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Messages - fussyhands

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91
http://wiki.bitshares.org/index.php/What_is_BitShares%3F

and all the links from there...

Yup.  Read those.  I don't see answers to my questions there.
http://107.170.163.35/index.php/Distributed_Autonomous_Companies
http://wiki.bitshares.org/index.php/The_History_of_BitShares
These are links in the article aren't they?

Also read this:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2425270

It is from independent (not connected to Bitshares) author. You might learn something that you clearly do not get, judging by your questions....

I'll have to give the ssrn paper a read later.

On the wiki, I think you're referring to this:
Quote
The concept of BitShares is based on the notion that the units issued by Bitcoin and all other cryptocurrency systems more intuitively resemble shares in startups with small capitalizations than legal tender of sovereign nations. Carrying the company analogy a bit further, the goal of maximizing the 'equity-value-per-share' ratio replaces the goal of maintaining a constant 'purchasing-power-per-unit' ratio in a currency system. With a currency, the general tendency is to strive for a stable price-per-stuff ratio. Shares, on the other hand, are expected to pay profits in shares, appreciate in value, or both. When we think of a DAC as a company, rather than as a mint, the idea of units that increase in value comes more naturally. In this way, the cryptocurrency acts as a medium of exchange and store of value, but not as a unit of account or measure of value... just like transferable shares in an investment portfolio... rather like buying goods and services with shares from one's investment portfolio.

I get that it's a useful analogy to think if a cryptocurrency as an equity rather than as currency, especially in the early stages where it has tremendous growth potential and tremendous risk and thus its value fluctuates wildly.  But that doesn't mean that it isn't actually currency.  Especially in the long run, if it is very successful, it's value might even stabilize more than USD stability, in which case it may be used almost entirely as a currency, and only as an equity to a very limited degree.  (At that point it's value would be more characteristic of a bond than of an equity, providing a very consistent modest return.  Or no return at all.  Stake holders might prefer a network with the lowest possible transaction fees necessary to support the network and no dividends.)

92
BTSX is not a currency, BitAssets within BTSX are the currency.
BTSX is the "bank" that is the source of credit behind the BitUSD issued.

Well BTSX is being traded as a currency on Bter, and can be sent to people like a currency from the wallet software.  I understand that BTSX is the value put up for collateral which underlies the market pegging of BitUSD.  But it is thus functioning as a currency is it not?  People can and will use it to buy/sell things.  Why do you say it's not a currency?

Maybe you are imagining that once BitUSD is stable people would just buy and sell things by transfering BitUSD instead of BTSX?  But they may also choose to use BTSX, no?  Especially if one of the parties believes that USD is being devalued by overprinting.  BTSX may be viewed as a more reliable currency...

Are you one of those excessive writers (as opposed to dedicated readers)? Not trying to be rude but, can you first read the wiki or listen to some videos?

I've read most of the wiki and watched a couple videos.  Everybody who is new to BitShares X seems to find it confusing.  It's not just me.  These things aren't clearly spelled out on the wiki as far as I could see.

http://wiki.bitshares.org/index.php/What_is_BitShares%3F

and all the links from there...

Yup.  Read those.  I don't see answers to my questions there.

93
BTSX is not a currency, BitAssets within BTSX are the currency.
BTSX is the "bank" that is the source of credit behind the BitUSD issued.

Well BTSX is being traded as a currency on Bter, and can be sent to people like a currency from the wallet software.  I understand that BTSX is the value put up for collateral which underlies the market pegging of BitUSD.  But it is thus functioning as a currency is it not?  People can and will use it to buy/sell things.  Why do you say it's not a currency?

Maybe you are imagining that once BitUSD is stable people would just buy and sell things by transfering BitUSD instead of BTSX?  But they may also choose to use BTSX, no?  Especially if one of the parties believes that USD is being devalued by overprinting.  BTSX may be viewed as a more reliable currency...

Are you one of those excessive writers (as opposed to dedicated readers)? Not trying to be rude but, can you first read the wiki or listen to some videos?

I've read most of the wiki and watched a couple videos.  Everybody who is new to BitShares X seems to find it confusing.  It's not just me.  These things aren't clearly spelled out on the wiki as far as I could see.

94
BTSX is not a currency, BitAssets within BTSX are the currency.
BTSX is the "bank" that is the source of credit behind the BitUSD issued.

Well BTSX is being traded as a currency on Bter, and can be sent to people like a currency from the wallet software.  I understand that BTSX is the value put up for collateral which underlies the market pegging of BitUSD.  But it is thus functioning as a currency is it not?  People can and will use it to buy/sell things.  Why do you say it's not a currency?

