The DAC I am proposing is tracking ownership interest (shares) which MyMindshare does not control in an account balance which MyMindshare does control. The DAC wouldn't accomplish anything if MyMindshare did not exist.

I was thinking that it would be too big a project to make MyMindshare into a DAC -- to blockchain and distribute the message ledger, as well as identity/profiles that are the senders/recipients.

I think a saw that a message system is part of the Keyhotee project. Do you think it would be worthwhile to propose MyMindshare and its business model as an extension of Keyhotee?

I thought this proposal was going well, but it seems to have faltered. How can I get this back on track?

Is it possible that a DAC is not necessary to accomplish what I am proposing? Can BitsharesX create a BitAsset called BitMindshare that tracks the value of the bitmindshare account at MyMindshare?

MyMindshare can be required to purchase BitMindshares with the funds in the bitmindshare account, which would align the interests of MyMindshare with the BitMindshare shareholders.

Quote from: toast on June 16, 2014, 05:42:02 PM
A great example is how bitshares X works - it can only make IOUs that track the value of a bitcoin, but it cannot actually control bitcoins.

So, BitMindshare DAC shares would be IOUs that track the value of the BitMindshare account at MyMindshare.

I'd like to lay this whole thing out using the dating analogy.

Here is the cast of players:

Alice -- a nice blue-eyed blonde
Bob -- a nice single guy
Eve -- brown-eyed brunette

BitDateDAC -- a dating service DAC that has an affiliate license with MyMindshare
BitDate.com -- a dating web site powered by MyMindshare

Bob is free on Saturday night so he has decided to try the new dating site called BitDate.com to get a date with a nice blue-eyed blonde. He registers and deposits $10 in his account. A 10% commission is transferred to the BitDateDAC account, leaving Bob with $9 to fund his message. Bob writes his message asking for a date on Saturday night that includes a link to his Facebook page. He attaches $1 to his message targeting blue-eyed blondes. He is betting that at least one of the nine recipients of his message will go out with him. If he wins the bet, he will continue to use BitDate.com; if he loses, he won't.

Eve thinks the whole BitDate thing is stupid and she wants to either scam it or short it, preferably both. To scam it, she needs to create an account and indicate in the profile that she is blue-eyed and blonde to receive Bob's $1 message. But in order to create an account, she has to purchase a share in BitDateDAC, which cancels out her short position and she loses $1 in transaction fees. It's not worthwhile to scam BitDate.com, but she might make some money shorting BitDateDAC.

Alice likes the BitDate concept, so she was happy to register and purchase a share in the  enterprise. She knows that it only works when people are honest, so she is honest in her profile and she receives Bob's $1 message. Alice also tells her blue-eyed blonde friends about BitDate, and they alse get Bob's $1 message. One of them agrees to go out with Bob on Saturday night, so Bob wins his bet and he plans on telling his friends about BitDate.

Eve's short position was countered by Alice's long position, and it turns out that Alice's position was the most profitable. But Eve is watching and waiting for the BitDate hype to blow up. Meanwhile, she is free next Saturday night, so she might give this BitDate thing a try.

Quote from: toast on June 16, 2014, 05:20:22 PM
A DAC can "own" anything where you can define "ownership" from reading data off of the blockchain.

When you say "the blockchain" do you mean any blockchain? Could it be the bitcoin blockchain? So the DAC has its own blockchain, which is a ledger of ownership interest in a bitcoin private key.

Quote from: toast on June 16, 2014, 05:20:22 PM
So if you built your centralized service 'around' the DAC then the DAC could interact with it as you described.

I don't know what you mean by 'around'. I understand I would have to build an API that the DAC would hook into. Not a problem.

At this point I am not proposing that the message platform be the DAC. I'm not proposing that the message ledger be blockchained, ala BitMessage. While that may be desirable at some point, right now it would be too huge a project.

I am proposing a DAC affiliate, as described above. This may be where my proposal goes off the rails, because the DAC has to be the owner of the MyMindshare account. Can a DAC own an asset other than its own shares?

Maybe the mechanism is not that the DAC owns the funds in the account, but that the DAC orders MyMindshare to purchase DAC shares with any funds in its account, thus converting the revenue to shares.

Now let's plug our players into a payoff matrix (http://en.wikipedia.org/wiki/Game_theory#Normal_form) and see what comes up:

The Sender has two choices: send a targeted message with value attached or don't send a targeted message with value attached.
The Receiver has two choices: be honest in the profile or be dishonest in the profile.

If the Sender believes the profile is honest, he will send a message with value attached.
If the Sender believes the profile is dishonest, he will not send a message with value attached.

If the Receiver believes she will profit more from being honest, she will be honest.
If the Receiver believes she will profit more from being dishonest, she will be dishonesst.

As we see from the story of Eve, her participation as a DAC shareholder puts her squarely in the first quadrant.

We could put everybody in the first quadrant if we require everyone to be a shareholder to participate.

There is another way that the DAC can be useful to this system.

