BitShares Forum

Other => Graveyard => Marketplace => Topic started by: toast on May 11, 2014, 07:24:10 pm

Title: Professional writer who understands all the details
Post by: toast on May 11, 2014, 07:24:10 pm
There is not a large intersection of people who "get it" and people who write well. Crowdsourcing doesn't cut it as editing by core team is another 80% work on top.

Stan and Charles Evans are good, but who else?

These concepts need to be clearly presented and curated:

* snapshots/airdrops
* market peg
* DAC as social dilemma solving machines
* DPOS & evolution of blockchain security model
* "guide to bitshares intro guides"
* "intro to bitshares" *tailored towards audiences* with separate entry points
    * cryptocurrency geeks
    * normal geeks
    * investors
    * average person
* complete understanding of bts x, me, lotto, dns, feeds & derivatives, ID,\
* what is theoretically possible with dac and what is not
* understanding of reasons why people who make good decisions choose to buy things
Title: Re: Professional writer who understands all the details
Post by: JoeyD on May 11, 2014, 08:46:52 pm
I noticed Toast seems to have a good grasp on things, plus he seems to have that rare talent of humour as well. Almost sad to see he's part of the core-team now, ... almost.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 17, 2014, 05:54:07 pm
looking forward to reading what comes of this if somebody answers this call.

I'm only clear on about half that stuff <_<
Title: Re: Professional writer who understands all the details
Post by: biophil on June 17, 2014, 06:55:31 pm
I wish I had a little more time on my hands. I would so love to do this, but between training for my ultra and working on my PhD, I just don't think I can make any more commitments.

Sent from my SCH-S720C using Tapatalk 2

Title: Re: Professional writer who understands all the details
Post by: gamey on June 17, 2014, 10:43:20 pm

I might be interested in doing parts of this, but I am not a very good writer.  A few times in my life I've been told I can write well. Well maybe twice... So I am not about to volunteer for this sort of thing.  Besides I'm a developer, not a writer.

However, I would suggest that perhaps people pair up. Find a technical guy who may not be a very good writer but whom could spit out a decent first edition and have their work edited by someone who could smooth out grammar/confusion/syntax etc.

Very similar to Dan's ideas on delegates.

Actually I mentioned writing a DAC to do just this sort of work. Where the edits are all kept on blockchain and payment voted on by those who buy shares, etc.  I don't think anyone responded to the idea proposal, but IMO it could be useful as a throw-away DAC for just this type of thing.  (I'm going off topic...)
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 18, 2014, 04:44:49 am
hey toast--

this (http://www.devtome.com/doku.php?id=wiki:user:merockstar) is stuff i've written so far

if you want, I could research each topic individually and try to take a stab at it, then have you double check everything. it would take me a minute though.

your call.
Title: Re: Professional writer who understands all the details
Post by: toast on June 18, 2014, 05:12:19 am
Holy thread necromancy... OP was over a month ago.

does it pay well?

I don't have spending control of AGS, perhaps someone who does will offer tips?

hey toast--

this (http://www.devtome.com/doku.php?id=wiki:user:merockstar) is stuff i've written so far

if you want, I could research each topic individually and try to take a stab at it, then have you double check everything. it would take me a minute though.

your call.

That would be awesome. Your writing is great. The more people wrap their heads around this the better, since then we don't have to be the ones re-explaining these things. Stan + Charles's blog posts are about the only content we have at this point.
Title: Re: Professional writer who understands all the details
Post by: yinchanggong on June 18, 2014, 05:28:58 am
Holy thread necromancy... OP was over a month ago.

does it pay well?

I don't have spending control of AGS, perhaps someone who does will offer tips?

hey toast--

this (http://www.devtome.com/doku.php?id=wiki:user:merockstar) is stuff i've written so far

if you want, I could research each topic individually and try to take a stab at it, then have you double check everything. it would take me a minute though.

your call.

That would be awesome. Your writing is great. The more people wrap their heads around this the better, since then we don't have to be the ones re-explaining these things. Stan + Charles's blog posts are about the only content we have at this point.
Hey toast, I hold the topic in chinese forum. And we will use the bts donations as reward. https://bitsharestalk.org/index.php?topic=5104.0
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 18, 2014, 05:30:15 am
alright, i'm on this.

gamey, biophil, tbkmcjl i say we make it a collaborative effort.

between us and anybody else who wants to have some input we oughta be able to comprise one person with complete understanding who isn't a dev.

i'll post it here and credit anybody who helps me with it by pointing out things to address and/or proofreading it.

so, I'm literally trying to come up with something as we speak, i figure i'll just go down toast's list.

first thing's first, snapshots and airdrops-- i'm pretty sure I have a solid understanding of those concepts, but if there's any points you'd like to make sure I don't miss, please post them now.

also, wtf is a market peg? does that refer to how bitUSD and bitGOLD would be pegged to their real life market values so that people can short?

toast, and other devs, your input is certainly welcome, but don't feel obliged-- i know you guys are busy and we got this (i hope).

as for thread necromancy... im pretty sure it was still on the first or second page, i think that says something about the size of this community (and the potential for profit if these DAC things blow up) :P

yinchanggong-- i wish i spoke mandarin, bro
Title: Re: Professional writer who understands all the details
Post by: toast on June 18, 2014, 05:37:57 am
Here are some resources:

http://bitshares.org/blog/
http://pad.xeroc.org/list

Snapshots/sharedrops are a good start. Stan wrote a bit in the blog, so I think for this we actually need a concise explanation with some visuals. This should help: https://bitsharestalk.org/index.php?topic=5065.msg66595#msg66595


The market peg refers to the mechanism by which BitAsset tracks Asset. There are several good blog posts already, so again a concise explanation with visuals for the BTS X info site would be good.
http://bitshares.org/bookie-bobs-solution-to-bitcoin-volatility/
http://bitshares.org/what-is-bitshares-x/


Thank you very much. I am sure we'll find a way to make it worth your while.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 18, 2014, 05:42:45 am
photoshop/gimp/pinta is definitely a non-talent of mine.

gonna need community input on visuals

toast, thanks for the links- scoping them out now. already got a paragraph written.

PS: it's almost 2AM EST June 18th 2014 and i'm in the chatroom right now if anybody wants to collaborate on this
Title: Re: Professional writer who understands all the details
Post by: xeroc on June 18, 2014, 06:15:52 am
http://pad.xeroc.org/list
also accessible via http://pad.bitshares.org
I thought a little about some topics that are worth writing about:
http://pad.bitshares.org/p/Upcoming_Newsletter_topiccollection
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 18, 2014, 07:13:00 am
Alrighty, here is a rough draft of the Airdrop/Snapshot portion. If you folks would be so kind as to fact check, proofread, and criticize, I would be much obliged. Meanwhile, I will go try to wrap my head around this "market peg" thing. Also, ideas for pictures would be very helpful. There's that neat graph explaining snapshots, but I don't really want to just gank that. I'm aiming for unique content.

____________________________________________________________________________


***article removed, please see more current draft posted on page five of this thread***
Title: Re: Professional writer who understands all the details
Post by: xeroc on June 18, 2014, 07:40:05 am
So imagine that you've developed a new DAC, coded it up and you're all ready to go. You decide to honor the social contract by airdropping a certain percent of your initial coin/share distribution to PTS/AGS holders, so you take a snapshot. Now you have a list of wallets belonging to the holders of PTS and AGS that you'd like to compensate. Through programming magic you can now reward those groups of people for their support by designating a certain amount of your premine to be distributed proportionally to the wallets on those lists. You simply include them in the blockchain from the beginning.
Maybe you can add more incentives for the developer to do that airdropping and honor the social contract. I will go through Stans posts and search for his words. He had some well written arguments.

// EDIT:  quotes are in:
https://bitsharestalk.org/index.php?topic=5095.msg66940#msg66940
https://bitsharestalk.org/index.php?topic=4696.0;all
https://bitsharestalk.org/index.php?topic=1890.msg53472#msg53472

Quote
When holders of PTS and AGS see that you've done this they can download the client for your new DAC and import their corresponding private keys from the addresses you just rewarded, allowing them to claim your offering, your airdrop.
That might be out-dated due to security issues. Importing privkeys from snapshots into third-party DACs is considered a bad idea
Read more: https://bitsharestalk.org/index.php?topic=4732.0;all

Quote
Snapshots aren't limited exclusively to PTS and AGS, you could give a portion of your premine to the Peercoin community if you wanted simply by tacking on a snapshot of their blockchain. This allows you to kickstart a community for your DAC by having a certain percentage of your coins/shares distributed to a demographic who already knows what to do with them.
Please elaborate a alittle around the social contract .. so that PTS/AGS get 10% share .. but may get more, i.e. in bitsharesX.

Besides these points it's a well written piece! Thx
Title: Re: Professional writer who understands all the details
Post by: yinchanggong on June 18, 2014, 07:45:35 am
alright, i'm on this.

gamey, biophil, tbkmcjl i say we make it a collaborative effort.

between us and anybody else who wants to have some input we oughta be able to comprise one person with complete understanding who isn't a dev.

i'll post it here and credit anybody who helps me with it by pointing out things to address and/or proofreading it.

so, I'm literally trying to come up with something as we speak, i figure i'll just go down toast's list.

first thing's first, snapshots and airdrops-- i'm pretty sure I have a solid understanding of those concepts, but if there's any points you'd like to make sure I don't miss, please post them now.

also, wtf is a market peg? does that refer to how bitUSD and bitGOLD would be pegged to their real life market values so that people can short?

toast, and other devs, your input is certainly welcome, but don't feel obliged-- i know you guys are busy and we got this (i hope).

as for thread necromancy... im pretty sure it was still on the first or second page, i think that says something about the size of this community (and the potential for profit if these DAC things blow up) :P

yinchanggong-- i wish i spoke mandarin, bro
I think someone will translate english to mandarin if your writings are as good as stan's...  ;D Both you and the  translator could earn the reward.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 18, 2014, 08:05:00 am
if your writings are as good as stan's...  ;D

so much for that. lol not even trying to compete with stan.

Both you and the  translator could earn the reward.

I'm not that concerned about the reward.

I would happily accept a reward if offered, but I'm not functioning under the assumption that my writing is good enough to justify compensation. I figure I could just repost it all to devtome and get paid anyway if 3i doesn't wanna buy it (maybe even if they do, would that be okay? can marketing material be creative commons?).

xeroc: thank you for the feedback. i'm starting to fall asleep but I will try to implement your suggestions tomorrow.
Title: Re: Professional writer who understands all the details
Post by: gamey on June 18, 2014, 08:40:31 am

I can help you, but I think you're doing a pretty good job.  A better writer than I am.  I have to edit a lot because of my screwy syntax etc.

One minor point, and that is that I don't think the auroracoin guys coerced the Icelandic government.  They just used the national id system that was already in place.  (I think.. not sure of details).  A minor change.

If you want to work on this interactively you can join the mumble server.  I was hanging out on there tonight with fuznuts.  You can either type or talk.  If you would rather use the chat system on here then that'd be ok too.  (I have not used it... and i had to block bitsharestalk.org on my main computer to help myself get work done.. but i'll probably start hanging out on mumble server at night..)

