BitShares Forum
Main => General Discussion => Topic started by: toast on November 22, 2014, 06:01:32 pm
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I think this would really help people understand how to make long-term valuations for BTS. We pursue things that help us burn BTS so that we can eventually start getting paid for owning stake in a profitable autonomous system.
The mechanics of the dividend are not important except that it should be in bitUSD or bitGOLD.
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So let me try to understand how this would work:
The system would save up burned BTS instead of burning it.
Then it would use that BTS as collateral to short bitUSD into existence.
Then it would distribute the bitUSD to everyone in a share drop.
But how would it cover the short later? Would this end up leaving extra bitUSD floating around that had no corresponding short?
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I don't understand how this complication helps people value BTS. Like any other company stock, the value in the growth phase should be coming from capital gains not dividends. I think the current system of burning the BTS is great.
But if you are planning on putting in all the code effort to convert BTS into BitUSD to pay out dividends, then I would love to see that used not for dividends but for delegate pay. The tricky part is that the software would have to somehow slowly buy up the BitUSD in the BTS/BitUSD market without affecting the price too much in a potentially illiquid market. So perhaps the DAC tries to buy BitUSD using its pool of collected BTS at a targeted average steady rate using a limit order where the price limit is some percentage above the one-hour price feed.
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Great concept. Great to market that. I have no clue about the economics of it.
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So perhaps the DAC tries to buy BitUSD using its pool of collected BTS at a targeted average steady rate using a limit order where the price limit is some percentage above the one-hour price feed.
I think this is the way to go for this proposal. The idea of the DAC shorting seems needlessly complicated. However, the system can always use more purchasers of bitUSD.
Actually I thought fees were already being paid this way as interest but I guess that's only for asset transactions not BTS transactions (voting, asset creation, sending shares, etc).
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So let me try to understand how this would work:
The system would save up burned BTS instead of burning it.
Then it would use that BTS as collateral to short bitUSD into existence.
Then it would distribute the bitUSD to everyone in a share drop.
But how would it cover the short later? Would this end up leaving extra bitUSD floating around that had no corresponding short?
No, you buy USD, or just give the BTS directly.
I don't understand how this complication helps people value BTS. Like any other company stock, the value in the growth phase should be coming from capital gains not dividends. I think the current system of burning the BTS is great.
But if you are planning on putting in all the code effort to convert BTS into BitUSD to pay out dividends, then I would love to see that used not for dividends but for delegate pay. The tricky part is that the software would have to somehow slowly buy up the BitUSD in the BTS/BitUSD market without affecting the price too much in a potentially illiquid market. So perhaps the DAC tries to buy BitUSD using its pool of collected BTS at a targeted average steady rate using a limit order where the price limit is some percentage above the one-hour price feed.
We wouldn't be adding the code to actually do it yet because it won't happen yet.
It helps people understand it has value because you can say "it pays dividends" instead of "it's economically equivalent to an asset that pays dividends"
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No-one is going to have confidence in the mechanics of the bitshares system if it can be constantly tinkered with.
Crypto markets and non-crypto investors know exactly what 'deflationary' means when applied to the base currency. There's simply no need to extract that value as a dividend in an alternate bit currency.
Dividend payments in bitUSD would be appropriate for holders of user assets, where there was 'real-world' activity that created profit. In this case, payment could be performed by scanning the chain, determining period of asset holding and dropping value against the address.
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Why not kill several birds with one stone?
1.First do not wait for 2 Bil, start now when we are at 3.7Bill.
2.Every new block has 50 additional BTS found on the blockchain. Some of them will be destroyed if less than 101 delegates with 100% pay. I do not know if all of those should be used for dividend or just say 50% (the one that are burned are effectively (and can be thought as) a stock buy back, which is also beneficial for the DAC), so lets go with 50% for now.
3.So up to 25 BTS + plus some transaction fees are available for dividends. Use those to buy bitUSD (the exact formula when and how to buy those can have a lot of variables) but for simplicity lets say general buy at the peg (or below it if some bitUSD are available below it), and not more than 15% of all available for sell.
4.Each dividend day (monthly or quarterly) send those bitUSD to all BTS accounts proportional to the amount held.
