BitShares Forum

Main => General Discussion => Topic started by: MrJeans on December 09, 2013, 10:57:09 pm

Title: BitShare investing/trading
Post by: MrJeans on December 09, 2013, 10:57:09 pm
Let me know if this should be moved elsewhere.

What would be the best way to get the most out of ones BitShares during the early stages of BitShares?

If I hold my BitShares, I will get more dividends (from half of mining and transaction fees). But the dividends would not be enough to keep up with the inflation of new BitShares entering the system (through mining).

Thus my purchasing power will not increase over time and may infact decrease.

And I also assume supply of BitShares will be high at the start.

Given the above what would be the best way for an early adopter to make the most of BitShares when it first comes out?

Would it be to hold BitShares and collect dividends and hope for high capital appreciation against fiat? Or buy BitUSD and collect dividends from your bitUSD through the BitShares you have used to back up the BitUSD?

I find the benefits of holding BitUSD or any other BitAsset over simply holding onto BitShares rather confusing.
Title: Re: BitShare investing/trading
Post by: MrJeans on December 10, 2013, 10:01:44 am
I find the benefits of holding BitUSD or any other BitAsset over simply holding onto BitShares rather confusing.

By this I mean; if I assume the value of BitShares will appreciate over time against fiat: would it be better to buy long on a particular BitAsset, or simply hold onto the BitShares.

I understand the benefits of buying BitAssets in order to speculate.
Title: Re: BitShare investing/trading
Post by: phoenix on December 10, 2013, 07:11:08 pm
I find the benefits of holding BitUSD or any other BitAsset over simply holding onto BitShares rather confusing.

By this I mean; if I assume the value of BitShares will appreciate over time against fiat: would it be better to buy long on a particular BitAsset, or simply hold onto the BitShares.

I understand the benefits of buying BitAssets in order to speculate.

For this aspect of Bitshares, the advantage of holding a Bitasset instead of Bitshares is that whenever you buy long on a Bitasset, someone else has to short the same Bitasset. They give up their dividends on the collateral they used on the Bitasset, and the people who bought long get to collect those extra dividends.

As for how to get the maximum value from Bitshares in the first few months, my best advice is to pay attention to the final plans for Bitshares. Bytemaster has suggested several plans for Bitshares, from a six month waiting period for mining rewards to mature, to proof of stake instead of proof of work mining. Not all of these plans will actually be implemented, but you should keep an eye on them. Then, when Bitshares are about to be released, you should look at what's actually going to be used, and make your own market predictions from there.
Title: Re: BitShare investing/trading
Post by: Stan on December 10, 2013, 09:09:08 pm
I find the benefits of holding BitUSD or any other BitAsset over simply holding onto BitShares rather confusing.

By this I mean; if I assume the value of BitShares will appreciate over time against fiat: would it be better to buy long on a particular BitAsset, or simply hold onto the BitShares.

I understand the benefits of buying BitAssets in order to speculate.

For this aspect of Bitshares, the advantage of holding a Bitasset instead of Bitshares is that whenever you buy long on a Bitasset, someone else has to short the same Bitasset. They give up their dividends on the collateral they used on the Bitasset, and the people who bought long get to collect those extra dividends.

As for how to get the maximum value from Bitshares in the first few months, my best advice is to pay attention to the final plans for Bitshares. Bytemaster has suggested several plans for Bitshares, from a six month waiting period for mining rewards to mature, to proof of stake instead of proof of work mining. Not all of these plans will actually be implemented, but you should keep an eye on them. Then, when Bitshares are about to be released, you should look at what's actually going to be used, and make your own market predictions from there.

... and we will probably release an iteration or two of "testshares" so you can experiment with it before you begin playing for "keeps".
Title: Re: BitShare investing/trading
Post by: MrJeans on December 10, 2013, 11:54:19 pm
Thanks! can't wait for testshares!
Title: Re: BitShare investing/trading
Post by: 8bit on December 12, 2013, 07:06:45 am
I find the benefits of holding BitUSD or any other BitAsset over simply holding onto BitShares rather confusing.

