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Well bithaus was that one delulo... :/
Quote from: delulo on June 07, 2014, 08:45:22 pmIt's deferentially a trade of and there is a risk involved but it will be a tough market that might not allow to exclude dilution as a tool to build the all important network effect. https://www.youtube.com/watch?v=y9ClKzMq3n0 16:45 and onInteresting video How can we generate an unstoppable network effect with Bitshares?
It's deferentially a trade of and there is a risk involved but it will be a tough market that might not allow to exclude dilution as a tool to build the all important network effect. https://www.youtube.com/watch?v=y9ClKzMq3n0 16:45 and on
Quote from: Agent86 on June 01, 2014, 08:12:42 pmNo offense luckybit, but you're not following the logic. I want to make ROI as much as anyone else. I'm also not advocating that we delay bitshares X for this.But keep in mind, companies do this because it works and it makes all the initial investors more money, you don't seem to be able to figure out why.BTW: We can make you your very own copy of bitshares X that you own 100% and you can keep it all!! Of course it will never be worth anything but rest assured you won't be diluted.Anyway, I should probably stop because I don't know any other way to say this. I suspect it will eventually be tried both ways and you can guess where my money will be going.At best, companies do this because they (the management) hope it will work, and that it will make the initial investors more money. You're acting like there's no risk involved, but of course there is. The question is whether each should risk only his own stake, or the stake of others also. I don't mind terribly if "freeloaders" also benefit from my contributions. I invest for my own reasons, but I hope and expect that this technology will benefit a great many people whether they've invested or not. Is it a punishment to contributors if non-contributors also benefit? Don't the contributors also benefit?As for how anyone could get taken advantage of, suppose the delegates determined that particular failing businesses based on use of the chain were in need of saving, and diluted the shares to revive them. Suppose the delegates hired a shady marketing group in exchange for kickbacks. A key part of the design is that even corrupted delegates could do little lasting damage to the system. Even if they have access to all transaction fees for reinvestment, this is true, as loss of a few weeks profits before the delegate is caught and replaced is a relatively minor setback. Dilution is permanent, and abuse would require consensus around a new fork to recover. That's a major setback and terrible PR.
No offense luckybit, but you're not following the logic. I want to make ROI as much as anyone else. I'm also not advocating that we delay bitshares X for this.But keep in mind, companies do this because it works and it makes all the initial investors more money, you don't seem to be able to figure out why.BTW: We can make you your very own copy of bitshares X that you own 100% and you can keep it all!! Of course it will never be worth anything but rest assured you won't be diluted.Anyway, I should probably stop because I don't know any other way to say this. I suspect it will eventually be tried both ways and you can guess where my money will be going.
Quote from: Troglodactyl on June 01, 2014, 03:53:11 pmShareholders definitely want the design of the DAC to protect them from each other. That's why transactions require signatures. This isn't about protecting them from themselves, as they can still use their shares for whatever they want. It's about protecting shareholders from tyranny of majority. A DAC's source code is like a nation's constitution. In theory, constitutions should define hard limits on the power of the various actors within the governmental system, but enforcement is a problem. With DACs, you have a business with source code that enforces its own rules. If you write those rules such that certain actors are overly dominant, you sacrifice much of that benefit.Centralization and decentralization each have different merits for different applications. We all knew III and AGS were centrally controlled when we started contributing.Trog, I understand your fears but I think you haven't thought it through. Take it step by step, how does anyone get taken advantage of?There is no getting around the fact that a DAC that can't dilute all shareholders equally to fund growth is a DAC that rewards freeloaders and punishes contributors.
Shareholders definitely want the design of the DAC to protect them from each other. That's why transactions require signatures. This isn't about protecting them from themselves, as they can still use their shares for whatever they want. It's about protecting shareholders from tyranny of majority. A DAC's source code is like a nation's constitution. In theory, constitutions should define hard limits on the power of the various actors within the governmental system, but enforcement is a problem. With DACs, you have a business with source code that enforces its own rules. If you write those rules such that certain actors are overly dominant, you sacrifice much of that benefit.Centralization and decentralization each have different merits for different applications. We all knew III and AGS were centrally controlled when we started contributing.
I think this is a great discussion and wanted to add my two cents.1) I am neutral with respect to the moral aspect of issuing new shares to raise capital because for the time being the whole process appears voluntary by all parties assuming all parties knew the conditions under-which it may happen.2) Property rights under shared-ownership are already stretched because obviously no one party is free to do with his fraction of the company as he chooses. It can be said that while you may have 100% property rights in your shares, you have no property rights in the system because no-one has the ability to control the system. I am using the 'control' == 'ownership' definition of property rights. So all parties 'own' the data controlled by their private key, but they do not own the wider system. 3) Under this premise we can say that if 99.999% of the shareholders want to dilute to raise capital and grow, then the other .001% is effectively getting a free ride (something for nothing) by refusing to be diluted. Assumptions here are that this is a simple capital infusion for new shares and the value of the cash infusion is greater than the value of the shares issued. Thus in the name of defending the property rights of the .001% the 99.999% have lost their property rights because they are no longer in control of the system they have invested in. 4) Based upon this principle the argument against dilution is that no one is in control of the system. This is indeed a goal of our decentralization effort and in the name of having a truly decentralized and corruption free system it is the ideal we should strive for.5) While dilution can help you grow, it is not a sustainable model in the long run. Eventually all systems must fund themselves from profits and not capital infusions. 6) The proper way to do a dilution is to fork a new DAC, honor 90% of the old shareholders and give 10% to the new source of funding. Then let the market sort out which DAC will survive.