Should be mentioned that those dividends seem to not to bee to excessive - about 3.24% at 2.5Bill supply (2.20% on 3.7 Bill).
So we have achieved:
- deflationary system ( to the likings of a lot of people)/ company that is buying back its shares contently; and we have got rid of the inflation complains/concerns;
-That pays actual dividends (and not achieving dividend like returns);
-In the process we have added (arguably) additional demand for bitAssets.
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The more complex and opaque the market mechanisms embedded in the public blockchain are, the less value it has for creating certainty and transparency about the risks and rewards that parties take on when they enter transactions.
After the inflation fork, and the marketing fork, what Bitshares desperately needs to gain adoption is a sense of stability. The world needs to absorb the implications of the market peg, before even more complexity is introduced into the system.
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It's inflates more this way.. Or say, deflates slower.
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When it comes to supporting valuation of BTS, the more important discussion is what the sources of income are and will be, rather than the form in which that value is distributed.
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I suppose the problem is you still have the issue that if BitShares gains mainstream adoption from consumers who don't care much about the blockchain on the backend, that we become largely expendable & obsolete. So we risk being diluted down by larger stakes unless BitShares commits to and markets itself to mainstream as having a fixed/defined supply long term. It's far more marketable & that way minority shareholders and early adopters gain greater protection long term.
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Where can I read about why the supply is changing?
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This seems like unnecessary complexity to me, honestly. Anyone who wants to hold BTS should be able to figure out what burning fees means for them. If you just want to use it for payments and savings without that minimal level of understanding, you should be using bitAssets and just getting interest instead anyway.
Supply issues I don't think will really be relevant for the foreseeable future, but I'd support doing a split and doubling all BTS balances on the chain any time the total supply drops under a billion. :P
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+5%
If market capital below 2B
Exchange all fees to bitUSD or bitGOLD
Distribute as dividend to BTS holders
else
Burn all fees
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I think this would really help people understand how to make long-term valuations for BTS. We pursue things that help us burn BTS so that we can eventually start getting paid for owning stake in a profitable autonomous system.
The mechanics of the dividend are not important except that it should be in bitUSD or bitGOLD.
For tax reasons I would prefer not to receive any BitUSD dividends. It makes things complicated legally. Just burn the BTS and you have a capital gains tax to pay if the price goes up which is lower than an income tax in some cases.
I prefer burning and I think it's also politically inappropriate to promote BitUSD over all other currencies. BitGOLD might be okay but GOLD is volatile and isn't BTS so it's not actual stake in the system. I do see that it might encourage people to hold BitUSD or BitGold and it has some strong points but I think deflation works for everyone without favoring any political currencies, specific BitAssets, or legal possibilities.
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I think this would really help people understand how to make long-term valuations for BTS. We pursue things that help us burn BTS so that we can eventually start getting paid for owning stake in a profitable autonomous system.
The mechanics of the dividend are not important except that it should be in bitUSD or bitGOLD.
For tax reasons I would prefer not to receive any BitUSD dividends. It makes things complicated legally. Just burn the BTS and you have a capital gains tax to pay if the price goes up which is lower than an income tax in some cases.
I prefer burning and I think it's also politically inappropriate to promote BitUSD over all other currencies. BitGOLD might be okay but GOLD is volatile and isn't BTS so it's not actual stake in the system. I do see that it might encourage people to hold BitUSD or BitGold and it has some strong points but I think deflation works for everyone without favoring any political currencies, specific BitAssets, or legal possibilities.
This is the overwhelming biggest consideration in the U.S. Do other countries have similar distinctions between dividends as immediately taxable Ordinary Income and burning to produce Capital Gains that are not taxed until the asset is sold?
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I think this would really help people understand how to make long-term valuations for BTS. We pursue things that help us burn BTS so that we can eventually start getting paid for owning stake in a profitable autonomous system.
The mechanics of the dividend are not important except that it should be in bitUSD or bitGOLD.
Yes, excellent idea.
When total share supply is burned down to 2bn the burn ends and all fees etc. are distributed on the 1st of the month to BTS holders.
Instant monthly income. Would be huge!