Mumble instructions are found here.  http://www.beyondbitcoinshow.com/index.php/get-involved (http://www.beyondbitcoinshow.com/index.php/get-involved)

Otherwise keep up the good work and I think by posting here and having everyone suggesting a few things you'll end up with some quality stuff.
Title: Re: Professional writer who understands all the details
Post by: Stan on June 18, 2014, 01:50:04 pm
This is producing some great work!   :)

(One tiny point:  we have been using the term Social Consensus rather than Social Contract to be a bit more accurate and avoid any unintended implications.)

Other paragraphs that might be expanded are the idea of "targeting" sharedrops to specific demographics.  Every altcoin in existence represents a demographic of some type (dog lovers, mars colonizers, whatever) so developers no longer need to burn more electricity to get a fair distribution (ahem, at least among technophiles).  Now you can pick whatever mix of existing distributions you need (including your competitors' customers) to get your DAC up and running with just the right audience!
Title: Re: Professional writer who understands all the details
Post by: xeroc on June 18, 2014, 01:55:30 pm
(One tiny point:  we have been using the term Social Consensus rather than Social Contract to be a bit more accurate and avoid any unintended implications.)
Hug .. I missed that :(
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 19, 2014, 02:07:59 am
Question: what exactly are the benefits of honouring the social consensus? I mean, other than targetting demographics of coin holders with an airdrop.

yea, this community would love you. but would invictus get behind you with marketing and legal help if necessary and AGS funds? sorry if this has already been answered somewhere.

Title: Re: Professional writer who understands all the details
Post by: toast on June 19, 2014, 02:21:36 am
This is a good answer:

https://bitsharestalk.org/index.php?topic=2876.msg35841#msg35841
Title: Re: Professional writer who understands all the details
Post by: toast on June 19, 2014, 02:22:38 am
but also Stan should weigh in with what sort of support I3 can offer new DAC devs
Title: Re: Professional writer who understands all the details
Post by: donkeypong on June 19, 2014, 02:35:07 am
Question: what exactly are the benefits of honouring the social consensus?

Every possible benefit. Hono(u)ring the social consensus brings you a tailor-made base of investors, miners, developers, boosters, savvy users, and even customers. You are creating stakeholders with an incentive to drive your DAC product, promote it virally, and ENSURE it succeeds financially and otherwise. And you are getting the benefit of Invictus' open source software, plus the support of the whole community of developers (Invictus included). Honoring the social contract costs you nothing, because your remaining stake after the PTS/AGS drop (as high as 80% that you still own) will be MUCH more valuable.

Furthermore, I would not want to be a DAC developer/owner who does NOT honor the social consensus, because with all the developers around here, someone will fork your product immediately and sharedrop it via the social consensus. Everyone in this community will be hell bent on ensuring the success of that new competitor DAC over yours. The marketing and sales cost of matching the social consensuswill be prohibitively expensive. In other words, watch the new competitor DAC (that DID honor the social consensus) sail right by you on the road as your product drives into the ditch.

(http://www.cartoonstock.com/lowres/history-neanderthal-caveman-prehistory-contract-agreement-wpr0506l.jpg)
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 19, 2014, 02:49:20 am
Question: what exactly are the benefits of honouring the social consensus?

 because with all the developers around here, someone will fork your product immediately and sharedrop it via the social consensus.

assuming your DAC is open source
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 19, 2014, 02:49:52 am
but also Stan should weigh in with what sort of support I3 can offer new DAC devs

this is what I'm getting at.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 19, 2014, 02:54:37 am
ive edited the post with the rough draft on it and replaced it with revision number two, trying to incorporate all the suggestions given.

give it another look if you would :)
Title: Re: Professional writer who understands all the details
Post by: gamey on June 19, 2014, 05:41:44 am
Merocktar -

I would suggest you ask questions of things you are confused about.  I would hope Bitshares marketing people use your questions to understand where they could improve.  Whether by discovering where the documentation is confusing or just what concepts are the most complicated.  Merockstar could basically be a 1 man focus group.
Title: Re: Professional writer who understands all the details
Post by: xeroc on June 19, 2014, 06:27:49 am
Question: what exactly are the benefits of honouring the social consensus?

Every possible benefit. Hono(u)ring the social consensus brings you a tailor-made base of investors, miners, developers, boosters, savvy users, and even customers. You are creating stakeholders with an incentive to drive your DAC product, promote it virally, and ENSURE it succeeds financially and otherwise. And you are getting the benefit of Invictus' open source software, plus the support of the whole community of developers (Invictus included). Honoring the social contract costs you nothing, because your remaining stake after the PTS/AGS drop (as high as 80% that you still own) will be MUCH more valuable.

Furthermore, I would not want to be a DAC developer/owner who does NOT honor the social consensus, because with all the developers around here, someone will fork your product immediately and sharedrop it via the social consensus. Everyone in this community will be hell bent on ensuring the success of that new competitor DAC over yours. The marketing and sales cost of matching the social consensuswill be prohibitively expensive. In other words, watch the new competitor DAC (that DID honor the social consensus) sail right by you on the road as your product drives into the ditch.

(http://www.cartoonstock.com/lowres/history-neanderthal-caveman-prehistory-contract-agreement-wpr0506l.jpg)
very good explanation .. need to add this to my techtalk about angelshares ... maybe we can write an article about the social consensus itself?
Title: Re: Professional writer who understands all the details
Post by: Stan on June 19, 2014, 02:56:25 pm
but also Stan should weigh in with what sort of support I3 can offer new DAC devs

It is our duty, nay, our glorious mission, to support DAC developers every way we can to grow the industry and produce value for holders of any of the BitShares family of DACs. 

What BitShares can do to help will vary with what a developer needs and our available funding reserves - which get replenished every time a new DAC is launched that honors AGS-donated PTS.  So, if reserves are fully committed a some point in time, just wait till the next successful DAC launch generates the resources to start whatever next project is at the top of the queue.  Then work to get your project to the top of that queue.

Bring us your business plan and win the hearts and minds of our community and you could win our support in incubating your new company.  What’s that include? Well, there are many things BitShares could provide depending upon the nature of the help your new startup may need. For example:
Here are some of the evaluation criteria that might apply. What others have we missed?

Business model. How does your DAC make money for its shareholders?
Technical approach. What are the underlying technologies you will use?
Regulatory environment. Have you selected a favorable legal jurisdiction?
Team Qualifications. Does your proposed company have what it takes to succeed?
Diversity. Does your company bring participation from other regions of the globe.
Popularity. How much donation-backed grass-roots support do you have?

Here's how to get started:
Then work to build support for your project as the next one BitShares chooses to sponsor.  Delegates will play a key role in this activity, since some of them may choose to use their "smart spigots" to contribute to your grass-roots funding war chest.  Supporting popular developers is a great way for BitShares Delegates to stay elected.  (And it helps to decentralize funding decisions throughout the BitShares community.)

BitShares is also ready to partner with third party developers who may not need any of the above, but still want to work with this community.  FreeTrade's Lotto Shares DAC is such an example.  He has honored the BitShares Social Consensus and asked for no assistance.   But we are happy to assist any way that we can.  For example, we have reached out to discuss a joint marketing promotion with him if and when he thinks the time is right.

So, you see, there is a full spectrum of ways to use the BitShares community as a launch platform for your new DACs.  There will be times, like May-June 2014, when we must focus all our energies on getting a specific product launched.  There will be other times, like March-April 2014, when BitShares will focus more energies on launching new products (and new developers!) 

So the key is to get your idea to be well-known and well-loved before the next round of resources become available as the current round is launched.

Remember, the primary purpose of BitShares is to build a decentralized community of developers who will then build and release and operate and support all kinds of insanely great DACs.  BitShares doesn't build DACs, it builds DAC developers and the tools and resources they need to be successful.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 19, 2014, 08:11:54 pm
exactly what i needed stan, thanks. third (maybe final) draft of that section coming soon.

up next, market pegging, if I can manage to wrap my head around it (working on it).
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 20, 2014, 12:07:35 am
stupid question to check understanding:

bitAssets like bitUSD and bitGOLD and what have ya won't be traded on third party exchanges like cryptsy, but will be limited to the exchange built into the BitShares X software, is this correct?

Idk why I'm having such a hard time with this... okay, maybe I do but don't wanna confront the answer to that question :P
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 12:26:34 am
bitAssets like bitUSD and bitGOLD and what have ya won't be traded on third party exchanges like cryptsy, but will be limited to the exchange built into the BitShares X software, is this correct?


Nothing prevents them from being traded... So they will probably/hopefully be traded.

Some 3rd parties (BTER, Cryptsy, JPMorgan Chase???)  will exchange USD for bitUSD…
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 20, 2014, 12:42:49 am
bitAssets like bitUSD and bitGOLD and what have ya won't be traded on third party exchanges like cryptsy, but will be limited to the exchange built into the BitShares X software, is this correct?


Nothing prevents them from being traded... So they will probably/hopefully be traded.

Some 3rd parties will exchange USD for bitUSD…

im starting to think this [market pegging bitAsset concept] might be a little over my head

ok here  (http://bitshares.org/bookie-bobs-solution-to-bitcoin-volatility/) it says:

Quote
• Then he gave Jane a note good for 20 bitcoins minus $10 worth of bitcoins at any time she wanted to cash out.

20 ... dollars worth of bitcoins? is that a typo?
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 12:50:34 am
im starting to think this [market pegging bitAsset concept] might be a little over my head


If you get the ‘peg’ the rest is a breeze :)
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 20, 2014, 12:54:57 am
im starting to think this [market pegging bitAsset concept] might be a little over my head


If you get the ‘peg’ the rest is a breeze :)

would it be accurate to say that a bitUSD is going to be worth a USD because the price won't be based on supply and demand, supply instead coming from bitUSD being conjured up on a case by case basis when the need for it is created by collateral being deposited, and the price will be determined by the expectation of every bitshares user that a bitUSD= a USD?
Title: Re: Professional writer who understands all the details
Post by: toast on June 20, 2014, 01:07:19 am
im starting to think this [market pegging bitAsset concept] might be a little over my head


If you get the ‘peg’ the rest is a breeze :)

would it be accurate to say that a bitUSD is going to be worth a USD because the price won't be based on supply and demand, supply instead coming from bitUSD being conjured up on a case by case basis when the need for it is created by collateral being deposited, and the price will be determined by the expectation of every bitshares user that a bitUSD= a USD?

I wouldn't call it "won't be based on supply and demand", but you got the rest right. Supply is generated because people think it is overvalued and so are willing to short and create more to sell. Demand is created when people think it is undervalued and so buy BitUSD to hold or to cover their shorts. If people base their beliefs on the belief that 1BitUSD=1USD in the future then this will push the price towards that direction.
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 01:12:25 am

would it be accurate to say that a bitUSD is going to be worth a USD because the price won't be based on supply and demand, supply instead coming from bitUSD being conjured up on a case by case basis when the need for it is created by collateral being deposited, and the price will be determined by the expectation of every bitshares user that a bitUSD= a USD?

The bold text is factually correct, the rest is edit of what you wrote… not sure this is the best way to put it though.

'would it be accurate to say that a bitUSD is going to be worth a USD because the price won't be based on supply and demand, supply instead coming from bitUSD being conjured by collateral being used (???), up on a case by case basis, when the need for bitUSD exists, and the price will be determined by the expectation of every bitshares user that a bitUSD= a USD?'

