution, the value you keep as BitGLD will not be inflated away at all.
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It requires a small paradigm shift but once you understand that, the world becomes clear and everything makes sense again.
There will definitely be two chains. One for BitSharesX the digital money and one for BitSharesX the crypto equity. (The digital money will need an enshrined constitution of sorts.)
Both have amazing potential! But once you get the difference you will see that they are different.
The chain as digital money already exist, it's called Bitcoin.
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That said, If someone wants to fork the code to launch BTSXDilution, good luck to them. Conversely, if the BTSX equity holders in majority want to change BTSX to BTSXDilution, so be it. We can re-launch BTSXnodillution.
So here's the trillion dollar question: if Dan and I3 support BTSXDilution and reject providing any additional support to BTSXnodilution other than "our code is on GitHub," what would you do then?
Ok good question. I don't have the answer....but I would hope the answer would be that the bitshares toolkit core support would extend to all versions of BTSX. Beyond that, the launching entity or equivalent to dacsunlimited (in the case of btsx) would launch the alternative. The health of the Bitshares ecosystem would be measured in use/uptake of bitshares toolkit.
I might add that I hope BTSX remains unified and that these discussions are largely exploratory...
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It requires a small paradigm shift but once you understand that, the world becomes clear and everything makes sense again.
There will definitely be two chains. One for BitSharesX the digital money and one for BitSharesX the crypto equity. (The digital money will need an enshrined constitution of sorts.)
Both have amazing potential! But once you get the difference you will see that they are different.
The chain as digital money already exist, it's called Bitcoin.
Yes but it's a poor digital money. It has high inflation and centralisation.
BTSX the digital money can replace Bitcoin. It has no inflation, it is decentralised, anonymous, fast & even profitable. (However it ceases to be digital money when its supply rules can be changed easily by shareholders, then it is a company not a money. So if BTSX diluted it would lose that market.)
BTSX the DAC is different. It cares less about being a money and more about selling the product 'BitAssets'. For BTSX the DAC it does make sense that a competitive company needs to be able to respond to the market and use tools like dilution (which may not necessarily be best at this stage) when there is consensus.
So now you have a case for BTSX the DAC and BTSX the money imo.
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Ok good question. I don't have the answer....but I would hope the answer would be that the bitshares toolkit core support would extend to all versions of BTSX. Beyond that, the launching entity or equivalent to dacsunlimited (in the case of btsx) would launch the alternative. The health of the Bitshares ecosystem would be measured in use/uptake of bitshares toolkit.
Keep in mind support is more than technical support even though that is incredibly important as well. It includes things like getting partners who provide on-ramps for BTSXdilution but not BTSXnodilution. Pushing merchants to support accepting BTSXdilution (while ignoring to mention BTSXnodilution at all). Paying for the cashback credit card reward and referral system that bytemaster talked about which would only work with BTSXdilution. Essentially building real world infrastructure and network effect (the sticky stuff unlike forkable code) around BTSXdilution. Sure, BTSXnodilution is able to free ride off of a lot of the hard work paid for by BTSXdilution holders beyond just the codebase (marketing can help people grok BTSXdilution, but then it also becomes super easy for them to also grok BTSXnodilution; once merchants setup accepting BitUSD on the BTSXdilution chain it isn't much of a burden for them to also accept BitUSD on the BTSXnodilution chain). However, it is still a huge risk to BTSXnodilution holders in terms of not getting enough user adoption and network effect, and at what cost? Perhaps double the fractional ownership of the stake? Doesn't mean very much if the market cap of BTSXnodilution ends up being 1000 times smaller than BTSXdilution.
Ideally it doesn't have to come down to a split of BTSX into BTSXdilution and BTSXnodilution. We could be all better off if we stay united and keep the larger network effect rather than compete with one another for user adoption and network effect. However, if staying united forces us to make bad decisions that can be an existential risk to BitShares X (remember in these early stages a fork of the code by stakeholders with much stronger network effect can easily kill us), then the best decision would be to split and let the smartest decision win.
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No, I'm hoping BM will see the difference between ounces of gold and shares in a company, (DA's and DACs) and the conflict trying to combine the two creates.
I don't understand what your concern is if you are interested in digital gold, or more generally a cryptocurrency (currencies should have price stability, which BTSX and BTC do not have). BitShares X already has what you want, it's called BitGLD. So, bytemaster already sees the difference between ounces of gold (BitGLD) and shares in a company (BTSX). Even if BitShares X implements dilution, the value you keep as BitGLD will not be inflated away at all.
Who knows what shareholders will vote for with regard to BitGLD. Banks 'should' act in the customers best interest and be transparent...
