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Messages - starspirit

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151
Technical Support / Re: [BitShares 2.0 Technologies] Dynamic Account Permissions (Discussion)
« on: June 11, 2015, 02:27:19 am »
I really loved this part of the announcement. Already I have a million ideas swimming through my head, oh the possibilities....

152
Technical Support / Re: [BitShares 2.0 Technologies] Price-Stable Cryptocurrencies (Discussion)
« on: June 11, 2015, 02:14:32 am »
On varying the settlement fee

I continue to have an unresolved issue with manipulating the forced settlement fee to control the market price relative to parity, or any desired premium. Settlement would only ever get used if the coin is at a discount, at which point the fee would be at its usual level (or perhaps some discounted level). Therefore increasing the fee because the coin is at a premium has no economic impact, and no difference to market pricing.

When the coin is at a discount, the market is incentivised to settle the token if the discount becomes larger than the fee. As price moves downward toward that point, there is never any incentive to settle, except perhaps on very large amounts that might have negatively impacted price to sell in the market. If the discount moves beyond that point, there is no reason to lower the fee further, because the discount itself incentivises the market to settle (unless you just want to speed things up).

ie. I would recommend for anyone using a forced settlement fee to just keep it fixed.

153
Technical Support / Re: [BitShares 2.0 Technologies] User-Issued Assets (Discussion)
« on: June 11, 2015, 01:44:54 am »
Why are privatised bitAssets being treated as user-issued assets (UIAs) rather than market-issued-assets (MIAs)? I am confused on what delineates the two - is there a definition?

It seems to be that privatised bitAssets are not actually being issued by a user, and outcomes are not subject to the ongoing performance of the person setting it up. Like MIAs, somebody is merely establishing the software rules under which different parties can interact with each other in a decentralised fashion. Why aren't these just a privatised form of MIA?

I guess there might be pragmatic reasons to do it this way. But I'm wondering how it might look legally (at least on the surface) if, by name at least, we infer these tokens are being issued by a particular party.

154
General Discussion / Re: Sidechains should be a priority for bitshares.
« on: June 11, 2015, 01:20:43 am »
Quote from: Chronos on June 10, 2015, 04:42:26 pm
Quote from: starspirit on June 10, 2015, 01:28:53 am
Having said that, if doable, I would lean to a flexible collateral system rather than one backed solely by BTC, which would be more flexible and less controversial. See for example...https://bitsharestalk.org/index.php/topic,16326.msg208798.html#msg208798
I think the issue for this idea is that the asset is no longer fungible. If the one backing collateral system fails, only those associated tokens are in trouble, which means an existing BitUSD token can be worth a different amount based on its backing. That wouldn't fly.
No it would still be fungible. Every short would be able to choose their own mix of collateral, as long as it satisfies the Coverage conditions (maintains minimum collateral according to the rules). The market will value the token at the value of the reference asset as long as collateral backing it is always sufficient. Only in the event of a black swan (or the perceived risk of such an event) does the actual value of the collateral make any difference to the value of the token.

155
Technical Support / Re: "High" Transaction Fees
« on: June 11, 2015, 12:41:07 am »
Quote from: merivercap on June 11, 2015, 12:08:36 am
Quote from: starspirit on June 10, 2015, 11:46:43 pm
I'm still wondering how this affects market transactions. Efficient markets must accommodate micro transactions. What would this look like for buy and sell orders? What would be the impact on market-makers?

And how do we deal with this...

Quote from: monsterer on June 10, 2015, 07:15:25 pm
Quote from: profitofthegods on June 10, 2015, 06:50:05 pm
How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.

Yeah I also forgot to mention microloans, microinvesting, microtrading in developing nations.

Depending on the avg trade size 20 cents can be better or worse for traders.  Typically Bitcoin exchanges charge 0.2% on each side and give a big discount for the maker.  That means your avg trade size has to be $100 to equal the trading costs of an avg. Bitcoin exchange.  At least the BitShares platform won't have counterparty risk.

