Author Topic: Is dilution a coercive tax? - and voluntary alternatives  (Read 4416 times)

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Offline btswildpig

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #15 on: November 01, 2014, 04:44:57 am »
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。
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Offline Method-X

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #16 on: November 01, 2014, 05:46:40 am »
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 Ander

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #17 on: November 01, 2014, 05:59:38 am »
Btswildpig is correct.  Hopefully he will be successful explaining this to the chinese community!
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Offline starspirit

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #18 on: November 01, 2014, 06:10:20 am »
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.
Taking the same value per share from everybody does not mean everyone's individual desires have been treated equally. It just means an equal outcome is compelled involuntarily on everyone, despite the best of intentions of all the yes-voters. Also, if there were a working list of endeavours that stakeholders could voluntarily donate to, the amounts raised from the community would hold far more information and be more optimal than a simple yes-no vote on a given amount.


Offline arhag

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #19 on: November 01, 2014, 06:52:00 am »
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.
Taking the same value per share from everybody does not mean everyone's individual desires have been treated equally. It just means an equal outcome is compelled involuntarily on everyone, despite the best of intentions of all the yes-voters. Also, if there were a working list of endeavours that stakeholders could voluntarily donate to, the amounts raised from the community would hold far more information and be more optimal than a simple yes-no vote on a given amount.

Free rider problem vs tyranny of the majority.

Voluntary donations suffer from the free rider problem. Bitcoin can fund development based on voluntary donations as well right now, and how well is that working for them?

Dilution allows us to achieve the funding necessary to give us a good shot at success. Taking that away will kill this project. Then people's relatively higher fractional ownership of BTS will be worthless, so what good will that do them? Good news: you're stake wasn't diluted at all! Bad news: it lost all of its value, sorry!

When you look at inflation/deflation not from the perspective of monetary inflation (increasing the number of tokens) but price inflation (decreasing the value of the tokens), the unyielding cruel free market could price inflate our BTS no matter what silly rules we come up with against monetary inflation on our blockchain. Some people are complaining about uncertainty because the total supply will be unknown several years from now. What about the huge uncertainty that this project can completely fail and BTS can be totally worthless! You cannot avoid uncertainty, sorry. This is an incredibly risky venture, but as a result it can potentially also be incredibly rewarding. Let's at least take the rational path forward to minimizing the risk of not realizing the rewards (the product of the probability of failure and dilution cost) rather blindly adhering to ideology.

Offline starspirit

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #20 on: November 01, 2014, 07:14:59 am »
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.
Taking the same value per share from everybody does not mean everyone's individual desires have been treated equally. It just means an equal outcome is compelled involuntarily on everyone, despite the best of intentions of all the yes-voters. Also, if there were a working list of endeavours that stakeholders could voluntarily donate to, the amounts raised from the community would hold far more information and be more optimal than a simple yes-no vote on a given amount.

Free rider problem vs tyranny of the majority.

Voluntary donations suffer from the free rider problem. Bitcoin can fund development based on voluntary donations as well right now, and how well is that working for them?

Dilution allows us to achieve the funding necessary to give us a good shot at success. Taking that away will kill this project. Then people's relatively higher fractional ownership of BTS will be worthless, so what good will that do them? Good news: you're stake wasn't diluted at all! Bad news: it lost all of its value, sorry!

When you look at inflation/deflation not from the perspective of monetary inflation (increasing the number of tokens) but price inflation (decreasing the value of the tokens), the unyielding cruel free market could price inflate our BTS no matter what silly rules we come up with against monetary inflation on our blockchain. Some people are complaining about uncertainty because the total supply will be unknown several years from now. What about the huge uncertainty that this project can completely fail and BTS can be totally worthless! You cannot avoid uncertainty, sorry. This is an incredibly risky venture, but as a result it can potentially also be incredibly rewarding. Let's at least take the rational path forward to minimizing the risk of not realizing the rewards (the product of the probability of failure and dilution cost) rather blindly adhering to ideology.
Yeah, that makes a lot of sense, its way too early and risky right now to get hung up on such principles at the expense of other priorities. I just hope we don't lose sight of them when we turn into something much bigger. Ostensibly the Fed is also creating inflation for the perceived benefit of the community, which for the most part laps it up. In any case, thanks for the slap, arhag! :D

Offline arhag

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #21 on: November 01, 2014, 07:28:13 am »
Yeah, that makes a lot of sense, its way too early and risky right now to get hung up on such principles at the expense of other priorities. I just hope we don't lose sight of them when we turn into something much bigger. Ostensibly the Fed is also creating inflation for the perceived benefit of the community, which for the most part laps it up. In any case, thanks for the slap, arhag! :D

 +5% No problem!  :)

Also, other things to keep in mind are that when we do get much bigger we can eventually get to a point where we no longer need to dilute and can instead burn to give dividends back to shareholders. Also, during this entire process we still have price stable assets like BitUSD, and if you want to not be exposed to the Fed then BitGold or BitSilver. Anyone who doesn't care about the risk/reward opportunities of BTS should play it safe and hold one of those BitAssets.

