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Messages - pendragon3

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76
After installing ver 0.4.22 64 bit, I found that the GUI no longer shows the amount of BTSX associated with some of my short positions. Only the cover price, amount owed in BitUSD, and cover date are shown.

77
General Discussion / Re: Will 3rd Party DACs honor PTS/AGS in the future?
« on: October 22, 2014, 01:37:43 pm »
how dare  to  broke the  social consensus for PTS/AGS 10% each???????????????????????

When you consider DNS and VOTE as part of the post-Feb 28th package then you do have 10%.
And they get a pre 28th share in BTSX as also.

So this actually exceeds the social consensus in that sense. 
Part of the balancing act needed to bring all parties together.
Not easy.   :)
 


The proposed allocation does not meet the social consensus. Factoring in DNS and VOTE, PTS and AGS would each get

7% + (30%*3%) + (40%*3%) = 9.1%

which is less than 10%, unless I'm missing something. Stan, the allocation really should be made right if Bitshares wants to be able to claim that the social consensus would be met.

78
Muse/SoundDAC / Re: Will Music be merged into BTS?
« on: October 22, 2014, 04:52:30 am »
They are thinking about it; no decision will be made for some time.

Cob has posted about this a couple of times in other threads, but I can't find those at the moment. Basically, they're considering it.

https://bitsharestalk.org/index.php?topic=10258.msg134826#msg134826

Thanks. My guess is that Music won't be merged to BTS, but will be "on" the BTS system as a DAPP.

Yes, that would seem to make the most sense. Bitshares doesn't need Music as part of its core, and Music can succeed and grow on its own. Besides, lumping Music into Bitshares along with other unrelated DACs might reduce the Music devs' focus and weaken their incentives to grow and improve their DAC.

79
General Discussion / Re: IMPORTANT: BTS Merger (Poll)
« on: October 21, 2014, 04:22:54 pm »
I'm re-posting this here so that it doesn't get lost in a thread before people can read it.

As I write this, the valuations on Coinmarketcap would seem to imply a naive marketcap-based allocation of about 10% to PTS, 10% to AGS, and 80% to BTSX. Here is a summary of the main reasons why this would be grossly unfair to PTS/AGS:

1. The proposed merger is in essence like an unsolicited takeover, to use the company metaphor, and PTS and AGS are not being given a chance to vote their approval. (I don't call it a "hostile" takeover because there is no management team for PTS/AGS in place to oppose it). Academic studies of large samples of corporate takeovers have shown that unsolicited takeovers typically require substantial premiums, say 40% or more, above the average pre-offer share price.

2. The coinmarketcap valuation of PTS likely understates the true fundamental value of Protoshares (and, by extension, Angelshares). This is because PTS is far less liquid than BTSX. Whether you look at dollar volume of trade or the order book on BTer, the conclusion is the same: PTS has a large built-in illiquidity discount relative to BTSX.

3. The proposed merger would basically discard the original social consensus (and perhaps try to forge a new one). The social consensus is an inherent property of PTS and AGS, and BTSX has certainly derived some value from "free riding" on it. None of what we have now would be possible without the cornerstone laid by PTS and AGS. Getting rid of the social consensus has a price that should also be factored in.

4. The new BTS entity being formed is not just BTSX 2.0. It is a much broader conglomerate that goes beyond banking and exchange. From this perspective, it is more like a merger of equals than a one-sided acquisition. Based on Bytemaster's recent views, we can expect that (1) a separately developed VOTE DAC would achieve a valuation equaling or exceeding BTSX, and (2) in the future, with a trillion dollar industry, the value would be spread evenly among a dozen or so different DACS rather than being concentrated in BTSX.
      So, PTS and AGS should be fully compensated for the substantial value that they are giving up. A simple example may help illustrate. Suppose that, without the merger, eventually BTSX = 100 and VOTE = 100. Suppose conservatively that all future DACS, large and small, would together be 200 (we can exclude DNS and MUSIC since the snapshots already occurred and we're focusing on future valuation). Now suppose that, with the merger, the combined BTS is 250 (there are additional synergies from eliminating competition between BTSX and VOTE). Finally, let's suppose chains inherit 10% (or 20% in the case of BTS).