Maybe you are imagining that once BitUSD is stable people would just buy and sell things by transfering BitUSD instead of BTSX?  But they may also choose to use BTSX, no?  Especially if one of the parties believes that USD is being devalued by overprinting.  BTSX may be viewed as a more reliable currency...

95
I'm trying to conceive a scenario in which some entity scoops BitsharesX, releases a knock-off and screws AGS/PTS/Community.

Can't come up with one that is viable.

At this point in time I can't see another group of devs jumping in and doing a better job at developing/marketing the platform, ie. winning the race.

In the future, once the platform is mature, I can't see another group of devs copying and adding enough gee-whiz to lure the community while simultaneously screwing the community.

In between, I can't see an attack or flaw that the devs/delegates could not fix/fork themselves.

Unless I'm missing something obvious this risk seems to be an armchair issue rather than something investors (myself included) need to worry about.

And finally... if someone rips off the code, what could they possibly call their knock-off that would compete with the Bitshares branding (CitiBank? Wells Fargo? BOA?).

I'm becoming convinced.  Is it true that the community would view any new DAC designed to function as a currency as a competitor to BitShares X and thus will not launch such a DAC (at least not with broad community support)?

96
Are you familiar with the snapshot concept? BM addressed above how btsx holder value is preserved even if a successor is announced

Sent from my SCH-I535 using Tapatalk

I read this:  http://wiki.bitshares.org/index.php/Sharedrops_and_Snapshots

But that talks about giving a small amount to PTS and AGS holders.  It doesn't say anything about honoring BTSX.

Also, the snapshot concept does not address the importance of network effects for making a coin actually useful.  For the mainstream to want to use a coin many other people need to already be using it (that is what make it useful for transactions).  Bitcoin looks like it might be able to successfully bootstrap itself into mainstream use, but none of the other altcoins are even close.  BitShares X has enough innovation that maybe it also has a chance to bootstrap.  But not if half the community moves to BitShares Y, and then BitShares Z.

Also, lets say that contrary to the snapshots wiki page,  10% of Bitshares Y goes to BitShares X and 10% of BitShares Z goes to BitShares Y and then BitShares Z achieves critical mass and becomes mainstream, while X and Y wither and die.  The snapshot concept means I retain 1% of my market share (10% of 10%).  That is not really very reassuring.

It would likely honor 100%, not 10%.

Really?  You wouldn't keep a small percentage for yourself?
I assume he has a small % in BTSX already, so he will keep that.

Won't he want to fund his development efforts without digging into his savings?

97
Are you familiar with the snapshot concept? BM addressed above how btsx holder value is preserved even if a successor is announced

Sent from my SCH-I535 using Tapatalk

I read this:  http://wiki.bitshares.org/index.php/Sharedrops_and_Snapshots

But that talks about giving a small amount to PTS and AGS holders.  It doesn't say anything about honoring BTSX.

Also, the snapshot concept does not address the importance of network effects for making a coin actually useful.  For the mainstream to want to use a coin many other people need to already be using it (that is what make it useful for transactions).  Bitcoin looks like it might be able to successfully bootstrap itself into mainstream use, but none of the other altcoins are even close.  BitShares X has enough innovation that maybe it also has a chance to bootstrap.  But not if half the community moves to BitShares Y, and then BitShares Z.

Also, lets say that contrary to the snapshots wiki page,  10% of Bitshares Y goes to BitShares X and 10% of BitShares Z goes to BitShares Y and then BitShares Z achieves critical mass and becomes mainstream, while X and Y wither and die.  The snapshot concept means I retain 1% of my market share (10% of 10%).  That is not really very reassuring.

It would likely honor 100%, not 10%.

Really?  You wouldn't keep a small percentage for yourself?

98

Does that answer you question?  I understand that the community is working hard on BitsharesX right now.  But is the plan to make a succession of competitors?  If so, the future of BitsharesX looks bleak compared to Bitcoin...

The plan is not to make competitors to Bitshares X. 

The new DACs that are under development, which you will get shares of if you own PTS, serve very different purposes:  Bitshares DNS, Bitshares Vote, Bitshares Music, etc.  They are not competitors to BitsharesX. 

These other projects are being worked on by other people than the core dev team of Bitshares X.  (I think?)


To summarize:
Bitshares X is the stock market and derivative exchange DAC.  It is being worked on very hard by the dev  team.  If you want it, you need to buy BTSX.