For there to be any dilution, the majority of stakeholders would have to want it. To me it seems strange for us to say: "even if the majority of stake/shareholders want it, we know what's best for them better than they do, so we should protect them from themselves." I don't think your co-owners want you to protect them from themselves, I think they want to be empowered and have their stake and voice respected.A DAC that can issue shares attracts developers with fair compensation and customers with low fees. A DAC that is waiting for the day they collect enough fees to start reinvesting in their growth would get SMOKED in comparison. Or again, a DAC that is expecting volunteers/charity and creating all the wrong incentive structures is going to get SMOKED. Not everyone with something to contribute has time to work for free; why would people volunteer to develop and promote this DAC when they can work for a reasonable DAC that is willing to compensate them for their time?Taking a hard line against leveraged growth is like teaching your kid financial responsibility by making them work at Walmart until they've saved enough for college.Do you think Zuckerberg could build Facebook into a company with 1000s of employees out of his dorm room by waiting for advertising revenue to come in to buy a couple more computers and maybe hire someone down the road? Not one chance in a million years.The only companies paying dividends and not leveraging their market value are companies that are already peaking in their growth or have achieved market saturation or dominance. Bitshares is a world away from this.We talk about decentralization, empowerment, and creating the right incentives and then ignore it completely to trust that AGS funds controlled by a handful of people is enough to grow our "decentralized" businesses.The devil is in the details and implementation. But rest assured someone will implement this and then watch out if they are HIRING while we are running on volunteer labor, transaction fees, and fumes.
If you owned 10% of the original business which was not much more than an idea and a few sales do you think you would be entitled to 10% of the new business that has $200k on the balance sheet and prominent new investor. Of course not, you would get diluted right along with everyone else.
Quote from: amencon on May 29, 2014, 11:31:56 pmI thought most of the "Shark Tank" deals were just equity being sold for cash. You're wrong. The Shark Tank deals are a dilution of equity. The cash they give is not income of the original business owner and does not belong to him/her; the cash belongs to the business. If the shark got 51% stake they actually have more control over that cash and how it's spent than the original business owner does.If you owned 10% of the original business which was not much more than an idea and a few sales do you think you would be entitled to 10% of the new business that has $200k on the balance sheet and prominent new investor. Of course not, you would get diluted right along with everyone else.
I thought most of the "Shark Tank" deals were just equity being sold for cash.
Shares are commonly diluted to pay executives stock options or do acquisitions of other companies. Ever watch Shark Tank? That's share dilution; the original business owners are being diluted to bring in new investors and capital.
No one should invest in a company that considers taxing the shareholders to cover expenses part of its long term business plan.
When was the last time Apple or Coca-Cola diluted their shares? AFAIK they only paid dividends and do buybacks out of their income...
QuoteTherefore the hypothesis above that a corporation is by definition a joint venture which is less likely to succeed if everybody claimed his full individual (property) rights can be seen as confirmed. Thoughts? When was the last time Apple or Coca-Cola diluted their shares? AFAIK they only paid dividends and do buybacks out of their income...
Therefore the hypothesis above that a corporation is by definition a joint venture which is less likely to succeed if everybody claimed his full individual (property) rights can be seen as confirmed. Thoughts?
My thing is that taking money from transactions fees is effectively the same as dilution. Those transaction fees are profit that should go to shareholders (in a general sense). So in the end, you're just decreasing the amount that shareholders receive to pay for expenses. Since dividends etc are paid in shares, it all seems like the same thing to me. After reading Delulo's last response I thought "Oh, the user is paying the bill and thats why transaction fees are different than dilution". Yet take it a bit further and it seems to end up being another form of dilution but just one that seems more appealing.
Quote from: toast on May 28, 2014, 06:41:53 pmQuote from: gamey on May 28, 2014, 06:38:48 pmMy thing is that taking money from transactions fees is effectively the same as dilution. Those transaction fees are profit that should go to shareholders (in a general sense). So in the end, you're just decreasing the amount that shareholders receive to pay for expenses. Since dividends etc are paid in shares, it all seems like the same thing to me. After reading Delulo's last response I thought "Oh, the user is paying the bill and thats why transaction fees are different than dilution". Yet take it a bit further and it seems to end up being another form of dilution but just one that seems more appealing. Not at all the same thing. *I individually* can choose to not transact and thus not pay transaction fees. I buy, hold, then sell, and the cost to me is 1 tx fee.I cannot choose not to have my share diluted. I buy, hold, then sell, and notice my share is smaller than before because people took some while I was gone.I think the difference is a lot smaller than you guys believe, but your point about not actually being able to have less equity than when you started is a good one. I was always implying the dilution would be known beforehand, so you *could* choose to not have your shares diluted by not purchasing shares in the DAC.Anyway .... I am just trying to figure out why people despise certain methods of paying a dev to maintain a DAC over others. To me there is also an incentive to keep the DAC going and not have some situation where the DAC dev just dumps shares and abandons it.