Scenario A: with a merger, assuming an 80/10/10 allocation of BTS:

BTSX gets:  80%*250 + 80%*20%*200 = 232
PTS/AGS get: 20%*250 + 20%*20%*200 = 58


Scenario B: without a merger, VOTE is developed as competitor to BTSX, and PTS, AGS each get 30% of VOTE:

BTSX gets: 100
PTS/AGS get:  60%*100 + 20%*200 = 100


The gains from the merger in Scenario A should be measured relative to values in the no-merger Scenario B, which is the default/fallback outcome (i.e., what would happen if the merger were not feasible). The relevant issue is, how much do parties gain or lose from choosing Scenario A versus Scenario B? Even if you adjust the numbers a bit, it's clear the 80/10/10 is woefully inadequate to compensate PTS and AGS for moving to Scenario A from Scenario B. And it becomes even more unfair the greater the assumed value of all future DACS.


So, the bottom line is, absolutely the merger should be done. It will yield great benefits in terms of branding, marketing, and incentives. But let's make sure we compensate PTS and AGS fairly and generously for the right to buy them out and eliminate them from the face of the earth.

80
As I write this, the valuations on Coinmarketcap would seem to imply a naive marketcap-based allocation of about 10% to PTS, 10% to AGS, and 80% to BTSX. Here is a summary of the main reasons why this would be grossly unfair to PTS/AGS:

1. The proposed merger is in essence like an unsolicited takeover, to use the company metaphor, and PTS and AGS are not being given a chance to vote their approval. (I don't call it a "hostile" takeover because there is no management team for PTS/AGS in place to oppose it). Academic studies of large samples of corporate takeovers have shown that unsolicited takeovers typically require substantial premiums, say 40% or more, above the average pre-offer share price.

2. The coinmarketcap valuation of PTS likely understates the true fundamental value of Protoshares (and, by extension, Angelshares). This is because PTS is far less liquid than BTSX. Whether you look at dollar volume of trade or the order book on BTer, the conclusion is the same: PTS has a large built-in illiquidity discount relative to BTSX.

3. The proposed merger would basically discard the original social consensus (and perhaps try to forge a new one). The social consensus is an inherent property of PTS and AGS, and BTSX has certainly derived some value from "free riding" on it. None of what we have now would be possible without the cornerstone laid by PTS and AGS. Getting rid of the social consensus has a price that should also be factored in.

4. The new BTS entity being formed is not just BTSX 2.0. It is a much broader conglomerate that goes beyond banking and exchange. From this perspective, it is more like a merger of equals than a one-sided acquisition. Based on Bytemaster's recent views, we can expect that (1) a separately developed VOTE DAC would achieve a valuation equaling or exceeding BTSX, and (2) in the future, with a trillion dollar industry, the value would be spread evenly among a dozen or so different DACS rather than being concentrated in BTSX.
      So, PTS and AGS should be fully compensated for the substantial value that they are giving up. A simple example may help illustrate. Suppose that, without the merger, eventually BTSX = 100 and VOTE = 100. Suppose conservatively that all future DACS, large and small, would together be 200 (we can exclude DNS and MUSIC since the snapshots already occurred and we're focusing on future valuation). Now suppose that, with the merger, the combined BTS is 250 (there are additional synergies from eliminating competition between BTSX and VOTE). Finally, let's suppose chains inherit 10% (or 20% in the case of BTS).

Scenario A: a merger and a 80/10/10 allocation of BTS:

BTSX gets:  80%*250 + 80%*20%*200 = 232
PTS/AGS get: 20%*250 + 20%*20%*200 = 58


Scenario B: without a merger, VOTE is developed as competitor to BTSX, and PTS, AGS each get 30%:

BTSX gets: 100
PTS/AGS get:  60%*100 + 20%*200 = 100


The gains from the merger in Scenario A should be measured relative to values in the no-merger Scenario B, which is the default/fallback outcome (i.e., what would happen if the merger were not feasible). The relevant issue is, how much do parties gain or lose from choosing Scenario A versus Scenario B? Even if you adjust the numbers a bit, it's clear the 80/10/10 is woefully inadequate to compensate PTS and AGS for moving to Scenario A from Scenario B. And it becomes even more unfair the greater the assumed value of all future DACS.


So, the bottom line is, absolutely the merger should be done. It will yield great benefits in terms of branding, marketing, and incentives. But let's make sure we compensate PTS and AGS fairly and generously for the right to buy them out and eliminate them from the face of the earth.

81
General Discussion / Re: IMPORTANT: BTS Merger (Poll)
« on: October 21, 2014, 02:40:10 pm »
Now vote only shows that many holders of AGS and BTSX, they are all standing on their own perspective. I hope 3I can consider PTS holders feel, after all PTS is 3I earliest supporters and advocates

Though I am interested in your opinions here (I hold equal weight in both btsx and pts), I do not know that I agree with the premise that PTS is playing second fiddle to AGS or btsx.. 
Can you explain further?

