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Messages - arhag

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1111
KeyID / Re: Here is my rant about namecoin
« on: September 10, 2014, 03:16:31 am »
Quote from: toast on September 09, 2014, 11:29:21 pm
Quote from: arhag on September 09, 2014, 11:53:12 am
It would nice if one day browsers and all other internet clients would use a standardized interface to ask the OS for the IP address and public key tuple for that domain name as determined by the DNS blockchain software installed on the computer (I'm hoping it's BitShares DNS : ) ). Then the internet client would validate the TLS connection directly using the given public key.

It's fairly standardized, I think this is actually the easiest way.

It is? A standard that browser makers all use today (without needing extensions and plugins) that we can plug BitShares DNS right into? What exactly is that and how does it work?


1112
General Discussion / Re: Bitshares MEME contest win a free tee and 10 bitUSD!!
« on: September 09, 2014, 11:37:03 pm »
Haha, what a fun thread. I liked toast's BitUSD stability one.

I also like this:
Quote from: robrigo on September 09, 2014, 09:21:12 pm
The most interesting bitUSD purchaser in the world


But I prefer to modify it to the following:


BitAssets.
To the moon, my friends.

1113
General Discussion / Re: BitUSD Yield (aka Interest) Scheduled for Launch Wednesday
« on: September 09, 2014, 10:31:51 pm »
Quote from: bytemaster on September 09, 2014, 09:36:40 pm
Quote from: arhag on September 09, 2014, 09:09:04 pm
Quote from: bytemaster on September 09, 2014, 06:29:41 pm
There is no computationally simple way to perform "compound interest" because the "interest rate" is variable over time and a number of other complexities.

Is this because it would take too much time to compute the factor to multiply the BitUSD value by for each transaction? Meaning if each block determines a factor f_i (representing e^y where y is the per block variable yield rate) for each BitAsset, then for each transaction with BitAsset inputs you would need to get all the BitAsset's f_i from block i = m where the transaction was created to block i = n which is the current block where the transaction was spent, and then multiply the BitAsset value by f_m * f_(m+1) * ... * f_n to get its new value with yield.

Yes.  It would greatly increase database size and transaction processing time.  I know how to "do it proper" from the original dividends design for BTSX.  It requires an accumulation table that must be updated every block for 1 years worth of blocks. 

Alright, that's too bad. Is this accumulation table the accumulating product from f_0 (factor for block in which the BitAsset was created) to f_n (current block) for each BitAsset? I don't quite understand why it has to increase the database size and transaction processing time by much. First, let me define that accumulating product for BitUSD to be p_n = f_c * f_(c+1) * ... * f_n, where block c was when yields for the BitAsset began. Also p_n = 1 for n < c. Then when creating a new transaction the after yield value of a BitUSD input = before yield value * p_n / p_m, where the current block is block n and the transaction containing the BitUSD output that is spent in the new transaction is on block m. Only the values for p_i for each block i and for each BitAsset need to be stored in the local client database. When validating the transaction the p_n value is already calculated (and stored in the database) for the current block and a look up from the database of the value p_m for each input of each transaction to be validated in the current block should be pretty fast (I think). Is the issue that this approach would have too much numerical error? Could rounding in favor of lower yields resolve that? What else am I missing?

Quote from: bytemaster on September 09, 2014, 09:36:40 pm
Quote
Quote from: bytemaster on September 09, 2014, 06:29:41 pm
I said it before and I will say it again, this isn't really "interest" because it doesn't "accrue" in a monotonic manner.   Your "estimated yield" could go down from day to day depending upon the rate of new fees, rewards claimed by others, and new issuance.   

Well as long as the yield rate is non-negative (which it should be) the value of your BitAssets are monotonically increasing.

Well the GUI shows "Estimated Yield" if you made a transaction "right now"... but the estimation could go down relative to an earlier estimation but it will never be negative.

Ah, I see. Yeah, I momentarily forgot that the current yield implementation is the compromising, easier-to-implement version rather than the one that compounds at every block. I get how the estimated yield on top of the current BitAsset balances would fluctuate over time. Which is what I find annoying about the compromising approach: that it can be gamed. But if it really does complicate validation and increase database size then I guess it isn't that big of a deal.

