Empirical1, thanks for reading.

It is true that I think that SR is an example of firm-superiority, and the existence of SR weakens the case for DACs. I think eventually (and soon) it will be possible for many people to easily set up their own anonymous website (MaidSafe / clearskies / whatever). Multisig I think will also become widespread, and then I think there will be an explosion of entrepreneurship in anonymous / illegal goods / tax-evasion. My forecast is that this will be done predominantly (if not exclusively) through firms, although they will almost certainly use Bitcoin and may use .p2p / Quixote ("Namecoin 2.0").

An office that can't open an Excel spreadsheet! Not buying it! 

Upon reflection, my argument "requires digital scarcity", does allow for Quixote (sorry, I can't spell it your way). I have a question though, if we have an Identification-Blockchain, why do we need a new blockchain for .p2p addresses (can't they just be registered as a type of 'name'). In fact, all of the "names" could be registered in a.....Namecoin.

So I suppose there are room for 3 digital scarcities: value, escrowed-value, and names. They will probably all have first-mover-advantage network-effects, but it looks like Namecoin is ripe for a superior replacement.

If your goal is to create a new world-changing blockchain, I think you'll find the following questions essential to your quest:
Can I think of a new blockchain-use, which doesn't involve digital scarcity?
Can I think of a new market-need for digital scarcity?
If so, can this be built into one of the 3 chains above, or is there an opportunity for something new?

AI, I did not realize the T-Coin market would have shorts and "longs" on continuously-priced assets.  Would you expect these assets to become pegged to their real world counterpart?

Check out this Excel sheet, Scaled Claims tab, to get the general idea here. I absolutely would expect them to become pegged, through the magic of arbitrage. Especially if the markets matured very soon (low basis / technical risk), or if there were many evenly-spaced markets. I plan to build in a sort of "arbitrage viewer", which calculates the implied annual interest rate, to encourage this as much as possible.

is linux as a whole experiencing software rot?

I don't see rot as "happening" to one thing or another. Any organism, including ourselves, would rot if we did not perform essential maintenance (food, exercise, rest, immune system, etc) on it. Linux is alive and not rotting. I'm simply trying to say that software has maintenance costs just like a firm has operating costs, so when people say "software will be cheaper long run" they aren't always right.

Please elaborate on [1] in regards to this:  If some bets Yes/No, then that person will need to wait until the event occurs to receive payout.  How will people deal with opportunity cost of betting Yes/No? 

I'm not sure opportunity cost was the phrase you meant to use. You might find this FAQ answer helpful.

I read the OP and vastly agree with it. But where does it contradict with one of the DACs developed based on the Bitshares toolkit (lottery, me, music, dns, insurance)? With Bitshares Music I see your point. Not with the rest.

Insurance I personally don't get. I think ME can be replaced with colored coins. Lottery I think is a little unambitious, actual prediction markets or legal gambling institutions (that you could sue if they cheated you) could replace. DNS I get although it might also be replaceable by colored coins.

What do you mean by

Quote

'real estate' storage

?

Simply that .p2p is sort of like storing real estate instead of cash. Its a different asset (web namespace) where digital scarcity would be important. I can't think of any others.

We'll see if that market cap lasts. I'm betting it won't.

As you refered to BTS X. This falls into the same category as Bitcoin: value transfer. At least one side of it. Based on your assessment the market cap should not fall (in case it works).   
[/quote]
You are right, based on this assessment it would have an opportunity to be very successful, and probably actually replace BTC with a superior currency. However, separate from this, I'm afraid I personally do not expect the market peg to work, and I expect liquidity to fall suddenly and unexpectedly. I'm reasonably confident of this, but as excited as anyone to see the software turn on and do its thing.


bb, I think you are referring to a difference between...
[1] " Yes/No the price of gold will be above $1000 on date D? "
and
[2] "The price of gold on date D".
...but even markets with [1] have "flow", if you define that as "a continuously changing price". Out of the money binary options still have a continuously changing price, which can be translated into an index.

Moreover, the Truthcoin markets I designed can allow you to "go long" or short continuously-priced assets such as [2].

I share toast's confusion, though. If the above guess was wrong I haven't the slightest idea what you are talking about! 


That meme is fantastic.

Here is another proposition:
 
Transparency for companies can (only) be enhanced if the respective company does ALL it's value transfer (receiving and spending) using crypto currency. A charity for example receives all it's money via a crypto currency which let's people see how much money the received. If they spend it all via a the same crypto currency then it is all traceable. If they have to exchange it to fiat and spend it then it is not tracable anymore.

What do you think? How else could a company enhance transparency (if the company is not a DAC itself)?

I think that transparency is hard, even with software and blockchains. There are many businesses, even small ones with professional accountants, where even the people running the business don't know exactly where all of their money is. I can sign a message from an address, but what does that really accomplish? I could transfer the coins to my personal BTC account and keep signing messages, or I could build a plan to steal the coins in one quick moment. What's the difference between an inside/outside job?