Offline Geneko

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #22 on: November 01, 2014, 08:19:14 am »
Now in order to not to be misunderstood I am all against dilution based on voting because it is fundamentally broken model long term. Short term it gives protection from SEC and other forces that could jeopardize young baby. It is so to speak fast solution, mother nature shifts for survival and thrive. So probably there will be another shifts in consensus model in the future so prepare to enter the unknown.
 
I have mentioned this already in another tread, dilution based on voting is Stud Hunt game. Long term it undermines trust in the whole system. It is welt redistribution tool. Only free market can do this effectively and efficiently and all other attempts to do so are fundamentally broken. 

Offline BTSdac

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #23 on: November 01, 2014, 12:43:37 pm »
I think people hate to invest something uncertainty. it is so difficult to introduce BTS without max supply limited  to new investor . though fact is the real dilution is lower to 3% per year. the max is
~8% per year. so no one know the max supply of bts. I don`t know why not set a top ceiling.

how about this model
the max supply of BTS is 3.9 billion , max pay rate is 50 BTS per block to delegate  till the supply of BTX is up to 3.2 billion , max pay rate reduce to 25 bts per block if supply of bts between 3.2 billion to 3.55 billion,so:
supply of bts                                max pay per block               how many year it will take if 100% pay                 how many year it will take if 25% pay   
2.5 billion to 3.2 billion                            50                                       ~4.5 years                                                                      ~18 years
3.2 billion to 3.55 billion                          25                                       ~4.5 years                                                                      ~18 years
3.55 billion to 3.725 billion                      12.5                                    ~4.5 years                                                                      ~18 years
3.725 billion to 3.8125 billion                  6.25                                    ~4.5 years                                                                      ~18 years=
+++                                                        6.25/2       
...............................

so the max supply of bts is limited to 3.9 billion
compare with BTC , max supply is 21M, and current supply is 13.4M, the totally dilution =21/13.45-1=56%          ,the max supply of bts is 3.9 B, and current supply is 2.5 B ,  the totally dilution=3.9/2.5-1=56%   , some dilution .
the figure show if the pay rate is 25% , situation of 50 bts per block can keep 18 years.
so there are much space to reduce the max dilution ,  if set the max supply of BTS is 3.2 billion ,the totally dilution =3.2/2.5-1=28% , it is half than BTC
« Last Edit: November 01, 2014, 01:34:41 pm by BTSdac »
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Offline xeroc

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #24 on: November 01, 2014, 12:47:05 pm »
and then there will be no more self-funding... :( -- should read more carfully
« Last Edit: November 01, 2014, 01:52:37 pm by xeroc »
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Offline Empirical1.1

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #25 on: November 01, 2014, 01:39:59 pm »
I think people hate to invest something uncertainty. it is so difficult to introduce BTS without max supply limited  to new investor . though fact is the real dilution is lower to 3% per year. the max is
~8% per year. so no one know the max supply of bts. I don`t know why not set a top ceiling.

how about this model
the max supply of BTS is 3.9 billion , max pay rate is 50 BTS per block to delegate  till the supply of BTX is up to 3.2 billion , max pay rate reduce to 25 bts per block if supply of bts between 3.2 billion to 3.55 billion,so:
supply of bts                                max pay per block               how many year it will take if 100% pay                 how many year it will take if 25% pay   
2.5 billion to 3.2 billion                            50                                       ~4.5 years                                                                      ~18 years
3.2 billion to 3.55 billion                          25                                       ~4.5 years                                                                      ~18 years
3.55 billion to 3.725 billion                      12.5                                    ~4.5 years                                                                      ~18 years
3.725 billion to 3.8125 billion                  6.25                                    ~4.5 years                                                                      ~18 years=
+++                                                        6.25/2       
...............................

so the max supply of bts is limited to 3.9 billion
compare with BTC , max supply is 21M, and current supply is 13.4M, the totally dilution =21/13.45-1=56%          ,the max supply of bts is 3.9 B, and current supply is 2.5 B ,  the totally dilution=3.9/2.5-1=56%   , some dilution .
the figure show if the pay rate is 25% , situation of 50 bts per block can keep 18 years.
so there are much space to reduce the max dilution ,  if set the max supply of BTS is 32 billion ,the totally dilution =3.2/2.5-1=28% , it is half than BTC

Yeah I like something like that, I don't know if the market will believe us though.