Yeah but its even worse for market-makers. On external exchanges, there is zero cost for setting, cancelling and moving orders, only for fills. In comparison, based on my current understanding, moving a single pair of bid/offer spread orders 100 times per day (to adjust to movements in the fair price of the asset) would cost $16 per day (net of cash backs if you're a lifetime member). I'm concerned about the economics of this, especially for privatised bitAsset issuers that wish to support their tokens.

I also need to clarify what happens if a market-maker's wall is chewed at by lots of small orders (usually the case with market-making). Does that mean the market-maker experiences a fixed cost for each small fill? If so, this would give the market-maker a lot less control over cost than on external exchanges, and make it even less economic.

Since it's price takers that have the control over their trade size, and market-makers are providing the efficiency in the market, would it be better to always put the combined fee on the price-taker?

Also, allowing market-makers to place relative orders (that do not need constant changing on the network) would help a lot, though I know there have been past issues raised around the technical implementation of this.

As another consideration, could the following be considered:
- setting a percentage fee on market transactions, consistent with other exchanges
- setting a lower fee on market transactions compared to other token transfers

Apologies if I am misunderstanding the intended application of these higher fees in market exchanges, but the efficient operation of the markets is critical to the entire success of bitShares.

[Xeldal's comments also reflect the same concerns]

156
Technical Support / Re: "High" Transaction Fees
« on: June 10, 2015, 11:59:26 pm »
Quote from: Troglodactyl on June 10, 2015, 11:55:04 pm
Quote from: starspirit on June 10, 2015, 11:46:43 pm
I'm still wondering how this affects market transactions. Efficient markets must accommodate micro transactions. What would this look like for buy and sell orders? What would be the impact on market-makers?

And how do we deal with this...

Quote from: monsterer on June 10, 2015, 07:15:25 pm
Quote from: profitofthegods on June 10, 2015, 06:50:05 pm
How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.

My understanding is that the fee itself is not different.  The difference is where the fee goes.  Lifetime members receive 80% of the fees they pay back as loyalty rewards, similar to how many credit card reward programs operate.  Subscription members get 50% of their fees, and basic users don't get anything back.  Subscription and basic have some of their fees diverted to their recruiters, and everything else goes to back to the network pool out of circulation.
Got it, thanks Trog.
Now still the question on efficient operation of markets.....

157
General Discussion / Re: Privatizing BitAssets
« on: June 10, 2015, 11:56:47 pm »
OK, so does buying the name SUPER (for example) automatically get you the entire set of names SUPER.<X>?
Do we need the "dot"?
And if the use of a "dot" in the nomenclature is not consistent with the codes used on external exchanges, I assume they can just choose to display it without the "dot" if they are willing to list it?

158
Technical Support / Re: "High" Transaction Fees
« on: June 10, 2015, 11:46:43 pm »
I'm still wondering how this affects market transactions. Efficient markets must accommodate micro transactions. What would this look like for buy and sell orders? What would be the impact on market-makers?

And how do we deal with this...

Quote from: monsterer on June 10, 2015, 07:15:25 pm
Quote from: profitofthegods on June 10, 2015, 06:50:05 pm
How do you buy anything with a credit or debit card? They do the same. When a merchant sets up their systems to accept Bitshares they will know that there is a fee taken off what they receive, just the same as if they were accepting cards or paypal or pretty much anything else.

Except that the fee will be different depending on the 'class' of user.

159
General Discussion / Re: Burning is Still Alive and Well
« on: June 10, 2015, 11:09:56 pm »
My opinion...

We need to understand the two separate concepts of income (increases value of BTS) versus distribution (application of income earned).

Burning is not a source of income. It is a distribution of income. Burning is not the main goal of BTS to increase value.

Revenue is earned when money comes into the system from things such as transaction fees. It used to be that revenues and burning occurred simultaneously, thus the past confusion of the two concepts. That is, transaction fees were used to instantly buy BTS and burn any excess not payable to the delegates. This represented an instant distribution of income to all owners, because there was no way for the business to hold it as a reserve.