These features favor putting the whole process on a blockchain, but as I said before, security/accounting audits are a lot of work. If you trust the charity enough to donate to it at all, why check and see what it is doing with the money? The true audit is for the real-world results of their operations, which makes the blockchain transparency irrelevant. Charities do not need to store your money, so they can just use Bitcoin.

Quote from: AsymmetricInformation on July 11, 2014, 09:07:38 pm

Right. I didn't mean to imply that BitsharesX could be replicated for $5. In fact I'm nearly suggesting the reverse: that what you guys are doing is very, very, hard. So hard that I predict that like-minded entrepreneurs will actually decide that they don't want to try it anymore (except perhaps for the challenge, or for the public good), and will instead do the traditional thing, and set up shop and sell their labor.

You do understand this is open source software, don't you? Now that the basic code is nearly complete, anyone can build their own DAC relatively easily; they will not be deterred by some great cost. I recently took a train ride up a mountainside in Alaska. It took a huge team of men many months and lots of black powder to blow apart the mountainside, at the cost of many lives. But today, I can buy a ticket and ride to the top comfortably in less than an hour. With the open source software toolkit that Invictus has created, anyone will be able to make their own DACs pretty easily. Does the price of my train ticket factor in how hard it was to blast that track out of the mountain? Does the simplicity with which anyone will be able to create a DAC factor in the difficulty and delays in getting the basic code built? Factor in that initial groundwork if your formulas and theories so demand, but don't be surprised if they don't quantify the relatively light burden remaining for anyone wishing to jump off from this platform.

The experienced software professionals I know (and I"m not saying that they are infallible) don't believe you. Instead, they believe in something called software rot, whereby the environment changes too quickly for the inputs of the software to remain relevant. Even though the mapping from inputs to outputs improves constantly, the benefit of performing that mapping at all falls quickly and unexpectedly.

This is why I wrote, in the OP (over a month ago): """Software development/maintenance requires a great deal of highly-skilled work, and then the software "rots" as it gradually becomes obsolete."""

Quote from: AsymmetricInformation on July 11, 2014, 10:54:52 pm

The point is that shareholders do NOT choose a company with lesser accounting transparency. Those companies are forced to borrow at the high rates charged to actually-doomed companies, but occasionally there is a good egg in there (a still-breathing company which could not prove it would still be breathing a year from now). Investors receive a reward disproportionate to the risk they assumed, so they actually win. Its the managers that lose, not the owners.

So the majority of companies would be 'actually-doomed' companies that could exist a while longer thanks to lower borrowing rates for example, but ultimately fail.

& you're/theory is saying that outside shareholders benefit from this because without that they would have failed sooner or perhaps not got a shot to get out of the hole. However as you say - the majority are 'actually-doomed' which means shareholders within the company & people close to them would have this inside information and be able to sell as 'doomsday' becomes inevitable. This would leave the outside shareholders at a disadvantage, they would only learn of problems at a much lower price and in extreme cases experience a complete loss in the case of some bankruptcies.

Does the theory take that sort of idea into account and still find it is in outside shareholders interest over all? 

Shareholders almost never have the inside information.
http://en.wikipedia.org/wiki/Agency_cost

I'm not quite sure about your response. The AI would predict that a DAC's managers / agents, would benefit from accounting transparency, but not necessarily the shareholders/owners/principals, who might actually suffer as a result of losing the option to gain a superior risk-adjusted return.

But it doesn't really matter, because "accounting transparency" is probably only important for value-storage, as I've been saying. You could look at the accounting statements of GE, Walmart, but of course you don't (the benefits are small and not worth your effort). Increasing the detail (checking every transaction) would just make things more confusing. Fully transparent accounting might prevent accounting fraud, but why bother? Writing code that is 1] secure and 2] flexible enough to allow a manager to delegate/approve every expense is going to be nearly impossible. As I've been saying, just start your own business. You'll know where your own money is! The intra-brain transaction costs are low.

However, for a bank or escrow, you would want to know where the money was. You'd know exactly what to expect, and checking it would be simple enough to be worth your time.

Quote from: bytemaster on July 11, 2014, 02:42:10 am

Suppose Bad Actor has 25% approval, everyone else has to find someone they can agree to give 26% approval to bump the Bad Actor.... there are 2 solid candidates and they each split the vote 13% / 13% and thus neither is able to bump the Bad Actor.    Everyone can agree the Bad Actor should go, so they simply vote against him.

Importantly, even if the 60% managed to use their votes to get another candidate in front of the one they oppose, BOTH candidates would likely still end up being delegates. Now we would still have a delegate who 60% STRONGLY OPPOSE!

I have some bad news for you:
http://en.wikipedia.org/wiki/Voting_paradox
http://en.wikipedia.org/wiki/Arrow%27s_impossibility_theorem