BTSX was on a solid uptrend about to break 0.0001 before this dilution stuff started. I think we could easily have been 0.00020 right now. Oh well.

Offline BTSdac

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #26 on: November 01, 2014, 03:41:24 pm »
I think people hate to invest something uncertainty. it is so difficult to introduce BTS without max supply limited  to new investor . though fact is the real dilution is lower to 3% per year. the max is
~8% per year. so no one know the max supply of bts. I don`t know why not set a top ceiling.

how about this model
the max supply of BTS is 3.9 billion , max pay rate is 50 BTS per block to delegate  till the supply of BTX is up to 3.2 billion , max pay rate reduce to 25 bts per block if supply of bts between 3.2 billion to 3.55 billion,so:
supply of bts                                max pay per block               how many year it will take if 100% pay                 how many year it will take if 25% pay   
2.5 billion to 3.2 billion                            50                                       ~4.5 years                                                                      ~18 years
3.2 billion to 3.55 billion                          25                                       ~4.5 years                                                                      ~18 years
3.55 billion to 3.725 billion                      12.5                                    ~4.5 years                                                                      ~18 years
3.725 billion to 3.8125 billion                  6.25                                    ~4.5 years                                                                      ~18 years=
+++                                                        6.25/2       
...............................

so the max supply of bts is limited to 3.9 billion
compare with BTC , max supply is 21M, and current supply is 13.4M, the totally dilution =21/13.45-1=56%          ,the max supply of bts is 3.9 B, and current supply is 2.5 B ,  the totally dilution=3.9/2.5-1=56%   , some dilution .
the figure show if the pay rate is 25% , situation of 50 bts per block can keep 18 years.
so there are much space to reduce the max dilution ,  if set the max supply of BTS is 32 billion ,the totally dilution =3.2/2.5-1=28% , it is half than BTC

Yeah I like something like that, I don't know if the market will believe us though.

BTSX was on a solid uptrend about to break 0.0001 before this dilution stuff started. I think we could easily have been 0.00020 right now. Oh well.
if there is`t a max simply limited , after I introduce many featureS of BTS to new investor , he ask me how many bts in max . I answer  infinite . I will make me stop.
but if I answer it`s dilution is half of BTC . he will let me go on.
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Offline Felix

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #27 on: November 01, 2014, 04:28:55 pm »
Btswildpig is correct.  Hopefully he will be successful explaining this to the chinese community!

Most chinese understand it well!

Offline amencon

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #28 on: November 01, 2014, 04:56:07 pm »
I think people hate to invest something uncertainty. it is so difficult to introduce BTS without max supply limited  to new investor . though fact is the real dilution is lower to 3% per year. the max is
~8% per year. so no one know the max supply of bts. I don`t know why not set a top ceiling.

how about this model
the max supply of BTS is 3.9 billion , max pay rate is 50 BTS per block to delegate  till the supply of BTX is up to 3.2 billion , max pay rate reduce to 25 bts per block if supply of bts between 3.2 billion to 3.55 billion,so:
supply of bts                                max pay per block               how many year it will take if 100% pay                 how many year it will take if 25% pay   
2.5 billion to 3.2 billion                            50                                       ~4.5 years                                                                      ~18 years
3.2 billion to 3.55 billion                          25                                       ~4.5 years                                                                      ~18 years
3.55 billion to 3.725 billion                      12.5                                    ~4.5 years                                                                      ~18 years
3.725 billion to 3.8125 billion                  6.25                                    ~4.5 years                                                                      ~18 years=
+++                                                        6.25/2       
...............................

so the max supply of bts is limited to 3.9 billion
compare with BTC , max supply is 21M, and current supply is 13.4M, the totally dilution =21/13.45-1=56%          ,the max supply of bts is 3.9 B, and current supply is 2.5 B ,  the totally dilution=3.9/2.5-1=56%   , some dilution .
the figure show if the pay rate is 25% , situation of 50 bts per block can keep 18 years.
so there are much space to reduce the max dilution ,  if set the max supply of BTS is 3.2 billion ,the totally dilution =3.2/2.5-1=28% , it is half than BTC
I like this compromise and agree with the concept (the specific numbers like fine as well at first glance).  I think it would help to be able to state a max supply possible and still keep inflation in place for early growth.

Offline jsidhu

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Re: Is dilution a coercive tax? - and voluntary alternatives
« Reply #29 on: November 01, 2014, 07:11:30 pm »
i have no prob with inflation as long as there is some form of deflation.

I still think something like this would work

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