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Unfortunately I agree with you luckybit.https://youtu.be/DTTx6fAisFk
I'll give my own part of my delegate pay for this month if someone can debunk this (for Americans).
You do have to pay income taxes if the IRS says you have to pay. Whether you think it's legal or not it's really just about avoiding the negative consequences such as guns to your head from swat teams, police brutality, arrest, fines, etc.
Depending on the consequence you can determine your risk. Different people are willing to accept different risks. The IRS isn't the agency to play around with though because they took the mafia down if you don't remember.
It would be great if we didn't have to pay the tax but to be honest the way the world works it's always a situation where we have to pay someone not to bring consequences to us. The only way out paying the strong man who has to be paid is to be the strong man getting paid and even then you probably have a stronger man above you who you're paying.
In the first model, all burned fees were considered as a profit.Burning is not strictly a source of DAC income, it's a source of capital re-distribution. Imagine a company that spends from its capital reserves or from debt raising to buy back and redeem shares - the remaining shares each represent greater ownership in the company, but the net assets of the company have been reduced by the same amount. There is no change to the underlying capital claim of shareholders unless the payment made for the shares is from an external party that is required to burn the shares. That's why I've previously argued that not all burns are equal. See https://bitsharestalk.org/index.php/topic,13214.msg173054.html#msg173054
In the first dilution model, transaction fees, UIA registration fees, etc. were burned and can be considered as a profit.
But now, I cannot find any profit model for shareholders. Company should earn profits. So what kind of profits is our DAC earning now?
Edit: I found one... burned fees when not-100% delegates generate blocks. But this will disappear when all delegates are 100%.
Sorry for delayed response, have been away. monsterer, my impression is that the yield harvest problem in the existing structure related to being able to self-create a short with 0% interest on the short, while earning a yield on the long, giving risk-free yield. If this is a mis-interpretation let me know. In the system I propose here, there is a single market-determined interest rate that at any time all shorts pay and all longs receive. Holding a simultaneous long and short position results in a neutral yield position - i.e. there is no possible net profit or loss.Yes. There is no yield harvesting problem, because all shorts pay the same rate in the Currency Creation Market.
I'm not sure I see how that prevents yield harvesting - can you explain?
I see. Thanks for providing the historical context.
I think the $0.85 for the bitUSD doesn't concern me in an illiquid market. I'm not sure you can guarantee anyone $1 because BTS will always fluctuate against USD To me it's more about perspective. Is the bitUSD flucutating between $0.85 and $1.10 or is BTS fluctuating against bitUSD? It's just what people use as a reference point. If a person's viewpoint is from BTS as money, BTS is stable and all assets move against it including bitUSD. If the person's viewpoint is from USD/bitUSD it's BTS that fluctuates around it. If Gold or Bitcoin were deemed the only legal tender tomorrow, all other fiat currencies will seem worthless or volatile. Bitcoin or Gold will seem stable.
Last I checked the price for Bitcoin was:
Local Bitcoins: $248.6
Coinbase: $236.5
Bitfinex was $235.7
http://bitcoincharts.com/markets/
From a Bitcoin perspective there are three different prices for one dollar. The differences are entry/exit costs and counterparty risk. From the dollar perspective there are three different prices for Bitcoin.
I think ultimately the social consensus that bitUSD pays for things with the same purchasing power as the dollar will be the consensus and that is what perspective the traders will take. In the real world no one values cash (Federal Reserve Notes/base money) differently from checkbook money, or traveler's checks or credit card money. No one sweats the difference. (Note: Right now the melt-value of a pre-1982 copper penny is worth 1.9 cents, but people trade it at 1 cent.)
Anyways if you take the perspective that people in the real world will treat bitUSD as a cash dollar in the real world and won't sweat the difference you'll have $1.00 per bitUSD in the real world. A bitUSD at an exchange would be less valuable because of entry/exit costs & counterparty risk. Hence you'll have something like $0.95 at CoinBaseBTS and $0.93 at BitFinexBTS.