Also...I am an AGS holder too...because I gave away the right to liquidity to fund the construction of the DACs we see today. That was a trade off and could be considered a fair trade by those who donated to AGS.

Keep in mind that most of the PTS donated to AGS are still in our war chest for everybody to see.  They are a key component of our development funds.  We also donated our own funds to AGS pre and post 2/18 and have since bought a large stake of BTSX.  That should provide comfort that we have skin in all three games.  :)

TBH, this is actually not very comforting. After all, it shows you are quite diversified/protected, so from that standpoint you'd be equally happy with almost any allocation, whether fair or not.

82
The way I see it, ending PTS and AGS simplifies and strengthens the incentive structure. From almost the beginning, there was some ambiguity about what exactly Bytemaster and the core team should be maximizing. Like a CEO who maximizes the current stock price, Bytemaster et al. initially set out to focus on maximizing the value of PTS. However, a tension was created between that objective and others when BTSX was launched.

To draw on the corporation metaphor, BTSX was like the first spinoff of PTS/AGS. Corporate spinoffs have their own stock and management team, so they inherit their own incentive structure and should in principle become self-sufficient vehicles for shareholder wealth maximization. In the case of BTSX, though, no alternate management team was available: Bytemaster was and continues to be the only one who can really drive it forward. This gave rise to fears that Bytemaster's loyalties and attention would be divided. By eliminating PTS and AGS, the problem of ambiguous incentives and divided loyalties is substantially reduced. So, I see the cessation of PTS and AGS as an essential part of the merger plan.

The key question then becomes, what allocation would be reasonably fair? One must realize that this merger is not just creating BTSX 2.0. It is creating a "conglomerate" with a much broader scope than just a decentralized bank & exchange. As with traditional mergers, the merging parties all bring something to the table. They "bargain" over the surplus relative to the status quo or default outcome. So, what is the default outcome here? It is what would happen if the merger proposal fell through or were infeasible. I'd argue that what would happen without a merger is that Bytemaster would proceed to develop VOTE into a formidable competitor, with market cap equaling or exceeding that of BTSX. in Bytemaster's words). Thus, by "agreeing" to the merger, PTS and AGS would be surrendering considerable value they would have otherwise gotten in VOTE. That is just one of the reasons I favor a higher allocation to PTS and AGS.

83
There is another issue worth pondering that I don't think have been discussed yet.

BM's proposal that bases the allocation on PTS market cap relative to BTSX market cap may be a simple solution, but is it really fair to PTS and AGS? If BTSX and PTS both had equally deep and liquid markets, perhaps market cap would be a suitable basis for relative value. But in fact PTS is and has been a much less liquid market. In the world of finance, it's well-known that illiquid stocks trade at a discount, and rightfully so--they are harder to get in and out of, so they should earn a higher return (and trade at a discount to the fundamental value). How large is the illiquidity discount for PTS? 20%? 30%? More?

So, if one wishes to argue that market cap is a good basis for allocation because it reflects the market consensus about the relative value of PTS vs. BTSX, one also needs to factor in that the PTS market cap understates the true value of Protoshares. Ergo, PTS and AGS should be allocated an extra premium.

84
THere is a big question here about the value that PTS holders give up when the whole PTS/AGS system is abandoned.  It is value that is being destroyed by the acquisition.  How do you even put that into the equation ?  You guys can just take a BTSX vote, but that isn't the same as a PTS vote.

I thought the idea was to transfer the remaining value of PTS/AGS into BTS.. not destroy value

Yes, future DACs (the functionality and/or actual separate DACs) will emerge from BTS.  it's not destroyed, only transferred.

You get more value in the form of BTSX but less from future snapshots which is why people invested in PTS/AGS to begin with.  That whole thing is flushed down to 17% or whatever of what it would have been.  So now PTS gets 17% of 20% instead of 20%.  Thats what PTS looses.

ah, I see.  There is a bit of a difference but that is very hard to calculate.  It seems very theoretical.  You don't know if the value added (new DAC-like functinality/app) to the new whole (BTS) is worth more than the sum of the separate DACS.  Some of them may not have been successful on their own and would benefit from being part of BTS or possibly the reverse I suppose.


It's not easy to estimate the value that would have accrued to PTS/AGS from stakes in all future DACs. But it can't be ignored. Didn't Bytemaster himself predict a couple of weeks ago that the potential future trillion-dollar valuation of the industry wouldn't just reside in BTSX, but instead be spread out over about a dozen or so different DACs?