1114
General Discussion / Re: BitUSD Yield (aka Interest) Scheduled for Launch Wednesday
« on: September 09, 2014, 09:09:04 pm »
Quote from: bytemaster on September 09, 2014, 06:29:41 pm
There is no computationally simple way to perform "compound interest" because the "interest rate" is variable over time and a number of other complexities.

Is this because it would take too much time to compute the factor to multiply the BitUSD value by for each transaction? Meaning if each block determines a factor f_i (representing e^y where y is the per block variable yield rate) for each BitAsset, then for each transaction with BitAsset inputs you would need to get all the BitAsset's f_i from block i = m where the transaction was created to block i = n which is the current block where the transaction was spent, and then multiply the BitAsset value by f_m * f_(m+1) * ... * f_n to get its new value with yield.

Quote from: bytemaster on September 09, 2014, 06:29:41 pm
I said it before and I will say it again, this isn't really "interest" because it doesn't "accrue" in a monotonic manner.   Your "estimated yield" could go down from day to day depending upon the rate of new fees, rewards claimed by others, and new issuance.   

Well as long as the yield rate is non-negative (which it should be) the value of your BitAssets are monotonically increasing.

1115
General Discussion / Re: Fee Flow / Yield Infor Graphic
« on: September 09, 2014, 08:29:08 pm »
Quote from: OldMan on September 09, 2014, 07:49:46 pm
Quote from: MeTHoDx on September 09, 2014, 06:09:41 pm
Should we start calling the "rainy day fund" the "rewards fund"?

Reserve fund.

I agree. I would also like to bring up an earlier point regarding the supposed lack of a need for an insurance fund. I don't think the yields replace the need for an insurance fund. If a black swan event occurs and the BitUSD issued is partially collateralized by the BTSX held as collateral in the short position, this might hurt the peg. As the BitUSD that was collected for yield is instead destroyed until BitUSD is fully backed, the peg should return to normal. However, that may take some time. On the other hand if there was enough BitUSD held in the reserve fund, the necessary amount of BitUSD could be immediately destroyed to give BitUSD holders immediate confidence that their BitUSD is fully backed. They do not have to assume the network will be able to collect BitUSD in the future to balance things; they will know it immediately.

In fact can't there be a possibility in which the network will not be able to collect enough BitUSD to again fully back the remaining BitUSD with the BTSX held in collateral? If everyone tries to convert their BitUSD into BTSX, couldn't it be possible that some slow movers will have BitUSD without any short position to back it. In such a scenario, the network was too eager in providing BitUSD holders high yields. All the quick movers were able to cash out their BitUSD with high yields into BTSX. The slow movers got stuck with worthless BitUSD.

I think there should be a minimum limit on the BitAsset reserve fund. This minimum limit should be proportional to the amount of the BitAsset issued. If the reserve fund is below the minimum limit, the BitAssets collected as fees should first be used to fill up the fund to above the limit. As the fund grows well above the limit, the network should determine an appropriate yield rate to pay to the issued BitUSD that will not reduce the fund levels below the minimum limit. It should also consider the history of incoming fees in order to pick a yield rate that is fairly consistent (not too volatile) but still high enough to not grow the reserve fund without bound. If a black swan event occurs, the network should immediately destroy as much of the BitAssets in the reserve as necessary and possible to make the BitAssets fully backed.

1116
General Discussion / Re: Fee Flow / Yield Infor Graphic
« on: September 09, 2014, 06:55:01 pm »
Quote from: MeTHoDx on September 09, 2014, 06:41:29 pm
I think (eventually) all income collected by the network should go to the delegates and the delegates should determine how the income is distributed.

--> Rewards Fund
--> Burn
--> Delegate Income

The shareholders vote for delegates that distribute network income in a way they agree with.

I would prefer if the delegates didn't actually get the money and then were expected to distribute it out to the appropriate funds (although that could be an acceptable compromise until a better system was built). I would like the network to do the distribution so that everyone can be guaranteed it will happen and they do not need to put additional trust in the delegates.