Anyway gold is just an analogy. A crypto-money has many advantages over gold.
The only properties a crypto-money shares with gold is that most of the initial rules can't or are incredibly likely to ever be changed, like the '21 million BTC'
Most current crypto-currencies can be described as crypto-money in that they'd have a hard time changing their supply. That's what many of the market who are investing in Bitcoin are looking for, a crypto-money.
BitSharesX is probably better suited to being a crypto-equity but there is an opportunity for a crypto-money spin off. It's possible in future the crypto-money would win the day. I mean do you want to hold a gold derivative with JP Morgan backed by shares of JP Morgan? Or do you want it backed by limited crypto-money?
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Ok good question. I don't have the answer....but I would hope the answer would be that the bitshares toolkit core support would extend to all versions of BTSX. Beyond that, the launching entity or equivalent to dacsunlimited (in the case of btsx) would launch the alternative. The health of the Bitshares ecosystem would be measured in use/uptake of bitshares toolkit.
Keep in mind support is more than technical support even though that is incredibly important as well. It includes things like getting partners who provide on-ramps for BTSXdilution but not BTSXnodilution. Pushing merchants to support accepting BTSXdilution (while ignoring to mention BTSXnodilution at all). Paying for the cashback credit card reward and referral system that bytemaster talked about which would only work with BTSXdilution. Essentially building real world infrastructure and network effect (the sticky stuff unlike forkable code) around BTSXdilution. Sure, BTSXnodilution is able to free ride off of a lot of the hard work paid for by BTSXdilution holders beyond just the codebase (marketing can help people grok BTSXdilution, but then it also becomes super easy for them to also grok BTSXnodilution; once merchants setup accepting BitUSD on the BTSXdilution chain it isn't much of a burden for them to also accept BitUSD on the BTSXnodilution chain). However, it is still a huge risk to BTSXnodilution holders in terms of not getting enough user adoption and network effect, and at what cost? Perhaps double the fractional ownership of the stake? Doesn't mean very much if the market cap of BTSXnodilution ends up being 1000 times smaller than BTSXdilution.
Ideally it doesn't have to come down to a split of BTSX into BTSXdilution and BTSXnodilution. We could be all better off if we stay united and keep the larger network effect rather than compete with one another for user adoption and network effect. However, if staying united forces us to make bad decisions that can be an existential risk to BitShares X (remember in these early stages a fork of the code by stakeholders with much stronger network effect can easily kill us), then the best decision would be to split and let the smartest decision win.
mmmm all good points. Fortunately i'm left with a sense of hope! I have been fortunate enough to witness the growth of this incredible community...born from the vision, integrity and technical skills of invictus and taken up by the legion of like-minded people they have attracted from all over the world. I feel confident that the right choice will be reached. I still think we have a lot left to try before dilution....
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Who knows what shareholders will vote for with regard to BitGLD. Banks 'should' act in the customers best interest and be transparent...
Anyway gold is just an analogy. A crypto-money has many advantages over gold.
The only properties a crypto-money shares with gold is that most of the initial rules can't or are incredibly likely to ever be changed, like the '21 million BTC'
Most current crypto-currencies can be described as crypto-money in that they'd have a hard time changing their supply. That's what many of the market who are investing in Bitcoin are looking for, a crypto-money.
BitSharesX is probably better suited to being a crypto-equity but there is an opportunity for a crypto-money spin off. It's possible in future the crypto-money would win the day. I mean do you want to hold a gold derivative with JP Morgan backed by shares of JP Morgan? Or do you want it backed by limited crypto-money?
This is the way I understand it. Right now btsx is centralized so I3 can choose to increase the 2 billion cap. But as time goes on btsx will become less centralized and when it does it will be more like bitcoin (have a hard cap that can't be changed by anyone). This is the kid (btsx) learning to ride a bike and I3 is the training wheels. Once the training wheels come off nobody has control over market rules, or the cap. At least that's the way I understand it.
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No, I'm hoping BM will see the difference between ounces of gold and shares in a company, (DA's and DACs) and the conflict trying to combine the two creates.
I don't understand what your concern is if you are interested in digital gold, or more generally a cryptocurrency (currencies should have price stability, which BTSX and BTC do not have). BitShares X already has what you want, it's called BitGLD. So, bytemaster already sees the difference between ounces of gold (BitGLD) and shares in a company (BTSX). Even if BitShares X implements dilution, the value you keep as BitGLD will not be inflated away at all.
Who knows what shareholders will vote for with regard to BitGLD. Banks 'should' act in the customers best interest and be transparent...
Anyway gold is just an analogy. A crypto-money has many advantages over gold.
