I would suggest a simplified and softened version with no protocol level enforcement.

Currently the minimum fee is 0.1 BTS and the default is 0.5.  Some of the light wallets are already boosting this fee slightly to pay for their development.  I suggest that some wallets could support defaulting to add an additional 0.1-0.5 BTS fee for every transaction, payed to the account that payed the registration fee for that wallet installations first account.  The idea here is that our grassroots marketers introduce people to BitShares, set up their wallets and register them, and receive transaction fees until the new user either stops using the network or changes the default settings.

This way there's no controversial protocol level enforcement pushed by the network as a whole, and marketers are incentivized to get legitimate users, because they're only rewarded if the user transacts.

I dont mind this option... Its a lot safer but a lot less powerful for a bunch of reasons.   But I am confused by this term "legitimate users"  What is a legitimate bitUSD user if it is not someone who holds bitUSD. Earns interest on bitUSD. Receives his income in bitUSD. Purchasers products with bitUSD, and trades in and out of bitUSD for fiat with his network of fellow bitUSD holders?   I don't think it gets any more legitimate than that.

An interesting mental exercise.  Imagine John Q Public clones bitshares and builds bitsharesMLM. He honors 100% bitshares holders so you have the same stake. He has a built in marketing system as described in the OP and limits the number of 100% delegates to 5 as that is ample to support the tech requirements of the chain.  which chain are you more excited about?

First I would like to acknowledge that there is no doubt a stigma to MLM. Further I agree that we will get shit for this if we decided to move forward on it in any form. Single tier or multi tier.  High Earner status fee/low fee / no fee.   We have already seen all of that in this thread already.   I recognize this, like all actions have risk.  The more aggressive we are the more shit we get and potentially the better the benefits.

The bad thing about any change is that if/when the change upsets some existing users, then they may leave. this happens immediately. Any benefit that may accrue from an action does so in the future.  This is true of all actions we can choose to take.  The assessment of the benefits and risks are important and this thread is doing a great job of it so far.

Just my thoughts, but I think the probability of this strategy doing more harm than good in the bitcoin space is substantial. By substantial I would say 30-50%  I think the benefits in the broader community though would be epic.  For this reason I think a high quality phone app is important for the release of this product.

On to a few replies....

BTS is already supposed to be a system where you buy in as an early investor by purchasing BTS, and then you get a dividend from market trading fees, in the form of having BTS be burned. 

But under the new proposed system, instead of encouraging people to buy $20 of BTS and supporting the share price, they are instead asked to put that $20 into a pyramid scheme operating within BTS.  Hilarious!  Its a way to dilute the potential revenues of BTS holders, thus making BTS worth less, in order to reward early participants in the new scheme.

There is so many things wrong with this post I don't know where to start.  The crypto is a place for rich people. you need serious money to invest in coins, mining hardware or have access to capital markets to raise money for a new venture.   If you are poor, move along.... Your hard work is not rewarded anywhere in crypto.  This proposal is the first mechanism in all of crypto that poor people can use sweat equity to ad value to a blockchain and get rewarded. Sounds a hell of a lot more egalitarian to me than just a place for people with investment dollars. A whole new realm of people... the ones who need it the most can participate in the crypto revolution with this marketing system.  And we would have a monopoly on it. 

Further this system dilutes revenues only in the revenues that are created by the participants.   People who do not have a referrer ie: the ones we would have got anyway through word of mouth have 100% of their fees go to the shareholders.

In a pyramid early adopters are rewarded.  In an MLM hard workes are rewarded.  It is up to us to choose the compensation plan that would reward hard work and not incentivize free loaders.

The question/fear I have is:

Do we trade immediate MLM-driven adoption for long term stigma and lower long-run number of users we are likely to see once that MLM label sticks?

Can you convince us that the fear is irrational or at least very unlikely?

Do you have any examples of successful businesses that have started MLM and weened off of it without the stigma of Amway, Mary Kay, Avon, etc.?

The stigma I Agree with, but I disagree that we will sacrifice anything in the long term total number of customers.   Entry into the business is voluntary and should not cost us customers.  Stigma may cost us some business relationships early, but not in the long run.

Once you go down this road it is poor form to turn it off.  If it works you would never want to.  If it does not work and you want to abandon it  you have a difficult situation... People paid $20 to be an earner and be able to sign up earners.   Even letting existing users stay but take away there ability earn a comm from the $20 sign up will not be taken well unless it was stated up front that after x number of signups no more can exist. But I don' think this is that good an idea.