In particular, I would love to see a system where the delegates can make proposals that tweak the network rules which only become active if enough shareholders ratify it. Any active delegate would create a new proposal. If the majority of active delegates voted with approval, the proposal would be put up for consideration. Only one proposal can be up for consideration at a time. If the majority of delegates decide to do so, they can discard a proposal at any time. If more than a certain percentage of the stake votes in favor of the proposal up for consideration, then it is ratified and its rules become active in the next round. Perhaps in addition, if more than another percentage of the stake vetoes the proposal, it would immediately be discarded as well. Therefore transactions would only need a small addition to acknowledge the active proposal with a yea or nay.

These proposals could have parameters that define things like delegate pay rate (perhaps denominated in BitUSD), pay rates to different accounts (both mandatory and discretionary incomes) so they can use the funds for productive purposes (like development and marketing), interest rate caps on each BitAsset, prioritization of paying BitAsset interest, etc.

1117
General Discussion / Re: Fee Flow / Yield Infor Graphic
« on: September 09, 2014, 06:32:17 pm »
Quote from: xeroc on September 09, 2014, 06:21:56 pm
Quote from: bytemaster on September 09, 2014, 05:52:00 pm
Margin call fee is in btsx.
Market fees are bitassets
Btsx holder benefits more paying interest on bit assets than from burning.
*fixed*

You still have the 5% fee on short orders (I assume you mean to say 5% fee on margin calls) going to the rewards fund. According to bytemaster's response, it should be going to the delegate's box instead.

1118
General Discussion / Re: Fee Flow / Yield Infor Graphic
« on: September 09, 2014, 06:16:16 pm »
Quote from: xeroc on September 09, 2014, 06:10:46 pm
Quote from: arhag on September 09, 2014, 06:00:57 pm
Quote from: bytemaster on September 09, 2014, 05:52:00 pm
Btsx holder benefits more paying interest on bit assets than from burning.

I get that but shouldn't BTSX stakeholders have a way of defining how much interest they want to give to each particular BitAsset? Interest given to a BitAsset is money not given to the stakeholders. For some BitAssets this makes a lot of sense in the initial stages. I am perfectly fine giving up to 5% interest to BitUSD for example (anything more than that I feel would be more useful given back to the stakeholders). However, I don't care much about giving high interest on BitBTC for example. The reason is because making BitUSD more attractive can help marketing to new users and thus increase adoption of BitShares X and thus increase value in BTSX. Providing additional value to BitBTC on the other hand seems counterproductive to our interests.

So basically, I would like to see what I proposed in the second paragraph of this post: https://bitsharestalk.org/index.php?topic=8396.msg109865#msg109865.
I dont really understand yet .. How is the btsx shareholder supposed to pay 'interest' for the bitAsset holder? have I missed sth?
please enlighten me!

The yield on BitAssets is coming from the various fees the network collects. This is a value transfer from the participants paying the fees to the network (it doesn't really matter what it is denominated in). This value has three places it can go: the BitAsset holders, the BTSX holders, and the delegates. I am saying that we would be better off if we (the shareholders) could define how much value goes to which.

1119
General Discussion / Re: Fee Flow / Yield Infor Graphic
« on: September 09, 2014, 06:00:57 pm »
Quote from: bytemaster on September 09, 2014, 05:52:00 pm
Btsx holder benefits more paying interest on bit assets than from burning.

I get that but shouldn't BTSX stakeholders have a way of defining how much interest they want to give to each particular BitAsset? Interest given to a BitAsset is money not given to the stakeholders. For some BitAssets this makes a lot of sense in the initial stages. I am perfectly fine giving up to 5% interest to BitUSD for example (anything more than that I feel would be more useful given back to the stakeholders). However, I don't care much about giving high interest on BitBTC for example. The reason is because making BitUSD more attractive can help marketing to new users and thus increase adoption of BitShares X and thus increase value in BTSX. Providing additional value to BitBTC on the other hand seems counterproductive to our interests.

So basically, I would like to see what I proposed in the second paragraph of this post: https://bitsharestalk.org/index.php?topic=8396.msg109865#msg109865.


1120
General Discussion / Re: Fee Flow / Yield Infor Graphic
« on: September 09, 2014, 05:46:10 pm »
Is the 5% fee on margin calls on BTSX or is it extracted as the BitAsset? Also, wouldn't the transaction fees on the market orders be sometimes BTSX and sometimes BitAsset? Finally, is the bid ask overlap always extracted as a BitAsset and never as BTSX?

