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Messages - Rune

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826
General Discussion / Re: Subsidizing bitUSD, bitEUR, bitCNY yield to minimum 5%, has this been discussed?
« on: October 28, 2014, 10:51:25 pm »
Quote from: gamey on October 28, 2014, 10:42:37 pm
Quote from: Rune on October 28, 2014, 10:33:24 pm
I think many people are scared of the word subsidy because of the negative connotations it has relating to government use. It's important to remember that bitshares are not coins, they're shares in a company. A company subsidizing a product is vastly different from a government subsidizing an industry. If done intelligently, it is exactly what makes or breaks the market. The companies or blockchains that are not able to subsidize and thus direct their capital with intelligence, will simply have to burn it to subsidize the recording of its existence (like bitcoin).


I don't think the difference is as large as you are claiming.  It isn't "vastly different".  The subsidizing is a form of wealth redistribution in both situations.  In theory, they should work the same.  I can't really see a difference at the motivation level.  As a citizen, you vote and have interest in your country's currency.  As a stockholder, you vote and have interest in your company's value (shares).

You whole approach seems to repeating how great this new metaphor is and how great it will be to spend all this new found money.  yuck

Government subsidies are democratically decided, and thus are used to enrich individual humans and the gatekeepers of the democratic process.

Company subsidies are decided by the capital itself, and is thus used to seek as much profit as possible.

827
General Discussion / Re: Subsidizing bitUSD, bitEUR, bitCNY yield to minimum 5%, has this been discussed?
« on: October 28, 2014, 10:48:55 pm »
Are you trying to use moral arguments to decide our marketing strategy? Unless a majority of our targeted consumers consider that (morality)as an important feature, we will simply be outcompeted and swallowed up by a competitor that makes its marketing decisions based on profitability.

I know many people here are very idealistic, but we shouldn't forget that everyone aren't like us.

I absolutely believe that we should eventually resort to our human morality as the primary director of the companys decision making, it should also absolutely not be before we have established ourselves at a point significantly beyond any attack by any of those whose business we threaten. Think about how many they truly are - right now we should focus only on growth.

828
General Discussion / Re: Subsidizing bitUSD, bitEUR, bitCNY yield to minimum 5%, has this been discussed?
« on: October 28, 2014, 10:35:04 pm »
Quote from: kisa on October 28, 2014, 10:31:34 pm
Quote from: Rune on October 28, 2014, 09:48:38 pm
Quote from: bytemaster on October 28, 2014, 09:45:49 pm
I think it is enough to post something like "last year people earned X% on BitUSD"... not changing... true... past performance is no guarantee of future performance.

Totally true, but that still leaves us nothing to market in our first year, and is exactly why we need the subsidy in the beginning.

i don't think that 5% p.a. would be enough to attract investors seeking return into holding bitUSD for a while. feels like we are fooling ourselves with regards to how much a fair compensation should be for exposure to systemic BTS risk. Even without BTS price volatility, my guess is 100%+ yield p.a. at current, initial stage.

most Western banks USD deposits yielding 0% are insured. For Argentina, or Russia perhaps, there is significant risk of local currency depreciation versus USD, and USD deposits can be seized by governments. Thus people prefer to hold cash USD, or local banks pay them 10% p.a. return on USD deposits. bitUSD could be an alternative, but yield should be priced fairly compared with BTS expected return.

As BM stated before - not everyone is seeking return. Some want to diversify away from banks, some want to do business. ratailers holding small amounts of bitUSD would be a plus. Perhaps demand could be substantial in the remittance market due to fast and cheap transfers, bitUSD price stability versus USD, while the exposure to BTS systemic risk by each transacting party is very brief and comparably small (as opposed to investors seeking return). here the local gateways, perhaps even private brokers (localbitcoins idea), would be key.

However, anyone thinking about marketing BTS platform to professional FX traders, please go and visit an FX trading desk first and see at what speed and what high tech is employed by leading brokers and exchanges. 10 seconds is like eternity there - BTSX isn't likely to get traction in there in the near future imo... also not sure, why someone with trading account in a bank should trade bitGOOG or bitGold instead of highly liquid Google or Gold CFD at 10 USD per trade... I am not saying bitAssets won't get even more accurately priced, gain liquidity in the future, and allow for smaller market participants without proper banking access to do all things they want at low cost. just think that the status quo with professional traders and electronic trading via exchanges, platforms like bloomberg etc. is not yet to be doubted.

We are marketing to people. They want stuff that easily catches their attention.