By this I mean; if I assume the value of BitShares will appreciate over time against fiat: would it be better to buy long on a particular BitAsset, or simply hold onto the BitShares.

I understand the benefits of buying BitAssets in order to speculate.

For this aspect of Bitshares, the advantage of holding a Bitasset instead of Bitshares is that whenever you buy long on a Bitasset, someone else has to short the same Bitasset. They give up their dividends on the collateral they used on the Bitasset, and the people who bought long get to collect those extra dividends.

As for how to get the maximum value from Bitshares in the first few months, my best advice is to pay attention to the final plans for Bitshares. Bytemaster has suggested several plans for Bitshares, from a six month waiting period for mining rewards to mature, to proof of stake instead of proof of work mining. Not all of these plans will actually be implemented, but you should keep an eye on them. Then, when Bitshares are about to be released, you should look at what's actually going to be used, and make your own market predictions from there.

... and we will probably release an iteration or two of "testshares" so you can experiment with it before you begin playing for "keeps".

How do you plan to prevent testshares from competing with bitshares?
Title: Re: BitShare investing/trading
Post by: MrJeans on December 12, 2013, 10:45:21 am
I would assume that BitShares would be improved, has bug fixes etc relative to each test share version. And if people know that test shares is only for testing, they wont take it seriously and for example spend all their test shares on one high risk trade.

It would therefore be in their best interest to use BitShares when it launches.
Title: Re: BitShare investing/trading
Post by: bytemaster on December 13, 2013, 09:27:09 am
BitShares depends upon one detail, the they must have non-0 value.  So TestShares must be carefully designed to make sure this is true.
Title: Re: BitShare investing/trading
Post by: MrJeans on December 13, 2013, 09:38:54 pm
When reading through the bitshares white paper in came across inactivity fees and dividend dust as a way of collecting fees for the bitshare, dac. How will these fees come into play. I hope to hold bitshares for their capital appreciation and not use them for trading. Will fees apply to me.
Title: Re: BitShare investing/trading
Post by: phoenix on December 13, 2013, 10:28:24 pm
When reading through the bitshares white paper in came across inactivity fees and dividend dust as a way of collecting fees for the bitshare, dac. How will these fees come into play. I hope to hold bitshares for their capital appreciation and not use them for trading. Will fees apply to me.

Those fees only apply to inactive Bitshares. However, you could simply transfer your Bitshares to your own address to get out of the fees. As long as you do this once a year, you'll be fine. (If the original wallet doesn't do this automatically, someone will make a wallet that does)
Title: Re: BitShare investing/trading
Post by: bytemaster on December 14, 2013, 07:41:14 pm
When reading through the bitshares white paper in came across inactivity fees and dividend dust as a way of collecting fees for the bitshare, dac. How will these fees come into play. I hope to hold bitshares for their capital appreciation and not use them for trading. Will fees apply to me.

Those fees only apply to inactive Bitshares. However, you could simply transfer your Bitshares to your own address to get out of the fees. As long as you do this once a year, you'll be fine. (If the original wallet doesn't do this automatically, someone will make a wallet that does)

This will save you the 5% penalty fee, but there will still be the normal transaction fee.  That said, dividends earned should more than compensate for this fee.
Title: Re: BitShare investing/trading
Post by: MrJeans on December 14, 2013, 09:05:30 pm
When reading through the bitshares white paper in came across inactivity fees and dividend dust as a way of collecting fees for the bitshare, dac. How will these fees come into play. I hope to hold bitshares for their capital appreciation and not use them for trading. Will fees apply to me.

