Author Topic: Is dilution a coercive tax? - and voluntary alternatives  (Read 7899 times)

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Offline Method-X

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I think dilution is already the fairest way to raise funds. Simple donations put donors at a disadvantage where as dilution adds or takes the same value per share for everybody. That means that every stakeholder, despite the amount he holds, is incentivized to vote in such a way that value per share is maximized. One can't harm others without harming oneself and oneself can't gain without letting others gain.

This is no guarantee for good decisions but as already stated you have always the possibility to hedge in- or outside the system.

Nope! dilution for raising funds? dilution for delegates!!! At least, the benefit from dilution shall not be  only for delegates!

在正常情况下,25个受托人才有100%支付率,如果超过了这个数目,股东会发现通胀率太大,对股价影响太大,最终否决超过25个受托人以上的席位。
所以大部分受托人都是3-5%左右的支付率才能有机会被股东选上,除非是核心程序员和核心市场推广团队。支付率的意思是,通胀支付你一定的百分比,然后剩余的直接销毁。如果100%就是没销毁,如果3%就是要销毁97%。

你之前想的是101受托人都能拿一样的高收入吧?多虑了。实际年通胀率一般在1-2%左右,如果是25个左右的100%支付率受托人。

Google Translate:

Under normal circumstances, the 25 trustees have 100% payout ratio , if more than this amount , the shareholders will find that the inflation rate is too big, too much influence on the share price , the final veto over more than 25 trustee seats.

So most of the trustees are about 3-5 % of the pay rate in order to have a chance to be on the shareholder election, unless it is the core of the core programmers and marketing team. Payment rates mean inflation pay you a certain percentage , then the rest of the direct destruction . If 100% is not destroyed, if the 3% is to destroy 97% .

Before you think that the trustee can get the same 101 high-income , right? Much concern . Actual annual inflation rate is generally around 1-2% , if it is 100% payout ratio of around 25 trustee .

Offline btswildpig

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I think dilution is already the fairest way to raise funds. Simple donations put donors at a disadvantage where as dilution adds or takes the same value per share for everybody. That means that every stakeholder, despite the amount he holds, is incentivized to vote in such a way that value per share is maximized. One can't harm others without harming oneself and oneself can't gain without letting others gain.

This is no guarantee for good decisions but as already stated you have always the possibility to hedge in- or outside the system.

Nope! dilution for raising funds? dilution for delegates!!! At least, the benefit from dilution shall not be  only for delegates!

在正常情况下,25个受托人才有100%支付率,如果超过了这个数目,股东会发现通胀率太大,对股价影响太大,最终否决超过25个受托人以上的席位。
所以大部分受托人都是3-5%左右的支付率才能有机会被股东选上,除非是核心程序员和核心市场推广团队。支付率的意思是,通胀支付你一定的百分比,然后剩余的直接销毁。如果100%就是没销毁,如果3%就是要销毁97%。

你之前想的是101受托人都能拿一样的高收入吧?多虑了。实际年通胀率一般在1-2%左右,如果是25个左右的100%支付率受托人。
这个是私人账号,表达的一切言论均不代表任何团队和任何人。This is my personal account , anything I said with this account will be my opinion alone and has nothing to do with any group.

Offline jsidhu

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I think funds should be raised based on donations from bts and then dilution only happens within a merge.. bts are burned on donation.. thus creating deflation pressure to inflate the economy with "good" dacs only. As it stands I think every idea that seems good will be diluted to even if they dont come to fruition
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Offline Felix

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I think dilution is already the fairest way to raise funds. Simple donations put donors at a disadvantage where as dilution adds or takes the same value per share for everybody. That means that every stakeholder, despite the amount he holds, is incentivized to vote in such a way that value per share is maximized. One can't harm others without harming oneself and oneself can't gain without letting others gain.

This is no guarantee for good decisions but as already stated you have always the possibility to hedge in- or outside the system.

Nope! dilution for raising funds? dilution for delegates!!! At least, the benefit from dilution shall not be  only for delegates!
« Last Edit: November 01, 2014, 04:07:21 am by Felix »

Offline starspirit

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What are the real reasons for this “turn around”?

