If your funds are not touched for 1 year, 5% is destroyed and the transaction is moved forward.
If the balance is less than the minimum trx fee, then 100% is destroyed

The act of destroying BTS is how dividends are paid, so dividends do not disappear into a black hole.

The money supply is infinitely divisible, so losing supply is not a problem.

I believe after 1 year the network starts reclaiming inactive addresses

Going back to the 5% inactivity fee, where dividends would more than compensate for this.
This may become a problem if people loose their bitshares (lost passphrase, hard drive etc). In such a situation, their address will continue to collect dividends, which will accumulate, collecting more dividends. This will create a blackhole for BitShares.

Stretch this out over a long period of time and BitShares will disappear into this black holes! Perhaps this will take very long and is nothing to worry about, but it is still a potential problem.

Maybe after 5 years of inactivity dividends stops being paid to those BTS. Then inactivity fees will recirculate the BTS back into the ecosystem.

Correct only if you are in a short position


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Yes, but this would only apply to persons holding positions in BitAssets and not persons simply holding BitShares for capital growth, correct?

Quote from: MrJeans on December 14, 2013, 09:05:30 PM

Quote from: bytemaster on December 14, 2013, 07:41:14 PM

Quote from: phoenix on December 13, 2013, 10:28:24 PM

Quote from: MrJeans on December 13, 2013, 09:38:54 PM
When reading through the bitshares white paper in came across inactivity fees and dividend dust as a way of collecting fees for the bitshare, dac. How will these fees come into play. I hope to hold bitshares for their capital appreciation and not use them for trading. Will fees apply to me.

Those fees only apply to inactive Bitshares. However, you could simply transfer your Bitshares to your own address to get out of the fees. As long as you do this once a year, you'll be fine. (If the original wallet doesn't do this automatically, someone will make a wallet that does)

This will save you the 5% penalty fee, but there will still be the normal transaction fee.  That said, dividends earned should more than compensate for this fee.

What other fees should steely eyed bit share holders look out for so as to not loose their precious assets?

If there is a margin call there is a 5% fee.

Quote from: bytemaster on December 14, 2013, 07:41:14 PM

Quote from: phoenix on December 13, 2013, 10:28:24 PM

Quote from: MrJeans on December 13, 2013, 09:38:54 PM
When reading through the bitshares white paper in came across inactivity fees and dividend dust as a way of collecting fees for the bitshare, dac. How will these fees come into play. I hope to hold bitshares for their capital appreciation and not use them for trading. Will fees apply to me.

Those fees only apply to inactive Bitshares. However, you could simply transfer your Bitshares to your own address to get out of the fees. As long as you do this once a year, you'll be fine. (If the original wallet doesn't do this automatically, someone will make a wallet that does)

This will save you the 5% penalty fee, but there will still be the normal transaction fee.  That said, dividends earned should more than compensate for this fee.

What other fees should steely eyed bit share holders look out for so as to not loose their precious assets?

Quote from: phoenix on December 13, 2013, 10:28:24 PM

Quote from: MrJeans on December 13, 2013, 09:38:54 PM
When reading through the bitshares white paper in came across inactivity fees and dividend dust as a way of collecting fees for the bitshare, dac. How will these fees come into play. I hope to hold bitshares for their capital appreciation and not use them for trading. Will fees apply to me.

Those fees only apply to inactive Bitshares. However, you could simply transfer your Bitshares to your own address to get out of the fees. As long as you do this once a year, you'll be fine. (If the original wallet doesn't do this automatically, someone will make a wallet that does)

This will save you the 5% penalty fee, but there will still be the normal transaction fee.  That said, dividends earned should more than compensate for this fee.

Quote from: MrJeans on December 13, 2013, 09:38:54 PM
When reading through the bitshares white paper in came across inactivity fees and dividend dust as a way of collecting fees for the bitshare, dac. How will these fees come into play. I hope to hold bitshares for their capital appreciation and not use them for trading. Will fees apply to me.

Those fees only apply to inactive Bitshares. However, you could simply transfer your Bitshares to your own address to get out of the fees. As long as you do this once a year, you'll be fine. (If the original wallet doesn't do this automatically, someone will make a wallet that does)

When reading through the bitshares white paper in came across inactivity fees and dividend dust as a way of collecting fees for the bitshare, dac. How will these fees come into play. I hope to hold bitshares for their capital appreciation and not use them for trading. Will fees apply to me.

BitShares depends upon one detail, the they must have non-0 value.  So TestShares must be carefully designed to make sure this is true.

I would assume that BitShares would be improved, has bug fixes etc relative to each test share version. And if people know that test shares is only for testing, they wont take it seriously and for example spend all their test shares on one high risk trade.

It would therefore be in their best interest to use BitShares when it launches.

Quote from: Stan on December 10, 2013, 09:09:08 PM

Quote from: phoenix on December 10, 2013, 07:11:08 PM

Quote from: MrJeans on December 10, 2013, 10:01:44 AM

Quote from: MrJeans on December 09, 2013, 10:57:09 PM
I find the benefits of holding BitUSD or any other BitAsset over simply holding onto BitShares rather confusing.

By this I mean; if I assume the value of BitShares will appreciate over time against fiat: would it be better to buy long on a particular BitAsset, or simply hold onto the BitShares.

I understand the benefits of buying BitAssets in order to speculate.

For this aspect of Bitshares, the advantage of holding a Bitasset instead of Bitshares is that whenever you buy long on a Bitasset, someone else has to short the same Bitasset. They give up their dividends on the collateral they used on the Bitasset, and the people who bought long get to collect those extra dividends.

As for how to get the maximum value from Bitshares in the first few months, my best advice is to pay attention to the final plans for Bitshares. Bytemaster has suggested several plans for Bitshares, from a six month waiting period for mining rewards to mature, to proof of stake instead of proof of work mining. Not all of these plans will actually be implemented, but you should keep an eye on them. Then, when Bitshares are about to be released, you should look at what's actually going to be used, and make your own market predictions from there.

... and we will probably release an iteration or two of "testshares" so you can experiment with it before you begin playing for "keeps".

How do you plan to prevent testshares from competing with bitshares?

Thanks! can't wait for testshares!

Quote from: phoenix on December 10, 2013, 07:11:08 PM

Quote from: MrJeans on December 10, 2013, 10:01:44 AM

Quote from: MrJeans on December 09, 2013, 10:57:09 PM
I find the benefits of holding BitUSD or any other BitAsset over simply holding onto BitShares rather confusing.

By this I mean; if I assume the value of BitShares will appreciate over time against fiat: would it be better to buy long on a particular BitAsset, or simply hold onto the BitShares.

I understand the benefits of buying BitAssets in order to speculate.

For this aspect of Bitshares, the advantage of holding a Bitasset instead of Bitshares is that whenever you buy long on a Bitasset, someone else has to short the same Bitasset. They give up their dividends on the collateral they used on the Bitasset, and the people who bought long get to collect those extra dividends.

As for how to get the maximum value from Bitshares in the first few months, my best advice is to pay attention to the final plans for Bitshares. Bytemaster has suggested several plans for Bitshares, from a six month waiting period for mining rewards to mature, to proof of stake instead of proof of work mining. Not all of these plans will actually be implemented, but you should keep an eye on them. Then, when Bitshares are about to be released, you should look at what's actually going to be used, and make your own market predictions from there.

... and we will probably release an iteration or two of "testshares" so you can experiment with it before you begin playing for "keeps".