The only properties a crypto-money shares with gold is that most of the initial rules can't or are incredibly likely to ever be changed, like the '21 million BTC'
Most current crypto-currencies can be described as crypto-money in that they'd have a hard time changing their supply. That's what many of the market who are investing in Bitcoin are looking for, a crypto-money.
BitSharesX is probably better suited to being a crypto-equity but there is an opportunity for a crypto-money spin off. It's possible in future the crypto-money would win the day. I mean do you want to hold a gold derivative with JP Morgan backed by shares of JP Morgan? Or do you want it backed by limited crypto-money?
The shareholders cannot change anything with respect to BitAssets or the peg would break, destroying their utility.
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Let's worry about the tyranny of the minority in the present before we assume stupidity and tyranny of the majority in the future.
Unfortunately, we are already faced with a situation where the good intentioned majority may change the rules https://bitsharestalk.org/index.php?topic=9603.0
Crypto-currencies are not best as DACs they are best as DA's
DACs will be popular for well, 'companies'
DAs will be popular as crypto-currency.
There is a difference between crypto equity and crypto money but BitShares has been interchanging them.
BTSX has some blurred lines.
I'm trying to understand the difference between a DA (decentralised application)? and a DAC.
My current understanding would be that DA's are like OpenBazzar for Bitcoin? And Bitcoin is a DAC where the shares issued are crypto-equities that are merely promoted as currency, hence why we call it a crypto currency.
Thanks in advance for any response.
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Let's worry about the tyranny of the minority in the present before we assume stupidity and tyranny of the majority in the future.
Unfortunately, we are already faced with a situation where the good intentioned majority may change the rules https://bitsharestalk.org/index.php?topic=9603.0
Crypto-currencies are not best as DACs they are best as DA's
DACs will be popular for well, 'companies'
DAs will be popular as crypto-currency.
There is a difference between crypto equity and crypto money but BitShares has been interchanging them.
BTSX has some blurred lines.
I'm trying to understand the difference between a DA (decentralised application)? and a DAC.
My current understanding would be that DA's are like OpenBazzar for Bitcoin? And Bitcoin is a DAC where the shares issued are crypto-equities that are merely promoted as currency, hence why we call it a crypto currency.
Thanks in advance for any response.
Oh sorry that's just me using abbreviations badly/wrongly. I was justing using DA to describe a decentralised autonomous company without the company part.
So, yeah a DAC is a decentralised autonomous company and under the current definition, BM would describe Bitcoin as a DAC and that Bitcoins are shares used as currency.
I'm making up a new thing that says until someone changes the supply rules it's just a DA - 'Decentralised Autonomous ...' and users are actually exchanging digital money.
If shareholders changed the initial supply rules then Bitcoin would no longer have performed like a money but would now be a company (DAC) and its units better described as shares.
So Gold could be a money & Silver could be a money because shareholders can't change the supply.
Right now we haven't changed the supply rules so BTSX has fixed features like a money, a digital gold but once we alter that, it has features more comparable to a share in a company.
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I don't think btsx is a Decentralized Autonomous Anything (DAA) at the moment. btsx is centralized at the moment and the rules are being changed all the time. Right now I would consider btsx to be in an open beta phase so rules and other things can be change. But when it is finally finished it will be a DAC. All the rules will be final and the cap will be unchangeable.
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I don't think btsx is a Decentralized Autonomous Anything (DAA) at the moment. btsx is centralized at the moment and the rules are being changed all the time. Right now I would consider btsx to be in an open beta phase so rules and other things can be change. But when it is finally finished it will be a DAC. All the rules will be final and the cap will be unchangeable.
How is it centralized? In order for the official chain to fork, there has to be a majority of people voting for delegates which agree to fork. If delegates do not agree to the fork, they can say so and people can vote for them. Sure, anybody can change the ruleset for the currency, but it is up to the delegates to implement the change.
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I don't think btsx is a Decentralized Autonomous Anything (DAA) at the moment. btsx is centralized at the moment and the rules are being changed all the time. Right now I would consider btsx to be in an open beta phase so rules and other things can be change. But when it is finally finished it will be a DAC. All the rules will be final and the cap will be unchangeable.
How is it centralized? In order for the official chain to fork, there has to be a majority of people voting for delegates which agree to fork. If delegates do not agree to the fork, they can say so and people can vote for them. Sure, anybody can change the ruleset for the currency, but it is up to the delegates to implement the change.
Many people aren't voting during this rapid development phase and so the developer block stake largely dictates delegate selection. Also it's centralised because it's so complicated if anything happened to the awesome pretty centralised dev team we'd be pretty screwed.