Quote from: gamey on May 28, 2014, 06:38:48 pmMy thing is that taking money from transactions fees is effectively the same as dilution. Those transaction fees are profit that should go to shareholders (in a general sense). So in the end, you're just decreasing the amount that shareholders receive to pay for expenses. Since dividends etc are paid in shares, it all seems like the same thing to me. After reading Delulo's last response I thought "Oh, the user is paying the bill and thats why transaction fees are different than dilution". Yet take it a bit further and it seems to end up being another form of dilution but just one that seems more appealing. Not at all the same thing. *I individually* can choose to not transact and thus not pay transaction fees. I buy, hold, then sell, and the cost to me is 1 tx fee.I cannot choose not to have my share diluted. I buy, hold, then sell, and notice my share is smaller than before because people took some while I was gone.
Quote from: Troglodactyl on May 28, 2014, 04:38:53 amIf the developer is payed by transaction fees, a new developer can still take over. No one should invest in a company that considers taxing the shareholders to cover expenses part of its long term business plan. After the capital investment raised by selling shares is consumed, the business should be sustainable on revenue from customers. If it permanently draws value from shareholders through dilution, rather than rewarding them with dividends, it's a zombie.I don't have a grasp on transaction fees and how many/when a DAC would pay.. I also don't understand why transaction fees are not being considered a "tax". Yes, a company that permanently draws value from shareholders without ever paying dividends will likely die. That is fairly obvious, but you could (depending on your definition of dilution) dilute while rewarding with dividends. I see no reason why transaction fees are any better than a reasonable preplanned dilution. Paying agents/employees all comes from the same place in the end, no matter how you calculate or name it. Those transaction fees could belong to shareholders just as much as a developer. Honestly.. I just do not understand these distinctions. Is it nothing more than ideology and anything that appears like a tax gets the bad connotations that go along with taxes? Is that whats going on?
If the developer is payed by transaction fees, a new developer can still take over. No one should invest in a company that considers taxing the shareholders to cover expenses part of its long term business plan. After the capital investment raised by selling shares is consumed, the business should be sustainable on revenue from customers. If it permanently draws value from shareholders through dilution, rather than rewarding them with dividends, it's a zombie.
The other useful thing about some form of dilution is that it allows a developer to sell off his job. If he just has preallocated shares we run into the same problem again where the new developer can just give up once they are paid and sell their shares. (Or worse, you don't get that far as the dev dumps his preallocated funds) If they are paid a salary through some mechanism of dilution then that job can be passed/sold off without the shareholders risking as much. Infact that becomes a lot more likely way for a dev to quit a DAC. They pass off the job to someone else if they can find someone suitable to take on the role.
Quote from: delulo on May 27, 2014, 05:50:26 pmQuote from: StephenReed on May 27, 2014, 05:33:54 pmQuote from: delulo on May 25, 2014, 09:59:26 amFrom the Bitcointalk thread:QuoteI introduced a new thought that is not in the whitepaper and that is that the block creation reward, in addition to funding infrastructure and developers, could also subsidize transactions to the extent of negative transaction fees, should the abuse problem be addressed. Imaging paying Amazon or any other global Internet retailer a week's worth of block creation rewards, i.e. $13 million to get them to accept bitcoins as payment. I call this notion paying for order flow.Would negative tx fees allow anyone to send coins back and forth and make money this way? Would the increased demand for coins through this way of making money overcompensate Bitcoin holders (on the one site the price might increases and on the other side negative tx fees have to be paid through dilution by holders)? Yes, paying for order flow invites abuse. Human organizations prevent this by audits of the paid organization by the paying organization. This could not be easily automated, but one can imagine in some possible world, a software agent that contracts with auditing companies to perform this role.Do you mean that an auditing company would ban every address that abuses this. Can someone not write a script/program that generates a new address for every tx?I would have an auditing company send humans to the payment processor site for a policy, procedures and software program audit to observe payments in action. Negative transaction fees are sufficiently high motivation for honest behavior. Another issue is that an autonomous system may need to be a legal entity for the purpose of enforcing contracts. I suppose that you all have an alternative and I would like to know more about how an anonymous bitcoin network could negotiate contracts with human organizations.