Those fees only apply to inactive Bitshares. However, you could simply transfer your Bitshares to your own address to get out of the fees. As long as you do this once a year, you'll be fine. (If the original wallet doesn't do this automatically, someone will make a wallet that does)

This will save you the 5% penalty fee, but there will still be the normal transaction fee.  That said, dividends earned should more than compensate for this fee.
What other fees should steely eyed bit share holders look out for so as to not loose their precious assets?
Title: Re: BitShare investing/trading
Post by: bytemaster on December 15, 2013, 01:14:45 am
When reading through the bitshares white paper in came across inactivity fees and dividend dust as a way of collecting fees for the bitshare, dac. How will these fees come into play. I hope to hold bitshares for their capital appreciation and not use them for trading. Will fees apply to me.

Those fees only apply to inactive Bitshares. However, you could simply transfer your Bitshares to your own address to get out of the fees. As long as you do this once a year, you'll be fine. (If the original wallet doesn't do this automatically, someone will make a wallet that does)

This will save you the 5% penalty fee, but there will still be the normal transaction fee.  That said, dividends earned should more than compensate for this fee.
What other fees should steely eyed bit share holders look out for so as to not loose their precious assets?

If there is a margin call there is a 5% fee.
Title: Re: BitShare investing/trading
Post by: MrJeans on December 15, 2013, 01:17:23 am
Yes, but this would only apply to persons holding positions in BitAssets and not persons simply holding BitShares for capital growth, correct?
Title: Re: BitShare investing/trading
Post by: bytemaster on December 15, 2013, 01:18:03 am
Correct only if you are in a short position


Sent from my iPhone using Tapatalk (http://tapatalk.com/m?id=1)
Title: Re: BitShare investing/trading
Post by: MrJeans on January 03, 2014, 07:57:32 pm
Going back to the 5% inactivity fee, where dividends would more than compensate for this.
This may become a problem if people loose their bitshares (lost passphrase, hard drive etc). In such a situation, their address will continue to collect dividends, which will accumulate, collecting more dividends. This will create a blackhole for BitShares.

Stretch this out over a long period of time and BitShares will disappear into this black holes! Perhaps this will take very long and is nothing to worry about, but it is still a potential problem.

Maybe after 5 years of inactivity dividends stops being paid to those BTS. Then inactivity fees will recirculate the BTS back into the ecosystem.
Title: Re: BitShare investing/trading
Post by: toast on January 03, 2014, 07:58:50 pm
I believe after 1 year the network starts reclaiming inactive addresses
Title: Re: BitShare investing/trading
Post by: bytemaster on January 03, 2014, 08:01:21 pm
If your funds are not touched for 1 year, 5% is destroyed and the transaction is moved forward.
If the balance is less than the minimum trx fee, then 100% is destroyed

The act of destroying BTS is how dividends are paid, so dividends do not disappear into a black hole.

The money supply is infinitely divisible, so losing supply is not a problem.
Title: Re: BitShare investing/trading
Post by: MrJeans on January 04, 2014, 02:01:55 pm
Oh ok. Guess that makes sense. For some reason I thought dividends would be received through circulating BitShares.
Title: Re: BitShare investing/trading
Post by: MrJeans on January 06, 2014, 11:58:14 am
If your funds are not touched for 1 year, 5% is destroyed and the transaction is moved forward.
If the balance is less than the minimum trx fee, then 100% is destroyed

The act of destroying BTS is how dividends are paid, so dividends do not disappear into a black hole.

The money supply is infinitely divisible, so losing supply is not a problem.
I gave this some more thought and it actually makes allot of sense as a method of charging fees and paying dividends. It just takes a bit of a cognitive restart to accept/understand this alternative method.

Something else ive been wondering about.

For someone to purchase a bitAsset, someone needs to short that bitAsset.
So what if someone purchases a bitAsset and holds it. But persons holding short positions cash out their short positions. And the majority of people holding shorts cash out their positions.

What happens to the people who own the bitAssets, do their bitAssets no longer exist? because the bitAssets are no longer being lent into existence?