I don't think btsx is a Decentralized Autonomous Anything (DAA) at the moment. btsx is centralized at the moment and the rules are being changed all the time. Right now I would consider btsx to be in an open beta phase so rules and other things can be change. But when it is finally finished it will be a DAC. All the rules will be final and the cap will be unchangeable.
That's an interesting perspective. Setting precedent is a powerful thing though & given the feedback in the other thread, even 'just this one major change and that's it' may not work for the non dilution crowd.
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So now you have a case for BTSX the DAC and BTSX the money imo.
You have it backwards, BTSX is the product, and bitAssets are the moneys. BTSX is shares in a bank, it's not trying to be a currency.
Here's what Dan says:
Thw problem with concrete limits on dilutions is that there already are: there's no dilution. Our ability to set social consensus disappears forever if we dilute btsx.
Yes.. this is why we don't want to inflate and are actively working on alternatives.
Any decision will be shareholder approved and capped. There is a difference between desperate and seeing an opportunity that is beyond our current means.
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You don't see shareholders of other companies voting to dilute unless it is going to grow or save the business.
Once again I fear we are letting the currency metaphor cloud our thinking.
If you want a dilution proof asset then go with gold or silver.
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I started this thread not because of desperation, but because it is a serious issue that need discussed.
I am reading this thread a fully sympathies with both sides of the debate.
You're suggesting DAs because you are concerned that DACs like BTSX could change their underlying rules unfavorably in the future. That's the premise of the thread. Is that fair to say?
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So now you have a case for BTSX the DAC and BTSX the money imo.
You have it backwards, BTSX is the product, and bitAssets are the moneys. BTSX is shares in a bank, it's not trying to be a currency.
No BitAssets are the product 100%.
We'd add dilution to BTSX and use it to maximise demand for BitAssets. Why? Because the more BitAssets people buy and use the better BTSX shareholders do. BTSX is the company, BitAssets the product.
So now you have a case for BTSX the DAC and BTSX the money imo.
You have it backwards, BTSX is the product, and bitAssets are the moneys. BTSX is shares in a bank, it's not trying to be a currency.
Here's what Dan says:
Thw problem with concrete limits on dilutions is that there already are: there's no dilution. Our ability to set social consensus disappears forever if we dilute btsx.
Yes.. this is why we don't want to inflate and are actively working on alternatives.
Any decision will be shareholder approved and capped. There is a difference between desperate and seeing an opportunity that is beyond our current means.
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You don't see shareholders of other companies voting to dilute unless it is going to grow or save the business.
Once again I fear we are letting the currency metaphor cloud our thinking.
If you want a dilution proof asset then go with gold or silver.
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I started this thread not because of desperation, but because it is a serious issue that need discussed.
I am reading this thread a fully sympathies with both sides of the debate.
You're suggesting DAs because you are concerned that DACs like BTSX could change their underlying rules unfavorably in the future. That's the premise of the thread. Is that fair to say?
Bytmaster does not see the distinction between a crypto-money and a crypto-equity. He does not see that by suggesting how great it would be if Bitcoin by consensus could switch from it's current supply structure that it would actually lose it's functionality as a crypto-money. Users would no longer have to evaluate Bitcoin as a limited crypto-money but as share in either a fiat currency/company, its supply rules subject to the whims of majority shareholders. Exactly what people don't want from a digital money.
(The requirement to be a money is to have initial supply rules that cannot be changed, like metals. So gold can be used as money, silver and even Bitcoin at this stage. Once shareholders alter the original supply then it is a fiat currency or a share in a company where you are no longer exchanging a limited money.)
In his mind Bitcoin is already a DAC, just an inefficient one and that those of us who are viewing it more as a money are stuck in a currency metaphor/paradigm.
Bytemaster thinks shareholders in BTSX are confusing dilution of a DAC with inflation of a money. Not realising that in the current model both are co-existing and to dilute BTSX the DAC would also be to inflate by consensus and thereby destroy the functionality of BTSX the digital money.
He doesn't agree that before dilution you have BTSX - A profitable digital money ecosystem, including BitAssets. Managed by shareholders but operating within the framework of a money. (Fixed initial supply rules.)
While adding dilution to BTSX only then does it create a pure Bank & Exchange DAC and a fiat currency/company share as a medium of exchange.
So we disagree. That is fine. Despite loving BM and the team, often experiencing hero worship and having invested 80%+ of my crypto portfolio in BitShares, I have often disagreed with Bytemaster on what the product and business actually is -
It was my understanding before BitAssets started Bytemaster saw the consensus forming around the idea that a BitUSD is worth 1-1 long term where I felt, the consensus would form around 1-1 being the benchmark on which a BitUSD would be valued relative to risk and utility. Perhaps the jury is still out on that one.
