It is really kind of a catch-22 on the community. Imagine for a moment that BTS value fell down to $10M because Bitcoin fell down to $80. At our maximum dilution rate of 50 BTS per block (~6% per year) your development budget would be crushed to $600,000 per year which is enough to pay about 5 developers each with 20 delegates.
Who would we let go? Toast, Nathan, Vikram, Valentine, Ben, Me, Stan, the entire marketing team?
Many developers would take "equity" in place of salary (ie, not contribute to sell pressure) but if you cannot offer them equity then they will go work someplace else and support BitShares part time if at all.
Many developers would take "equity" in place of salary (ie, not contribute to sell pressure) but if you cannot offer them equity then they will go work someplace else and support BitShares part time if at all.
TLDR of my previous post: I'm a developer and I'd rather have debt, not equity, if we can make the debt USD-denominated and have a reasonable plan for having delegates elected to pay it off over time.Many developers would take "equity" in place of salary (ie, not contribute to sell pressure) but if you cannot offer them equity then they will go work someplace else and support BitShares part time if at all.
Rather than having an income of X BTS per round, I'd rather have an income of $Y per round. The dilution of BTS holders necessary to sustain that level of income will change as the BTS / USD exchange rate rises and falls. It makes more sense to pay developers fiat-denominated salaries.
I didn't read past your first paragraph.
I didn't read past your first paragraph.
Inflating BTSX heavily damaged our value and network effect. The income derived from fees at a higher valuation may well have been comparable to what we currently access via dilution at a low CAP. Losing profitable DAC status but more importantly crypto-money status especially given the way inflation is distributed will be our main marketing & PR headwind going forward and it's possible no amount of dilution spent on marketing can offset the marketing cost of dilution.
Also looking at the big picture, long term outlook, BitAssets will take you only so far and then the future belongs to a very large defined supply crypto-currency. It will be hard for BitShares to play that role vs. a money that defines a supply, which builds trust, confidence and increasing value in it over a period of time as well as stickiness. (Ie. Future investors wouldn't change by consensus because of the loss of crypto-currency status and BitShares has already given them an example of what happens to your value when you do.) Now we may just be seen as a crypto-equity whereas other options established by more far sighted investors can play a dual role.
BitShares is still best places to replace Bitcoin in the near term imo.
I didn't read past your first paragraph.
Based on what you wrote, I think that if you read it all you wouldve seen that I was agreeing with you. :)
I didn't read past your first paragraph.
Inflating BTSX heavily damaged our value and network effect. The income derived from fees at a higher valuation may well have been comparable to what we currently access via dilution at a low CAP. Losing profitable DAC status but more importantly crypto-money status especially given the way inflation is distributed will be our main marketing & PR headwind going forward and it's possible no amount of dilution spent on marketing can offset the marketing cost of dilution.
Also looking at the big picture, long term outlook, BitAssets will take you only so far and then the future belongs to a very large defined supply crypto-currency. It will be hard for BitShares to play that role vs. a money that defines a supply, which builds trust, confidence and increasing value in it over a period of time as well as stickiness. (Ie. Future investors wouldn't change by consensus because of the loss of crypto-currency status and BitShares has already given them an example of what happens to your value when you do.) Now we may just be seen as a crypto-equity whereas other options established by more far sighted investors can play a dual role.
BitShares is still best places to replace Bitcoin in the near term imo.
People like rune came when inflation was added
It is really kind of a catch-22 on the community. Imagine for a moment that BTS value fell down to $10M because Bitcoin fell down to $80. At our maximum dilution rate of 50 BTS per block (~6% per year) your development budget would be crushed to $600,000 per year which is enough to pay about 5 developers each with 20 delegates.
Who would we let go? Toast, Nathan, Vikram, Valentine, Ben, Me, Stan, the entire marketing team?
So while I think it is safe to say that we will never dilute by more than $3 million dollars per year of capital infusion I doubt the stakeholders would want to cripple our team which is the only hope we have toward long term viability.