* conjure def. : 'To summon (a devil or spirit) by magical or supernatural power.'
Title: Re: Professional writer who understands all the details
Post by: chono on June 20, 2014, 03:31:16 am

would it be accurate to say that a bitUSD is going to be worth a USD because the price won't be based on supply and demand, supply instead coming from bitUSD being conjured up on a case by case basis when the need for it is created by collateral being deposited, and the price will be determined by the expectation of every bitshares user that a bitUSD= a USD?

The bold text is factually correct, the rest is edit of what you wrote… not sure this is the best way to put it though.

'would it be accurate to say that a bitUSD is going to be worth a USD because the price won't be based on supply and demand, supply instead coming from bitUSD being conjured by collateral being used (???), up on a case by case basis, when the need for bitUSD exists, and the price will be determined by the expectation of every bitshares user that a bitUSD= a USD?'

* conjure def. : 'To summon (a devil or spirit) by magical or supernatural power.'

Why people expect that a bitUSD= a USD?I still can not get it :'(
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 03:39:18 am
Why people expect that a bitUSD= a USD?I still can not get it :'(

If this will make you stop crying: That is a hypothesis that is being tested.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 20, 2014, 03:51:53 am
hmm...

i chose the word conjure as a stylistic liberty, not like im including it in this thing im trying to write.

lets try this one:

the price of a bitUSD will always be worth the same as USD even though it's based on supply and demand because if supply or demand of bitUSD changes then that value change will be reflected in the currencies it's being used to trade against. this is a result of general consensus that a bitUSD should be worth the same as a USD.

is that accurate?

also, tonyk, you realize I'm not chono, right?
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 03:58:03 am
I know you are not chono, you are the 'chicken nuggets filled with taco bell nacho cheese. ' guy.

[edit] Seriously now, let see what you have written.
Title: Re: Professional writer who understands all the details
Post by: toast on June 20, 2014, 03:59:28 am

the price of a bitUSD will always be worth the same as USD even though it's based on supply and demand because if supply or demand of bitUSD changes then that value change will be reflected in the currencies it's being used to trade against. this is a result of general consensus that a bitUSD should be worth the same as a USD.

But why is the bolded part true, and why should that cause BitUSD to track USD?

The key is "because everyone is trying to make a profit" and "you can only trade profitably by trading towards consensus". It is like a prediction market.
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 04:00:30 am
the price of a bitUSD will always be worth the same as USD even though it's based on supply and demand because if supply or demand of bitUSD changes then that value change will be reflected in the currencies it's being used to trade against. this is a result of general consensus that a bitUSD should be worth the same as a USD.


I am kind of lost...
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 20, 2014, 04:05:36 am
I know you are not chono, you are the 'chicken nuggets filled with taco bell nacho cheese. ' guy.

[edit] Seriously now, let see what you have written.

i am, just wanted to clarify cause it didn't look like chonos had put forth any kind of hypothesis, so i figured maybe you were answering one of my earlier statements thinking mistakenly that he was me.

haven’t started writing on this subject yet, just trying to solidify my understanding.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 20, 2014, 04:08:11 am

the price of a bitUSD will always be worth the same as USD even though it's based on supply and demand because if supply or demand of bitUSD changes then that value change will be reflected in the currencies it's being used to trade against. this is a result of general consensus that a bitUSD should be worth the same as a USD.

But why is the bolded part true, and why should that cause BitUSD to track USD?

The key is "because everyone is trying to make a profit" and "you can only trade profitably by trading towards consensus". It is like a prediction market.

that part is true because by everybody agreeing that a bitUSD should be the same as a USD makes it possible for people to short it, or the opposite of short (borrow money from the people who are shorting it in exchange for taking their risk)?

sorry to be such a pain in the ass about this toast.
Title: Re: Professional writer who understands all the details
Post by: toast on June 20, 2014, 04:17:21 am
Not "everyone agreeing". If *most people* (most capital) agree, you are forced to agree, or you will lose money because price will move in that direction since most people agree.

Let's look at all the scenarios.

If you think BitUSD is worth $0.9, you will short BitUSD when it is $0.95 expect to be able to cover at a lower price. But if the price goes up to $1 and stays there you are forced to cover and take a loss. (You are incentivized to eat your loss because if it goes up too far there is a margin call).

If you think BitUSD is worth $1.1, you will buy when it is $1.05 expecting to be able to make a profit at a higher price. But if the price falls to $1 you can only get out at a loss.

On the flip side.

If you think BitUSD is worth $1, you will buy BitUSD when it is $0.95, pushing the price up a tiny bit. When it finally reaches $1 you can sell it for a profit.

If you think BitUSD is worth $1, you will short BitUSD when it is $1.05, pushing the price down a tiny bit. When it finally reaches $1 you can cover and sell your BTS for a profit.


So, assuming *most* other people agree, the price will move towards $1, hence if you agree you will gain money and if you disagree you will lose money.

So you will either lose all your money or be converted to a believer.

So it is a self-reinforcing belief that BitUSD should be worth one USD.
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 04:28:24 am
1. The hypothesis that is being tested is ‘bitUSD will be ‘equal’/’pegged’ to USD ~ 1:1;

2. Start from what toast wrote in his last post. It is a GREAT start/explanation why bitUSD=USD!!!

3. Try explaining it without using supply and demand.

2c
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 20, 2014, 04:37:01 am
so it's a self fulfilling prophecy?

if *most* market participants were to get together and decide they wanted to screw up the system, they could agree to change the price, but they wouldn't do that because they want to have the ability to short or go long?
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 04:42:44 am
'so it's a self fulfilling prophecy?'

You are getting there ...

But you not gonna write 'a self-fulfilling prophecy' in the actual thing, are you? We prefer the term ‘Nash equilibrium’
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 20, 2014, 04:46:47 am

You are getting there ...

But you not gonna write 'a self-fulfilling prophecy' in the actual thing, are you? We prefer the term ‘Nash equilibrium’

of course i'm not going to phrase it that way. just trying to understand it for myself before I go writing about it.
Title: Re: Professional writer who understands all the details
Post by: toast on June 20, 2014, 04:48:17 am
so it's a self fulfilling prophecy?
Yeah, basically

Quote
if *most* market participants were to get together and decide they wanted to screw up the system, they could agree to change the price, but they wouldn't do that because they want to have the ability to short or go long?

Pretty much - not even "ability to go short and go long" as much as "have anything worth anything at all". If word gets out that a particular BTS X chain is in the hands of a small number of colluding individuals then that chain's value would crash. Why don't bitcoin miners collude to give themselves higher block rewards? Furthermore, how easy is it to actually get 51% of hash power? (it turns out to be possible - we assume buying out a whole BTS X chain is more expensive proportional to the value of the network)
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 05:07:22 am
Continued ...
‘if *most* market participants were to get together and decide they wanted to screw up the system, they could agree to change the price, ‘


Actually my main topic of interest with this project is finding and proving that prices other than the equilibrium (1~1) will be provably more beneficial to all market participants (and if possible removing such possibilities). But this is not here nor there.
Most people just either believe or do not in the viability of such market peg in the first place. Most people just either believe or do not in the viability of such market peg in the first place – that’s  danger #1; My theories are danger #2; and market participants colluding is danger#3 – for which the logic why we do not care was explained by toast
Title: Re: Professional writer who understands all the details
Post by: toast on June 20, 2014, 05:09:47 am
Continued ...
‘if *most* market participants were to get together and decide they wanted to screw up the system, they could agree to change the price, ‘


Actually my main topic of interest with this project is finding and proving that prices other than the equilibrium (1~1) will be provably more beneficial to all market participants (and if possible removing such possibilities). But this is not here nor there.
Most people just either believe or do not in the viability of such market peg in the first place.

Would be very interested in any leads you have. Where could there be possible stable points besides 0, 1:1, or a secret colluding signal?
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 05:16:42 am
Continued ...
‘if *most* market participants were to get together and decide they wanted to screw up the system, they could agree to change the price, ‘


Actually my main topic of interest with this project is finding and proving that prices other than the equilibrium (1~1) will be provably more beneficial to all market participants (and if possible removing such possibilities). But this is not here nor there.
Most people just either believe or do not in the viability of such market peg in the first place.

Would be very interested in any leads you have. Where could there be possible stable points besides 0, 1:1, or a secret colluding signal?

My concerns are well documented… in this forum including...... but if you want to know exactly:

1.any price of bitAsset > collateral, AND time = min

2. any price of bitAsset > purchase price (if collateral > 2x purchase price)


PS
BTW on ‘a secret colluding signal’? – Is not beneficial to all participants if is a ‘secret’, so not my field
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 20, 2014, 07:57:08 am
I think I'm finally starting to wrap my head around this. Appreciate you guys patiently tolerating me on this.

Yet another stupid question: are Bitshares themselves the only thing that can be used to short another asset (thus creating bitAsset, which the network will loan to somebody who decides to go long on that asset), or can somebody use BTC, or heck even a different bitAsset to short something?
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 12:47:59 pm
Yet another stupid question: are Bitshares themselves the only thing that can be used to short another asset (thus creating bitAsset, which the network will loan to somebody who decides to go long on that asset), or can somebody use BTC, or heck even a different bitAsset to short something?

1.Right know only Bitshares can be used as a collateral.
2.Using other of the assets listed on the exchange is theoretically possible I believe (with implications I have not thought about).
3.Other outside of the exchange assets i.e. BTCs as a collateral? I do not think so, but if you want to go in that big of a detail you should ask Bytemaster.

‘creating bitAsset, which the network will loan to somebody who decides to go long on that asset’
The assets are not loaned by the network to the  party that goes long. The person going long is buying the asset!
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 20, 2014, 01:11:33 pm
Using other bitAsset as a collateral

When you will want to do that instead of simply selling the asset and using the BTS received as collateral – When you think that the asset used as collateral  will go up and the shorted asset will go down. So you think bitGold will go up and bitUSD will go down (relative to one another), and you a. you do not have opinion what bitGold will do compared to BTS b. think that bitGold will increase more than BTS compared to bitUSD. So at first look seems that it would be possible and some interest in that feature might exist but: it has to be coded/included in the system (maybe in some future version); While  cross asset direct trades will be possible with the first version we have to wait and see how deep dose cross-market will be in practice.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 21, 2014, 08:30:42 am
alright guys. double check my understanding here, it was hard earned.

Market Pegging first draft


***article removed, please see page five for a more current draft***
Title: Re: Professional writer who understands all the details
Post by: xeroc on June 21, 2014, 11:29:52 am
Could you please copy your articles to the bitshares wiki archive?
You could create a [EcoTalk] series much like the [techtalk] series!?

If you need help with that just pm me!

would be awesome!!
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 21, 2014, 11:56:23 am
Merockstar

There was a thread ‘The life of a short position’ or something like that.(actually I found 2 useful ones)

https://bitsharestalk.org/index.php?topic=4515.0

https://bitsharestalk.org/index.php?topic=4573.0

Read them and fix what  you have written above according to BM/toast/my comments in those threads
. There is only one issue on which we disagree there – I believe my explanation is easier to comprehend *(1)  but it really does not matter - just use their explanation -it is more of a choice of selecting how to think about how particular stuff works, the end result is the same. In their explanation the system looks more powerful, so as I said, use their explanation on that.



