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General Discussion / Next Committee Proposal: Witness Pay
« on: May 07, 2017, 09:01:20 pm »
Since the last Committee Proposal went through (fee-adjustement), @xeroc remembered and asked the Committee tu discuss about the witness pay, and more precisely what is a rational payment for a witness job
The following is the reply I wrote on the telegram committee group and, as suggested by @abit soon after, I am now posting it here too, for a wider discussion with the community
******
These are just inputs... there surely are more questions that may be worth asking and answering... please comment and discuss them, modify or add your own
If instead you want to decide what a witness pay should be without consider what his job is really about and what it is worth for the blockchain etc, then I am not interested in the discussion... I will vote for whatever the committee or shareholders decide, but probably without giving any meaningful input or personal thought
Questions we should answer:
1- Should we consider how much the witness "ideal" guy is worth on the real world? (ie. how much a (even Junior) SysAdmin gets paid)
2- Should we consider the 24/7/365 requirement aspect of the witness job? (you can sleep, have week-ends and holidays, but you still have to "go to the office" in a timely manner no matter what the day and time is)
3- Should we consider how much other blockchains spend (invest?) for their own security? (ie. how much BTC, ETH, etc spend, compared to market-cap) (even other dpos like STEEM and soon PEERPLAYS)
4- Should we consider the current profitability of the DEX DAC?
4a- If so, should it be able to greatly increase what the points 1,2,3 would suggest?
4b- If so, should it be able to greatly decrease (or even reset) what the points 1,2,3 would suggest? (ie, no profit for the DEX == no profit for the witnesses --> witness pay = costs of running a witness)
Maybe more tough (and subjective?) questions:
5- How much is the whole blockchain task, security and decentralization worth? (this is what a witness really do, from a pure blockchain pov) (looking at point 3 may help)
6- Should 4, and particularly 4b, be able to overcome 5?
Plus:
IMHO we shouldn't start from a number to later check if that is sustainable for a witness, but rather start from what an adequate pay for the job is, and only later set the pay...
So, witness pay = job pay + costs (adequate/deserved witness net income + costs that the job itself requires)
******
PS:
BTW, it's basically one year that I pay my BTS witness costs thanks to STEEM... if it was for BTS itself I wouldn't have earned nothing, or worst I would be at loss...
I hope this will be read and understood by all those people that were jumping and screaming around as soon as bts (finally) rose in value, to point the finger to the witnesses that, suddenly, were "earning too much" thanks to their "unbelievable, unaccettable and absurd pay"
I also hope this will be considered for choosing an adequate BTS witness pay
_ _ _ _ _ _ _ _ _ _ _ _ _ _
Some data about point 3 at the time of this post, from coinmarketcap, considering current rewards
BTC:
Market-cap: $25,617,582,661
Price: $1570.05
Monthly blockchain expenses: 12.5(btc/block) * 144(blocks/day) * 30(days/month) * 1570(usd/btc) = $84,780,000
BTC expenses / BTC market-cap --> 84,780,000 / 25,617,000,000 = 0.0033
STEEM:
Market-cap: $132,000.000
Price: $0.562
Monthly blockchain expenses: 25 * 0.189 / 63 * 86400 * 30 * 0.562 = $109,252.80 (edited to consider the x5 runner-up cost)
STEEM expenses / STEEM market-cap --> 91,800 / 132,000,000 = 0.00083
BTS:
Market-cap: $95,908,469
Price: $0.036894
Monthly blockchain expenses: 3600 (bts/hour) * 24(hours/day) * 30(days/month) * 0.037(usd/bts) = $95,900
BTS expenses / BTS market-cap --> 95,900 / 95,900,000 = 0.001
This means, compared to their market-cap:
BTS current expenses is less than 1/3 of BTC's expenses
STEEM current expenses is about 15% lower than BTS's current expenses
_ _ _ _ _ _ _ _ _ _ _ _ _ _
If interested in the matter, please comment, discuss, and share your thoughts. Thanks
The following is the reply I wrote on the telegram committee group and, as suggested by @abit soon after, I am now posting it here too, for a wider discussion with the community
******
These are just inputs... there surely are more questions that may be worth asking and answering... please comment and discuss them, modify or add your own
If instead you want to decide what a witness pay should be without consider what his job is really about and what it is worth for the blockchain etc, then I am not interested in the discussion... I will vote for whatever the committee or shareholders decide, but probably without giving any meaningful input or personal thought
Questions we should answer:
1- Should we consider how much the witness "ideal" guy is worth on the real world? (ie. how much a (even Junior) SysAdmin gets paid)
2- Should we consider the 24/7/365 requirement aspect of the witness job? (you can sleep, have week-ends and holidays, but you still have to "go to the office" in a timely manner no matter what the day and time is)
3- Should we consider how much other blockchains spend (invest?) for their own security? (ie. how much BTC, ETH, etc spend, compared to market-cap) (even other dpos like STEEM and soon PEERPLAYS)
4- Should we consider the current profitability of the DEX DAC?
4a- If so, should it be able to greatly increase what the points 1,2,3 would suggest?
4b- If so, should it be able to greatly decrease (or even reset) what the points 1,2,3 would suggest? (ie, no profit for the DEX == no profit for the witnesses --> witness pay = costs of running a witness)
Maybe more tough (and subjective?) questions:
5- How much is the whole blockchain task, security and decentralization worth? (this is what a witness really do, from a pure blockchain pov) (looking at point 3 may help)
6- Should 4, and particularly 4b, be able to overcome 5?
Plus:
IMHO we shouldn't start from a number to later check if that is sustainable for a witness, but rather start from what an adequate pay for the job is, and only later set the pay...
So, witness pay = job pay + costs (adequate/deserved witness net income + costs that the job itself requires)
******
PS:
BTW, it's basically one year that I pay my BTS witness costs thanks to STEEM... if it was for BTS itself I wouldn't have earned nothing, or worst I would be at loss...
I hope this will be read and understood by all those people that were jumping and screaming around as soon as bts (finally) rose in value, to point the finger to the witnesses that, suddenly, were "earning too much" thanks to their "unbelievable, unaccettable and absurd pay"
I also hope this will be considered for choosing an adequate BTS witness pay
_ _ _ _ _ _ _ _ _ _ _ _ _ _
Some data about point 3 at the time of this post, from coinmarketcap, considering current rewards
BTC:
Market-cap: $25,617,582,661
Price: $1570.05
Monthly blockchain expenses: 12.5(btc/block) * 144(blocks/day) * 30(days/month) * 1570(usd/btc) = $84,780,000
BTC expenses / BTC market-cap --> 84,780,000 / 25,617,000,000 = 0.0033
STEEM:
Market-cap: $132,000.000
Price: $0.562
Monthly blockchain expenses: 25 * 0.189 / 63 * 86400 * 30 * 0.562 = $109,252.80 (edited to consider the x5 runner-up cost)
STEEM expenses / STEEM market-cap --> 91,800 / 132,000,000 = 0.00083
BTS:
Market-cap: $95,908,469
Price: $0.036894
Monthly blockchain expenses: 3600 (bts/hour) * 24(hours/day) * 30(days/month) * 0.037(usd/bts) = $95,900
BTS expenses / BTS market-cap --> 95,900 / 95,900,000 = 0.001
This means, compared to their market-cap:
BTS current expenses is less than 1/3 of BTC's expenses
STEEM current expenses is about 15% lower than BTS's current expenses
_ _ _ _ _ _ _ _ _ _ _ _ _ _
If interested in the matter, please comment, discuss, and share your thoughts. Thanks
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