As it stands right now, we will need 101 fully paid 100% delegates to maintain our current burn rate. The community would have to start making tough choices on who to let go.
Many developers would take "equity" in place of salary (ie, not contribute to sell pressure) but if you cannot offer them equity then they will go work someplace else and support BitShares part time if at all.
On the other hand by the time we grow to be the size of Bitcoin it is inconceivable that we should need any additional dilution. So I would be sure to caveat any "rules" on dilution to only apply at market caps above $250M because below that point we are still in the "bootstrap" phase.
Not saying I want to dilute, I would much rather have us grow faster than we are diluting, but we can never guess how Bitcoin's fate could impact us.
It is really kind of a catch-22 on the community. Imagine for a moment that BTS value fell down to $10M because Bitcoin fell down to $80. At our maximum dilution rate of 50 BTS per block (~6% per year) your development budget would be crushed to $600,000 per year which is enough to pay about 5 developers each with 20 delegates.
Who would we let go? Toast, Nathan, Vikram, Valentine, Ben, Me, Stan, the entire marketing team?
So while I think it is safe to say that we will never dilute by more than $3 million dollars per year of capital infusion I doubt the stakeholders would want to cripple our team which is the only hope we have toward long term viability.
As it stands right now, we will need 101 fully paid 100% delegates to maintain our current burn rate. The community would have to start making tough choices on who to let go.
Many developers would take "equity" in place of salary (ie, not contribute to sell pressure) but if you cannot offer them equity then they will go work someplace else and support BitShares part time if at all.
On the other hand by the time we grow to be the size of Bitcoin it is inconceivable that we should need any additional dilution. So I would be sure to caveat any "rules" on dilution to only apply at market caps above $250M because below that point we are still in the "bootstrap" phase.
Not saying I want to dilute, I would much rather have us grow faster than we are diluting, but we can never guess how Bitcoin's fate could impact us.
One way to ensure developers have enough budget, and the market gets its certainty, is to set the maximum inflation as an annual dollar amount. The market will then be guaranteed that when the market cap grows high enough, inflation will be very small. And if the market cap is very low, that must be due to other reasons, so any investors left ought to be willing to fund the developers even if the "inflation rate" is high, or else see the project die.
Having said that, on a philosophical front, I still feel that voluntary funding solutions are closer to the ideal of personal freedom than a mandated inflation, which leaves the only real free choice as "like it or leave it". It would be great to start imagining solutions in this direction.
Many developers would take "equity" in place of salary (ie, not contribute to sell pressure) but if you cannot offer them equity then they will go work someplace else and support BitShares part time if at all.
I thought there was a hard cap for Bitshares. 3.7 billion.
https://bitsharestalk.org/index.php?topic=11213.0
I thought there was a hard cap for Bitshares. 3.7 billion.
https://bitsharestalk.org/index.php?topic=11213.0
I thought there was a hard cap for Bitshares. 3.7 billion.
https://bitsharestalk.org/index.php?topic=11213.0
There is if no one changes the rules. The point of this post is that we should all publically agree to commit to "we won't change the rules, even if it seems like a good idea". Such a commitment would greatly raise the cost of changing the rules, thus making it less likely to occur, thus making investors perceive of the BTS hard cap as real, in the same way that they perceive the Bitcoin hard cap of 21 million as real.
Because right now, plenty of people out there do NOT perceive the 3.7 billion BTS hard cap as real, and it hurts us.
There is only one way to achieve trust that 3.7 is the absolute hard cap and that is for the protocol to free itself from needing / wanting support of any developer that supported the prior change. Effectively, fire current management and hire new management. Unless you are prepared to do that, then current management "rules". Not that I want to rule or anything, it is just the practical reality. I very much look forward to the day where BTS is bigger than any small group of individuals.
I think I would feel comfortable stating no more "bulk" inflations like the "merger".