The dilution thing based on voting is another means for efficient voluntary donations. There are no clear obligations attached to it so SEC couldn’t go after you. You are buying time. We need those in order to survive, period.
It's not a turnaround. I am only representing my own personal opinion.
I agree that voting-based dilution makes it voluntary for the community, but it does not make it voluntary for individuals. Some individuals will want to dilute less than average, some will  be quite happy to dilute more and be recognised for this. I'm only suggesting why not give individuals the choice if we have the power and tools to do that. Then we still have all the same flexibility as a community, as well as preserving individual freedoms over what they choose to do with their wealth.
And in the case where we are diluting for work done within the community (as opposed to capital bought into the community), why dilute at all when there is the option of voluntary contributions?

I disagree with your position. In a system with dilution, non dilutionists would unfairly receive the benefits others paid for.

I like a system of defined dilution, because I believe humans on average and almost always when acting as a group are an inferior, short term focused organism that I want to be protected from. I don't want to have to leave when they change the rules, I prefer to settle in a system where the amount of damage they can do to me is limited. I think all systems should exist though, including yours, but I'll choose the one with reasonable limits as I'm confident it is the winner but that's a personal opinion.
Thank you Empirical for giving it due consideration.
I totally empathise with the need to protect one's rights against group-think. That's indeed exactly why I was proposing voluntary levels of participation in dilution rather than mandated by a group vote. But I've got to concede I've lost this ideological battle for now. The company metaphor is where the current mindset is at, and perhaps most appropriately for now. One day when bitShares is hugely successful as an economic system and people begin thinking of BTS as a currency, I will dust this off.  ;)

Offline Empirical1.1

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What are the real reasons for this “turn around”?

The dilution thing based on voting is another means for efficient voluntary donations. There are no clear obligations attached to it so SEC couldn’t go after you. You are buying time. We need those in order to survive, period.
It's not a turnaround. I am only representing my own personal opinion.
I agree that voting-based dilution makes it voluntary for the community, but it does not make it voluntary for individuals. Some individuals will want to dilute less than average, some will  be quite happy to dilute more and be recognised for this. I'm only suggesting why not give individuals the choice if we have the power and tools to do that. Then we still have all the same flexibility as a community, as well as preserving individual freedoms over what they choose to do with their wealth.
And in the case where we are diluting for work done within the community (as opposed to capital bought into the community), why dilute at all when there is the option of voluntary contributions?

I disagree with your position. In a system with dilution, non dilutionists would unfairly receive the benefits others paid for.

I like a system of defined dilution, because I believe humans on average and almost always when acting as a group are an inferior, short term focused organism that I want to be protected from. I don't want to have to leave when they change the rules, I prefer to settle in a system where the amount of damage they can do to me is limited. I think all systems should exist though, including yours, but I'll choose the one with reasonable limits as I'm confident it is the winner but that's a personal opinion.

Offline starspirit

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What are the real reasons for this “turn around”?

The dilution thing based on voting is another means for efficient voluntary donations. There are no clear obligations attached to it so SEC couldn’t go after you. You are buying time. We need those in order to survive, period.
It's not a turnaround. I am only representing my own personal opinion.
I agree that voting-based dilution makes it voluntary for the community, but it does not make it voluntary for individuals. Some individuals will want to dilute less than average, some will  be quite happy to dilute more and be recognised for this. I'm only suggesting why not give individuals the choice if we have the power and tools to do that. Then we still have all the same flexibility as a community, as well as preserving individual freedoms over what they choose to do with their wealth.
And in the case where we are diluting for work done within the community (as opposed to capital bought into the community), why dilute at all when there is the option of voluntary contributions?

Offline Geneko

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What are the real reasons for this “turn around”?

The dilution thing based on voting is another means for efficient voluntary donations. There are no clear obligations attached to it so SEC couldn’t go after you. You are buying time. We need those in order to survive, period. 

Offline starspirit

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Viewed from the perspective of an investment, yes somebody can always opt out if they don't like the group dynamic. But viewed from the perspective of an economy that people can live and work in (someday in the future), somebody does not really want to opt out. They are willingly entangled in it.

Why would you not adopt a system of voluntary behaviour if you could?

I have you just have chosen a perspective that denies you a choice and then concluded it isn't voluntary.   Show me the gun.  Show me the threat of violence...   