Quote from: StephenReed on May 27, 2014, 05:33:54 pmQuote from: delulo on May 25, 2014, 09:59:26 amFrom the Bitcointalk thread:QuoteI introduced a new thought that is not in the whitepaper and that is that the block creation reward, in addition to funding infrastructure and developers, could also subsidize transactions to the extent of negative transaction fees, should the abuse problem be addressed. Imaging paying Amazon or any other global Internet retailer a week's worth of block creation rewards, i.e. $13 million to get them to accept bitcoins as payment. I call this notion paying for order flow.Would negative tx fees allow anyone to send coins back and forth and make money this way? Would the increased demand for coins through this way of making money overcompensate Bitcoin holders (on the one site the price might increases and on the other side negative tx fees have to be paid through dilution by holders)? Yes, paying for order flow invites abuse. Human organizations prevent this by audits of the paid organization by the paying organization. This could not be easily automated, but one can imagine in some possible world, a software agent that contracts with auditing companies to perform this role.Do you mean that an auditing company would ban every address that abuses this. Can someone not write a script/program that generates a new address for every tx?
Quote from: delulo on May 25, 2014, 09:59:26 amFrom the Bitcointalk thread:QuoteI introduced a new thought that is not in the whitepaper and that is that the block creation reward, in addition to funding infrastructure and developers, could also subsidize transactions to the extent of negative transaction fees, should the abuse problem be addressed. Imaging paying Amazon or any other global Internet retailer a week's worth of block creation rewards, i.e. $13 million to get them to accept bitcoins as payment. I call this notion paying for order flow.Would negative tx fees allow anyone to send coins back and forth and make money this way? Would the increased demand for coins through this way of making money overcompensate Bitcoin holders (on the one site the price might increases and on the other side negative tx fees have to be paid through dilution by holders)? Yes, paying for order flow invites abuse. Human organizations prevent this by audits of the paid organization by the paying organization. This could not be easily automated, but one can imagine in some possible world, a software agent that contracts with auditing companies to perform this role.
From the Bitcointalk thread:QuoteI introduced a new thought that is not in the whitepaper and that is that the block creation reward, in addition to funding infrastructure and developers, could also subsidize transactions to the extent of negative transaction fees, should the abuse problem be addressed. Imaging paying Amazon or any other global Internet retailer a week's worth of block creation rewards, i.e. $13 million to get them to accept bitcoins as payment. I call this notion paying for order flow.Would negative tx fees allow anyone to send coins back and forth and make money this way? Would the increased demand for coins through this way of making money overcompensate Bitcoin holders (on the one site the price might increases and on the other side negative tx fees have to be paid through dilution by holders)?
I introduced a new thought that is not in the whitepaper and that is that the block creation reward, in addition to funding infrastructure and developers, could also subsidize transactions to the extent of negative transaction fees, should the abuse problem be addressed. Imaging paying Amazon or any other global Internet retailer a week's worth of block creation rewards, i.e. $13 million to get them to accept bitcoins as payment. I call this notion paying for order flow.
You don't need dilution at all. Pay salaries in a BitAsset like BitUSD. Do you have to create new Bitshares to create BitUSD? No you do not. So why would you have to create new Bitshares to pay salaries in BitUSD?
Mastercoin has developer funds without any dilution so I'm not buying the idea that you need inflation or dilution. Price all that in at the beginning.
You don't need dilution at all. Pay salaries in a BitAsset like BitUSD. Do you have to create new Bitshares to create BitUSD? No you do not. So why would you have to create new Bitshares to pay salaries in BitUSD?If it's really valuable to people then people will not need dilution/inflation to pay for it. If it's trash then of course you need inflation to pay for that because no one in their right mind would want to pay for it otherwise.Bitcoin security was an exception because at the time there was no other known way to do it. In this case there are others ways to do it so you have to show that doing it through inflation is somehow the best way out of all other possible ways which don't involve inflation.Let's find all the possible ways and then create a pro/con list?Mastercoin has developer funds without any dilution so I'm not buying the idea that you need inflation or dilution. Price all that in at the beginning.
It seems that if you don't dilute then you just have to allocate the creator of the DAC a larger share upfront. Isn't that how this is supposed to work ? That has its own problem in that the DAC creator could just dump their shares and walk away. Unlike currencies etc the DAC could still have existing value as it continues to run. This continuation of the DAC network somewhat mitigates the effect of a dump, but if the DAC was worth dumping then it likely won't recover.Alternatively you constantly dilute shares via inflation and at least you mitigate a lot of the problems and types of fraud people will see. Instead I give myself .5% but then become paid chief via dilution and with a sliding scale of payment that decreases over time. I can't just walk away and or I lose out on what I am being paid and I can't just dump and run for a big bag of loot. (Most likely scam outcome). I think for a healthy DAC you need dilution to pay salaries/marketing costs, or an alternative that is worse. I think a DAC structured like this SHOULD give investors/users confidence.