BitUSD has been seeded with the consensus that the value of one BitUSD should be equal to the value of one US dollar. Therefore, unless something happens to change this consensus the most profitable trade to make is to buy BitUSD when it is under 1 USD and sell BitUSD when it is over 1 USD. If you trade against this then you are predicting others will do the same and as far as I know there is no rationale for any other price.
I'm not hot with this stuff, but from my perspective a BitUSD may be worth less than a USD in the beginning to me, because of system risk, lack of utility and the cost+effort of converting via a centralised exchange to say real USD for example.
I think once the system has proved robust, it has more utility, it's other advantages, as well as if traditional banking risk factors increase. A BitUSD may be worth more than a normal USD to me.
Is that irrational. Is that not how it works?
I think once the system has proved robust, it has more utility, it's other advantages, as well as if traditional banking risk factors increase. A BitUSD may be worth more than a normal USD to me.
Is that irrational. Is that not how it works?
These factors are irrelevant to the consensus... Initially shorts will probably be paying interest (by having BitUSD available at a discount) to attract new people (like yourself) to hold BitUSD. However, everyone who recognizes the opportunity to buy BitUSD cheap can get some free gains when it returns to mean. Provided it returns to the mean faster than BTSX climbs in value.
Thanks for the explanation, sure you're right. It still seems in my head that even though you can seed it with a consensus of 1-1, the actual consensus could form around what is a BitUSD worth relative to a $, that will find a mean but not necessarily 1-1.
Also before trading started, despite not having shorted, I watched a short video on shorting and with that I could already see that we would need to limit trading below the peg. They had not anticipated that outcome and dismissed it. (I would also say I envisaged the interest system pretty much like the one we are settling on now.)
I think lots of people will be willing to short BitUSD, not a lot willing to go long at the start.
Might make BitUSD price trade too far below peg. But this will hurt BTSX price causing the situation to correct itself...
Seems like it may need interest rates if you really want to keep it at 1-1. Because a short may be willing to short BitUSD and pay X% interest to entice a long to trade.
You lost me here...why this will hurt BTSX price? If a lot of people go short bitusd, wouldn't bitusd fall relatively to BTSX price. Therefore BTSX will rise and will be worth more bitsud..
I think a lot of people are hoping BitUSD may track USD fairly close to 1-1 most of the time.
However because people are so bullish on BTSX and shorting BTSX lets you take a leveraged position on BTSX. BTSX bulls may be willing to short still at $0.70, this trading range will be so far from the peg that it could damage the credibility of the peg. This could make people sell BTSX. This will mean less BTSX bulls willing to short below the peg and the situation will correct itself.
I don't mind a BitUSD like that but it might not appeal as much to retailers and savers.
It seems to make it stable you should introduce free market interest rates.
Then you still short 1-1 but when most people are bulls like now you will pay a higher interest rate to short BitUSD as opposed to shorting very far below the peg.
The premium for shorting below the peg will be proportional to the interest rate paid for going long.... the farther from the peg, the higher the effective interest rate.
Yes this is kind of my understanding. I was just worried BTSX bulls would be willing to pay such a high interest rate to short right now it could move the price too far away from the peg but hopefully it will be fine.
I think Bytemaster was always going to add interest anyway & though they veered off course a bit experimenting with a full collateral based shorting system, they now have settled on what I think is a lean mean BitAsset machine, pretty much along the lines of what I envisaged before trading started despite not understanding PM's, shorting etc.
Now I have made a ton of wrong assumptions and been shown the light by BM. With those examples, I'm trying to make the point that before you jump head long into dilution because BM says its good, recognise that just like the rest of us, for him a lot of this is brand new territory, adapt and evolve stuff & also that I do have a track record however small being half decent at anticipating behavioural outcomes.
Previously I haven't been particularly worried because the Dev team are living Gods in my eyes with regards to how fast they can adapt, evolve and implement things that my brain thinks must take ages.
The reason why I'm so loud about this dilution subject is that the implications of not seeing crypto-money differently to crypto-equity and not have a good anticipation of behavioural outcomes makes dilution a high risk play. It's not an adapt and evolve situation. If BTSX adds dilution then the negative feedback loop especially after one incorrect BitDrop could kill BTSX.
BTSX+dilution could be
-so unpopular to the crypto-money market it significantly impairs BTSX before the dilution program starts (5%).
-The dilution program* could be so unsuccessful (20%) that it destroys BTSX.
-The medium term mistakes of shareholders could make a crypto-money preferrable as backing for BitAssets than a crypto-equity. It will also appeal more to the libertarian market who make up 35%+ of the Bitcoin demographic.
