None of the pegged currency concepts is yet ideal. And all are in constant development. So I think its important to not get on our high horses and be overly critical of any innovation, its all moving to a better world.

The robustness problem with NuBits is well acknowledged here. But there are positives from a user perspective that should also be acknowledged - it is very simple and accessible.

BitUSD is not ideal yet either.

Though BitUSD has a flexible supply to deal with demand shocks, sellers of any size will still need to take some haircut to the peg to exit. The proposed rule that shorts must cover in 30 days will help to ensure the discount does not grow too great.

But the main issue to adoption in my view is complexity. It requires a BTSX wallet (and BTSX as collateral) to access and hold BitUSD. Its a multi-step process. And trading it requires a knowledge of some quite complicated (and constantly shifting) rules to understand the market dynamic, at least until enough history means people can just default to trusting it. For outsiders interested in holding BitUSD it requires some view on this relatively unknown thing called BTSX, which is held as additional collateral at risk, but also if it moves up too far can knock you out of your BitUSD position through a margin call. This requires another layer of monitoring and risk.

These are big hurdles for the outside layman, and does not facilitate easy trading of BitUSD outside its specialised environment, so heavily constrains liquidity. NuBits by comparison is bought and sold like any other crypto and so can be used easily by traders on the exchanges.

I'm not taking any sides here.

But I think it would be useful if BitUSD could be wrapped in some way that is simpler to handle. For example, if there were a fund/DAC/crypto/ETF that did the job of managing all this on behalf of the underlying investors.

I think you're misunderstanding a few things.  You don't have to hold BTSX to hold bitUSD, and a margin call will not compromise your bitUSD.  BitSapphire is also working on a simplified wallet for those who just want to transact simply, and already in the existing wallet most of the complexity can be switched off and ignored if all you want to do is use bitUSD. You can buy bitUSD directly without holding BTSX first.

Quote from: donkeypong on October 05, 2014, 04:41:45 am

The "no dilution" folks aren't jumping ship. They just want to see this proposal limited to a hard and fast number. Because they're right; BTSX is supposed to decrease, not increase. I think this dilution will be very limited in scope, but it does need to be defined/capped.

And anybody who is smart will stick with BTSX, not AcmeFork DAC, since AcmeFork DAC will be too rigid. It will not have the business development potential that will now be possible with BTSX. We just need to see a capped limit on the dilution.

 

Edit: and "Dance with the BM that brought you"...

There's already a cap on dilution that's harder than any new cap will be.  If that cap is broken, everyone will know the new one is meaningless also.

I don't like this focus on marketing. It makes it seem like the BTSX team is desperate for money.

We should be focused entirely on making the system as robust and bug-free as possible. If the pegged assets system works as intended, then the market will speak for itself and users will come on of their own accord.. Trying to draw in new users with big promises should not be a priority, and it makes this whole thing look scammy...

I agree.  There are already great marketing efforts under way from my understanding, but much of this discussion seems like the sort of desperation I would expect if the project were to be a failure on technical merits, which is definitely not the case.

See also: https://bitsharestalk.org/index.php?topic=5082.0

Indeed.  Unfortunate timing, but my understanding is that immediately after posting the AMA thread significant feedback was received and they're making significant efforts to respond and improve internally.  I'd much rather be patient until he can give new answers than have him waste time giving answers that are already outdated, though it would have been nice of him to post in the thread making that clear if that's what's going on.

Welcome!

Unfortunately the donation period for AGS is over, so PTS is the nearest available alternative now.

I agree with arubi here. If users start depending on any particular method to input their secret to access their funds, hackers will eventually design trojans to exploit it. Once your OS is compromised you cannot rely on fancy methods of entering your secret into the computer. That will just give users a false sense of security.

This is why multisig is essential. Let the hacker see the funds in your main account, they still won't be able to steal all of your money since the third-party company holding one of the three keys for multsig won't allow a huge transfer of wealth in a 24 hour period without further verification. You could establish your own the limits, for example: if less than $100 will be moved today and other limits haven't been reached, then sign as long as my account has already signed the transaction; if greater than $100 will be moved today or greater than $250 will be moved in the last three days, then require a two-factor authentication code that is only accessible from my smartphone; if greater than $3,000 will be moved in the last week, then have an employee call me on the phone, verify I am the one speaking (by comparing to a previous recording of me), and have me confirm that I want to make the transaction; if greater than $20,000 will be moved in the last week, then require that I come to the nearest facility in person to verify my identity using biometrics and confirm I want to make the transaction.

Multisig is definitely the key.  I'm not sure if I'd use a third party company, but I'd love to have the option and I'm sure it would be popular.  Multisig support drastically increases both security and business flexibility with escrow and dynamic payments.

why would 2FA not be worth adding immediately as an option on login, to reduce keylogger threat?

If by 2FA you mean something like Google Authenticator with one time use passcodes, that's a solution for authenticating a trusted user to a trusted server resisting eavesdropper playback attacks, if the concern is that the system on which the wallet resides may be compromised it doesn't really help.

We already have technical 2 factor authentication, with the wallet file being one factor and the password being the other.  You need both factors to use the wallet.

If BTSX fees are inadequate to pay the delegates' expenses, but BitUSD fees would be, doesn't that create an excellent incentive for delegates to do a hard fork which changes the fee distribution at that time?

Or are we worried that there may be non-updateable clients in the wild at that time, and hard forks will cause those users too much pain?

Getting rid of subsidies is more disruptive the longer they've been paid.  We're better off fixing the problem earlier.

Quote from: Troglodactyl on September 11, 2014, 01:31:44 pm

Conceptually, I think the ideal is that transaction fees should pay for the real costs of transactions, and shorts should pay longs a variable amount depending on the current demand to short.  Is there any disagreement on this?

Yes.
Today she shorts seem  in great abundance.
We will have to change the system to make their life more bearable, long before we reach Visa-like transaction volumes...

I'm not understanding this.  Are you saying we need to make it easier to short?

The primary argument here is that in a BitUSD only use case (consumer->merchant, BitUSD<->USD), they pay nothing to the network (only other BitUSD users).  This could yield VISA level transaction volume with no compensation to the delegates.   

The delegates would have to make their money from margin calls and order submission/update on BTSX orders.   Here is the fact of the matter:  market orders will always out number consumer->merchant orders by an order of magnitude.   So assuming there are 4 market order transactions for every consumer transaction then the speculators can easily cover the costs of the consumers. 

Speculators are in the business of making money from their transactions so the fees don't hurt them nearly as much. 

Where do you get that market orders will always outnumber consumer orders by an order of magnitude?  More relevantly, are you implying that this will remain true not only globally, but in our specific market, regardless of the incentive structure we impose on that market?  O.o

Are you saying the speculators should subsidize the consumers just because they can afford it?  Since they're focused on making money, rather than on convenience in spending, I'd expect fees to be a stronger deterrent to speculators, especially when they can find lower fees in other markets in which they aren't subsidizing others.