I think I would also feel comfortable limiting the maximum delegate dilution rate to 2x what it is now *if* we fall under 20M otherwise to keep it what is now.
I definately support no more unilateral inflations.
I think the fear that some have is round 2 of the big bulk inflation.
I think the fear that some have is round 2 of the big bulk inflation.
If there's a Round 2 of that, then BitShares is dead. Period. Every ounce of promotion we are doing, and much more, would be lost.
I think the whole point of those changes was to position BitShares well so that it will be strong for many years to come.
Many developers would take "equity" in place of salary (ie, not contribute to sell pressure) but if you cannot offer them equity then they will go work someplace else and support BitShares part time if at all.
This statement (if true) disappoints me ... :(
So all (or the majority) of the Dev's are motivated because of money/equity only? Is anybody motivated for the great vision behind bitshares?
Is anybody motivated to dedicate himself in the name of freedom, in the name of liberty or whatever? So you say we are depended from the bitcoin success (or not) and not by our self?
I really don't want to believe that in case that our market cap decrease to much (whatever the reason is) we will loose the support of all of our Dev's...
Sorry but I have imagined it a little bit different ... and I still (want to) believe, I can keep dreaming ...
(http://25.media.tumblr.com/tumblr_m3cpk2i1MP1rtcdwao1_500.jpg)
There is confusion about we what wish to commit to now and what the reality about how the system works is.
The system is ruled by shareholder vote. If you promise a fixed cap as part of the system, you are lying.
...
This is a good question. Are the supply cap and inflation going to be determined by an individual, some individuals or the votes of the decentralised company's shareholders?The bigger picture is, and that is what toast wrote in his blog post, that for any upcoming hardfork that changes the protocol (not just bugfixes) shareholder approval is required before a hardfork will become "valid" ..
I think the fear that some have is round 2 of the big bulk inflation.
If there's a Round 2 of that, then BitShares is dead. Period. Every ounce of promotion we are doing, and much more, would be lost.
I think the whole point of those changes was to position BitShares well so that it will be strong for many years to come.
I think the fear that some have is round 2 of the big bulk inflation.
If there's a Round 2 of that, then BitShares is dead. Period. Every ounce of promotion we are doing, and much more, would be lost.
I think the whole point of those changes was to position BitShares well so that it will be strong for many years to come.
Agreed .
Dilution is only mean to fund the operation and grow the eco-system , if there comes to a point that the current rate of dilution can't sustain the operation , then we're not actually growing , are we ?
If our business grows 10 times , then yes , more dilution maybe acceptable in the future . You can add 10X dilution and people might gladly accept it .
But if the business stays the same or even shrinking , then additional dilution won't do much good either . Everybody's pay will be diluted as well to the point that no dilution amount can revive the business .
I remembered at the old days , the poor people can't afford to eat regular meal , they make rice porridge for the
whole family , and as the rice became rare , they added more water to make the porridge to a point that it's not even a porridge but water with rice .
Unless those additional dilution is paid in a postpone period , just like the stock options in real companies .
If we're gonna argue that our system is "self-funding" , then we have to increase the value , so the dilution can have meaning . Otherwise , it's just like putting more water in a rice porridge . If there comes to a point that we need additional dilution to maintain a shrinking business , then just like what people in the regular company would do : Cut costs , reform business model , make extra income , lobby for outside funding .
Dilution is not the final answer for everything .
I agree with toast on this matter. What is the value of giving promises that no single party is able to keep? Every future shareholder is involved in the decision process. This is the way it should be.I think the fear that some have is round 2 of the big bulk inflation.
If there's a Round 2 of that, then BitShares is dead. Period. Every ounce of promotion we are doing, and much more, would be lost.
I think the whole point of those changes was to position BitShares well so that it will be strong for many years to come.
Agreed .
Dilution is only mean to fund the operation and grow the eco-system , if there comes to a point that the current rate of dilution can't sustain the operation , then we're not actually growing , are we ?