Also BTS systemic risk will be low if we have a public bail-out policy for the major bitassets, and we are careful with importing upgrades from devshares

829
General Discussion / Re: Subsidizing bitUSD, bitEUR, bitCNY yield to minimum 5%, has this been discussed?
« on: October 28, 2014, 10:33:24 pm »
I think many people are scared of the word subsidy because of the negative connotations it has relating to government use. It's important to remember that bitshares are not coins, they're shares in a company. A company subsidizing a product is vastly different from a government subsidizing an industry. If done intelligently, it is exactly what makes or breaks the market. The companies or blockchains that are not able to subsidize and thus direct their capital with intelligence, will simply have to burn it to subsidize the recording of its existence (like bitcoin).

A developer delegate is another example of the blockchain subsidizing a product, in this case it is subsidizing it's own development (instead of waiting for consumers to do it for free).

830
General Discussion / Re: Subsidizing bitUSD, bitEUR, bitCNY yield to minimum 5%, has this been discussed?
« on: October 28, 2014, 10:15:42 pm »
Quote
Do we want people to understand how our system works or do we just want to throw returns in peoples faces?

You realise we are talking about marketing a product, right? No, we do not require people to understand how our company works on the back-end, yes we want to throw clearly digestible numbers in their faces when telling them about our products.

831
General Discussion / Re: Subsidizing bitUSD, bitEUR, bitCNY yield to minimum 5%, has this been discussed?
« on: October 28, 2014, 09:48:38 pm »
Quote from: bytemaster on October 28, 2014, 09:45:49 pm
I think it is enough to post something like "last year people earned X% on BitUSD"... not changing... true... past performance is no guarantee of future performance.

Totally true, but that still leaves us nothing to market in our first year, and is exactly why we need the subsidy in the beginning.

832
General Discussion / Re: Subsidizing bitUSD, bitEUR, bitCNY yield to minimum 5%, has this been discussed?
« on: October 28, 2014, 09:47:27 pm »
Quote from: bytemaster on October 28, 2014, 09:43:30 pm
Quote from: starspirit on October 28, 2014, 09:42:13 pm
I've always been hesitant about the idea of promoting the yield on BitAssets at all. The only reason a yield can be delivered is because the shorts cannot provide an absolute guarantee that longs will be made whole in the event of a BTS collapse. For the privilege of a leveraged exposure to BTS, without recourse to any personal assets outside of the the BTS contributed as collateral, shorts are willing to pay interest to the longs. This is akin to the incentives on each side of margin lending.

In an ideal design, if possible at all, it would be better for mainstream adoption to have an iron-clad guarantee on the security of BitUSD being made whole, and give up on the interest.

That implies that you can create an iron-clad guarantee that BTS will have value... not possible.   Not even possible in traditional banks.

Near certainty is enough. A public bail-out policy on the main bitassets would be such a gargantuan advantage. In the event of a price collapse of BTS, bitasset owners will wait a lot longer to panic and begin pulling out their own funds (that would only happen if they think that the price is literally going to 0 and the network will cease to exist). This will give a market-wide increase in confidence and will help prevent a crash from happening in the first place.

833
General Discussion / Re: Subsidizing bitUSD, bitEUR, bitCNY yield to minimum 5%, has this been discussed?
« on: October 28, 2014, 09:44:12 pm »
Quote from: nomoreheroes7 on October 28, 2014, 09:26:30 pm
Quote from: Rune on October 28, 2014, 08:50:15 pm
Unlike nubits we have total control on when to end this subsidy. The very second that shareholders deem it unprofitable to continue the subsidy, they will vote to end it.

You guys are thinking in bitcoin terms, not in company terms. This would be a promotional marketing campaign, an investment meant to result in a higher payoff (through rapid influx of capital deposited in bitAssets). You are underestimating the massive advantage the promise of a real number will give people, rather than simply a promise of "it pays interest".

I think it is a bad idea to simply dismiss it outright. It is better to discuss if and how it could be done profitably.

...but if we're able to naturally provide somewhere in the realm of 5% interest, none of this would be necessary...let's focus on getting the yield naturally.

Even if we were able to naturally provide that, we could never back it up and thus never advertise it. All advertising efforts would at best be able to come up with a constantly updating sign that says current average interest rate = x%. Or interest rate on some set date was x%. I think this will make people suspicious that it could disappear at any time. At least it's a lot more difficult to set up advertising like that in price and a lot more difficult to communicate effectively between people in general. We want to be able to go viral (sorry for using buzzwords).

If we just set our subsidized interest rate below what we can predict will be the average interest rate, it should cost very little but have enormous marketing benefits. If we feel like we're being gamed, or we set the target wrong, we can just vote to remove it. I personally think 5% natural rates should be possible to achieve given our small market cap and enormous growth potential. We could perhaps subsidize at 4%, which is still a really significant number to be able to bring to a negative-interest market. The amount of people who will be drawn in by this 4% guarantee will vastly outweigh the price, if any, we have to pay for it.