*(1) Basically BM and toast are people with well above average intelligence (so they have the ability concepts that are 3 or 5 times more complex). For them adding a new extra twist on top of a concept that about 10 to 25 % of the population will never understand is not a problem, as they see nothing too hard there. For me removing this extra layer of complexity, making the whole explanation more concise and logical makes the difference between 25% not getting it and only 10% not getting it. You know the story of the last straw that broke the camel back, right?
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 21, 2014, 01:00:46 pm
Additionally:
1. I do not like ‘long against that asset’ use ‘long in that asset’ even better ‘long that asset’

2. How did you come up with this (bolded):
 
-If the price of the asset/bitAsset falls, then the person doing the shorting has won the bet, and can claim the difference between the new value of the amount of bitAsset that was created and collateral they had put up, closing their position. The remaining collateral is held to sell back to the person who went long and took a loss, in case they choose to claim it.
[/b]
-When somebody who has gone long purchases back their collateral using a bitAsset, the bitAsset is destroyed, and their position is closed – Although theoretically possible -there is no collateral for the long position in this system!!!!  I,e. change collateral to BTS X if you like this to stay. (also read my first post - the bitAsset might or might not be destroyed!)
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 21, 2014, 06:55:04 pm
xeroc, I will do as you suggest when I feel they're ready. First I need tonyk and toast to finish ripping them to shreds so I can put them back together better. I'm also hoping to post them to devtome when the time comes so I hope that won't create a conflict of interest.








EDIT: I was clearly confused when I wrote this. If you're trying to learn from this thread please skip this post.





Merockstar

There was a thread ‘The life of a short position’ or something like that.(actually I found 2 useful ones)

https://bitsharestalk.org/index.php?topic=4515.0

https://bitsharestalk.org/index.php?topic=4573.0

Read them and fix what  you have written above according to BM/toast/my comments in those threads
. There is only one issue on which we disagree there – I believe my explanation is easier to comprehend *(1)  but it really does not matter - just use their explanation -it is more of a choice of selecting how to think about how particular stuff works, the end result is the same. In their explanation the system looks more powerful, so as I said, use their explanation on that.



*(1) Basically BM and toast are people with well above average intelligence (so they have the ability concepts that are 3 or 5 times more complex). For them adding a new extra twist on top of a concept that about 10 to 25 % of the population will never understand is not a problem, as they see nothing too hard there. For me removing this extra layer of complexity, making the whole explanation more concise and logical makes the difference between 25% not getting it and only 10% not getting it. You know the story of the last straw that broke the camel back, right?

The first thread I've gone through like four times, actually, and am about to go through again.

The second thread you linked is new to me though, and may be helpful, I sincerely thank you for digging that up. About to go look through that one.

I feel like every explanation I've seen so far uses an example instead of just saying how it works, so I wanted to make one that avoids examples because to me that kind of clouds things up. The way I see it examples are for after you've wrapped your head around it to reinforce understanding, not for initial learning. Maybe other people disagree but if I think that way there has to be at least a few others who agree.

Regarding the bolded part above, I would love you if you could give specific examples where I'm wrong. I realize that request may be addressed on those threads already, and grant that I've not gone through the second thread you linked yet (kind of excited about that, actually), but who knows, maybe your redundant explanations could help some of that 15% out.

From what I've seen, I would agree BM and toast are friggin geniuses. I don't think of myself as THAT smart, but normally I'm no dummy myself. I don't know why I'm having such a rough time with this concept, but I'm enjoying the challenge.

Additionally:
1. I do not like ‘long against that asset’ use ‘long in that asset’ even better ‘long that asset’

2. How did you come up with this (bolded):
 
-If the price of the asset/bitAsset falls, then the person doing the shorting has won the bet, and can claim the difference between the new value of the amount of bitAsset that was created and collateral they had put up, closing their position. The remaining collateral is held to sell back to the person who went long and took a loss, in case they choose to claim it.
[/b]
-When somebody who has gone long purchases back their collateral using a bitAsset, the bitAsset is destroyed, and their position is closed – Although theoretically possible -there is no collateral for the long position in this system!!!!  I,e. change collateral to BTS X if you like this to stay. (also read my first post - the bitAsset might or might not be destroyed!)


1) ah, I was kind of wondering about that myself as I was writing it. I will fix that.

2) point taken about there being no collateral for the long. I will fix that as well. I think you zoned right in on a concern I had while I was writing this. What does happen to the leftover BTS if it doesn't get claimed? does the system shuffle it back onto the exchange?

Or can the person who did the shorting just claim all of it? I feel like that wouldn't really make for a fair bet, but it would guarantee that I'm going to be trying my hand at some shorting when this comes out, if that happens to be the case.

Some people may resent the scathing manner in which you present your criticisms, but I appreciate all the help you're giving me and how prompt you're being about it.

Anyway, I'm off to review that second thread you linked. Maybe it will make everything clear.

When everything's done, I'm thinking about titling it "Everything you wanted to know about BitShares but didn't have the time and patience to dredge through the forums and dig up enough info haphazardly to put all the pieces together"

^--- that was another of my attempts at humor


Title: Re: Professional writer who understands all the details
Post by: merockstar on June 21, 2014, 08:37:22 pm
slowly, this continues to come together for me.

on the second thread tony linked, i found this toast-gem of an explanation:

sam wants to short usd. Current price is 10 bitusd per bts. Larry wants to go long usd.

1) sam places a short sell order for 10 usd for 0.1 bts each. To place this order, he has to have 2 bts, which is taken as collateral.
2) larry puts buy order 10 usd for a bts.
3) the orders are matched. Network prints 10 bitusd and gives them to larry, and takes larry's bts and gives them to sam.
3) sam has 1 bts live and 2 in collateral. Larry has 10 usd.
... time passes ...
4) sam buys back 10 bitusd, but his bet was right so it costs him 0.5 bts only. Sam has 0.5 bts live and 2 in collatetal, and 10 bitusd. Larry (assuming he was again on the other side of this trade) has 0.5 bts.
5) sam uses his 10 bitusd to cover and reclaim his collateral. The bitusd is destroyed and now same has 2.5 bts.

Sent from my SCH-I535 using Tapatalk

but... it seems like bytemaster corrects him:

I don't think that's right... you put up 2x collateral at the time you place the order. The bts you trade the bitusd for and your margin are separate. You never have negative balance, just locked collateral

Sent from my SCH-I535 using Tapatalk

Each party puts up 1x for a total of 2x entering the trade, and the output of the trade is -USD backed by 2x and +USD

meaning, that in toast's example sam only offers up 1 BTS as collateral instead of 2, and the system is only holding 1 BTS collateral (with the BTS that larry used to buy the bitUSD going to sam). is this correct?
Title: Re: Professional writer who understands all the details
Post by: toast on June 21, 2014, 08:48:16 pm
I think dan's correction isn't right, I think he just meant "this is how we could do it if collateral was 2x" without thinking it through.

If it did work how he described, it would still be 2x collateral: 1x you put in, 1x from sale of USD which you don't get to have (normally you would get to have it since you put up entire required collateral up front).

Why it's not right:
* If the buy order at your price is not big enough to get another 1x from the market then 1x + extra BTS from sale would not be enough.
* That way only works if the collateral reqiurement is <=2x, which it might not be.

Title: Re: Professional writer who understands all the details
Post by: merockstar on June 21, 2014, 08:57:10 pm
I think dan's correction isn't right, I think he just meant "this is how we could do it if collateral was 2x" without thinking it through.

If it did work how he described, it would still be 2x collateral: 1x you put in, 1x from sale of USD which you don't get to have (normally you would get to have it since you put up entire required collateral up front).

Why it's not right:
* If the buy order at your price is not big enough to get another 1x from the market then 1x + extra BTS from sale would not be enough.
* That way only works if the collateral reqiurement is <=2x, which it might not be.

gotcha, so i should change my explanation to reflect the fact that the person doing the shorting actually puts up twice the amount as collateral.

this frees larry to go do whatever he wants with the bitUSD he bought, and the whole example is just a contract between sam and the system. sam can just go buy back the necessary bitUSD to cover his position from the exchange.
Title: Re: Professional writer who understands all the details
Post by: toast on June 21, 2014, 09:03:35 pm
this frees larry to go do whatever he wants with the bitUSD he bought, and the whole example is just a contract between sam and the system. sam can just go buy back the necessary bitUSD to cover his position from the exchange.

Sounds like you're getting it!
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 21, 2014, 09:09:11 pm
this frees larry to go do whatever he wants with the bitUSD he bought, and the whole example is just a contract between sam and the system. sam can just go buy back the necessary bitUSD to cover his position from the exchange.

Sounds like you're getting it!

sweet. but this calls for an almost complete rewrite. I think i see now why tony just pointed me to those threads and said "fix it" without further explanation.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 21, 2014, 09:34:56 pm
Let's say Sam's wrong, and bitShares falls in value (put another way, bitUSD gains value on BitShares).

after a certain point does he just plain lose the ability to cover his position, and the collateral gets destroyed thus replacing the bitUSD that got created out of thin air?
Title: Re: Professional writer who understands all the details
Post by: toast on June 21, 2014, 10:07:04 pm
Let's say Sam's wrong, and bitShares falls in value (put another way, bitUSD gains value on BitShares).

after a certain point does he just plain lose the ability to cover his position, and the collateral gets destroyed thus replacing the bitUSD that got created out of thin air?

Yes, at the margin call price (say, 1.5x original price) the network takes his ENTIRE collateral (2x original price), buys enough bitUSD to cover his position off of the market, destroys the bitusd, and then destroys the rest of the BTS from collateral
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 21, 2014, 10:52:07 pm
okay boys and girls, try these on for size, if you would.

somebody please double check the italicized and bolded part of my market pegging article, I'm not yet completely clear on how that works, I'm basically just going off toasts assertion that this would happen at 1.5x the value of the asset being shorted. If somebody could explain this like I'm five it would be very helpful.


***articles were here, but have been clipped. more current drafts on page 7 of this thread***
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 21, 2014, 11:02:48 pm
Let's say Sam's wrong, and bitShares falls in value (put another way, bitUSD gains value on BitShares).

after a certain point does he just plain lose the ability to cover his position, and the collateral gets destroyed thus replacing the bitUSD that got created out of thin air?

'out of thin air'  or 'from the unlimited supply of the system' – I advised you to use the second! :))
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 21, 2014, 11:55:55 pm
Let's say Sam's wrong, and bitShares falls in value (put another way, bitUSD gains value on BitShares).

after a certain point does he just plain lose the ability to cover his position, and the collateral gets destroyed thus replacing the bitUSD that got created out of thin air?

'out of thin air'  or 'from the unlimited supply of the system' – I advised you to use the second! :))

in the actual article, i just say they are "created."

who cares what i put in the forum post? when it comes to that, i prefer conjured :)
Title: Re: Professional writer who understands all the details
Post by: Stan on June 22, 2014, 12:06:57 am
okay boys and girls, try these on for size, if you would.

somebody please double check the italicized and bolded part of my market pegging article, I'm not yet completely clear on how that works, I'm basically just going off toasts assertion that this would happen at 1.5x the value of the asset being shorted. If somebody could explain this like I'm five it would be very helpful.


Airdrops and Snapshots third draft

You're going to hear the phrases "snapshots," and "airdrops," thrown around quite a bit in the Bitshares community. What are they and what role do they play in the DAC biosphere?