If our business grows 10 times , then yes , more dilution maybe acceptable in the future . You can add 10X dilution and people might gladly accept it .
But if the business stays the same or even shrinking , then additional dilution won't do much good either . Everybody's pay will be diluted as well to the point that no dilution amount can revive the business .
I remembered at the old days , the poor people can't afford to eat regular meal , they make rice porridge for the
whole family , and as the rice became rare , they added more water to make the porridge to a point that it's not even a porridge but water with rice .
Unless those additional dilution is paid in a postpone period , just like the stock options in real companies .
If we're gonna argue that our system is "self-funding" , then we have to increase the value , so the dilution can have meaning . Otherwise , it's just like putting more water in a rice porridge . If there comes to a point that we need additional dilution to maintain a shrinking business , then just like what people in the regular company would do : Cut costs , reform business model , make extra income , lobby for outside funding .
Dilution is not the final answer for everything .
I agree that dilution isn't a universal solution, yet I don't agree with the rest you said.
Growing an ecosystem isn't a linear process. You can't say that for every $1 worth of work put into the system it has to grow more than $1. The point is this has just to be true on average. There will be days where you spend more than you make, but that is okay as long as it doesn't happen too often.
Just look at BitShares' history. We already had a cap of $80 mil. Since then we lost value. Was it wrong to dilute in this time to get to the point where we currently are? Was it wrong to pay bytemaster, toast, vikram and all the others for their development efforts, even though they didn't bring a huge value improvement yet? No. The time where this efforts pay out will come, but probably not today or tomorrow. It is simple. You have to invest first, before you can make money.
Notice that "additional dilution" was what I mentioned .
Notice that "additional dilution" was what I mentioned .
Okay. My point was just that we have to support certain core positions (primarily devs) pretty much at any price.
But I do hope that we will never be in the situation where we struggle with that.
Notice that "additional dilution" was what I mentioned .
Okay. My point was just that we have to support certain core positions (primarily devs) pretty much at any price.
But I do hope that we will never be in the situation where we struggle with that.
I just updated my post with new info .
And I don't think the developers would really feel safe watching the price drop and needed additional dilution to support them . They will know something is weird and will have the urge to prepare for a exit strategy in case something even additional dilution can't support them any longer . How can we expect the motivation for them if this happens ?
Additional solution for the business model is not just for the shareholders , but for the developers as well .
If I'm a developer , if I know that this month's income comes from more dilution , then I'll think about how long this can last , and I have mouths to feed , so I'm not sure I'll be comfortable even the fiat value is the same as the last month . Just imaging if you know your employer is borrowing more debts to pay your salary , won't you worry at all if the next month can pay ?
It is really kind of a catch-22 on the community. Imagine for a moment that BTS value fell down to $10M because Bitcoin fell down to $80. At our maximum dilution rate of 50 BTS per block (~6% per year) your development budget would be crushed to $600,000 per year which is enough to pay about 5 developers each with 20 delegates.I agree you almost your view so far, but this time ,I disagree
Who would we let go? Toast, Nathan, Vikram, Valentine, Ben, Me, Stan, the entire marketing team?
So while I think it is safe to say that we will never dilute by more than $3 million dollars per year of capital infusion I doubt the stakeholders would want to cripple our team which is the only hope we have toward long term viability.
As it stands right now, we will need 101 fully paid 100% delegates to maintain our current burn rate. The community would have to start making tough choices on who to let go.
Many developers would take "equity" in place of salary (ie, not contribute to sell pressure) but if you cannot offer them equity then they will go work someplace else and support BitShares part time if at all.
On the other hand by the time we grow to be the size of Bitcoin it is inconceivable that we should need any additional dilution. So I would be sure to caveat any "rules" on dilution to only apply at market caps above $250M because below that point we are still in the "bootstrap" phase.