In this way, is their risk in holding a bitAsset over the real asset (given that BitShares never reaches a non-zero value)?
Title: Re: BitShare investing/trading
Post by: zhang8862686 on January 06, 2014, 01:44:59 pm
hum, i will invest both PTS and  FUCKING  ags
Title: Re: BitShare investing/trading
Post by: bytemaster on January 06, 2014, 04:42:08 pm
If your funds are not touched for 1 year, 5% is destroyed and the transaction is moved forward.
If the balance is less than the minimum trx fee, then 100% is destroyed

The act of destroying BTS is how dividends are paid, so dividends do not disappear into a black hole.

The money supply is infinitely divisible, so losing supply is not a problem.
I gave this some more thought and it actually makes allot of sense as a method of charging fees and paying dividends. It just takes a bit of a cognitive restart to accept/understand this alternative method.

Something else ive been wondering about.

For someone to purchase a bitAsset, someone needs to short that bitAsset.
So what if someone purchases a bitAsset and holds it. But persons holding short positions cash out their short positions. And the majority of people holding shorts cash out their positions.

What happens to the people who own the bitAssets, do their bitAssets no longer exist? because the bitAssets are no longer being lent into existence?

In this way, is their risk in holding a bitAsset over the real asset (given that BitShares never reaches a non-zero value)?

Those who hold short positions cannot 'cash out' without buying from those who hold long positions.  If the longs don't want to give up their position then the price will rise at which point in time longs may wish to sell for a profit or new shorts will enter the market at the higher prices and thus allowing the old shorts to exit and serving to keep a check on the price if it starts to deviate more than a couple of percent from the value of USD/BTS
Title: Re: BitShare investing/trading
Post by: toast on January 06, 2014, 07:25:31 pm
BitShares depends upon one detail, the they must have non-0 value.  So TestShares must be carefully designed to make sure this is true.

Perhaps set aside 100 PTS (or 500 or 1000) and award them to TestShare holders in proportion to how many they have and the end of the test period (before the real BTS freeze)?
Title: Re: BitShare investing/trading
Post by: MrJeans on January 06, 2014, 07:32:50 pm
If your funds are not touched for 1 year, 5% is destroyed and the transaction is moved forward.
If the balance is less than the minimum trx fee, then 100% is destroyed

The act of destroying BTS is how dividends are paid, so dividends do not disappear into a black hole.

The money supply is infinitely divisible, so losing supply is not a problem.
I gave this some more thought and it actually makes allot of sense as a method of charging fees and paying dividends. It just takes a bit of a cognitive restart to accept/understand this alternative method.

Something else ive been wondering about.

For someone to purchase a bitAsset, someone needs to short that bitAsset.
So what if someone purchases a bitAsset and holds it. But persons holding short positions cash out their short positions. And the majority of people holding shorts cash out their positions.

What happens to the people who own the bitAssets, do their bitAssets no longer exist? because the bitAssets are no longer being lent into existence?

In this way, is their risk in holding a bitAsset over the real asset (given that BitShares never reaches a non-zero value)?

Those who hold short positions cannot 'cash out' without buying from those who hold long positions.  If the longs don't want to give up their position then the price will rise at which point in time longs may wish to sell for a profit or new shorts will enter the market at the higher prices and thus allowing the old shorts to exit and serving to keep a check on the price if it starts to deviate more than a couple of percent from the value of USD/BTS
And once again Bytemaster's elegant logic saves the day.
Thanks!
Title: Re: BitShare investing/trading
Post by: luckybit on January 14, 2014, 04:38:00 pm
Oh ok. Guess that makes sense. For some reason I thought dividends would be received through circulating BitShares.

Actually this may be much better if you think of the tax implications. Capital gains tax might still apply, but not income taxes which are ridiculously high in some places.
Title: Re: BitShare investing/trading
Post by: mint chocolate chip on January 14, 2014, 09:53:30 pm
How are dividends paid?

What currency are they paid in, where do dividends go (to your wallet?) and how often are they paid out?
Title: Re: BitShare investing/trading
Post by: bytemaster on January 14, 2014, 10:09:27 pm
How are dividends paid?