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Dilution is not actual money ..... so to speak .....
Even if the supply is go below 2bn , the BTS in circulation would be 20 million or so , when you dilute , you're essentially dilute them to the 20 million , not 2bn , so the dilution effect is much bigger on the market price .....
The P/E ratio in cryptos are so high to just consider any dilution actual "income" .
That's why I want to suggest all the delegates don't dump their salary at once , esp. in this market depth and high P/E .
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Dilution is not actual money ..... so to speak .....
Even if the supply is go below 2bn , the BTS in circulation would be 20 million or so , when you dilute , you're essentially dilute them to the 20 million , not 2bn , so the dilution effect is much bigger on the market price .....
The P/E ratio in cryptos are so high to just consider any dilution actual "income" .
That's why I want to suggest all the delegates don't dump their salary at once , esp. in this market depth and high P/E .
此文啥意思?
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Dilution is not actual money ..... so to speak .....
Even if the supply is go below 2bn , the BTS in circulation would be 20 million or so , when you dilute , you're essentially dilute them to the 20 million , not 2bn , so the dilution effect is much bigger on the market price .....
The P/E ratio in cryptos are so high to just consider any dilution actual "income" .
That's why I want to suggest all the delegates don't dump their salary at once , esp. in this market depth and high P/E .
此文啥意思?
没啥意思，就是让烧就烧吧，别用来分红了。
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I think this would really help people understand how to make long-term valuations for BTS. We pursue things that help us burn BTS so that we can eventually start getting paid for owning stake in a profitable autonomous system.
The mechanics of the dividend are not important except that it should be in bitUSD or bitGOLD.
For tax reasons I would prefer not to receive any BitUSD dividends. It makes things complicated legally. Just burn the BTS and you have a capital gains tax to pay if the price goes up which is lower than an income tax in some cases.
I prefer burning and I think it's also politically inappropriate to promote BitUSD over all other currencies. BitGOLD might be okay but GOLD is volatile and isn't BTS so it's not actual stake in the system. I do see that it might encourage people to hold BitUSD or BitGold and it has some strong points but I think deflation works for everyone without favoring any political currencies, specific BitAssets, or legal possibilities.
There is a lot of merit in this.
But eventually BTS is going to have to reset the share supply.
So just reset on a monthly basis to maintain a 2bn share supply.
BTS holders recieve BTS deposit on the first of the month; no need for bitUSD/GOLD etc.
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I think this would really help people understand how to make long-term valuations for BTS. We pursue things that help us burn BTS so that we can eventually start getting paid for owning stake in a profitable autonomous system.
The mechanics of the dividend are not important except that it should be in bitUSD or bitGOLD.
For tax reasons I would prefer not to receive any BitUSD dividends. It makes things complicated legally. Just burn the BTS and you have a capital gains tax to pay if the price goes up which is lower than an income tax in some cases.
I prefer burning and I think it's also politically inappropriate to promote BitUSD over all other currencies. BitGOLD might be okay but GOLD is volatile and isn't BTS so it's not actual stake in the system. I do see that it might encourage people to hold BitUSD or BitGold and it has some strong points but I think deflation works for everyone without favoring any political currencies, specific BitAssets, or legal possibilities.
There is a lot of merit in this.
But eventually BTS is going to have to reset the share supply.
So just reset on a monthly basis to maintain a 2bn share supply.
BTS holders recieve BTS deposit on the first of the month; no need for bitUSD/GOLD etc.
I don't see why the share supply has to be reset. In fact I think developers need to stop messing with the share supply. Stability in the protocol for BTS token holders come from there being predictability in the share supply. Stop diluting, inflating, or otherwise adding insecurity to the mix when it's not necessary.
If you want to do cash dividends then set up a legal cooperative and distribute dividends to all who are members. If you're not going to do this then just burn the transaction fees and by increasing the burn rate when people sell their BTS they'll pay either capital gains or income tax.
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I think this would really help people understand how to make long-term valuations for BTS. We pursue things that help us burn BTS so that we can eventually start getting paid for owning stake in a profitable autonomous system.
The mechanics of the dividend are not important except that it should be in bitUSD or bitGOLD.