(*While working with marketing gurus, the gurus are not familar with the crypto-market, the demograhic and have no track record in this space. The 'gurus' are likely to try cross-over strategies that are no directly applicable to this field. It's the same mistake BitShares made hiring Brian early on imo. While I absolutely LOVE what Brian is doing now and what he brings to the table, particularly with regard to what it takes for a mainstream user to want to interact with this space and what it takes to make that happen and his passion for it. He was a poor choice when the majority of our market, which is still the case today is the alt-coin market. The opportunity cost to me of not hiring a crypto-currency immersed, passionate person with a bit of a track record here, that communicated, debated and actively informed other forums & avenues in this space and in the process fine tuned and simplified the BitShares message would have created a simpler more succint BitShares with a lower learning curve and much greater Western Alt-coin market penetration imo.)
So considering I view BTSX with no dilution as a DAC but operating within the constrains of a limited digital money what do I think is the best solution?
Honestly I'm not sure. By diluting you also turn BTSX the crypto-money into a fiat currency/company share but by not diluting you potentially limit BTSX the crypto-equity which should be operating as a company to maximise the BitAsset product line.
What I can see is that it does open the door for a separate DPOS crypto-money. Lets call it Athena for the example. It would likely be a pretty small affair but could act as a small hedge.
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ATHENA - The goddess of wisdom, courage, inspiration, civilization, law and justice, mathematics, strength, strategy, the arts, crafts, and skill.
ATHENA is a crypto-money not a crypto-equity.
A Decentralised Autonomous Guardianship (DAG)
A DAG is defined by its initial supply rules and has them enshrined it its constitution - It therefore becomes a digital money that will struggle to be changed even by the majority because it's supply rules are what explicitly defines it. A crypto-money that is built on the principal that it's a well 'money'.
It doesn't have BitAssets to start, just a DPOS chain and wallet. It's very simple to understand for the alt-coin market. It's a digital limited money.
Athena can replace Bitcoin. It has no inflation, it is decentralised, anonymous, fast & even profitable. (However it ceases to be digital money when its supply rules can be changed easily by shareholders, then it is a company not a money.
Many BTSX holders who like the idea of a digital money may increase their snapshot position in Athena. If Dilution is added to BTSX, more of the digital money crowd will like it. If dilution is added and the sharedrop fails, then definitely they will move to Athena. You may even have in the future customers feeling more comfortable having their BitAssets backed and controlled by ATHENA, a crypto-money vs. BTSX a crypto-equity which is subject to the short term whims of the majority of shareholders. So Athena could add BitAssets too and still function as a a money, DAG, provided shareholders were limited & could only act within the initial supply rules on which Athena was founded.
Even with more limited resources a good form of money attracts demand and infrastructure around it like gold and even Bitcoin was best at it's job for a while. (However a G(uardian)POS crypto-money that is decentralised, fast, profitable and anonymous is far superior to Bitcoin.)
Also if you are someone that loves mankind and feels human controlled monetary systems often exploit society, even with a gold standard, then you may see the benefit to humanity of trying to create a decentralised, anonymous, fast digital money with no inflation that is founded on the initial rules with an enshrined constitution designed to protect the easily exploited from themselves for as long as possible and who knows perhaps even create something ultimately that does that job better than gold.
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In my opinion BitAssets are the gold mine. BitAssets are $100 Billion+ baby if you get it right.
I would say BTSX + the option of dilution may be optimal to maximise the business of BitAssets especially in the short to medium term.
However given the risks of adding dilution, if it can be avoided I would, and if dilution cannot be avoided I would give serious consideration to a crypto-money that could act as a small hedge on which you can build on if BTSX+dilution turns out to be catastrophic.
Athena right now would be worth < $1 million & the good news it is even if someone else starts it you can probably hedge your BTSX position very cheaply if we don't do a BTSX snapshot. Athena could potentially add BitAssets later and pick up the pieces if BTSX failed but had done the hard job of marketing them to the world. So I'd like a piece of both if we added dilution.
The bad news is there's no guarantee that a BTSX failure won't instead open the door for another pegged asset system from say Ethereum.
I love BTSX, BM & the team and am heavily invested in BTSX and have added to my holdings despite these concerns. I also think the things they seem to be working on the background are freaking awesome. But I've said it before and I'll say it again, BTSX + dilution could be a pandora's box or a humpty dumpty if you don't see the difference between crypto-money and crypto-equity and if you don't anticipate behavioural implications well. The huge response from even within the community to even the mention of dilution is a testament to that - https://bitsharestalk.org/index.php?topic=9603.0
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I am not going to pretend that I understand what you are saying but I like the name "ATHENA" :)
If I understand correctly you want to create an altcoin using DPOS called "ATHENA", but why would this be better than bitusd, bitbtc or any bitxyzcoin?