834
General Discussion / Re: This is where QE inflation went
« on: October 28, 2014, 09:12:11 pm »
Quote from: toast on October 28, 2014, 08:39:00 pm
So where did it go? "Low velocity of money" is not a place money flows

You know how "burning bitshares is like distributing the shares proportionally to everyone else"?

It it a specific instance of the equation of exchange (http://en.wikipedia.org/wiki/Equation_of_exchange) M*V = P*Q. When you remove money from circulation permanently, it is like reducing either Monetary base (M) or  velocity of money (V) permanently, resulting in lower prices (P) and thus deflation which is a benefit for coin/share holders.

What we have seen with QE is that while monetary base M has increased (due to printing of fresh money), velocity of money V has proportionally decreased (because banks park that fresh money directly with the central bank), causing P to remain constant. Once V increases back to its natural level (when the now bank-owned QE money is actually used in the economy), P will shoot up exactly by the proportion M was originally increased.

edit: judging by this chart, the dollar could be currently overvalued by more than 10%. I'm not sure if there's a plausible scenario where this all comes at once, though.

835
General Discussion / Re: Subsidizing bitUSD, bitEUR, bitCNY yield to minimum 5%, has this been discussed?
« on: October 28, 2014, 08:50:15 pm »
Unlike nubits we have total control on when to end this subsidy. The very second that shareholders deem it unprofitable to continue the subsidy, they will vote to end it.

You guys are thinking in bitcoin terms, not in company terms. This would be a promotional marketing campaign, an investment meant to result in a higher payoff (through rapid influx of capital deposited in bitAssets). You are underestimating the massive advantage the promise of a real number will give people, rather than simply a promise of "it pays interest".

I think it is a bad idea to simply dismiss it outright. It is better to discuss if and how it could be done profitably.

836
General Discussion / Re: Advice wanted: I'm considering running a marketing delegate.
« on: October 28, 2014, 08:44:13 pm »
The big question in this is really salary and transparency. If the results are lacking but with efficient transparency, it would be extremely easy for stakeholders to simply fire a delegate again. So there would still be very little risk at hiring people to e.g. work full time at a competitive salary from the beginning.

The first step in winning the entire crypto market is for industry-wide highly specialized skill to consider a bitshares delegate position the most attractive in the industry. We need to be the google of crypto when it comes to jobs.

We can afford to offer "google-level" positions because it is so easy to fire a delegate again as long there is efficient transparency.

837
General Discussion / This is where QE inflation went
« on: October 28, 2014, 08:28:50 pm »
I thought this chart was pretty interesting, as it explains why we have observed no USD inflation despite the massive QE in the US.

If money velocity begins to pick up again, inflation will be joining it with a vengeance.


838
General Discussion / Re: Subsidizing bitUSD, bitEUR, bitCNY yield to minimum 5%, has this been discussed?
« on: October 28, 2014, 08:11:33 pm »
What I get from this is that yield is not going to be around 5% then. Then what will it be, 2%? Then we should put that as the subsidy floor and advertise that. Any number is better than no number (which will always be assumed to be 0.001% like all other banks).

839
General Discussion / Subsidizing bitUSD, bitEUR, bitCNY yield to minimum 5%, has this been discussed?
« on: October 28, 2014, 06:50:14 pm »
So as far as I understand it, we will most certainly see natural yield of around 5%. I think it would be a huge marketing advantage if we decided to subsidize it to always be at least 5% for the three main currency bitAssets (USD, EUR, CNY), because that means we can write that as the minimum yield in promotional material.

5% isn't an outrageous amount of interest, but it is significant in this era of negative interest rates. I think being able to use concrete numbers will make it so much easier to make mainstream people curious. If it becomes trusted enough, I could see this becoming viral knowledge between cautious savers especially in China, with people rushing to put their life savings into it if they hear about it from people they already trust - the Chinese are fond of getting on trends about what the safest longterm investments are. Right now we're seeing a housing bubble pop, and it would be the perfect time for them to be introduced to a new safe investment.

840
General Discussion / Re: Momentum Approval: Solving problems in inflation and voting
« on: October 28, 2014, 01:40:23 am »
Quote from: fluxer555 on October 28, 2014, 12:37:56 am
Rune, care to address any of the current problems with Majority Approval, such as no stimulation for shareholder involvement, not holding apathetic shareholders accountable, failed-delegate risk mitigation, or anything else I mentioned in my proposal?

What will happen when a delegate flickers between <50% and >50%, when the community is divided? Might we hire/fire the same person many times per week? If I was that delegate, what should I do?

If no-one else sees the problems I do now, I hope it's because they don't exist. If they do exist, I'll probably be bumping this thread in a couple months...

There will both be internal and external forces in play that determines the sitting delegates and their policies. Delegates sponsor each other through their slates. They will be able to control who are in the "safe jobs" (that professional developers and marketers need), with the stakeholder community essentially functioning as an emergency veto and setting the long term trends and attitudes of the DAC.

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