The more I think about it, the more I'm convinced that 10% of the new BTS would be a raw deal for PTS and AGS holders. And BTSX holders may be gaining an unfairly large windfall because they will now have the ability to inherit a stake in all the future DACs, which was previously only available to investors in PTS and AGS.

85
I had my PTS and AGS after the 2.28 Snap. does that means that I will never have any other DAC in the future? it is the 10% shares for AGS and PTS respectively that make me buy PTS and AGS after 2.28 snap. if the new plan make AGSers not get other DAC shares, it's extreamly unfair for US!

Actually the proposal states that not only you will continue to get shares from future DACs in the future, BUT you will also get shares in BTSX ... shares that you were not supposed / promised to get... up to now.


By the same token, BTSX share holders weren't promised the hugely important network benefits that Vote brings to the table, while PTS/AGS were. Nor were BTSX supposed to get a cut of future non-BTSX child DACs, but now they will as a result of the merger with PTS/AGS. So, the various groups all bring a lot of value to the merger and should all be honored and recognized fairly.

BTS will be a new entity that is hopefully greater than the sum of the parts. IMO, the fair way to do the allocation would be to give a fraction of BTS, say 25%, to BTSX holders (to compensate them for the dilution that will occur from the merger) and then allocate the rest, say 75%, via a new snapshot to all PTS/AGS holders.

86
General Discussion / Re: DAC dilution model proposal
« on: October 04, 2014, 08:35:02 pm »

3. Why are many users (including me) so scared of dilution? IMO this is due to (seemingly) lacking predictability and controllability. That's why it must be priority
to build a transparent, not overly complex, system that guarantees long term predictability.



Unfortunately, at this point in time, it's not realistic to think that dilution will go over well with the masses whom we hope to bring to BTSX. If savvy BTSX users and holders on this forum are themselves scared and skeptical about dilution, what hope do we have that the non-techie, non-crypto, traditional investors will feel ok about it?

Sure, dilution can be a powerful tool for some DACs for which the front end interface with consumers is all-important, such as Music. For such DACs, dilution can be a good backup funding source if future financing needs arise. For the main flagship BitsharesX chain, though, using a dilution model at this point would do more harm than good, in my opinion. On this thread, it has been proposed that dilution be used to fund user acquisition and referrals. Growing the user base is clearly an important goal, and despite what some have said, network effects and word-of-mouth will be critical for achieving mainstream adoption of crypto. My question is, why can't referrals and MLM be accomplished with transaction fees and interest paid by shorts? Perhaps in principle dilution would do the same thing as transaction fees and interest. As a practical matter, though, issuing shares would be seen in a very different light than funding based on transactions and interest.

I've argued before that those who support a dilution scheme in BTSX do not appear to be factoring in an important cost, namely, the perception dilution would create--rightly or wrongly--that BitsharesX is an unsound system. This is a general cost that goes well beyond the quantifiable $100 per user cost. Once you open the door to dilution, even a minimal amount like 1%, the promise to not dilute in the future will forevermore lack credibility. This would change the entire image of BitsharesX. It's sort of like a AAA credit rating. In 1980, about 60 companies had a AAA rating from Standard and Poor's. By 2008, only about six firms in the world had a AAA. Now, we're down to three worldwide. History shows that, after a AAA rating is lost, it's nearly impossible to regain. The same thing goes for the image of a stable, fixed share supply. Once that image is lost, BTSX would be a "broken" system and could never go back to the original state. And burning enough shares to offset the dilution by reducing supply back down below 2 billion shares would NOT restore credibility because investors would know that dilution did happen before and could happen again.

Why is the commitment to not dilute so important for the BitsharesX DAC? It's because BitsharesX aims to be the premier, flagship DAC, the go-to safe haven for investors in a world of uncertainty. In order to be the true, undisputed successor to the Bitcoin throne, BTSX needs to be seen as being utterly reliable, solid and immutable as a slab of granite, predictable as a block of gold. It is supposed to be a "virtual vault," is it not? When the next crisis occurs, does BTSX want to be seen as the safest of safe havens, or just as another second-best alternative with open-ended share supply?

It could be argued that the problem is simply that "dilution" is a dirty word and that some different terminology describing share supply increases would go over better with investors and shareholders. But the reality is that even a small share supply increase would cause an irrevocable shift in perception. We need to weigh very, very carefully whether the benefits justify going down this road. Because there would be no turning back from going down this road...