Other DACs are being worked on as well, which do not compete with Bitshares, but instead serve other functions.  If you want in on these, you buy PTS.

In that case which one aspires to be a universal currency?  I.e. the one I can walk into any store and buy a coffee, or send to a friend and know that he'll accept it as real money, or buy a house with, etc.?

Is that BitShares X? 

Can I be assured that the community won't come out with "BitShares Coin" in a year that is supposed to play that role?

Will the community resist attempts to create a DAC that compete with BitShares X for that role, or will they enthusiastically embrace the new competitor?

99
Are you familiar with the snapshot concept? BM addressed above how btsx holder value is preserved even if a successor is announced

Sent from my SCH-I535 using Tapatalk

I read this:  http://wiki.bitshares.org/index.php/Sharedrops_and_Snapshots

But that talks about giving a small amount to PTS and AGS holders.  It doesn't say anything about honoring BTSX.

Also, the snapshot concept does not address the importance of network effects for making a coin actually useful.  For the mainstream to want to use a coin many other people need to already be using it (that is what make it useful for transactions).  Bitcoin looks like it might be able to successfully bootstrap itself into mainstream use, but none of the other altcoins are even close.  BitShares X has enough innovation that maybe it also has a chance to bootstrap.  But not if half the community moves to BitShares Y, and then BitShares Z.

Also, lets say that contrary to the snapshots wiki page,  10% of Bitshares Y goes to BitShares X and 10% of BitShares Z goes to BitShares Y and then BitShares Z achieves critical mass and becomes mainstream, while X and Y wither and die.  The snapshot concept means I retain 1% of my market share (10% of 10%).  That is not really very reassuring.

100
Any BitShares Y DAC would honor BitShares X so buying BTSX is getting a cut in any other DACs that leverage that technology.   

Of course BitShares Y would have new features funded by new capital and thus likely dilute BTSX holders when upgrading but BTSX would continue on its own. 

So betting on BTSX is betting on all DACs derived from it (to some extent).

Developers own a lot of BTSX so they have reason to see it grow.

This seems very nebulous to me.  What does it mean that they would honor BTSX?

More importantly, as I just wrote in another message "The value of the coin is only secondarily related to technology, and primarily related to how many other people have adopted it, and therefore how useful it is for transactions.  I don't want to invest in a coin whose developers are *planning* to dilute its network effects by creating competitors."

The reason Bitcoin is so valuable right now despite its inferior technology is because it has experienced radically more adoption than any of its competitors, and that makes it about a zillion times more useful (and as the front runner, people are betting that it will continue to experience more adoption).  What can I use a ripple/litcoin/bitshareX for in the real world?  Basically nothing.  But I can buy actual stuff with Bitcoin.  Will litecoin ever experience mainstream adoption?  I doubt it.  It basically does nothing that Bitcoin doesn't already do, so people will just use Bitcoin instead.  Bitshare X *does* do something that Bitcoin doesn't already do, so it has a chance of widespread adoption, but not if it's community is going to release a stream of competitors that dilute it's network effects.

101
  It makes it sound like bitsharesX is just a one particular set of DACs, but that the core developers and perhaps the community are not committed to working towards bitsharesX becoming the main way of moving money around, making mobile retail payments, etc.

I am curious how did you get to that conclusion?
-Was it from the fact that the whole dev team is working well more than 8h a day on it, and in my observation 6 (and quite likely 7) days a week.
-Was it from to fact that some of that team have promising DAC's of their own, that are left for later, while BTSX is rapidly developed.
-Is it due to versions coming every 2 to 4 days.
-was it due to the fact that new features (and significantly new) are coming at least once a week.

It's partly due to the fact that as a newbie, it's *extremely* hard to understand how all these DACs fit together and it isn't explained anywhere.  I think there should be an investment page on the wiki that lays it all out.

At any rate, if I'm investing in BitShares X it's because I am hoping that it will become the leading cryptocurrency, and that as the most widely used cryptocurrency it will have the greatest utility through network effects, and that this will drive demand, and the price will rise dramatically due to pairing increasing demand and fixed supply.

But if the plan is to create BitShares Y, BitShares Z, etc. then why will BitShares X be valuable?  For one, dramatic increases in price depend on fixed supply, so creating new coins with similar mind share will spread the demand.  Secondly, for long term success a coin needs to benefit from economic network effects.  That is why people are betting on Bitcoin even though it's technology is inferior.  The value of the coin is only secondarily related to technology, and primarily related to how many other people have adopted it, and therefore how useful it is for transactions.  I don't want to invest in a coin whose developers are *planning* to dilute its network effects by creating competitors.