The term "airdrop" was first popularized by the  Auroracoin project (http://www.auroracoin.org). The Auroracoin devs thought it would be a good idea to try and bring digital cryptocurrency a little closer to mainstream by premining half a coin, and earmarking it for distribution to a specific demographic, in this case, the population of Iceland.

The Auroracoin team achieved this by using a system set up by the Icelandic government to keep track of their population to verify that they were only handing out coins to Icelandic citizens. Although this is not the only means by which an airdrop can be carried out.

To be clear, "airdrop" does not refer to literally physically dropping anything out of an airbound vehicle, although that would certainly be neat to watch. What it does refer to is any means of distribution of a coin, or in the case of DACs, shares, which are basically coins but tailor-made to suit the purposes of a specific DAC and it's corresponding blockchain.

Developers who create DACs by using the Bitshares toolkit, angelshare funds, or who just want the support of the Bitshare community are expected to honor what the community refers to as a "social consensus," which asks that they airdrop a certain percentage of their coin's initial public offering to holders of PTS and AGS, or if the DAC doesn't work that way contrive a way to otherwise compensate said PTS and AGS holders.

In a typical scenario this would be effectuated by means of a snapshot. Snapshot is a pretty apt metaphor here, when you take a picture with a camera, you're freezing time in a manner of speaking. In DAC-speak a snapshot also means to freeze time, but instead of taking a real-world image, you're taking a picture of the blockchains for different coins.

For those not yet familiar a blockchain is a freely distributed public ledger containing every transaction that has ever taken place in a cryptocurrency. This means that a blockchain contains up-to-date information about the balances of every single wallet, even yours. A snapshot is actually taking a picture of those balances.

Angelshares do not have a blockchain, but there is a means in place by which the same effect can be achieved.

So imagine that you've developed a new DAC, coded it up and you're all ready to go. You decide to honor the social consensus by airdropping a certain percent of your initial coin/share distribution to PTS/AGS holders, so you take a snapshot. Now you have a list of wallets belonging to the holders of PTS and AGS that you'd like to compensate. Through programming magic you can now reward those groups of people for their support by designating a certain amount of your premine to be distributed proportionally to the wallets on those lists. You simply include them in the blockchain from the beginning.

When holders of PTS and AGS see that you've done this they can download the client for your new DAC and there will be an easy to use tool made available that you can point at the wallets you're using to donate to angelshares or to hold an honored currency, which will communicate to the new DAC that you are the holder of those coins, and you'll get credited the balance.

All this kind of begs the question, if you were making a DAC why on earth would you WANT to use a snapshot to airdrop a premine out to people? Well, the main motivation here is that honoring this social consensus by allocating at least ten percent of your initial shares to AGS donators, and ten percent to PTS holders, gets the support of the Bitshares community behind you. This would open up the door to getting marketing help from both the community. This would also cause the community to embrace your project more enthusiastically, and give you a place you could get technical support in maintaining your DAC where needed.

Additionally, honoring the social consensus causes Invictus to be on your side. Depending on the availability of funds, which get replenished from time to time when new snapshots are released, and the amount of other projects currently being backed by the company, support from Invictus, per Stan, could potentially include legal help getting your company set up in it's chosen favorable jurisdiction, literal office space at Invictus' US headquarters at Virginia Tech, help putting together a website while you work on more important things, legal help on the financial end of things, use of Invictus' trusted escrow service, consultation with Bytemaster (Dan Larimer) and other really smart people for help making your code better, help with finding conferences to speak at for marketing your DAC as well as promotional support within the bounds of Invcitus' global marketing campaign. [citation for Stan's post here]

Individual BitShares delegate, who will be given to opprtunity to spread Angelshares funds out through a program of "smart spigots," may also choose to toss you some startup cash at their discretion. [citation]

What kind of support, and how much of it your DAC could get from invictus depends on certain factors including but not limited to how promising the community deems your business model to be, what technologies you choose to use to implement your business model, whether or not you've selected an optimal legal jurisdiction for your DAC to flourish, how qualified you and your team is to make it happen, and how popular your idea is. [citation]

Snapshots aren't limited exclusively to PTS and AGS, you could give a portion of your premine to the Peercoin community if you wanted simply by tacking on a snapshot of their blockchain. This allows you to kickstart a community for your DAC by having a certain percentage of your coins/shares distributed to a demographic who already knows what to do with them. This is a huge advantage in and of itself because since the alt-coin explosion earlier this year just about any demographic you can think of is already represented by an alt-coin of some kind. Let me toss a couple examples out there. Protoshares would be a way of targetting more technically oriented people interested in business. Angelshares might be a way of targetting a group of people more likely to donate to some cause or participate in an IPO. If you're trying to target the meme loving redditors of the world you could include dogecoin in your airdrop. If you had a DAC that you want to get into the hands of scientists you might consider airdropping to Primecoin. If you're trying to undercut a competitor you may even consider airdropping to their coin! Possibilities are limitless and growing with each to addition to the cryptocurrency world.

In effect, the existence of blockchains make possible a system of rewarding early investors in a manner similar to a public IPO, except one need not be an accredited investor to get in on it. The ability to airdrop coins allows for you to start with a nice, diverse community of holders who are already a part of the crypto-world, ready to get behind your DAC and give it value from the get-go.


Market Pegging second draft

Market pegging is a term to describe how the value of bitAssets will be equal to about the value of their real world counterparts. Anything in the real world that has value can theoretically be represented as part of the BitShares X banking and exchange platform, examples: bitUSD, bitEuro, bitGOLD, bitBTC, bitDiapers, bitOil etc.

None of these bitAssets will exist when the exchange first comes out. They get created when people place bets that the price of these real world assets will go down, to facilitate these bets, BitSharesX will have something akin to a prediction market, enabling people to profit from the view that a given asset will go down in value. Placing such a bet is called shorting.

When somebody is shorting an asset this means they think the price of said asset will fall with respect to the price of BitShares, the currency that's to be used as collateral for placing these bets. They put an amount of BitShares equal to twice the value of the amount of the asset they want to short up to be held by the system as collateral, and the system creates an appropriate amount of bitAssets to match the value of half that collateral.

The system holds this BitAsset until somebody decides to accept their bet by taking a long position on the asset. When somebody takes a long position against an asset they are simply purchasing the newly created BitAsset from the system, and the system gives the BitShares paid for that bitAsset back to the person who did the shorting.

Now the person who went short has half the amount of BitShares that they put up as collateral back, the person who went long has the bitAsset, and the system is still holding the collateral that was put up by the person doing the shorting until the person shorting it decides to close their position.

At this point, the person who bought the bitAsset can disappear and do whatever they want with it, if they choose. To close their position, the person doing the shorting will have to purchase an amount of the bitAsset from an exchange equal to what's been created so they can reclaim their collateral. When they do this, if they were correct and the price of the bitAsset has fallen, then it will cost them less bitShares to buy the asset back to cover their position and the difference is profit for them.

On the flipside, if the person doing the shorting was incorrect in the thinking the value of the asset would fall then it would cost them more of their bitshares to buy back enough of the bitAsset to close out their position. If the value goes up 50% and the person who shorted can no longer benefit from covering their position then the network uses the collateral to buy the amount of the bitAsset that was created back from the market and destroys it along with the remaining collateral. This removes the extra value from the market that was created when the bitAsset came into existence, closing the short person's position for them, and they untilmately end up losing half their BitShares.

You might be wondering how we know that the bitAssets that get created through this process will stay the same price as their real-world asset counterparts. This price tracking occurs as a result of the belief by the majority of participants in the market that this bitAsset will be pegged to the price of the real world asset. If the price were to somehow deviate, perhaps from somebody making an incredibly large buy or sell order for a bitAsset, then the rest of the world knows that the bitAsset is supposed to be the same price as the real world asset, and they will buy and sell accordingly, hoping to profit.

This system of market pegging is what makes BitShares X use as a bank possible.

***lead into intro to BitShares X here***

I'm finally beginning to understand this stuff!  Thanks.  :)

(I would use the word "honor" not "compensate" when share-dropping to PTS/AGS (or Doge).  By "honoring" them you are indicating that they are a demographic you value and are seeking their support.)

Title: Re: Professional writer who understands all the details
Post by: merockstar on June 22, 2014, 12:21:19 am
****clipped for brevity****

I'm finally beginning to understand this stuff!  Thanks.  :)

(I would use the word "honor" not "compensate" when share-dropping to PTS/AGS (or Doge).  By "honoring" them you are indicating that they are a demographic you value and are seeking their support.)

 :o my pleasure, Stan. I will change that in the final draft.   8)
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 22, 2014, 03:47:14 am
1.The market peg part is correct enough!

 2.Just Change:
If the value goes up 50% and the person who shorted can no longer benefit from covering their position then the network uses the collateral to buy the amount of the bitAsset that was created back from the market and destroys it along with the remaining collateral. This removes the extra value from the market that was created when the bitAsset came into existence, closing the short person's position for them, and they untilmately end up losing half their BitShares.


With:

In order to guarantee that no short position exists without enough collateral backing it up, at predetermined price level (more precisely ratio of collateral to current bitAsset market price)  the system uses the collateral to close such short position. To do this the system simply (re)purchases the bitAsset from the market. Any remaining collateral after those purchases, if any, is returned to the ex-short-position-holder.

You can add  this immediately after: It is precisely the same behavior the short position  holder will have if she decides that her short positions have produce enough loses and she wants to prevent any future losses, only this is done automatically by the system not the position holder herself.

3. The problem of course is that in 90 % of the ‘market peg’ subsection you explain technical details (known to mankind for quite some time) and you leave just 10% to talk about the real  innovative market peg  system. But it is what it is…


4.On a side note:
‘when it comes to that, i prefer conjured  ’
I think that word conjured is an excellent choice in that context!
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 22, 2014, 04:16:31 am

Any remaining collateral after those purchases, if any, is returned to the ex-short-position-holder.




is it though? toast just told me it gets destroyed.

Let's say Sam's wrong, and bitShares falls in value (put another way, bitUSD gains value on BitShares).

after a certain point does he just plain lose the ability to cover his position, and the collateral gets destroyed thus replacing the bitUSD that got created out of thin air?

Yes, at the margin call price (say, 1.5x original price) the network takes his ENTIRE collateral (2x original price), buys enough bitUSD to cover his position off of the market, destroys the bitusd, and then destroys the rest of the BTS from collateral
Title: Re: Professional writer who understands all the details
Post by: toast on June 22, 2014, 04:20:36 am

Any remaining collateral after those purchases, if any, is returned to the ex-short-position-holder.




is it though? toast just told me it gets destroyed.

Let's say Sam's wrong, and bitShares falls in value (put another way, bitUSD gains value on BitShares).

after a certain point does he just plain lose the ability to cover his position, and the collateral gets destroyed thus replacing the bitUSD that got created out of thin air?

Yes, at the margin call price (say, 1.5x original price) the network takes his ENTIRE collateral (2x original price), buys enough bitUSD to cover his position off of the market, destroys the bitusd, and then destroys the rest of the BTS from collateral

Actually I think I was wrong, IIRC the plan is to destroy 5% of unused collateral as punishment for margin call and return the rest
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 22, 2014, 04:24:38 am

Any remaining collateral after those purchases, if any, is returned to the ex-short-position-holder.




is it though? toast just told me it gets destroyed.