To be clear we will not be changing code to accommodate these ideas in the first release. Sent from my iPhone using Tapatalk
Also stop to consider the issue mathematically. For example, in a group of 100 people, you contribute 1% to the total if everyone works equally hard, which of course they won’t. If you do less than the others, you contribute even less than 1%, so your efforts are statistically meaningless; if you do more, your efforts are subsidizing the slackers – but you’ll still have to share the reward with them.
establishing an objective measure of the value of the capital infusion and who is responsible for that infusion
In the short term, it may seem that redistributing property in order to stimulate growth is catalytic and beneficial, but in the long run I think efficiency will win out, and forced redistribution is inherently inefficient and destabilizing.You say that you know the rules going in, but the rules to which you're referring are the rules for changing the rules. People should read the fine print and see this, but if they do, do you think they would still invest? I would hate to see the "decentralized solutions to centralized problems" goal die here and the project become just another tool some people use to dominate others.There are lots of philosophical and moral issues here, and to deny them I think would be shortsighted. They're part of the product, and sacrificing them for apparent expediency could alienate potential customers and investors.
Next is the Group Trap, which is the belief that you can accomplish more by acting in groups than you can by acting on your own. Harry didn’t believe that there’s anything inherently wrong with participating in groups; you may enjoy the social aspect or something else about it. But you should be consciously aware that, if you just want to accomplish something, you not only don’t have to go through a group, but it’s actually easier to act on your own......Also stop to consider the issue mathematically. For example, in a group of 100 people, you contribute 1% to the total if everyone works equally hard, which of course they won’t. If you do less than the others, you contribute even less than 1%, so your efforts are statistically meaningless; if you do more, your efforts are subsidizing the slackers – but you’ll still have to share the reward with them.
Quote from: Troglodactyl on May 25, 2014, 11:19:31 pmThat's right, the majority doesn't have to open their wallets. They can take no action. They don't have any more right to force the minority to open their wallets than the minority has to force the majority to open their wallets. The default state is that each is free to use his own resources as he sees fit, but none are free to use the resources of others without their consent. If I choose to do something that I claim will also benefit you, that does not entitle me to use your money to pay for it unless you agree to contribute.Snapshotting to split a network by strategy is an interesting idea, but it sacrifices network effect for purity. It might be necessary if the main network is headed for collapse and can't be turned, but it's a sacrifice technique.Talking about "they don't have a right" as if it's a moral question is missing the point. By not allowing dilution on some kind of philosophical ground you are just limiting the options and tying the hands of the company. I believe that a company that refuses under all circumstances to allow dilution would be out competed in the market by a company that can do this.Virtually no large successful companies could ever have made it without being able to raise capital and/or bring in new stakeholders by issuing new shares.These DACs can be quickly hiring developers/marketers/lawyers/executives making deals companies like Coinbase... While you sit around waiting for enough transaction fees to come in so you can finally do something, and/or appealing to the charitable nature of some of the stakeholders while others profit more from inaction.It's not a moral issue, you know the rules going in, if you don't like the way the rules are written you don't have to buy in to the DAC or you can sell your shares. If you don't like to go along with what a majority want than don't buy shares of a company, because that's what you have to do.
That's right, the majority doesn't have to open their wallets. They can take no action. They don't have any more right to force the minority to open their wallets than the minority has to force the majority to open their wallets. The default state is that each is free to use his own resources as he sees fit, but none are free to use the resources of others without their consent. If I choose to do something that I claim will also benefit you, that does not entitle me to use your money to pay for it unless you agree to contribute.Snapshotting to split a network by strategy is an interesting idea, but it sacrifices network effect for purity. It might be necessary if the main network is headed for collapse and can't be turned, but it's a sacrifice technique.
Quote from: delulo on May 25, 2014, 09:54:41 pmI don't think it would be a good idea to hard code a share dilution for a fixes amount of time. Would there be a possibility to do a temporary share dilution without hard forking? Would be helpful, especially at the beginning, in case tx fees are not enough and the gains from adoption would be the highest. QuoteWhy not just let all delegates keep as much of the fee from their blocks as they want, and destroy the rest? If they abuse that, they'll be voted out quickly, and the market will naturally regulate the dividend rate and strategies for reinvestment.This is a good idea and would be necessary if delegates also make reinvestment decisions. My concern was that an entity with an interest to harm the network that has a lot of financial backup (like a state) can survive this low compensation better. But there is probably no way to prevent it and a harmful actor could obfuscate its identity anyway. Could it? I thought about whether it is a problem that the max. amount of votes a delegate can get is 2% of all votes (pro - contra votes). But is should be no problem if it is not possible to vote for a delegate that would have more than 2% if you voted for him. Then the personal or team behind the delegate has to set up a new delegate... If transaction fees are insufficient I'd suggest convincing shareholders to reinvest directly and voluntarily. Allowing even a majority of stakeholders the discretion to dilute the stake of the minority without their consent is problematic.The concern at surviving low compensation isn't solved by hard coding compensation, since any delegate can reduce his own compensation by destroying some of it manually, and can advertise these dividends to the shareholders. If a state wants to run a delegate at low compensation, they're welcome to, but if they try to use it to exert power negatively, they should be voted out quickly just like anyone else would be.
