I understand why there is a heavy reluctance to consider a bitShares product with a BTC underlying. It seems like we are "supporting the enemy". Being dirty. And throwing away our capital gain potential. But if we get past the initial moral disgust, we might see that none of these things are actually true.

Who made BTC our enemy? What is the point of even having an enemy? BTC is really just the industry benchmark that we are seeking to exceed. It need be no more emotional than that. Using it as a form of collateral does not take any credibility from bitShares, nor add any to BTC. It is merely a statement that BTC is by far the most commonly held form of available collateral at this time.

There is also much scope to challenge the idea that BTS derives its growth potential by backing bitAssets.

I've demonstrated previously that bitAssets can be issued via self-creation, with funds raised from the sale of the bitAsset being used for any general purpose the borrower desires. In fact, my view is that using these funds to arbitrage against the real asset is the preferred motivator for issuers. This merely requires participating BTS users to move their existing tokens to the collateral pool. It does not require anybody to increase demand for BTS - BTS leverage is just one potential application of the borrowed funds.

I've also argued (without convincing many people yet!) that the market value of BTS is determined by supply and demand at any time, irrespective of any prior market trades that may have been initiated by new purchases of bitAsset. That is, the market needs to be convinced that any price BTS is forcibly bid up to is a reasonable price given its future return prospects, or it will simply realign the price at a lower level again.

This then gets to the essence of what really does drive the BTS price. In my opinion, its the utility that BTS can provide to owners through the prospect of income, or the potential utility of being able to access opportunities to earn income within the bitShares system. If there is real value there, does it really matter if a source of credit growth is removed?

So if we did offer a product to the market that had much greater demand potential and capacity (BTC>100x the market cap of BTS at this point) in the medium term, and we structured it so as to earn an income stream for BTS owners from that product, that could actually be a very good thing for owners of BTS. This would seem a lot more robust as a business model to me - earn income from a product, rather than the product concept merely being to compound the credit available to BTS bulls.

I believe the theoretically optimal model is to actually offer flexible collateral, where BTS, BTC or other digital collateral can be held as a mix to back bitAssets. Perhaps that will be more palatable to bitshares because its not seen as directly supporting any specific "competing" token and offers maximum flexibility.

Now this is a big shift for many given the previous paradigms held in bitShares, and everyone will have a different opinion on it. So what's to stop us doing both? With privatised bitAssets, the purists can still have BTS backed bitAssets, and there can be a parallel market for bitAssets backed by BTC or other combinations of collateral. Better us earning the reward than a competitor. And to be truly self-funding, bitShares ultimately needs to earn reward by delivering value to the market and meeting its needs.

Quote from: starspirit on June 09, 2015, 08:08:57 am

If reputations (when available) are linked to named accounts, can transferability be abused, and how do you avoid such abuse?

https://bitshares.github.io/technology/transferable-named-accounts/
"When users transfer an account name to another user, they use a special transaction that clears all of the links in the web-of-trust. Both the buyer and the seller are protected by this fact, because simply updating the key that controls a named account does not signify a legal change in ownership."

Wouldn't we also need to resurrect old reputations if users wish to re-enter the web of trust under a new account name?

It is a question worth pondering as to whether copyright is needed.

Suppose somebody made an exact replica of bitShares. There would be no point in establishing a new network from scratch unless they wanted to take it in a different strategic direction. And if they go different strategic directions, they will develop different features and specialise in different things to bitShares, at the expense of things that bitShares would continue to develop and improve. Both businesses could theoretically outsource their non-core services to the other - are they then still competitors?

Without copyrights, we not only enhance the rate of external innovation in our world for everybody's benefit, but we create synergy benefits for the entire ecosystem in which we all operate.

Are these short transcripts with links useful to anyone (other than us at TF)?

Yes! I find it easy to find and access the topics of most relevance to me. I like it.

DSN, what is an MIA? Do you mean an IMA (Investment Management Agreement)?

Permie, I like your goal. A scope limit I see with this specific approach is how to audit the traders that are using external markets to ensure they are not absconding with funds. If this is not auditable, you would need to limit their activity to arbitrage and market making on internal exchanges, and not give them any power to withdraw funds from the pool they are managing, only the power to trade it.

 

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So I'm looking at all these intellectual battles in the forum around how bitAssets should be structured, including my own head-banging, and thinking "the modern financial industry doesn't just have one way for people to invest in an asset, but many ways, each designed to meet different needs". So why are we all arguing? Maybe we should all be working together to design everything we want, but not all in one "holy grail" bitAsset package. Maybe we just need different instruments.

Most of these different products require liquidity, correct?
If we can find a way for shareholders to pool together and provide liquidity for some low risk profit then a lot of these projects/products will get off the ground a lot faster.
There must be some way to use the UIA system to achieve this

What do you think?
I've read about CryptoHedge doing something similar for bitGold, not sure what's happening now.
A fund to trade our main products bitUSD and bitCYN against BTC/fiat in as low risk way as possible is of benefit to the entire BitShares ecosystem. Perhaps the community can find some "verified" (?) traders who are deemed trustworthy to trade for the fund and take the lion's share of the profits, distributing the rest to bitFUND asset holders.
Do we have to wait for whales or can the community crowdfund this stuff?

Good thoughts Permie.

1. I think the first and most critical thing is incentive. The optimal incentive structure needs to be in place for issuers or counter parties to be willing to offer and support each instrument.
2. The second thing that will help liquidity is convenience. Give the parties the most convenient tools possible to make their job of supporting the market easier.
3. Finally pooling. Offer avenues, through UIAs as you suggest, that allow the broadest possible range of users to pool to support the endeavour, with a manager that handles the more sophisticated implementation.

I believe setting these up as clear profit and income opportunities will attract more people, including whales, into the community to support it. Build it and they will come.

We are all constantly debating over the best form for bitAssets to take. We are all trying to have our voice heard as to what we think is the best structure. So why not let us put in place whatever structure we like?

There are people in this community that have skills to design and develop all sorts of block-chain based equivalents to CFDs, futures, options, ETFs, prediction markets etc. So instead of trying to funnel this through a resource constrained core development team, with bytemaster acting as the queue master, could we do something like the following:

- Allow Designers to design and develop code templates for different classes of instrument, that operate to different rules,
- Promoters can use these templates to specify their particular parameters, pay a fee to have it accepted into the core bitShares code, and pay a fee to the Designer

Privatised bitAssets will allow anybody to take the bitAsset template and reset the parameters how they like. The above approach extends this to any class or form we can imagine, so that we can build new markets.

I personally believe that we have all been somewhat obsessed by trying to find the perfect bitAsset structure (and especially currency structure) that will suit everybody's needs and wants. But such a structure does not exist. Instead we need to realise that there are many possible structures, just as there are in the traditional financial environment, that each meet different needs and purposes. What I'm looking for here is a way to make that happen more effectively and faster, rather than the current process of trying to force a million pigs through the poor old python (or choosing one pig from the million). I'm not a coder/developer, so others may have better ideas on how such a goal could be implemented.

Not sure how clear this is, hopefully you get the gist.