Let's say Sam's wrong, and bitShares falls in value (put another way, bitUSD gains value on BitShares).

after a certain point does he just plain lose the ability to cover his position, and the collateral gets destroyed thus replacing the bitUSD that got created out of thin air?

Yes, at the margin call price (say, 1.5x original price) the network takes his ENTIRE collateral (2x original price), buys enough bitUSD to cover his position off of the market, destroys the bitusd, and then destroys the rest of the BTS from collateral

Actually I think I was wrong, IIRC the plan is to destroy 5% of unused collateral as punishment for margin call and return the rest

roger that, I will make the necessary changes in the final draft.

3. The problem of course is that in 90 % of the ‘market peg’ subsection you explain technical details (known to mankind for quite some time) and you leave just 10% to talk about the real  innovative market peg  system. But it is what it is…


It's been known to money-havin mankind for quite some time. Those of us who are normal (read: poor as shit) have no idea what all this shit is about, and it will be our very first ever opportunity to engage in financial practices.

Nevertheless, could you give an example of what you were expecting?

(http://i.imgur.com/7QbZNeb.jpg)
Title: Re: Professional writer who understands all the details
Post by: toast on June 22, 2014, 04:42:13 am
I agree, the last paragraph is 99% of the innovation. It's important to explain the concept that each individual will choose to trade towards consensus *because they expect others to do it*.

You aren't really betting about the future price, you are betting about what you think everyone else thinks the future price will be. Or rather, what everyone else thinks everyone else thinks everyone else thinks .... the future price will be.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 22, 2014, 04:47:45 am
I agree, the last paragraph is 99% of the innovation. It's important to explain the concept that each individual will choose to trade towards consensus *because they expect others to do it*.

You aren't really betting about the future price, you are betting about what you think everyone else thinks the future price will be. Or rather, what everyone else thinks everyone else thinks everyone else thinks .... the future price will be.

so you and tonyk are saying i should expand on the last paragraph?

okey. i will add that to the list.

that's going to be a tough one to explain though. I have half a mind just to quote that post you made for me earlier, toast.
Title: Re: Professional writer who understands all the details
Post by: toast on June 22, 2014, 04:53:13 am
I agree, the last paragraph is 99% of the innovation. It's important to explain the concept that each individual will choose to trade towards consensus *because they expect others to do it*.

You aren't really betting about the future price, you are betting about what you think everyone else thinks the future price will be. Or rather, what everyone else thinks everyone else thinks everyone else thinks .... the future price will be.

so you and tonyk are saying i should expand on the last paragraph?

okey. i will add that to the list.

that's going to be a tough one to explain though. I have half a mind just to quote that post you made for me earlier, toast.

Not a bad idea =P

Your explanation will be one of many I hope to host on the bitshares-x.info site. The more different ways of explaining we have the better.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 22, 2014, 04:54:46 am
I agree, the last paragraph is 99% of the innovation. It's important to explain the concept that each individual will choose to trade towards consensus *because they expect others to do it*.

You aren't really betting about the future price, you are betting about what you think everyone else thinks the future price will be. Or rather, what everyone else thinks everyone else thinks everyone else thinks .... the future price will be.

so you and tonyk are saying i should expand on the last paragraph?

okey. i will add that to the list.

that's going to be a tough one to explain though. I have half a mind just to quote that post you made for me earlier, toast.

Not a bad idea =P

Your explanation will be one of many I hope to host on the bitshares-x.info site. The more different ways of explaining we have the better.

in that case, i will try to come up with something more unique, and you can have yours.

but do use that post you made earlier, it's what made it click for me and i think it could help alotta people understand.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 22, 2014, 05:10:18 am
Can anyone think of any other points I should include as part of the last paragraph?

I now intend to expand on that explanation a bit a la toast's post here (https://bitsharestalk.org/index.php?topic=4563.msg67786#msg67786). But if I'm missing anything else I'd love to hear about it.
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 22, 2014, 05:37:15 am

in that case, i will try to come up with something more unique, and you can have yours.

but do use that post you made earlier, it's what made it click for me and i think it could help alotta people understand.

but do use that post you made earlier, it's what made it click for me and i think it could help alotta people understand.

If you mean the post I sad is great

https://bitsharestalk.org/index.php?topic=4563.msg67786#msg67786

 – it is truly great and you should start with it.

 If it is something else keep in mind that it is very very hard to be in somebody else’s brain and to understand exactly which tiny connection is not so obvious to them… the base strategy for those is what toast said – have a lot of different explanation, from a lot of different people and hope that every willing student will find his ‘personal missing bit of information’  in one of them….
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 22, 2014, 06:28:13 am

in that case, i will try to come up with something more unique, and you can have yours.

but do use that post you made earlier, it's what made it click for me and i think it could help alotta people understand.

but do use that post you made earlier, it's what made it click for me and i think it could help alotta people understand.

If you mean the post I sad is great

https://bitsharestalk.org/index.php?topic=4563.msg67786#msg67786

 – it is truly great and you should start with it.

 If it is something else keep in mind that it is very very hard to be in somebody else’s brain and to understand exactly which tiny connection is not so obvious to them… the base strategy for those is what toast said – have a lot of different explanation, from a lot of different people and hope that every willing student will find his ‘personal missing bit of information’  in one of them….

that is exactly the post to which i was referring.
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 22, 2014, 06:51:23 am
I am truly surprised by the progress you made in 2 days!

You should be proud of yourself!


PS
 If you read at least some of my posts my compliments do not come easy!
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 22, 2014, 06:58:10 am
I am truly surprised by the progress you made in 2 days!

You should be proud of yourself!


PS
 If you read at least some of my posts my compliments do not come easy!

why thank you sir.   :D
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 23, 2014, 05:15:25 am
question: I've read random threads here and there that reference dividends being paid to holders of bitAssets.

I've also read about it here: http://invictus-innovations.com/bitshares-as-dac-bank

is the dividends thing still in the works?

according to the site I just linked, the destroyed five percent fee was going to go towards those dividends.
is that still true?

can anyone fill me in or link to the most current threads on the subject?
Title: Re: Professional writer who understands all the details
Post by: toast on June 23, 2014, 05:42:59 am
question: I've read random threads here and there that reference dividends being paid to holders of bitAssets.

I've also read about it here: http://invictus-innovations.com/bitshares-as-dac-bank

is the dividends thing still in the works?

according to the site I just linked, the destroyed five percent fee was going to go towards those dividends.
is that still true?

can anyone fill me in or link to the most current threads on the subject?

"Dividends" are just destroyed shares. If you do your accounting in BIPS (billionths of the current share supply), then the dividends are explicit and you actually see your balance go up. Otherwise they are implicit and you gain value from the reduced supply.

Long ago there was a plan to have BitAssets earn interest out of the short position's collateral. That plan is abandoned (or delayed for a future chain).
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 23, 2014, 06:08:35 am
question: I've read random threads here and there that reference dividends being paid to holders of bitAssets.

I've also read about it here: http://invictus-innovations.com/bitshares-as-dac-bank

is the dividends thing still in the works?

according to the site I just linked, the destroyed five percent fee was going to go towards those dividends.
is that still true?

can anyone fill me in or link to the most current threads on the subject?

"Dividends" are just destroyed shares. If you do your accounting in BIPS (billionths of the current share supply), then the dividends are explicit and you actually see your balance go up. Otherwise they are implicit and you gain value from the reduced supply.

Long ago there was a plan to have BitAssets earn interest out of the short position's collateral. That plan is abandoned (or delayed for a future chain).

roger that, so you dont get any interest or dividends for holding bitUSD.
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 23, 2014, 01:52:38 pm
question: I've read random threads here and there that reference dividends being paid to holders of bitAssets.

I've also read about it here: http://invictus-innovations.com/bitshares-as-dac-bank

is the dividends thing still in the works?

according to the site I just linked, the destroyed five percent fee was going to go towards those dividends.
is that still true?

can anyone fill me in or link to the most current threads on the subject?

"Dividends" are just destroyed shares. If you do your accounting in BIPS (billionths of the current share supply), then the dividends are explicit and you actually see your balance go up. Otherwise they are implicit and you gain value from the reduced supply.

Long ago there was a plan to have BitAssets earn interest out of the short position's collateral. That plan is abandoned (or delayed for a future chain).

Hmmm …To not earn dividends on the collateral when the dividends come as destroyed BTS X (reduced supply) a special care must be taken and calculations made (as in how many shares were destroyed ever since the collateral was given) and the returned collateral must be generally a smaller amount of BTS
…the other way of course is the collateral to be held in bips not BTS.. which one is true?

And if in bips – are the prices gonna be quoted in BTS or in  bips?
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 24, 2014, 08:55:22 am
I've gone ahead and revised my articles with all the suggestions that have been posted so far. Toast, I really couldn't come up with a way to explain the market pegging thing any better than you did, so I basically went with your example (but I intend to cite you as well). Can anybody think of any other ways I could expand on the topic of innovativeness as it pertains to market pegging?

As for the airdrop/snapshot article, I think it's almost done. I did a few minor edits to it, and I'm posting it here for people to have one more look over. If nobody has any further input I'm going to go ahead and call that one a wrap and post it in various places tomorrow.

I'm doing something to promote angelshares. I think I'm going to take a few days off from writing this after I publish the airdrop article, and start putting some effort into that before I return to this thread and continue to work down toast's list. I'm on this hardcore now. In the meantime, any feedback that can be offered on the current iteration of the market pegging article would be invaluable.

Anyway, here's the most current iterations of both articles.



Airdrops and Snapshots final draft

You're going to hear the phrases "snapshots," and "airdrops," thrown around quite a bit in the Bitshares community. What are they and what role do they play in the DAC biosphere?

The term "airdrop" was first popularized by the  Auroracoin project (http://www.auroracoin.org). The Auroracoin devs thought it would be a good idea to try and bring digital cryptocurrency a little closer to mainstream by premining half a coin, and earmarking it for distribution to a specific demographic, in this case, the population of Iceland.

The Auroracoin team achieved this by using a system set up by the Icelandic government to keep track of their population to verify that they were only handing out coins to Icelandic citizens. Although this is not the only means by which an airdrop can be carried out.

To be clear, "airdrop" does not refer to literally physically dropping anything out of an airbound vehicle, although that would certainly be neat to watch. What it does refer to is any means of distribution of a coin, or in the case of DACs, shares, which are basically coins but tailor-made to suit the purposes of a specific DAC and it's corresponding blockchain.

Developers who create DACs by using the Bitshares toolkit, angelshare funds, or who just want the support of the Bitshare community are expected to honor what the community refers to as a "social consensus," which asks that they airdrop a certain percentage of their coin's initial public offering to holders of PTS and AGS, or if the DAC doesn't work that way contrive a way to otherwise honor said PTS and AGS holders.

In a typical scenario this would be effectuated by means of a snapshot. Snapshot is a pretty apt metaphor here, when you take a picture with a camera, you're freezing time in a manner of speaking. In DAC-speak a snapshot also means to freeze time, but instead of taking a real-world image, you're taking a picture of the blockchains for different coins.

For those not yet familiar a blockchain is a freely distributed public ledger containing every transaction that has ever taken place in a cryptocurrency. This means that a blockchain contains up-to-date information about the balances of every single wallet, even yours. A snapshot is actually taking a picture of those balances.