Is the $20 fee to be part of the scheme really needed? If a user signs up a new account referring to his own old account to get half his fees back, then so what? He his still paying the network something.

From the networks point of view it is fine, but from the person who introduced him gets nothing and so he is not incentivized to do any work.

Quote from: bitmarket on March 26, 2015, 02:51:37 pm

Quote from: bytemaster on March 26, 2015, 02:48:22 pm

Great ideas Max and this is in line with various ideas that have been floating around our lunch discussions. 

The primary challenge we face is that there is nothing stopping everyone from simply "referring themselves" and then using the account N levels down so they get the rebate on all of their transaction fees.   

You solve this somewhat with the $20 fee to create a participating account.   This fee would prevent all abuse from anyone generating less than $20 in transaction fees per year.  4000 transactions per year at $0.01 per transaction assuming 50% of fees go to the referrer.   

I think the $20 fee could be seen as a pyramid scheme where the bottom of the pyramid never makes their money back.     On the other hand, if you can convince just 2 people to sign up then your fee is covered.  So it seems like a low enough barrier to anyone who is passionate about the concept.   

Technically it is all possible.

Yep you nailed it all.  With no "buy in" it won't work because of the abuse issue.

How about buy in 20USD and lock it for 1 year then return it ?
That would prevent abuse and pyramid claims .

If you give it back it means you can't pay out on it.  Without that it is significantly less appealing for people and less profit for bitshares

Great ideas Max and this is in line with various ideas that have been floating around our lunch discussions. 

The primary challenge we face is that there is nothing stopping everyone from simply "referring themselves" and then using the account N levels down so they get the rebate on all of their transaction fees.   

You solve this somewhat with the $20 fee to create a participating account.   This fee would prevent all abuse from anyone generating less than $20 in transaction fees per year.  4000 transactions per year at $0.01 per transaction assuming 50% of fees go to the referrer.   

I think the $20 fee could be seen as a pyramid scheme where the bottom of the pyramid never makes their money back.     On the other hand, if you can convince just 2 people to sign up then your fee is covered.  So it seems like a low enough barrier to anyone who is passionate about the concept.   

Technically it is all possible.

Yep you nailed it all.  With no "buy in" it won't work because of the abuse issue.  Are there any other issues you have discovered?

To someone elses point, I do not see why fees should increase at all.  I would like to learn why you think they should.  remember digital currency is very divisible.  The 0.5 bts fee can be divided many ways.

1.) I like the idea of an affiliate program but much less the multi tiered MLM style. See point 2

2.) it would change people's perception of us and I believe that for many this will be towards the negative.

I agree but two things jump to mind.
1) Haters gonna hate, and
2) Money talks and bullshit talks.

3.) as you wrote in Bitshares 101 the barrier to entry is high at the moment and I don't see this working well  until we have a stable mobile wallet. I just upgraded to 8.0 and it took almost a whole day which include countless crashes.

Agreed.  A quality product is always the most important thing.  As a marketer I cant control that. That is in the hands of the gods (read Dev team). As the product improves the power of this and any other marketing strategy will too.

Important: There is nothing official about this post.  I have not spoken to anyone about it yet. Just an idea I would like to get feedback on.

The following is an idea to:

• Increase bitshares revenues immediately.
• Create an army of rabid fans that are paid to promote bitshares
• Pay those fans from fees and not by dilution and only after they have created value for bitshares.
• Eliminate the need to pay any marketing delegates through dilution.
• Create massive incentives for organizations and companies to begin using bitassets with their employees, customers and partners,
• Create massive incentives for people to run bitshares meetups.
• Create a model for all bitshares chains to automate their marketing, and
• Allow bitshares to be the only blockchain that pays its users directly through the blockchain for growing the user base.

The idea: Allow bitshares fees to be shared with the person who introduced the user that paid the fees. Possibly allow the sharing of those fees for several generations or tiers.

Details (from someone who can’t code and has no idea if this is feasible)(All figures used are just place holders and should be thought out more):  The blockchain already records all registered users by recording a TITAN name for each user. What if it recorded 2 more pieces of information.
1.   The status of the account, and
2.   The TITAN name of the introducer/referrer.