I don't think it would be a good idea to hard code a share dilution for a fixes amount of time. Would there be a possibility to do a temporary share dilution without hard forking? Would be helpful, especially at the beginning, in case tx fees are not enough and the gains from adoption would be the highest. QuoteWhy not just let all delegates keep as much of the fee from their blocks as they want, and destroy the rest? If they abuse that, they'll be voted out quickly, and the market will naturally regulate the dividend rate and strategies for reinvestment.This is a good idea and would be necessary if delegates also make reinvestment decisions. My concern was that an entity with an interest to harm the network that has a lot of financial backup (like a state) can survive this low compensation better. But there is probably no way to prevent it and a harmful actor could obfuscate its identity anyway. Could it? I thought about whether it is a problem that the max. amount of votes a delegate can get is 2% of all votes (pro - contra votes). But is should be no problem if it is not possible to vote for a delegate that would have more than 2% if you voted for him. Then the personal or team behind the delegate has to set up a new delegate...
Why not just let all delegates keep as much of the fee from their blocks as they want, and destroy the rest? If they abuse that, they'll be voted out quickly, and the market will naturally regulate the dividend rate and strategies for reinvestment.
Quote from: Troglodactyl on May 25, 2014, 10:07:30 pmAllowing even a majority of stakeholders the discretion to dilute the stake of the minority without their consent is problematic.I disagree with this. Just because some small group decides they want to be "freeloaders" doesn't mean that the majority has to open their wallets and pay for them while they get all the growth benefits at no charge. This would be like making taxes optional, no one will pay them.It's not like majority can vote that the minority has to give them all the money or something, the minority still has representation.My previous idea is everyone votes for an inflation rate and take the median, or some other way of giving the DAC flexibility toward growth or dividends. 0% inflation would be all fees are given to delegates with no dividend. 2% inflation would be creating new shares to fund growth. -1% inflation would be destroying some percent of transaction fees for dividends (might be more appropriate for a long established DAC).The way we take a snapshot now to honor a DAC, in the future, people might honor all shares of a DAC that vote for a particular group of delegates. That way people who want to take the company in a different direction can fork it and bring the people who share that vision with them and then compete in the market.
Allowing even a majority of stakeholders the discretion to dilute the stake of the minority without their consent is problematic.
1) Diluting shareholders as Bitcoin does now and spending this money / those coins on marketing ("paying Amazon to accept Bitcoin") instead of paying it to miners or shareholders - would this be an advantage to DPOS/bitshares?
Quote from: CLains on May 25, 2014, 01:40:34 pmIs it not obvious that inflation is a brilliant way to force everyone to continually donate a tiny amount? Does it not effectively solve the tragedy of the commons problem? Are we sure our idealist attitudes are not interfering with our judgement? What does it matter that voting etc. on how to spend this influx of money is flawed, when we know that it can solve at least one problem that individuals as individuals can not, namely the situation where each donating a tiny amount would be rational if they all did it, but they do not do it since they can not be sure everyone or even anyone else does. Pending a perfect solution, do we not already know that we require both types of spending for the whole system to be supra-rational?I think of it more like shareholders agreeing to a dilution in exchange for a capital infusion. I think it is indeed a good idea in the short run and works well for DPOS. Early on in a networks life transaction fees are unlikely to be sufficient to motivate growth. They will merely cover costs. So I have thought about it some and recognized that no company pays a dividend while in its growth phase. Only after it has matured does it start paying dividends. So paying 100% of transaction fees to the delegates is a middle ground. Have the percent paid to delegates decrees down to 10% over 10 years as the network matures. On the other hand, paying dividends is marketing in its own right and is effectively paying every shareholder to grow the network. I think that transaction fees will more than cover infrastructure growth as the network grows.
Is it not obvious that inflation is a brilliant way to force everyone to continually donate a tiny amount? Does it not effectively solve the tragedy of the commons problem? Are we sure our idealist attitudes are not interfering with our judgement? What does it matter that voting etc. on how to spend this influx of money is flawed, when we know that it can solve at least one problem that individuals as individuals can not, namely the situation where each donating a tiny amount would be rational if they all did it, but they do not do it since they can not be sure everyone or even anyone else does. Pending a perfect solution, do we not already know that we require both types of spending for the whole system to be supra-rational?
...The best solution might be to make the tx fees grandiose from the beginning and let the market / shareholders decide then.
Sorry, I meant if transaction fees were insufficient, not share dilution. What I typed originally didn't make much sense...
The concern at surviving low compensation isn't solved by hard coding compensation, since any delegate can reduce his own compensation by destroying some of it manually, and can advertise these dividends to the shareholders. If a state wants to run a delegate at low compensation, they're welcome to, but if they try to use it to exert power negatively, they should be voted out quickly just like anyone else would be.
If share dilution is insufficient I'd suggest convincing shareholders to reinvest directly and voluntarily. Allowing even a majority of stakeholders the discretion to dilute the stake of the minority without their consent is problematic.