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I am not going to pretend that I understand what you are saying but I like the name "ATHENA" :)
If I understand correctly you want to create an altcoin using DPOS called "ATHENA", but why would this be better than bitusd, bitbtc or any bitxyzcoin?
If I understand it correctly "ATHENA" would be the same exact thing as btsx except for the fact that it can't be diluted. So in other words there would be 2 billion "ATHENA" coins and you can't add any more to that cap.
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In order to dilute BTSX what is the estimated market cap of BTSX before such dilution to take place?
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I am not going to pretend that I understand what you are saying but I like the name "ATHENA" :)
If I understand correctly you want to create an altcoin using DPOS called "ATHENA", but why would this be better than bitusd, bitbtc or any bitxyzcoin?
If I understand it correctly "ATHENA" would be the same exact thing as btsx except for the fact that it can't be diluted. So in other words there would be 2 billion "ATHENA" coins and you can't add any more to that cap.
I think BitUSD, BitGold and BitAssets are actually better.
However, I think we also need to recognise that, there is also such a thing as a digital money.
If we add dilution to BTSX then it might be good to also start a DPOS digital money, ATHENA
A DPOS crypto-money would be better than a POW crypto-money.
Also if people didn't like BTSX + dilution or if BTSX shareholders made other mistakes then Athena could be a digital money and the home of the biggest BitAsset market.
(So yes it's the same as BTSX but it can't be diluted.)
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In order to dilute BTSX what is the estimated market cap of BTSX before such dilution to take place?
"The goal of this idea is that no dilution occurs unless a user signs up and first buys 1000 bit usd. Then the dilution is used to purchase bit usd" -BM
So I would assume the dilution would be very gradual and not effect the market cap significantly at first.
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I don't really know how btsx works under the hood (the code). But the way I thought it worked was this...
Right now btsx is in the hands of I3
They can pretty much do whatever they want (within reason)
Once btsx is no longer in the hands of I3 things like dilution are practically impossible even with shareholder consent.
Are my assumptions wrong?
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I don't really know how btsx works under the hood (the code). But the way I thought it worked was this...
Right now btsx is in the hands of I3
They can pretty much do whatever they want (within reason)
Once btsx is no longer in the hands of I3 things like dilution are practically impossible even with shareholder consent.
Are my assumptions wrong?
With shareholder consent dilution is possible at any stage I think.
Yeah BTSX shareholders give I3 free reign basically at this stage which is good. But shareholders have enough voting power to control BTSX independently even now, it's just most people that own BTSX aren't voting yet because they don't need to. They know I3 & BM will only act in their best interest and put important discussions and topics to the community like dilution etc, for discussion and feedback.
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I don't really know how btsx works under the hood (the code). But the way I thought it worked was this...
Right now btsx is in the hands of I3
They can pretty much do whatever they want (within reason)
Once btsx is no longer in the hands of I3 things like dilution are practically impossible even with shareholder consent.
Are my assumptions wrong?
With shareholder consent dilution is possible at any stage I think.
How? I thought delegates had very limited power.
Ok let me see if I understand this if bitcoin had shareholder (miner) consensus could they increase the 21 million bitcoin cap?
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Dilution represents a critical move away from the key principals that original BTSX participants used to evaluate their investment. It also clearly sets a precedent within the BTSX network.
That said, If someone wants to fork the code to launch BTSXDilution, good luck to them. Conversely, if the BTSX equity holders in majority want to change BTSX to BTSXDilution, so be it. We can re-launch BTSXnodillution.
Network participants will put value where they think it should be....the overall network effect will continue to increase (based on utility) and eventually one network may become stronger than the other. There could be many versions of BTSX, all of which could keep changing the rules along with some that don't, it's all good as long as over time, more people are attracted to crypto in general and society benefits from the power of money being more widely distributed.
I'm pretty confident the way BM has been viewing Bitcoin as a DAC is incorrect. I think some of the stuff he will say in Vegas, by thinking along those lines is incorrect too.
I've really had a Eureka moment, this is really fundamental to understand...
There is a difference between crypto equity and crypto money but BitShares has been interchanging them.
BTSX has some blurred lines.
It requires a small paradigm shift but once you understand that, the world becomes clear and everything makes sense again.
There will definitely be two chains. One for BitSharesX the digital money and one for BitSharesX the crypto equity. (The digital money will need an enshrined constitution of sorts.)
Both have amazing potential! But once you get the difference you will see that they are different.