Angelshares do not have a blockchain, but there is a means in place by which the same effect can be achieved.

So imagine that you've developed a new DAC, coded it up and you're all ready to go. You decide to honor the social consensus by airdropping a certain percent of your initial coin/share distribution to PTS/AGS holders, so you take a snapshot. Now you have a list of wallets belonging to the holders of PTS and AGS that you'd like to honor. Through programming magic you can now reward those groups of people for their support by designating a certain amount of your premine to be distributed proportionally to the wallets on those lists. You simply include them in the blockchain from the beginning.

When holders of PTS and AGS see that you've done this they can download the client for your new DAC and there will be an easy to use tool made available that you can point at the wallets you're using to donate to angelshares or to hold an honored currency, which will communicate to the new DAC that you are the holder of those coins, and you'll get credited the balance.

All this kind of begs the question, if you were making a DAC why on earth would you WANT to use a snapshot to airdrop a premine out to people? Well, the main motivation here is that honoring this social consensus by allocating at least ten percent of your initial shares to AGS donators, and ten percent to PTS holders, gets the support of the Bitshares community behind you. This would open up the door to getting marketing help from both the community. This would also cause the community to embrace your project more enthusiastically, and give you a place you could get technical support in maintaining your DAC where needed.

Additionally, honoring the social consensus causes Invictus to be on your side. Depending on the availability of funds, which get replenished from time to time when new snapshots are released, and the amount of other projects currently being backed by the company, support from Invictus, per Stan, could potentially include legal help getting your company set up in it's chosen favorable jurisdiction, literal office space at Invictus' US headquarters at Virginia Tech, help putting together a website while you work on more important things, legal help on the financial end of things, use of Invictus' trusted escrow service, consultation with Bytemaster (Dan Larimer) and other really smart people for help making your code better, help with finding conferences to speak at for marketing your DAC as well as promotional support within the bounds of Invcitus' global marketing campaign. [citation for Stan's post here]

Individual BitShares delegate, who will be given to opprtunity to spread Angelshares funds out through a program of "smart spigots," may also choose to toss you some startup cash at their discretion. [citation]

What kind of support, and how much of it your DAC could get from invictus depends on certain factors including but not limited to how promising the community deems your business model to be, what technologies you choose to use to implement your business model, whether or not you've selected an optimal legal jurisdiction for your DAC to flourish, how qualified you and your team is to make it happen, and how popular your idea is. [citation]

Snapshots aren't limited exclusively to PTS and AGS, you could give a portion of your premine to the Peercoin community if you wanted simply by tacking on a snapshot of their blockchain. This allows you to kickstart a community for your DAC by having a certain percentage of your coins/shares distributed to a demographic who already knows what to do with them. This is a huge advantage in and of itself because since the alt-coin explosion earlier this year just about any demographic you can think of is already represented by an alt-coin of some kind. Let me toss a couple examples out there. Protoshares would be a way of targetting more technically oriented people interested in business. Angelshares might be a way of targetting a group of people more likely to donate to some cause or participate in an IPO. If you're trying to target the meme loving redditors of the world you could include dogecoin in your airdrop. If you had a DAC that you want to get into the hands of scientists you might consider airdropping to Primecoin. If you're trying to undercut a competitor you may even consider airdropping to their coin! Possibilities are limitless and growing with each to addition to the cryptocurrency world.

In effect, the existence of blockchains make possible a system of rewarding early investors in a manner similar to a public IPO, except one need not be an accredited investor to get in on it. The ability to airdrop coins allows for you to start with a nice, diverse community of holders who are already a part of the crypto-world, ready to get behind your DAC and give it value from the get-go.



Market Pegging third draft

Market pegging is a term to describe how the value of bitAssets will be equal to about the value of their real world counterparts. Anything in the real world that has value can theoretically be represented as part of the BitShares X banking and exchange platform, examples: bitUSD, bitEuro, bitGOLD, bitBTC, bitDiapers, bitOil etc. At first the software will focus on fiat currencies but later will expand to include other commodities. This will be accomplished through several different iterations of BitShares X which will have different letters attached to the end of their names.

None of these bitAssets will exist when the exchange first comes out. They get created when people place bets that the price of these real world assets will go down, to facilitate these bets, BitSharesX will have something akin to a prediction market, enabling people to profit from the view that a given asset will go down in value. Placing such a bet is called shorting.

When somebody is shorting an asset this means they think the price of said asset will fall with respect to the price of BitShares, the currency that's to be used as collateral for placing these bets. They put an amount of BitShares equal to twice the value of the amount of the asset they want to short up to be held by the system as collateral, and the system creates an appropriate amount of bitAssets to match the value of half that collateral.

The system holds this BitAsset until somebody decides to accept their bet by taking a long position on the asset. When somebody takes a long position against an asset they are simply purchasing the newly created BitAsset from the system, and the system gives the BitShares paid for that bitAsset back to the person who did the shorting.

Now the person who went short has half the amount of BitShares that they put up as collateral back, the person who went long has the bitAsset, and the system is still holding the collateral that was put up by the person doing the shorting until the person shorting it decides to close their position.

At this point, the person who bought the bitAsset can disappear and do whatever they want with it, if they choose. To close their position, the person doing the shorting will have to purchase an amount of the bitAsset from an exchange equal to what's been created so they can reclaim their collateral. When they do this, if they were correct and the price of the bitAsset has fallen, then it will cost them less bitShares to buy the asset back to cover their position and the difference is profit for them.

On the flipside, if the person doing the shorting was incorrect in the thinking the value of the asset would fall then it would cost them more of their bitshares to buy back enough of the bitAsset to close out their position. If the value goes up 50% to 1.5x the starting price then the network uses the collateral to buy the amount of the bitAsset that was created back from the market, destroys it and returns the remaining collateral minus a 5% fee for letting the system close their position for them which gets destroyed. When the system closes a short position for somebody this referred to as a margin call. This removes the extra value from the market that was created when the bitAsset came into existence.

You might be wondering how we know that the bitAssets that get created through this process will stay the same price as their real-world asset counterparts. This price tracking occurs as a result of the belief by the majority of participants in the market that this bitAsset will be pegged to the price of the real world asset. If the price were to somehow deviate, perhaps from somebody making an incredibly large buy or sell order for a bitAsset, then the rest of the world knows that the bitAsset is supposed to be the same price as the real world asset, and they will buy and sell accordingly, hoping to profit. Arbitrage is what ensures that the price of a bitAsset will equal the price of a real asset.

Let me explain what I mean by that, the easiest way to do so is to use an example such as the one bitsharetalk forum member, and code contributer 'toast' walked me through [citation]. It involves imagining every possible scenario that involves the price of a bitAsset deviating from the price of it's real world asset. The hidden secret here is the precedent established by everybody knowing that a bitUSD should be worth about a dollar. As long as most people agree with that precedent then disagreeing with it will not result in profit for you. Say you're a naysayer, and you think a bitUSD is actually going to be worth ninety cents, this means you would likely short at ninety-five cents or a dollar- but if the price goes up to a dollar you're going to be stuck covering your position, which involves buying some bitUSD helping push the price up. On the other hand, if you think a bitUSD is worth $1.10, it would make sense to buy at $1.05 but if the price falls back to a dollar you would only be able to get out at a loss. Now let's look at how that would play out for somebody who agrees that a bitUSD is worth a dollar. If the price were to fall to ninety-five cents you would buy it, pushing up the price a little, so that you could sell at a dollar. If it were $1.10 you would short it, creating new bitUSD and pushing the price down a little bit, so the cycle is self-perpetuating. Knowing that most other people agree that the price of a bitUSD should be a dollar would cause you to take actions that support that assertion in the interest of your own profit.

This system of market pegging is what makes BitShares X use as a bank possible. The creation of what might be thought of as the crypto equivalent to fiat currencies creates a more stable alternative to traditional cryptocurrencies for the time being, defeating the argument that instability will prevent cryptocurrencies from ever being more widely used. This also enables people who value stability in their currency to truly approach a blockchain as a means of storing their wealth, until the market cap of an actual cryptocurrency is high enough to create stability in its own right.

***lead into intro to BitShares X here***






Title: Re: Professional writer who understands all the details
Post by: xeroc on June 24, 2014, 11:39:43 am

Just my 2PTS for the Airdropping article. Need a little more time for the
MarketPeg.

Quote
You simply include them in the blockchain from the beginning.
... So to say in the first block (called genesis block) all investors start with
an initial transaction or stake ...

Quote
This would also cause the community to embrace your project more
enthusiastically, and give you a place you could get technical support in
maintaining your DAC where needed.

... Developers would gain technicall support aswell as marketing ...

Besides that: Just an awesome article!
PM me your PTS address I will send you a tip. Never mind .. found it! 93c3a81f4de18b5fd5e89f9fa56ffbc91e6acb717bbbc31ead8a7b3a2f47dcb5
Title: Re: Professional writer who understands all the details
Post by: xeroc on June 24, 2014, 11:59:27 am
Quote
None of these bitAssets will exist when the exchange first comes out. They get
created when people place bets that the price of these real world assets will go
down, to facilitate these bets, BitSharesX will have something akin to a
prediction market, enabling people to profit from the view that a given asset
will go down in value. Placing such a bet is called shorting.
Could you compare shorting to lending from the System .. instead of lending from
a broker/bank? .. reading more of the article I relized that the guy how went
short is lending the asset to someone else ... seems to work out .. maybe I was
wrong with the economics :)

Quote
The system holds this BitAsset until somebody decides to accept their bet by
taking a long position on the asset. When somebody takes a long position against
an asset they are simply purchasing the newly created BitAsset from the system,
and the system gives the BitShares paid for that bitAsset back to the person who
did the shorting.
What does this mean for the 'price' of an asset when a shorting finds a partner
going long?

Quote
On the flipside, if the person doing the shorting was incorrect in the thinking
the value of the asset would fall then it would cost them more of their
bitshares to buy back enough of the bitAsset to close out their position. If the
value goes up 50% to 1.5x the starting price then the network uses the
collateral to buy the amount of the bitAsset that was created back from the
market, destroys it and returns the remaining collateral minus a 5% fee for
letting the system close their position for them which gets destroyed. When the
system closes a short position for somebody this referred to as a margin call.
This removes the extra value from the market that was created when the bitAsset
came into existence.
So why do I have to pay 2x to buy the asset and get margin called when the price
rises to 1.5x? why not later when price is at 2x?