What currency are they paid in, where do dividends go (to your wallet?) and how often are they paid out?

Every transaction destroys currency which increases your cut when displayed as a percentage of remaining BTS.
Title: Re: BitShare investing/trading
Post by: mint chocolate chip on January 15, 2014, 05:49:16 pm
How are dividends paid?

What currency are they paid in, where do dividends go (to your wallet?) and how often are they paid out?

Every transaction destroys currency which increases your cut when displayed as a percentage of remaining BTS.

I am having trouble understanding this, so the number of BTS (4 million) actually decreases over time? until (there are no more BTS???)?
Title: Re: BitShare investing/trading
Post by: bytemaster on January 15, 2014, 06:18:16 pm
How are dividends paid?

What currency are they paid in, where do dividends go (to your wallet?) and how often are they paid out?

Every transaction destroys currency which increases your cut when displayed as a percentage of remaining BTS.

BTS are infinitely divisible and at any time the network could perform a 'stock split'

I am having trouble understanding this, so the number of BTS (4 million) actually decreases over time? until (there are no more BTS???)?
Title: Re: BitShare investing/trading
Post by: MrJeans on January 15, 2014, 08:58:53 pm
How are dividends paid?

What currency are they paid in, where do dividends go (to your wallet?) and how often are they paid out?

Every transaction destroys currency which increases your cut when displayed as a percentage of remaining BTS.

BTS are infinitely divisible and at any time the network could perform a 'stock split'

I am having trouble understanding this, so the number of BTS (4 million) actually decreases over time? until (there are no more BTS???)?
The money supply is infinitely divisible, so losing supply is not a problem.
Bitshares will have the bitcoin quality of being highly divisible.

Instead of having a complicated method of transferring dividends and taking away fees, Invictus has thought of the simple and elegant solution of simply destroying BitShares as a way of charging fees. Less Bitshares in existence means that the remaining shares become more valuable (akin to that of a listed company buying back its own shares to increase shareholder value).

For the stock splitting I'm assuming that this would mean for example: if the number of bitshares is reduced to say 2million, then a stock split could reward share holders by giving them a free bitshare for every bitshare they have. This will bring the total number of bitshares back to 4million.
Title: Re: BitShare investing/trading
Post by: mint chocolate chip on January 16, 2014, 02:57:39 am
How are dividends paid?

What currency are they paid in, where do dividends go (to your wallet?) and how often are they paid out?

Every transaction destroys currency which increases your cut when displayed as a percentage of remaining BTS.

BTS are infinitely divisible and at any time the network could perform a 'stock split'

I am having trouble understanding this, so the number of BTS (4 million) actually decreases over time? until (there are no more BTS???)?
The money supply is infinitely divisible, so losing supply is not a problem.
Bitshares will have the bitcoin quality of being highly divisible.

Instead of having a complicated method of transferring dividends and taking away fees, Invictus has thought of the simple and elegant solution of simply destroying BitShares as a way of charging fees. Less Bitshares in existence means that the remaining shares become more valuable (akin to that of a listed company buying back its own shares to increase shareholder value).

For the stock splitting I'm assuming that this would mean for example: if the number of bitshares is reduced to say 2million, then a stock split could reward share holders by giving them a free bitshare for every bitshare they have. This will bring the total number of bitshares back to 4million.
Brilliant. This whole idea as it rolls out is going to be exciting and a lot of fun. godspeed
Title: Re: BitShare investing/trading
Post by: joele on January 19, 2014, 11:11:25 am
If your funds are not touched for 1 year, 5% is destroyed and the transaction is moved forward.
If the balance is less than the minimum trx fee, then 100% is destroyed

You mean we need to trade at least once a year at any amount so our fund will not get 5% deduction?
Title: Re: BitShare investing/trading
Post by: bytemaster on January 19, 2014, 04:17:29 pm
Just send a transfer to yourself.


Sent from my iPhone using Tapatalk (http://tapatalk.com/m?id=1)