For tax reasons I would prefer not to receive any BitUSD dividends. It makes things complicated legally. Just burn the BTS and you have a capital gains tax to pay if the price goes up which is lower than an income tax in some cases.
I prefer burning and I think it's also politically inappropriate to promote BitUSD over all other currencies. BitGOLD might be okay but GOLD is volatile and isn't BTS so it's not actual stake in the system. I do see that it might encourage people to hold BitUSD or BitGold and it has some strong points but I think deflation works for everyone without favoring any political currencies, specific BitAssets, or legal possibilities.
There is a lot of merit in this.
But eventually BTS is going to have to reset the share supply.
So just reset on a monthly basis to maintain a 2bn share supply.
BTS holders recieve BTS deposit on the first of the month; no need for bitUSD/GOLD etc.
I don't see why the share supply has to be reset. In fact I think developers need to stop messing with the share supply. Stability in the protocol for BTS token holders come from there being predictability in the share supply. Stop diluting, inflating, or otherwise adding insecurity to the mix when it's not necessary.
If you want to do cash dividends then set up a legal cooperative and distribute dividends to all who are members. If you're not going to do this then just burn the transaction fees and by increasing the burn rate when people sell their BTS they'll pay either capital gains or income tax.
The only time the share supply would need to be reset is if the price is so high as to inhibit usable granularity. Meaning, if the price of one BTS gets to about $50,000 or more...
I don't anticipate this problem in the foreseeable future.
EDIT: Actually for market issued assets we probably need much finer granularity than that, so maybe $1000/BTS.
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I think this would really help people understand how to make long-term valuations for BTS. We pursue things that help us burn BTS so that we can eventually start getting paid for owning stake in a profitable autonomous system.
The mechanics of the dividend are not important except that it should be in bitUSD or bitGOLD.
For tax reasons I would prefer not to receive any BitUSD dividends. It makes things complicated legally. Just burn the BTS and you have a capital gains tax to pay if the price goes up which is lower than an income tax in some cases.
I prefer burning and I think it's also politically inappropriate to promote BitUSD over all other currencies. BitGOLD might be okay but GOLD is volatile and isn't BTS so it's not actual stake in the system. I do see that it might encourage people to hold BitUSD or BitGold and it has some strong points but I think deflation works for everyone without favoring any political currencies, specific BitAssets, or legal possibilities.
There is a lot of merit in this.
But eventually BTS is going to have to reset the share supply.
So just reset on a monthly basis to maintain a 2bn share supply.
BTS holders recieve BTS deposit on the first of the month; no need for bitUSD/GOLD etc.
I don't see why the share supply has to be reset. In fact I think developers need to stop messing with the share supply. Stability in the protocol for BTS token holders come from there being predictability in the share supply. Stop diluting, inflating, or otherwise adding insecurity to the mix when it's not necessary.
If you want to do cash dividends then set up a legal cooperative and distribute dividends to all who are members. If you're not going to do this then just burn the transaction fees and by increasing the burn rate when people sell their BTS they'll pay either capital gains or income tax.
Burn means eventually the share supply will reach zero.
If/when BTS experiences large scale adoption the burn rate might surprise folks - BTS may become the most lucrative 'company' in existence.
As the share supply shrinks usability will be adversely impacted.
So rather than one massive share reset 10 years down the road, just program in monthly BTS distributions to maintain the 2bn supply.
Tax implications would need to be understood, but I think most folks would just consider it as taxable income.
Client should make it easy to track BTS distributions for tax purposes.
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low translation fee attract more people use bitusd , because it close to zero cost, so if the price of bts is up to $10, maybe the translation fee will reduce to 0.01BTS per tx
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Hmm...does this mean we expect the supply to actually decrease to 2bn sometime in the medium-near future, in spite of dilution? I understand that the supply is basically 2.5bn now and is expandable up to 3.7bn max, but do we really expect the burn and transaction fees to offset this dilution anytime soon? How long-term are we thinking here, 5 years, 10-20 years?
It still feels difficult to "make long-term valuations for BTS" when the supply seems to range anywhere from 2 - 3.7 billion...am I missing anything?