An account may have one of 2 states. A non income earner state/status. This is the current status that we all know and love. Or An income earner status.  For a fee of 20bitUSD a user may upgrade to this status, which enables them to earn a share in the Fees paid by anyone they introduce for the next say 20 years. This includes the 20 bitUSD fees for upgrading status.

For a simple example lets say all fees are shared 20% to the bitshares network, 50% to first upline who is earner status and 30% to the next upline of earner status. When a user (John) makes a transaction, lets say he pays 20bitUSD for earner status here is what happens.
1.The Bitshares network takes 4bitUSD and converts it to bitshares and burns them. (Yay us, we are reversing our dilution or said another way we re creating income for the DAC)
2. John’s introducer is looked up. John’s introducer is Mary. Mary has not paid the 20bitUSD to become an income earner status and so the network looks for Mary’s introducer. Mary’s introducer is Jane and Jane has paid the 20 bitUSD fee and does have income earner Status.  She will receive 10bitUSD (50% of the 20).   
3.Hopefully you guys can figure out how the remaining 6bitUSD is distributed. If no one in Jane’s upline has paid the $20 then the network gets it and burns as above.

There are lots of different combinations of tiers/percentages/payouts that could take place.  That is for us to discuss later but the point is that we have achieved the worlds first self marketing DAC. No elections and No dilutions necessary. And only performers get paid. No guessing who will produce like the delegate model.

Consider some use cases.
1.   Anyone hosting a meetup now has a revenue model and an advertising budget to grow their meetup.
2.   Someone may be incentivized to hand out paper wallets loaded with several dollars on it. The QR code contains their TITAN referrer name and when someone scans the QR code to receive the funds the referrer is automatically populated.
3.   Brochure printers are incentivized to print and handout brochures with a referrer code on it.
4.   A factory owner in say China says to his workers…. From now on I am paying you all in bitCNY.  I have purchased a bitshres ATM and placed it in the lobby so everyone can redeem their pay for cash when ever they want. The factory owner makes money on the ATM spreads, and the fees generated by his employees for 20 years, but that that will take too long.  He holds a meeting for his employees and explains the Earner status option. His profits from the signups pay for the ATM in the first week and he now has an army of employees who are out introducing bitshares to local merchants so they can spend their wages their and so they can earn commissions.
5.   This will get the attention of every person in Crypto.
6.   Have a twitter list? Email list? Facebook friends?  Big pay day on your horizon.

One of the best things about this idea for me is people are incentivized to sit with someone, explain it to them, set them up with an account and be there first bridge. 
For example: I meet my friend for lunch. I tell them about this cool new money/payment network.  I show them the app.  I say here. Let me show you how easy it is.  I will send you 50 cents. We download the app together and set them up with a TITAN address. I want to be involved in this process so I can make sure I am the referrer. I say now you try it and send me 40 cents back. They try. They love it. I explain you can send any amount of money anywhere in their world and it is that fast and that simple.  They say Wow this is the Future. (this has happened to me 3 times since the light wallet has been live btw.)   I say, well you know you can make money with this thing, just by introducing people like I just did you.  Because I introduced you, I am going to get paid a fraction of a penny every time you use this app for the next 20 years.  With enough people it adds up real fast. In fact if you introduce people to this, I get paid on that as well. I have hundreds of people introducing this to other people for me right now… And I get paid on all of it. (Insert 5 minutes of questions of answers) My friend says I want to be an earner.  I say It is simple. It only costs $20. You give me the 20 now and I will pay your fee for you and you will be an earner. In fact give me another 20 and I will send you 20bitUSD so you have some funds to by stuff.  Plus I will show you to a few websites where you can purchase stuff with it or just hold it and earn interest what ever you like.

That is a powerful conversation.

MLM groups will be all over this like white on rice.  In fact I already know of one who would get behind it right now if it were built.

So community is it a good idea? Tech crew is it possible? An answer in the affirmative will not be seen as an endorsement.

Thoughts/feedback/criticisms welcome

Quote from: dannotestein on March 25, 2015, 09:14:43 pm

I do agree that BitBTC/BitUSD is an important market, since it would give Bitcoin speculators an easy way to "park" value in a more stable asset and that it should be highlighted if we have or can get some good market makers operating for it.

I agree.  In fact, it might be a decent idea to have a dedicated light weight bitBTC:bitUSD wallet for this exact purchase and market it to BTC fans.

Moonstone on the way.