Quote from: delulo on May 25, 2014, 09:54:41 pmI don't think it would be a good idea to hard code a share dilution for a fixes amount of time. Would there be a possibility to do a temporary share dilution without hard forking? Would be helpful, especially at the beginning, in case tx fees are not enough and the gains from adoption would be the highest. QuoteWhy not just let all delegates keep as much of the fee from their blocks as they want, and destroy the rest? If they abuse that, they'll be voted out quickly, and the market will naturally regulate the dividend rate and strategies for reinvestment.This is a good idea and would be necessary if delegates also make reinvestment decisions. My concern was that an entity with an interest to harm the network that has a lot of financial backup (like a state) can survive this low compensation better. But there is probably no way to prevent it and a harmful actor could obfuscate its identity anyway. Could it? I thought about whether it is a problem that the max. amount of votes a delegate can get is 2% of all votes (pro - contra votes). But is should be no problem if it is not possible to vote for a delegate that would have more than 2% if you voted for him. Then the personal or team behind the delegate has to set up a new delegate... If share dilution is insufficient I'd suggest convincing shareholders to reinvest directly and voluntarily. Allowing even a majority of stakeholders the discretion to dilute the stake of the minority without their consent is problematic.The concern at surviving low compensation isn't solved by hard coding compensation, since any delegate can reduce his own compensation by destroying some of it manually, and can advertise these dividends to the shareholders. If a state wants to run a delegate at low compensation, they're welcome to, but if they try to use it to exert power negatively, they should be voted out quickly just like anyone else would be.
Quote from: delulo on May 25, 2014, 09:54:41 pmI don't think it would be a good idea to hard code a share dilution for a fixes amount of time. Would there be a possibility to do a temporary share dilution without hard forking? Would be helpful, especially at the beginning, in case tx fees are not enough and the gains from adoption would be the highest. QuoteWhy not just let all delegates keep as much of the fee from their blocks as they want, and destroy the rest? If they abuse that, they'll be voted out quickly, and the market will naturally regulate the dividend rate and strategies for reinvestment.This is a good idea and would be necessary if delegates also make reinvestment decisions. My concern was that an entity with an interest to harm the network that has a lot of financial backup (like a state) can survive this low compensation better. But there is probably no way to prevent it and a harmful actor could obfuscate its identity anyway. Could it? I thought about whether it is a problem that the max. amount of votes a delegate can get is 2% of all votes (pro - contra votes). But is should be no problem if it is not possible to vote for a delegate that would have more than 2% if you voted for him. Then the persona or team behind the delegate has to set up a new delegate with "votes free to be spent"... Actually the max pro is 2% and the max against is 2%.
I don't think it would be a good idea to hard code a share dilution for a fixes amount of time. Would there be a possibility to do a temporary share dilution without hard forking? Would be helpful, especially at the beginning, in case tx fees are not enough and the gains from adoption would be the highest. QuoteWhy not just let all delegates keep as much of the fee from their blocks as they want, and destroy the rest? If they abuse that, they'll be voted out quickly, and the market will naturally regulate the dividend rate and strategies for reinvestment.This is a good idea and would be necessary if delegates also make reinvestment decisions. My concern was that an entity with an interest to harm the network that has a lot of financial backup (like a state) can survive this low compensation better. But there is probably no way to prevent it and a harmful actor could obfuscate its identity anyway. Could it? I thought about whether it is a problem that the max. amount of votes a delegate can get is 2% of all votes (pro - contra votes). But is should be no problem if it is not possible to vote for a delegate that would have more than 2% if you voted for him. Then the persona or team behind the delegate has to set up a new delegate with "votes free to be spent"...
Quote from: Troglodactyl on May 25, 2014, 08:48:21 pmThe problem with this is that if you're reinvesting profits funneled through a small number of individuals, it isn't exactly a DAC anymore, and you start having more of the problems you have with traditional centralized structures. Funneling the profits through the delegates who are elected by stakeholders I think mostly solves this, but I don't see a need to artificially fix the percentage of transaction fees available to them for profit and reinvestment in the success of the network.Why not just let all delegates keep as much of the fee from their blocks as they want, and destroy the rest? If they abuse that, they'll be voted out quickly, and the market will naturally regulate the dividend rate and strategies for reinvestment.QuoteWhy not just let all delegates keep as much of the fee from their blocks as they want, and destroy the rest? If they abuse that, they'll be voted out quickly, and the market will naturally regulate the dividend rate and strategies for reinvestment.This might be good for political delegates (potentially not trustworthy?) and not sustainable for those delegates that only do it for profit.QuoteThe problem with this is that if you're reinvesting profits funneled through a small number of individuals, it isn't exactly a DAC anymore, and you start having more of the problems you have with traditional centralized structures.Companies like DACs can hire other companies and outsource something that can not be done inhouse. This is the case anyway because there will de facto always be a developer (team) that maintains the DAC and thus performs such an outside service to it. QuoteFunneling the profits through the delegates who are elected by stakeholders I think mostly solves thisOf course delegates have to be paid sufficiently. But that was not the point. The point was whether is makes sense to invest the companies revenues and / or shares into marketing so the price increase because of adoption increase can (by far) make good the expenses. Or do you mean that the delegates should decide how to invest the money? That could make a lot of sense. It would be like the CEOs of a company deciding what to do with the money from revenue and whether it makes sense to issue new shares and then reinvest it or pay dividends.