Perhaps the biggest problem that I face as the creator/administrator of this system is the problem of the dishonest Receiver. This is an entity (person or bot) that has misrepresented itself in order to receive higher value targeted messages. This is the college student sitting in her dorm at 3am pretending to be a high net worth middle aged family man who owns his home, drives luxury cars, travels business class and actively manages his stock portfolio.

Let's call our miscreant college student Eve. Let's also imagine a future when there are a wide variety of sites powered by MyMindshare serving a wide variety of communities. Because Eve is greedy, she has created a wide variety of false profiles, each one optimized to maximize the value of targeted messages.

Eve is actually in the process of killing the golden goose because the extent to which she is successful is the extent to which Senders will start abandoning the MyMindshare system.

But there is one site powered by MyMindshare on which she is meticulously honest and works obsessively to ferret out other Eves from the site. This is the site that is devoted to college students like herself, where her honesty adds value. This site was founded by a DAC and Eve was in on the IPO, so as a shareholder she has a vested interest in the overall health of the site. If the Eves of the world are able to run amuk, the share price will collapse.

Here is the lineup of players in the MyMindshare messaging system:

1. Senders of messages
2. Receivers of messages
3. The creator/administrator of the system

In the MyMindshare system, messages are transactions. Senders attach value to messages, and Receivers complete the transaction when they receive the messages. A 5% admin fee is charged by the creator/administrator of the system.

With the affiliate program, a fourth player is added to the lineup:
4. Affiliate

Think of the Affiliate as an entrepreneur who has created/identified a community of Senders and Receivers for whom the MyMindshare messaging system is useful/valuable. The Affiliate receives a 20% commission on the value of transactions sourced by the Affiliate.

My proposal is to replace the Affiliate/Entrepreneur with Affiliate/DAC/Shareholders.

The DAC is a mechanism by which a community of Senders and Receivers can act corporately and share the profits of the enterprise. It also enables them to realize future profit by trading the DAC shares.

This is good. Now I'm being educated. I'll think this through and get back to you.

This is interesting -- if the DAC shares are trading at par, then the DAC self liquidates when it distributes dividends -- it purchases and destroys all its shares.

This would happen if the market anticipates zero future revenue.

The short answer is yes, demand for the BitMindshare DAC equity is based on the dividends that are earned by BitMindshare.com powered by MyMindshare.

Here's how it looks from my end:

I have created an account in MyMindshare with the username bitmindshare. I have granted that account affiliate license #15 and created the affiliate site at http://bitmindshare.mymindshare.com/ (this is what will become BitMessage.com when the domain is registered).

Now, everyone and everything that registers at the affiliate site are tagged with #15, which means that when revenue events occur, the commission is paid to the bitmindshare account.

BitMindshare the DAC needs to be programmed to periodically cash out the bitmindshare account. This means that the DAC needs a bitcoin wallet. Then the DAC distributes the revenue by purchasing it's own shares and destroying them.

So how is demand created?

Let's say that the DAC doesn't distribute dividends. Instead it just let's the bitcoin sit in its wallet. Let's say that there are 1000 shares of the DAC. If there is 1 BTC in the DAC wallet, then each share is worth 0.001 BTC. Now let's say that it is anticipated that BitMindshare.com will generate another 1 BTC in one year, increasing the value of a DAC share to 0.002 BTC -- the overall value of the DAC increases to 2 BTC.

The current owners of the DAC shares are not willing to sell for less than 0.001 BTC, but they would be willing to sell for something more than 0.001 BTC. Believing that the value of a share is going to double in one year, how much would you pay today to own a share? If anyone is willing to pay something, then we have demand. If anyone is willing to pay more that 0.001 BTC, then we have a market for BitMindshare DAC shares.

I think that the fundamental question that my proposal raises is:

"Can BitMindshare.com as described and implemented (see http://bitmindshare.mymindshare.com) produce a revenue stream for BitMindshare the DAC?"

Actually, this is two questions, one speculative and the other technical.

1. Can BitMindshare.com produce revenue?
2. Can that revenue accrue to the DAC?

As the developer of the MyMindshare messaging system, in cooperation with Bitshares developers (or the Bitshares toolkit), I can confidently answer the second question affirmatively.

As to the first question, of course my answer is yes, and I am prepared to make my case to anyone who can make a counter argument.

Quote from: toast on June 14, 2014, 11:36:43 PM
the DAC's business model seems like nothing more than a glorified accounting spreadsheet on behalf of a centralized company.

That is indeed a legitimate concern, however I would caution against undervaluing the value of a "glorified accounting spreadsheet" that has all the attributes that are so eloquently described and being developed by the Bitshares community. We are talking about a "glorified accounting spreadsheet" that is entirely outside of the control of the centralized company -- it is distributed and trustless, and perhaps most importantly, it is trade-able (or, rather, it is a record of trades that is distributed and trustless and outside the control of the centralized company).

Again, I'm just beginning to understand Bitshares, so I may be wrong, but let's take a look at BitUSD, which by my understanding is a unit of digital asset that is designed to trade at par with the U.S dollar. One could argue that BitUSD is a "glorified accounting spreadsheet on behalf of a centralized" government or central bank.