Really it seems like there is no reason the network couldn't exchange between BTSX fees and BitAsset fees as desired. After all there is a decentralized exchange right there. So I guess my question is how much of the potential value available should be given to BitAsset holders vs BTSX holders?

1121
Stakeholder Proposals / Re: MineBitShares.com - A virtual mining multi-pool for BitSharesX
« on: September 09, 2014, 12:11:00 pm »
Quote from: cryptillionaire on September 09, 2014, 11:25:26 am
It drives the price of another crypto down whilst pushing the price of btsx up, I support it.

So does simply selling the other crypto tokens for BTSX. The people mining on MineBitShares support BitShares enough to want to hold on to BTSX. If they already support it they can trade on an exchange directly and cut out the middleman.

Edit: I don't know. Maybe there is some weird psychological marketing voodoo going on that I cannot comprehend. Perhaps it would be attractive to people still on the fence about POW vs DPOS. I still think that if you think mining still has some value for the time being, it makes more sense to mine on a well established mining pool and then trade your BTC for BTSX on an exchange.

1122
KeyID / Re: Here is my rant about namecoin
« on: September 09, 2014, 11:53:12 am »
It would nice if one day browsers and all other internet clients would use a standardized interface to ask the OS for the IP address and public key tuple for that domain name as determined by the DNS blockchain software installed on the computer (I'm hoping it's BitShares DNS : ) ). Then the internet client would validate the TLS connection directly using the given public key.

Until that magical day, backwards compatibility hacks are needed to easily get adoption in the beginning. It would be really powerful if I could use my browser (with no extensions or plugins), have traditional HTTPS sites work, and have blockchain registered domains also securely work (with no risk of man-in-the-middle attacks). I've briefly described how I would like to see this done. Just have a local HTTP proxy daemon running on the computer which man-in-the-middle attacks SSL connections and rewrites the SSL certificate and signs it with its own local trusted CA key. If the domain is a legacy domain signed by a third-party CA in a list of trusted legacy CAs, then the proxy will resign the certificate with its own key. If the domain is a BitShares DNS domain that validates according to the blockchain, then the proxy will sign the certificate with its own key. Otherwise, break the certificate so the browser complains. Then the browser is set up to only have one trusted CA key (the one of the local proxy) and is configured to use the HTTP proxy.

The real trouble is how this could work on mobile devices. You would need to be able to run a daemon proxy accepting the mobile browser's HTTP(S) connections. This might work on Android, not sure about iOS. Maybe a custom browser app is the other way to go on mobile?

1123
Stakeholder Proposals / Re: MineBitShares.com - A virtual mining multi-pool for BitSharesX
« on: September 09, 2014, 11:06:05 am »
Quote from: nethyb on July 26, 2014, 07:19:19 am
MineBitShares.com - A virtual mining multi-pool for BitSharesX
Making the unminable, mineable! - Coming Soon


I'm initiating a delegate campaign to support MineBitShares.com.

MineBitShares.com is a mining pool which will direct the miners hashing power to mine the most profitable traditional POW based crypto currencies that is automatically exchanged for BTSX and paid daily to miners.

It’s likely the pool will help attract and retain new members of the crypto community to BitShares, and by automatically selling other crypto currencies to buy BitSharesX, it’ should also have a positive effect on the price.

Am I the only one who doesn't get the appeal of this? You are essentially acting like a middleman in the exchange between the POW tokens and BTSX. Is this just for people who don't want to bother with the "trouble" of trading their POW tokens (mined from an already well established mining pool) for BTSX on an regular exchange? Besides, if a POW miner actually believes in BTSX enough (or even just DPOS) to want to earn BTSX instead of the POW tokens, I would think their smartest move would be to sell their ASICs while they still can.

1124
General Discussion / Re: drltc's interest rate and BitBond proposal
« on: September 07, 2014, 04:05:39 am »
drltc, first let me just say, thanks for all your quick responses. This has been a good discussion.

You have addressed most of my initial concerns. But there are two things left about the proposal that are unsatisfactory to me.