The problem with this is that if you're reinvesting profits funneled through a small number of individuals, it isn't exactly a DAC anymore, and you start having more of the problems you have with traditional centralized structures. Funneling the profits through the delegates who are elected by stakeholders I think mostly solves this, but I don't see a need to artificially fix the percentage of transaction fees available to them for profit and reinvestment in the success of the network.Why not just let all delegates keep as much of the fee from their blocks as they want, and destroy the rest? If they abuse that, they'll be voted out quickly, and the market will naturally regulate the dividend rate and strategies for reinvestment.
The problem with this is that if you're reinvesting profits funneled through a small number of individuals, it isn't exactly a DAC anymore, and you start having more of the problems you have with traditional centralized structures.
Funneling the profits through the delegates who are elected by stakeholders I think mostly solves this
Quote from: delulo on May 25, 2014, 07:21:31 pmQuote from: onceuponatime on May 25, 2014, 06:47:47 pmQuote from: bytemaster on May 25, 2014, 06:36:26 pmQuote from: delulo on May 25, 2014, 06:25:43 pmYou can justify dividends better if there was dilution to foster adoption which costs the most for those who later get high dividends... If the DAC analogy applies it can't be that wrong for DACs what has evolved over decades for brick and mortar companies.Yep...I'm sorry, I'm a little slow today. Couldn't catch the meaning here. Would you kindly extrapolate a bit?So POS is more efficient than POW, meaning higher security and less costs for the network to provide the security. This leaves room to take the tx fees and either pay dividends or use them to grow the network (pay amazon to accept your tokens or other marketing efforts). You can cover marketing expenses by diluting shareholders = issue new shares (bitcoin issues 25 new coins / 10 minutes and dilutes shareholders by 10% per year this way). Now you can first dilute shareholders to pay for marketing which hurts those the most that have the biggest stake (in absolute terms). In absolute terms those that have the most also get the highest dividends when later marketing is not necessary any more because everyone understands how to use crypto currencies and sees the benefits etc... *If the "Bitcoin is a company" analogy applies it can't be that wrong for Bitcoin (and any other crypto service) what has evolved over decades for brick and mortar companies (the above; in the brick and mortar world: In reality companies only pay dividends when they think that they can not invest the revenue anymore profitably and can't grow anymore (e.g. coka cola))Got it. Thank you.
Quote from: onceuponatime on May 25, 2014, 06:47:47 pmQuote from: bytemaster on May 25, 2014, 06:36:26 pmQuote from: delulo on May 25, 2014, 06:25:43 pmYou can justify dividends better if there was dilution to foster adoption which costs the most for those who later get high dividends... If the DAC analogy applies it can't be that wrong for DACs what has evolved over decades for brick and mortar companies.Yep...I'm sorry, I'm a little slow today. Couldn't catch the meaning here. Would you kindly extrapolate a bit?So POS is more efficient than POW, meaning higher security and less costs for the network to provide the security. This leaves room to take the tx fees and either pay dividends or use them to grow the network (pay amazon to accept your tokens or other marketing efforts). You can cover marketing expenses by diluting shareholders = issue new shares (bitcoin issues 25 new coins / 10 minutes and dilutes shareholders by 10% per year this way). Now you can first dilute shareholders to pay for marketing which hurts those the most that have the biggest stake (in absolute terms). In absolute terms those that have the most also get the highest dividends when later marketing is not necessary any more because everyone understands how to use crypto currencies and sees the benefits etc... *If the "Bitcoin is a company" analogy applies it can't be that wrong for Bitcoin (and any other crypto service) what has evolved over decades for brick and mortar companies (the above; in the brick and mortar world: In reality companies only pay dividends when they think that they can not invest the revenue anymore profitably and can't grow anymore (e.g. coka cola))
Quote from: bytemaster on May 25, 2014, 06:36:26 pmQuote from: delulo on May 25, 2014, 06:25:43 pmYou can justify dividends better if there was dilution to foster adoption which costs the most for those who later get high dividends... If the DAC analogy applies it can't be that wrong for DACs what has evolved over decades for brick and mortar companies.Yep...I'm sorry, I'm a little slow today. Couldn't catch the meaning here. Would you kindly extrapolate a bit?
Quote from: delulo on May 25, 2014, 06:25:43 pmYou can justify dividends better if there was dilution to foster adoption which costs the most for those who later get high dividends... If the DAC analogy applies it can't be that wrong for DACs what has evolved over decades for brick and mortar companies.Yep...
You can justify dividends better if there was dilution to foster adoption which costs the most for those who later get high dividends... If the DAC analogy applies it can't be that wrong for DACs what has evolved over decades for brick and mortar companies.
So I have thought about it some and recognized that no company pays a dividend while in its growth phase. Only after it has matured does it start paying dividends.
On the other hand, paying dividends is marketing in its own right and is effectively paying every shareholder to grow the network.