Not saying I want to dilute, I would much rather have us grow faster than we are diluting, but we can never guess how Bitcoin's fate could impact us.
Notice that "additional dilution" was what I mentioned .
Okay. My point was just that we have to support certain core positions (primarily devs) pretty much at any price.
But I do hope that we will never be in the situation where we struggle with that.
I just updated my post with new info .
And I don't think the developers would really feel safe watching the price drop and needed additional dilution to support them . They will know something is weird and will have the urge to prepare for a exit strategy in case something even additional dilution can't support them any longer . How can we expect the motivation for them if this happens ?
Additional solution for the business model is not just for the shareholders , but for the developers as well .
If I'm a developer , if I know that this month's income comes from more dilution , then I'll think about how long this can last , and I have mouths to feed , so I'm not sure I'll be comfortable even the fiat value is the same as the last month . Just imaging if you know your employer is borrowing more debts to pay your salary , won't you worry at all if the next month can pay ?
You're right the situation would be very uncomfortable and unstable for all involved parties. The risk that it would fail completely at this point is quite high. The question is just, what are the alternatives?
You're right the situation would be very uncomfortable and unstable for all involved parties. The risk that it would fail completely at this point is quite high. The question is just, what are the alternatives?
You're right the situation would be very uncomfortable and unstable for all involved parties. The risk that it would fail completely at this point is quite high. The question is just, what are the alternatives?
There are no alternatives except to not do it and suffer whatever consequences there may be. I don't even get what the point of this is. It seems Dan and Toast are being asked to make statements they know are not true so that others will be made happy because that is "how a business is run? "
Seriously. D.E. is just an over the top troll going after BitShares because he has no better target and NXT is feeling how far they're getting behind. It was something for Stan to do who is unmatched in his responses.
I'd still bet NXT will start diluting within 2 years, possibly 1 year.
Many developers would take "equity" in place of salary (ie, not contribute to sell pressure) but if you cannot offer them equity then they will go work someplace else and support BitShares part time if at all.
This statement (if true) disappoints me ... :(
So all (or the majority) of the Dev's are motivated because of money/equity only? Is anybody motivated for the great vision behind bitshares?
Is anybody motivated to dedicate himself in the name of freedom, in the name of liberty or whatever? So you say we are depended from the bitcoin success (or not) and not by our self?
I really don't want to believe that in case that our market cap decrease to much (whatever the reason is) we will loose the support of all of our Dev's...
Sorry but I have imagined it a little bit different ... and I still (want to) believe, I can keep dreaming ...
(http://25.media.tumblr.com/tumblr_m3cpk2i1MP1rtcdwao1_500.jpg)
Many developers would take "equity" in place of salary (ie, not contribute to sell pressure) but if you cannot offer them equity then they will go work someplace else and support BitShares part time if at all.
This statement (if true) disappoints me ... :(
So all (or the majority) of the Dev's are motivated because of money/equity only? Is anybody motivated for the great vision behind bitshares?
Is anybody motivated to dedicate himself in the name of freedom, in the name of liberty or whatever? So you say we are depended from the bitcoin success (or not) and not by our self?
I really don't want to believe that in case that our market cap decrease to much (whatever the reason is) we will loose the support of all of our Dev's...
Sorry but I have imagined it a little bit different ... and I still (want to) believe, I can keep dreaming ...
(http://25.media.tumblr.com/tumblr_m3cpk2i1MP1rtcdwao1_500.jpg)
If bts falls to 10mil market cap we will see how many people are actually here for the vision.....
There is confusion about we what wish to commit to now and what the reality about how the system works is.what we really want to do ? why we start?
The system is ruled by shareholder vote. If you promise a fixed cap as part of the system, you are lying. The chance to have people believe anything the devs or the code says has passed. The only thing left is the consensus metric.
If you promise a fixed cap is what everyone thinks is the best option to commit to now, that's a different story. We should have a shareholder vote of confidence to convince the world that's what current shareholders want.