If you think shares of a blockchain are money, then you are just like all those bitcoiners whose investments ruin their vision and plug their ears.
Shares in a blockchain are like shares in a country, they get their value thru the services which back them and the services that the country provides, BitUSD is BTSX's service like the USD is the USA's service. There is no blurred metaphor. There is no crypto money except in the form of BitAssets.
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I don't really know how btsx works under the hood (the code). But the way I thought it worked was this...
Right now btsx is in the hands of I3
They can pretty much do whatever they want (within reason)
Once btsx is no longer in the hands of I3 things like dilution are practically impossible even with shareholder consent.
Are my assumptions wrong?
With shareholder consent dilution is possible at any stage I think.
Yeah BTSX shareholders give I3 free reign basically at this stage which is good. But shareholders have enough voting power to control BTSX independently even now, it's just most people that own BTSX aren't voting yet because they don't need to. They know I3 & BM will only act in their best interest and put important discussions and topics to the community like dilution etc, for discussion and feedback.
Diluting a company does not make it an inflationary currency, it makes it a company raising money. It's one-time action, it serves clear purpose. It works perfectly with the company metaphor, no need to be a bitcoiner and worry about becoming inflationary because that's not nearly the same thing
Sent from my iPhone using Tapatalk
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I don't really know how btsx works under the hood (the code). But the way I thought it worked was this...
Right now btsx is in the hands of I3
They can pretty much do whatever they want (within reason)
Once btsx is no longer in the hands of I3 things like dilution are practically impossible even with shareholder consent.
Are my assumptions wrong?
With shareholder consent dilution is possible at any stage I think.
How? I thought delegates had very limited power.
Ok let me see if I understand this if bitcoin had shareholder (miner) consensus could they increase the 21 million bitcoin cap?
Yes is my understanding. The miners could increase it with 51% but they won't because if they did then people could no longer trust Bitcoin as limited digital money and so the miners would lose.
I think Bytemaster thinks it would be great if the actual owners of Bitcoin could vote on issues like that. (To change the supply structure.) but I think the act of changing the initial supply stucture even by consensus would change Bitcoin from people exchanging digital money into people exchanging digital shares in a company.
Right now people are evaluating Bitcoin as a digital money with 21 million max coins. If shareholders could change it, people would see Bitcoins as just shares in a company subject to short term shareholder decisions and no longer trust or value it as a decentralised form of money imo.
Dilution represents a critical move away from the key principals that original BTSX participants used to evaluate their investment. It also clearly sets a precedent within the BTSX network.
That said, If someone wants to fork the code to launch BTSXDilution, good luck to them. Conversely, if the BTSX equity holders in majority want to change BTSX to BTSXDilution, so be it. We can re-launch BTSXnodillution.
Network participants will put value where they think it should be....the overall network effect will continue to increase (based on utility) and eventually one network may become stronger than the other. There could be many versions of BTSX, all of which could keep changing the rules along with some that don't, it's all good as long as over time, more people are attracted to crypto in general and society benefits from the power of money being more widely distributed.
I'm pretty confident the way BM has been viewing Bitcoin as a DAC is incorrect. I think some of the stuff he will say in Vegas, by thinking along those lines is incorrect too.
I've really had a Eureka moment, this is really fundamental to understand...
There is a difference between crypto equity and crypto money but BitShares has been interchanging them.
BTSX has some blurred lines.
It requires a small paradigm shift but once you understand that, the world becomes clear and everything makes sense again.
There will definitely be two chains. One for BitSharesX the digital money and one for BitSharesX the crypto equity. (The digital money will need an enshrined constitution of sorts.)
Both have amazing potential! But once you get the difference you will see that they are different.
If you think shares of a blockchain are money, then you are just like all those bitcoiners whose investments ruin their vision and plug their ears.
Shares in a blockchain are like shares in a country, they get their value thru the services which back them and the services that the country provides, BitUSD is BTSX's service like the USD is the USA's service. There is no blurred metaphor. There is no crypto money except in the form of BitAssets.
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Yes all your responses work perfectly when you think of a blockchain as a company.
Are metals a company? No. They are just materials that exist in limited supply that cannot be influenced by man or shareholders, as such the best of them are able to function as money.
You can replicate the properties of metals in digital money form provided you effectively remove the mechanism where their supply can be influenced by man or shareholders, & the best of them will be able to function as digital money.
Because the miners hands are tied with regard to changing the Bitcoin supply, Bitcoin is functioning effectively as a digital form of money albeit an inefficient one.
Only when you change those rules does your company metaphor come into play in that they are no longer exchanging something that could be trusted or valued as limited digital money but rather they would be exchanging shares in a company whose quantity is subject to the decisions of shareholders.