The new approach will change that, by holding the BTS in reserve instead of burning it. So when the fees are earned (in excess of pay to witnesses), that is earned revenue that goes into the pool, which is owned by BTS. From that expenses are paid to the workers. The remainder is the net profit of the business.

The choices from there are what to do with that profit. Do you distribute it - i.e. burn it? Or do you reinvest it - i.e. use it to fund other work or projects? Or do you even use if for strategic purposes - i.e. to fund acquisitions etc? The quality of the decisions made in these areas will ultimately determine what value the marketplace is willing to place upon BTS. So we need to ensure those are truly wise decisions. There is no point in burning for the sake of appearances as long as there exist better ways to reinvest that money, especially early in our growth cycle. At the point of saturation there is no point in reinvesting, and all profits should be burned. But its good to have both options.

There are other choices too. If we spend more on witnesses and workers than we earn in fees etc, then we are making a loss, which dilutes the business. This can make sense for a startup, but from an investors' perspective, only with a convincing plan to move it to state of future profit (or make a trade sale to another party, but I assume that's not the end goal). The notional amount of BTS to be initially allocated to the reserve pool (ie. 1.2 bn BTS) is a signal to the market as to how much we are willing to dilute the business before eventually turning a profit. From an investor's perspective, the bigger this pool, the longer the time I expect I'll have to wait before BTS is profitable. For example, if we believed we could be profitable in 3 years, there would be no need for 1.2bn BTS to exist as a dilutionary spending reserve. Of course maybe we are just being really conservative, and conservative management is not a bad thing either. I'm not sure what the right figure should be, but hopefully this gives you some idea of how investors might look at things.

160
General Discussion / Re: Privatizing BitAssets
« on: June 10, 2015, 08:36:33 am »
Quote from: monsterer on June 10, 2015, 08:15:03 am
Other way around - you'd need to own USD to make SUPER.USD

monsterer, are you sure? I just noticed there are many existing UIAs that share common prefixes, such as BDR.<X> and BREAKOUT.<X>, just as the first 2 examples I saw.
There happens to be a BDR.USD and a BREAKOUT.USD, but these seem to be two different issuers...

161
General Discussion / Re: Privatizing BitAssets
« on: June 10, 2015, 07:32:36 am »
Quote from: xeroc on June 09, 2015, 06:11:16 am
You can do with a dot ... SUPER.USD
So if I buy the name SUPER, does that mean I automatically own anything that is SUPER.<X>, or is that an extra cost to get the entire class? How much would this be?
I suppose anybody else could still buy SUPERB and SUPERB.X, or SUPERMAN and SUPERMAN.X, which are extensions of that label, correct?

Thanks.
(PS These are all just hypothetical examples, clearly)

162
General Discussion / Re: Sidechains should be a priority for bitshares.
« on: June 10, 2015, 03:26:50 am »
Quote from: fuzzy on June 10, 2015, 02:45:38 am
Quote from: Method-X on June 10, 2015, 02:17:48 am
I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.

Sidechains likely are legit...which means that there really is no reason to worry on that front.  But the real question is...how does this help us?  And can it benefit us in a way that we wouldnt already see if we had patience and persistence?

We are tying ourselves into a market that actually is not free.  Bitcoin has many backers...ironically one of which seems to be the CFR. For those who know about the CFR, this should be a concern...because if they want bitcoin...it means it is precisely the technocrat's dream device for tracking every interaction we ever have.  In fact nearly all the big names in "journalism" out there these days are actually members of the CFR as well.  If we think these people are not connected with the same kingpins in charge today...we are blinding ourselves unnecessarily to facts.

I see no reason to back bitassets directly with bitcoin...or to even open up that Avenue because then we are opening the floodgates for a stealth attack that steals our tech and moves it to bitcoin with little repayment to our community (what happens to the BTS you each hold if the mining and banking cartels inject huge funds into btc-backed bitassets???).

Just like data said...we CAN back them with bitcoi  INTERNALLY and still keep control over what we ALL have fought so hard to make thrive!  Don't forget everyone... bitBTC can back bitassets to now with the bitassets 2.0 proposal.