Quote
You might be wondering how we know that the bitAssets that get created through
this process will stay the same price as their real-world asset counterparts.
This price tracking occurs as a result of the belief by the majority of
participants in the market that this bitAsset will be pegged to the price of the
real world asset. If the price were to somehow deviate, perhaps from somebody
making an incredibly large buy or sell order for a bitAsset, then the rest of
the world knows that the bitAsset is supposed to be the same price as the real
world asset, and they will buy and sell accordingly, hoping to profit. Arbitrage
is what ensures that the price of a bitAsset will equal the price of a real
asset.
The tech guys usually call this a "negative feedback" .. just fyi

Quote
Let me explain what I mean by that, the easiest way to do so is to use an
example such as the one bitsharetalk forum member, and code contributer 'toast'
walked me through [citation]. It involves imagining every possible scenario that
involves the price of a bitAsset deviating from the price of it's real world
asset. The hidden secret here is the precedent established by everybody knowing
that a bitUSD should be worth about a dollar. As long as most people agree with
that precedent then disagreeing with it will not result in profit for you. Say
you're a naysayer, and you think a bitUSD is actually going to be worth ninety
cents, this means you would likely short at ninety-five cents or a dollar- but
if the price goes up to a dollar you're going to be stuck covering your
position, which involves buying some bitUSD helping push the price up. On the
other hand, if you think a bitUSD is worth $1.10, it would make sense to buy at
$1.05 but if the price falls back to a dollar you would only be able to get out
at a loss. Now let's look at how that would play out for somebody who agrees
that a bitUSD is worth a dollar. If the price were to fall to ninety-five cents
you would buy it, pushing up the price a little, so that you could sell at a
dollar. If it were $1.10 you would short it, creating new bitUSD and pushing
the price down a little bit, so the cycle is self-perpetuating. Knowing that
most other people agree that the price of a bitUSD should be a dollar would
cause you to take actions that support that assertion in the interest of your
own profit.
Let's now just assume a dollor is worth a US dollar :) ... just kidding ;)


my 2 PTS:
awesome article ... easy to read and understand for a technician as I am one ..
I have no clew about economics but your article is very clear to follow and
absolutely makes sense .. I wish I could just by even more BTS!

+5%
Title: Re: Professional writer who understands all the details
Post by: tonyk on June 24, 2014, 12:57:25 pm
merockstar,

I am probably well on your nerves already, so this is my final suggestion/request for change in this writing BUT:

You just cannot leave the word ‘arbitrage’ there… if arbitrage was an option there would be no experiment involved, it would be certainty.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 24, 2014, 08:01:06 pm
merockstar,

I am probably well on your nerves already, so this is my final suggestion/request for change in this writing BUT:

You just cannot leave the word ‘arbitrage’ there… if arbitrage was an option there would be no experiment involved, it would be certainty.

no no no you are absolutely NOT on my nerves. good writers value criticism like gold (or should i say BitShares). anything else you see, drop it on me. I can take it.

and thank you.
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 25, 2014, 12:12:57 am
xeroc, that is some really solid feedback there sir. i thank you for it.
Title: Re: Professional writer who understands all the details
Post by: metalallen on June 25, 2014, 04:45:00 am
Bitshares solves all the inherent problems of bitcoin:

- slow transactions per second when compared to a major payment processor like visa (7 tps vs 10,000 tps)
- wallets are machine readable not human readable (as a result something like 5% of btc have been irrevocably lost)
- transactions are not anonymous
- distribution model is inflationary, even if the argument can be made that the inflation has been priced in
- price volatility (obviously this is the biggest deterrent when it comes to adoption as a major currency)
- security of the network cost anywhere from $500 million to $1 billion annually depending on the bitcoin market capitalization
- control of the network is proportional to hashing power not proportional to you relative bitcoin holdings
- centralization of hashing power under the control of a single mining pool

How Bitshares solves these issues:

- DPOS reduces block production to 15-30 seconds and since computational resources are used for the purpose of transaction propagation and confirmation rather than pointless computational work, DPOS blockchains can scale to the transaction load of visa
- Bitshares uses accounts that can be registered on the blockchain. Users no longer need to send money to an alpha numeric string that can be miscopied. Instead you send money as easily you would send an email and in the exact same fashion. It is very difficult to send to a wrong account. You can still send to public keys but its unnecessary and adds little advantage
- Bitshares uses TITAN which automates the creation of stealth address using an accounts registered public key. No need for mixing or "masternodes." All transactions are inherently anonymous without the user needing to do anything
- Bitshares is a 100% proof of stake system so all the shares are pre-allocated and there is no need for the dilution of stake
- Bitshares X is a bank that allows people to hold deposits in whatever asset they want. This system allows investors with a higher risk tolerance to collateralize and trade virtual assets, to ensure that users who simply want to use crypto currencies as a stable medium of exchange can do so without risk due to the volatility of the networks main equity/currency. (That is to say that if you put $100 in the network your deposit always redeemable for $100 worth of bitshares, as a result of the free market peg of bitUSD to real USD)
- The cost of securing the network is simply a fraction of the transaction fees accumulated by the network. Transaction fees are destroyed which acts as an implicit dividend to holders of bitshares and makes Bitshares truly deflationary.
- Delegates compete for votes and the top 101 delegates produce blocks. The job of a delegate is simple include as many valid transactions
in your given block and sign a single block. If a delegate signs multiple blocks they are immediately fired. If a delegate blocks transactions they will be voted out of office. Each round delegates are randomly assigned a block to produce thereby making it that much harder to coordinate a sustained attack on the network without 51% of the shares.
- Shareholder votes are proportionate to the relative number of shares they own. The DAC is completely shareholder run

Bitshares solves all the problems of bitcoin and does not overcomplicate things in the way that Ethereum does. When you view these crypto currencies networks through metaphor of a company you realize how misinformed people are about how these networks should be designed.  It is imperative that the developers of a crypto currency network have a solid understanding of economics and I believe that Dan Larimer and his team have the best economic perspective  in the crypto currency space. To be honest if you truly evaluate the fundamentals ethereum is just not even comparable, both as a crypto network and as an investment. People need to stop buying into hype and do the necessary research before they invest.

I translated this into Chinese. Hopefully it will help newbies in China to see the whole picture.
https://bitsharestalk.org/index.php?topic=5290.0 (https://bitsharestalk.org/index.php?topic=5290.0)

https://bitsharestalk.org/index.php?topic=5213.msg69186#msg69186 (https://bitsharestalk.org/index.php?topic=5213.msg69186#msg69186)
I translated this into Chinese. Hopefully it will help newbies in China to see the whole picture.
https://bitsharestalk.org/index.php?topic=5290.0

早上看到alt推荐的英文贴,觉得这是个挺通俗易懂的扫盲贴所以就翻译了过来,并添加了少许个人见解,或许能帮助新人们更好的了解Bitshares。翻译水平有限,还请各位大力斧正。 ;D

英文原帖:https://bitsharestalk.org/index.php?topic=5213.msg69186#msg69186

译文:
我们为什么要支持比特股?

比特股解决了下列比特币所有的固有问题:
- 缓慢的每秒交易速度,尤其是和像Visa这样的系统进行对比(每秒7次交易 VS 每秒上万次交易);

- 钱包只能是机读的,可能造成钱包文件、密码、密匙的丢失(这导致了有5%左右的比特币已经彻底丢失);

- 交易不是匿名进行的;

- 分发方式是通胀的,即时有说法认为这种通胀已经被市场消化了;

- 价格波动。显然这对要成为一种主要货币的比特币来说是最大的硬伤;

- 每年在网络安全上的花费在5亿美元到10亿美元,具体数字取决于比特币的总市值;

- 对比特币网络的控制权和算力大小成正比,而不是和个体拥有的比特币数量成正比;

- 一个拥有巨大算力的矿池就能导致中心化。

比特股怎么解决这些问题?
- DPOS算法将出块时间减低到15-30秒,并把算力资源应用到交易广播和确认上而不是浪费在无意义的计算上。这使得DPOS块链可以承载Visa级别的交易量;

- 比特股的交易地址用的是可以在块链上注册的账号。使用者不用再将钱发送到一串很长的数字字母混合的地址上,并且在拷贝地址过程中有可能误操作。比特股使用者可以像发送邮件一样很简单的给各个账号汇款,这很简单并不容易发错。同时,你也可以选择发送到账号对应下的公共密匙地址(一串很长的数字字母的混合)上,但并没这必要;

- 比特股使用了TITAN技术,它能够在交易中让用户的账号和公共密匙自动“隐身”。不用再混合或使用主节点。所有的交易本质上都是匿名的,而过程中无需用户做任何事情;

- 比特股是100%的POS分发系统,所以所有股份都是预分配的,也没有必要对股权进行稀释;

- 比特股X是一个允许人们存储任何形式虚拟资产的银行。这个系统允许具有较高风险承受能力的投资者们抵押和交易虚拟资产,并确保了用户可以使用币值稳定的加密货币作为交易媒介,剔除了汇率波动带来的风险(也就是说,如果你在比特股X中存入100美元,你总会得到价值100美元的比特资产,因为在自由市场上100比特美元锚定了100美元);

- 网络安全方面的花费仅仅是在比特股网络中累积起来的交易费的一小部分。交易费,像比特股持有者的隐藏分红一样的形式被摧毁,这会让比特股持续通缩;

- 系统中的受托人们会竞争选票,由得票最多的前101名受托人来进行出块的工作。受托人的工作简单来说,他需要在包含很多有效交易信息的区块中签名一个块。如果一个受托人签了多个块,那他将会被立刻解雇。如果受托人阻挡了交易进行那他也会被踢出局。因为每一轮受托人们都是随机签名,并没有固定顺序,所以这个系统很难被持续攻击;

- 股份持有者的投票力度是跟他的持股数量成正比的。DAC完全是股份持有者们在运营。

比特股可以解决比特币的所有问题,又并不是像以太坊那样在做过于复杂的东西。当你发现你可以用看待一个公司的方式来看待加密货币网络的时候,你会意识到很多人误解了这些网络该如何设计。至关重要的是,加密货币网络的开发人员应该对经济方面有深刻的认识。我认为BM和他的团队在经济方面和加密货币领域的认识都有很深刻的认识和研究。说实话,如果你认真评估一下以太坊的设计基础,你会发现无论在加密网络还是投资前景方面都跟比特股不具可比性。人们需要停止炒作,最起码在投资前你要对项目做必要的研究。
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 25, 2014, 06:21:53 am
I have finalized both articles and will be posting them shortly. am now starting work on "DACs as social dilemma solving machines"

if anybody knows of any relevant posts pertaining to this subject it would be tremendously helpful.
Title: Re: Professional writer who understands all the details
Post by: toast on June 25, 2014, 06:27:11 am
I have finalized both articles and will be posting them shortly. am now starting work on "DACs as social dilemma solving machines"

if anybody knows of any relevant posts pertaining to this subject it would be tremendously helpful.

https://bitsharestalk.org/index.php?topic=3488.msg43785

But I think we should skip this topic and move to the more concrete / immediate ones
Title: Re: Professional writer who understands all the details
Post by: merockstar on June 25, 2014, 07:02:41 am
I have finalized both articles and will be posting them shortly. am now starting work on "DACs as social dilemma solving machines"

if anybody knows of any relevant posts pertaining to this subject it would be tremendously helpful.

https://bitsharestalk.org/index.php?topic=3488.msg43785

But I think we should skip this topic and move to the more concrete / immediate ones

DPOS and evolution of blockchain security model? You lead the way, powdered toast-man, and I shall follow.

just saw what clout did on the google drive and holy shit! don't need to ask for people to refer me to threads anymore. but if you want to thats still welcome :)

final drafts:
http://www.devtome.com/doku.php?id=bitshares_-_airdrops_and_snapshots
http://www.devtome.com/doku.php?id=bitshares_-_market_pegging

Title: Re: Professional writer who understands all the details
Post by: xeroc on June 25, 2014, 07:47:06 am
+5%

I also need to upgrade the techtalk article about Voting
Title: Re: Professional writer who understands all the details
Post by: gamey on July 26, 2014, 04:22:11 am
+5%

I also need to upgrade the techtalk article about Voting

"techtalk article" ?