Does this proposal deal with the yield harvesting problem?Yes. There is no yield harvesting problem, because all shorts pay the same rate in the Currency Creation Market.
Starspirit,
I'm curious to know what level of importance you place on the current external price feed. How much do you trust it and why? Currently it seems we are using BTC38, BTER, Yunbi exchanges to extrapolate the external 'real' USD/ BTS market. I would suggest it is more likely these external price feeds are being manipulated than the internal price feed. Since there is forced 30-day settlement and a heavier collateral burden for long positions in BTS (short bitUSD), all one has to do is buy internal bitUSD and manipulate the external feed downwards. I'm not saying that is what is occurring, but I wouldn't be surprised if were.
Remember BTC38 & BTER are centralized exchanges. I'd be skeptical about trusting their pricing. If we had a trusted exchange with high liquidity we can rely more on price feeds. I'm open to using external price feeds when there are better sources, but right now there aren't any. Furthermore I think the current internal floating free market mechanism is fine and the social consensus will drive the market towards the perceived value of a dollar.
Another reason is that normally in finance someone who wants to go short GOLD means they want to profit when GOLD falls versus the USD. But in BitShares shorting the bitGOLD(i.e. GOLD/BTS) and does not give the same kind of exposure. It would be good if there was a way to establish an asset whose "Last Price" was a formula instead of a direct price feed. For example: bitGOLDUSD = GOLD/USD. This is the asset that the wider market really wants. At the moment shorting bitAssets means you increase your long exposure to BTS. So if the market trend for BTS is down nobody wants to short.Soon you will be able to have BitGOLD backed by BitUSD.
I hope that you don't imply that one could create bitGold by shorting BitUSD but rather trade BitGold vs.BitUSD right?
Means trade bitUSD to bitGold.
BTS is the collateral for the whole system, you cannot create assets without it.
Absolutely, that is true, yes. Market making cannot help enforce the peg. It can only add liquidity around the price level where buyers and sellers are willing to meet. The only thing that can help strengthen the peg is convertibility and the ability to arbitrage in free markets around that. And that depends on the price feed. This is why I criticise the view that the pegging problem will be resolved one day once we have enough liquidity in the market. I can expand further if you like.
Doesn't this mean there is little point to having an internal bitAsset market? Couldn't you just replace the whole thing with a system which created and destroyed bitassets directly at the feed price, as long as each side had sufficient collateral?
Absolutely, that is true, yes. Market making cannot help enforce the peg. It can only add liquidity around the price level where buyers and sellers are willing to meet. The only thing that can help strengthen the peg is convertibility and the ability to arbitrage in free markets around that. And that depends on the price feed. This is why I criticise the view that the pegging problem will be resolved one day once we have enough liquidity in the market. I can expand further if you like.not really sure how. monsterer, I thank yourself and joele for the dialogue, but for now I still feel the evidence is lacking for this concept, and so I must continue to reject it.
Ok, lets come at this from another angle. If what you assume is true, and the internal market actions cannot affect the external price, then by associated reasoning, market making on the internal exchange cannot help to strengthen the peg?
Its not a fairytale. BitShares is capable of it:bitmarley, looking through your linked thread, such a decentralised market for real BTC:BTS, with enough liquidity, could be used as a substitute source for price feeds for other bitAssets such as bitUSD. All you require for this is one internal asset against one external asset. That would still not prevent manipulation of the feed by large players, but it would reduce reliance on centralised exchanges.
https://bitsharestalk.org/index.php/topic,13274.0.html
ACCT are just not working with btc the way it is required ..Yeah, but that's less controversial. That's just bitAsset backed by bitUSD backed by BTS. That's a good idea that I've also promoted for some time.
I'm suggesting the possibility of another class altogether: bitUSD backed by bitBTC backed by BTC.
I don't know if it technically can be done, just floating the idea, because I think the more immediate market potential might be far greater.
The difficult part is the bitBTC backed by BTC - that requires trust, unless you believe in the fairytale of atomic cross chain transactions