Actually fuzzy, what I imagined was a BTC-backed token existing on our block-chain, and using that as the collateral, rather than BTC directly. So the control, issuance and settlement features would never leave the domain of bitShares, although it could trade freely externally like any other bitAsset. I introduced this idea here, and expanded it to looking at using such a token for collateral in this thread...https://bitsharestalk.org/index.php/topic,15957.0.html
Why you might do this rather than using bitBTC backed by BTS is for the reasons I listed earlier in this thread. But like I said earlier, I would prefer the ability to have a collateral mix rather than just BTC, another advantage being less chance of black swans.

I think ultimately something like this will be done if it can be done. Down the track there is no reason why collateral can't just be plug-and-play - insert whatever token or mix of tokens you want. So maybe we are only left to debate how much support we might wish to give it when it happens. Personally I think its better to have the bitShares technology at the centre of it and controlling it, and earning reward and brand recognition for the community, rather than left out of it. But it will be interesting to see how things evolve and what we all think at that point.

Quote from: nomoreheroes7 on June 10, 2015, 03:05:34 am
Quote from: Method-X on June 10, 2015, 02:17:48 am
I would 100% support bitassets being backed by BTC (assuming sidechains are legit). BitShares is a platform that goes far beyond bitassets and this would be a great way to partner with another crypto and leverage their network effect. We would both win if this were implemented.

Hmm...I'm failing to see how we would both win in this scenario. Literally what value would BTS have if it wasn't backing bitassets? Sounds to me like it would have a quick drop to zero, while bitcoin reaps all the hard work of the BTS devs...

Am I missing something?
The point you raise is that we need to be much clearer on the value model for BTS. If its only value is in backing bitAssets, and bitAssets don't require BTS backing, then we are lost...
(BTW I think we are far from lost, just highlighting the need to explore the bigger picture on what BTS can be).

163
General Discussion / Re: Sidechains should be a priority for bitshares.
« on: June 10, 2015, 01:28:53 am »
Quote from: yellowecho on June 10, 2015, 01:15:54 am
Quote from: roadscape on June 10, 2015, 01:08:05 am
Quote from: jonnybitcoin on June 09, 2015, 11:21:57 pm
But the truth is that bitcoin will be the collateral for the most commonly used USD derivative as it is the biggest most liquid and most trusted crypto.
Bitshares need to make btc the default collateral for bit assets or another USD derivative will take its place.

Cringe to say it, but this is a good idea. We could theoretically use any crypto as collateral, and the fact is that BTC does have qualities that make it desirable to be used as such.
I could easily imagine such a feature existing in BTS 3 or 4. It's just a matter of priorities and dev resources.

What's the point?  Why not use bitBTC instead since it'd have the same value as BTC but it'd be more efficient and less expensive?
There are 3 differences I can think of:

1. bitBTC backed by BTS is limited by the availability of BTS. bitBTC backed by BTC is only limited by the availability of BTC.
2. bitBTC backed by BTS will have wider spreads than backed by BTC, because of underlying liquidity.
3. The wider market is more familiar with BTC than BTS and so may be more comfortable with it.

Having said that, if doable, I would lean to a flexible collateral system rather than one backed solely by BTC, which would be more flexible and less controversial. See for example...https://bitsharestalk.org/index.php/topic,16326.msg208798.html#msg208798

164
General Discussion / Re: Burning is Still Alive and Well
« on: June 10, 2015, 01:18:56 am »
It seems to me more like a capital reserve (controlled by vote) than burning (requiring a hard fork to reverse). I expect how the market values that depends on how wisely they expect that capital reserve to be managed in the future.

165
General Discussion / Re: Sidechains should be a priority for bitshares.
« on: June 10, 2015, 01:00:34 am »
We all perceive the same things differently. Somebody could view the product of bitShares as bitAssets. Somebody else could view the product of bitShares as an open architecture platform for finance. I don't see that either of these necessarily destroys our rights and freedoms...

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