87
Good Luck BM!

I suggest also refrain from implying directly that BTC price fall is due to selling pressure from mining ... let people figure it out themselves. also leave room for people to think that bitcoin may just as well bubble again (cuz it might) and leave predictions aside.

Yes. There's not much to be gained by denigrating BTC too harshly. Traders, developers, investors, and VCs will come around soon enough and figure out that there may be something better. Rather than blatantly criticizing, it's best to be constructive and plant positive seeds in people's minds about Bitshares so they will look to it first and not hate/shun it irrationally when they decide to diversify out of BTC.

88
Muse/SoundDAC / Re: Best MUSIC DAC launch model for 2014?
« on: October 04, 2014, 07:04:55 pm »
In my opinion, the current proposed allocation and hybrid model has got it just about right. It strikes a good balance between short-term capital needs and the flexibility to raise funds in the future.

There will certainly be publicity benefits to a pre-sale, and I hope/expect the marketing to ramp up before and during this event. However, those who call for a bigger pre-sale are not looking at the whole picture. Imagine that you were able to get $20 million from an initial sale of 80% of the shares now. The problem is that this doesn't leave much room for future fundraising. It would be selling for cheap at a time when few people understand the potential of the DAC. What if, sometime in the near future--a year or two or three from now--the DAC has a multi-billion $ capitalization, and it becomes apparent that, to really compete on a global scale with big players, Peertracks needs $200 million capital. If they already sold 80% up front, then they will have used up all their ammo, so to speak, and left themselves with few options. They'd be effectively hamstrung. With the hybrid model, though, the DAC could easily raise the needed funds via a prudent amount of dilution.

Since no one can predict the future with total accuracy, it's best to limit the size of the pre-sale to preserve the option of substantial fundraising in the future. The reasoning for this is similar to that for traditional equity IPOs. Ask yourself why traditional companies don't sell 80% of their shares in an IPO. Why do companies going public usually sell only a fraction, like between 10% to 15%? It's because they don't want to let go of too many shares at the beginning. Later, when they have grown and when (if) more funds are needed, they can sell shares at a higher price and gain more "bang for the buck."

89
General Discussion / Re: Different fees for different short holding periods
« on: September 27, 2014, 06:05:13 am »
Quote
I expected the price to rise sometime in probably the next few months, not necessarily real soon...
the goal of the proposal is to avoid such free lunch an incentive traders to make more short/medium term predictions.

Almost feels like there should be a "grandfathering" clause or something then, I would've never opened the shorts if I would have known that. I've already lost some BTSX getting margin called in the BitCNY market (due to the low liquidity, not the actual price on the exchange) and I wouldn't have risked more of my balance if I didn't think I could hold it until BTSX really took off.

 :(

I agree.  It doesn't seem fair to apply this to existing shorts.

Agree. Existing short positions should be grandfathered in. Otherwise, it wouldn't be fair for those who took a risk to invest in their long-term views under the publicized rules that were in force at the time. What happened to the dictum that "everyone should get what they ask for" and not be forced to do something against their will?

More generally, forcing shorts to cover periodically doesn't seem like a good idea. It's a heavy-handed measure that is unlikely to increase liquidity much if at all. The reason is that it disincentivizes would-be short sellers too much. A short-seller who is forced to cover won't be able to easily re-short, as they have to compete with numerous others on collateral amount to carry out another short sale. The uncertainty of whether rolling into another short is feasible is disruptive to medium-term or long-term trading strategies of the bulls. It's an attempt to create greater balance between bulls and bears, but at a high cost and in an inefficient way.

Why not have shorts pay a modest amount of interest over time? (The rate should be modest and capped, perhaps tied to inflation). This way, shorts can choose how long to hold their positions. This would be like what happens in traditional markets with short selling of equity.



90
General Discussion / Re: "insufficient funds" Help Thread
« on: September 23, 2014, 03:55:41 pm »
I don't think its safe to assume wallet_account_balance in the console is correct. In fact, it's almost surely wrong in some cases.

Recently, I installed 0.4.16 32-bit, and after importing a backup wallet, my BTSX and BitUSD balances disappeared. Also, a lot of the recent transactions are now to "UNKNOWN", and some of the transaction history after about a week ago is missing altogether. Regenerating keys, rescanning, etc. did not help.

The console command for wallet transactions history does seems to give the correct ending balance of xxx,000 BTSX. But both the GUI and the console command wallet_account_balance incorrectly display 0.00 BTSX.

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