I think the primary goal is that the currency of a society should not be subject to human printing presses or group decision making.   

The challenge is figuring out how to distribute said currency and who gets the value from it.   It seems like the only "fair" way to distribute a fixed supply currency is 1 unit per person, potentially awarded to them on their 18th birthday.   It is of course no longer fixed supply.... and why would people initially value it for trade when they could use BitGold instead?
OK agree, so coercive is not the right word, more like involuntary. To put it into more tempered terms, there will stakeholders who feel they have had value involuntarily taken away, and others that feel they have received a windfall, depending on their evaluation of the capital infusion.

It seems to me that how one feels about the fairness of this depends on our different views about what bitShares is and what it could be.

1. When viewed as "like shares in a company", dilution happens all the time, you can always vote a new board or opt to sell up if you don't like management decisions.

2. When viewed as "like an economy in which to grow and participate", with BTS as the money, its a tax, arguably with value attached, but an involuntary tax nonetheless, and it is subject to printing press and group decision making, which you have said we would want to avoid.

I believe if we move hopefully move toward 2., then a voluntary basis maximises freedom for all participants. I am probably way too early and optimistic on this view. For now a voting system is familiar and easiest, but it would be good to not lock this into anything like a constitution in my view, and give us ways to evolve the approach.

Offline Frodo

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I think dilution is already the fairest way to raise funds. Simple donations put donors at a disadvantage where as dilution adds or takes the same value per share for everybody. That means that every stakeholder, despite the amount he holds, is incentivized to vote in such a way that value per share is maximized. One can't harm others without harming oneself and oneself can't gain without letting others gain.

This is no guarantee for good decisions but as already stated you have always the possibility to hedge in- or outside the system.

Offline Troglodactyl

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No one is forcing you to hold BTS, or requiring you to have it in order to pay taxes in it.  Holding BTS is voluntarily investing in a collective effort, and accepting the consequences of both its successes and its failures.

If you think that the group is going down the wrong path, either divest completely or convert to bitAssets, depending on the seriousness of your disagreement.
Trog, I'm not looking to opt out on the basis we are "going down the wrong path". I'm very positive on bitshares and thinking about it it a much bigger context. I'm trying to contribute thoughts to future directions we could take it.

Sorry that was unclear, I meant that those options will be available in the future to any who thought the system was making poor choices.

Offline bytemaster

Viewed from the perspective of an investment, yes somebody can always opt out if they don't like the group dynamic. But viewed from the perspective of an economy that people can live and work in (someday in the future), somebody does not really want to opt out. They are willingly entangled in it.

Why would you not adopt a system of voluntary behaviour if you could?

I have you just have chosen a perspective that denies you a choice and then concluded it isn't voluntary.   Show me the gun.  Show me the threat of violence...   

I think the primary goal is that the currency of a society should not be subject to human printing presses or group decision making.   

The challenge is figuring out how to distribute said currency and who gets the value from it.   It seems like the only "fair" way to distribute a fixed supply currency is 1 unit per person, potentially awarded to them on their 18th birthday.   It is of course no longer fixed supply.... and why would people initially value it for trade when they could use BitGold instead? 

For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline starspirit

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No one is forcing you to hold BTS, or requiring you to have it in order to pay taxes in it.  Holding BTS is voluntarily investing in a collective effort, and accepting the consequences of both its successes and its failures.

If you think that the group is going down the wrong path, either divest completely or convert to bitAssets, depending on the seriousness of your disagreement.
Trog, I'm not looking to opt out on the basis we are "going down the wrong path". I'm very positive on bitshares and thinking about it it a much bigger context. I'm trying to contribute thoughts to future directions we could take it.

Offline starspirit

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Viewed from the perspective of an investment, yes somebody can always opt out if they don't like the group dynamic. But viewed from the perspective of an economy that people can live and work in (someday in the future), somebody does not really want to opt out. They are willingly entangled in it.

Why would you not adopt a system of voluntary behaviour if you could?


Offline Troglodactyl

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No one is forcing you to hold BTS, or requiring you to have it in order to pay taxes in it.  Holding BTS is voluntarily investing in a collective effort, and accepting the consequences of both its successes and its failures.

If you think that the group is going down the wrong path, either divest completely or convert to bitAssets, depending on the seriousness of your disagreement.