Does that answer you question?  I understand that the community is working hard on BitsharesX right now.  But is the plan to make a succession of competitors?  If so, the future of BitsharesX looks bleak compared to Bitcoin...

102
I'm still wrapping my mind around the whole bitshares thing, and trying to decide if it makes sense to invest.

I see a lot of technological innovation that I'm excited about in bitsharesX (faster confirmation times, more secure network, no wasted energy mining, account names, greater anonymity, etc.) and I am encourage by its rapid ascent.

However, I'm confused by the whole DAC and protoshares thing.  It makes it sound like bitsharesX is just a one particular set of DACs, but that the core developers and perhaps the community are not committed to working towards bitsharesX becoming the main way of moving money around, making mobile retail payments, etc.

From an investing perspective this is concerning.  A cryptocoin is only worth as much as its mind-share and momentum.  Bitcoin's market cap is 100x bitshareX's because of its first mover advantage, and the hope that a cryptocoin could replace some of the antiquated financial infrastructure we are currently stuck with.  People are building the infrastructure necessary to get Bitcoin at ATMs, pay at retail establishments with Bitcoin, integrate Bitcoin seamlessly into e-commerce channels, etc.  Very little of this kind of work is being done for any altcoin, but an altcoin with a sufficiently superior technology might have a shot at making it to the mainstream.

bitsharesX seems like it might bring enough technological improvement to have a shot.  But if the core developers and community are going to move on to bitsharesY (a hypothetical new DAC) in a year then bitsharesX doesn't seem like a good bet.

Is bitsharesX the one to bet on, or should I wait for bitsharesY?  Does my concern make any sense?  Am I totally misunderstanding something important?

103
Decentralized feed is the median of 51+ feeds produced by elected delegates.

How is that price feed used?  Is there a place that I can read about it?

The price feed is used to prevent shorters from offering BitUSD for lower and lower amounts of BTSX. Without this restriction they could short BitUSD down to near zero for the sake of outcompeting other shorters. BitUSD buyers know this and so are forced to offer a fair amount of BTSX if they want to get any BitUSD.

Interesting.  I think you have the reason wrong though.  Shorters would not compete with each other to offer lower prices because the lower the price the more likely they are to lose money, and the less money they stand to gain.  Instead, I think tying minimum prices to the feed must be to prevent shorters from intentionally forcing the price down in order to cause a panic.

104
Decentralized feed is the median of 51+ feeds produced by elected delegates.

How is that price feed used?  Is there a place that I can read about it?

105
You are missing a couple thingsā€¦. The BitUSD holders have a lot of leverage in the "negotiation."  It is much more likely that they can hold out for a fair price from the shorts than that the shorts can hold out until BitUSD holders give it away for no reason.  This is in part because bitUSD is liquid and the shorts are stuck (until they cover they can't get their bitshares and they can't sell them.)  There's no reason for bitUSD holders to sell for nothingā€¦ Myself and many others would take it off their hands before they do so; why give it away when the shorts have to buy it back sometime to get their money, they also may be forced to buy it back at a fair price due to a margin call.  The smart shorts will pick up cheap bitUSD as a good chance to cover and try to re-short rather than futilely hoping it goes to zero, and the ones hoping it crashes will just miss the best opportunities they will get to cover at good price.

OK, you are right that there is no reason for a bitUSD holder to sell for nothing, but there may be a reason to sell at a steep discount:  to cut losses.  If they see the price at 80% for a prolonged period of time, that will erode their confidence that the price will recover, rather than drop further.  They can sit around waiting for new bitUSD demand to kick the price up, but where will that demand come from when the price looks so shaky?  You can others like you might buy up some of it, but if it's a manufactured short squeeze you may run out of funds before you move the price.  If its in a downtrend long enough it's going to cause a panic and bankrun.  I'm not getting it yet.

BTW, what is the point of covering and re-shorting?  To reduce the collateral that is tied up in the position?  And how does covering and re-shorting help those who are long?  If you re-short the same number of bitUSD it exerts the same downward price pressure as if you had just held on to your original short, doesn't it?

You are also missing that shorts can't short at 80%.  We use a decentralized price feed to prevent any new shorts from executing at below the real USD/BTSX exchange rate.

Maybe this is the key element that I'm missing.  What is a decentralized price feed?  Where can I read more about that?

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