First, I really think it needs a mechanism to adjust the interest rate shorts need to pay. I don't like the idea of setting a fixed number like 7%. Shorts shouldn't be selling below the peg, so they need another way to compete for bids, and I think that should be through the rewards they are expected to pay to the funds.

Second, I am okay with the BitBond concept, but I still don't prefer it over alternative strategies of using the value of the excess interest. For one, I am not convinced how interesting BitUSD with full variable interest or BitBonds would be to someone who wants to grow their wealth over the long-term in these early stages of the DAC (and in the saturation stages there wouldn't be enough growth occurring to fund BitBonds anyway). It makes more sense to me to just hold the wealth as BTSX. If it is over the long-term and they expect BTSX to grow in value enough to provide such nice returns in the first place, the small short-term volatility should not be a concern to them. Assuming they have a little flexibility in when they sell it, it should give them higher returns than BitBonds.

Thus, I don't think of BitBond as a compelling product. BitUSD is the compelling product because it can be used as a currency (at least when we finally have merchants accepting it). Adding a reasonable interest rate (5% if we can manage it) makes a lot of sense because it outcompetes what people can get in their regular bank accounts. Adding more to it probably doesn't add much extra demand (people would want to keep the majority of their savings in the higher growth BTSX). If BitUSD is not useful right now, then the only reason people would be investing in BitBonds is if they believe BitUSD will be useful someday. This means they already believe in potential of BitShares X and that BTSX will grow. Why not just hold BTSX then?

So, what should be done with the excess interest after ensuring the insurance fund has enough reserve and the 5% interest is paid to BitUSD holders? Again, I would say it makes the most sense to just give that value back to the shareholders. Yes, that means having the DAC use the BitUSD to buy up (and then destroy) BTSX on the BTSX/BitUSD exchange at market price. Alternatively, I think it would be cool if some of that BitUSD was first used to pay delegates and other designated workers (who fund projects like development and marketing) their USD-denominated income. Then any remaining excess funds could be used to buy up and destroy BTSX to provide a dividend to shareholders.



1125
General Discussion / Re: drltc's interest rate and BitBond proposal
« on: September 07, 2014, 12:52:54 am »
Quote from: drltc on September 06, 2014, 11:49:38 pm
This is exactly what I'm saying.  If the interest rate is too high, we may have some fundamental problems.  Even 5% may be too high once the market is large enough.  But bytemaster computed somewhere that APY so far from fees alone is 10%.  Add short interest into the mix and 5% should be very reasonable for the next several years at least. My proposal also includes "buffering" some amount of pending interest payments in case there are some underwater shorts that will be unable to pay.  So if 5% is ever too high, even in a terrible black swan the buffer will pay longs 5% for months.  In those months we can hopefully work out a community consensus for a hard-fork to fix whatever the actual problem is.  Or if no hard-fork solution finds consensus, at least the long-holders will have plenty of warning that their interest rates are going to drop.

I'm glad we are finally reaching an understanding. My issue is I really don't like price fixing and would prefer a design that can last. I rather avoid requiring some other consensus mechanism to constantly tweak parameters if there is another market-based solution that can take care of it. Of course, the trade-off with that as you mention is that the BitUSD holder has difficulty predicting what kind of returns he will get.

Quote from: drltc on September 06, 2014, 11:49:38 pm
I really think a fixed interest rate is simpler to market and more attractive for investors.  And I really want to have a way to reward investors for making a long term commitment.

So if you make the assumption that BTSX growth will always be good enough that you can sustain a 5% interest rate without depleting the insurance fund, then is it fair to say that you are basically taking the free-market variable interest paid by shorts, buffering it into a fund, and then paying that interest out capped at 5% to BitUSD holders, and then using the excess interest to pay for the BitBonds? If so, that means if BTSX growth slows (thus reducing interest rates shorts are willing to pay) and/or transaction and ask/bid overlap fees shrink, you risk having BitBonds become worthless (since they wouldn't pay higher interest than just holding BitUSD), the insurance fund providing no protection against black swans, and in extreme situations perhaps not even being able to pay the full 5% interest. I would tweak the "graceful degradation" to prioritize the insurance funds before the the 5% interest. Even then, I still don't care for the BitBond concept all that much. I don't see why we should be rewarding people more for long term commitment. Why not just take the excess interest and give that value to the shareholders instead?

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