Author Topic: Economics on BTS 101 : Market cap is not our wealth to spend easily  (Read 12792 times)

0 Members and 1 Guest are viewing this topic.

Offline Ben Mason

  • Hero Member
  • *****
  • Posts: 1070
  • Integrity & Innovation, powered by Bitshares
    • View Profile
  • BitShares: benjojo
I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.
+5%
I do not know how to explain this but it is 'that the minimalistic (conservative) view is not the way to go.'
I am pretty  sure that if we vote 70 possibly good choices, we will have 5 delegates that produce 100x the value... and this will way outweigh the 10 bad actors, that we will vote out in 3 mo. or less.

70 full paid delegates ? It's a wishful thinking , esp. if the price go up like stan expected by 4X .
Then you'll have 3000USD*4*70=0.84 million USD in salary a month .

You think if the price goes up 4X , the revenue in the system will go up 4X ?  Nope , the salary will still be taking out of the the market cap by the factor of 20X . Unless those 70 full paid delegates can raise the revenue by 4X their salary , 4 months later , we'll still having this conversation .

25-30 full paid delegates is what stan expected if the inflation rate maintain at 1-2% a year .

btswildpig can I check my understanding....if we have many fully paid delegates but demand fails to grow straight away, then we may have too much BTS coming onto the market due to salary collection.  Therefore we should balance the need for value creating delegates that are paid against the growth potential / demand for BTS that would pay for them and also think hard about the mix of delegate type (marketing vs coding etc.)  Delegates can't collect value that isn't there.

So we need a strategy that can be suggested to the community to help guide our voting practices or we could end up taking out too much value from the network before the delegates actions have had a chance to increase the value of the network. 

Delegates could commit to holding their BTS (is this proovable?) which would limit the role to those that didn't need the income.....


Offline davidpbrown

Good points from OP. Some clones seem to run on the idea that you can create X Billion coins, sell one to yourself for a dollar and become a billionaire overnight. Selling a large fraction of coins to the market can have real effect; I think Mastercoin perhaps suffered that mistake. The same goes for any currency; the whole is only valid while there is consensus that each part has utility and value. People like to look to best case but better to plan for worst case and enjoy the positives. Until there is utility for mainstream, it's a waiting game.

Perhaps one useful metric relative to market cap is the total coins in markets? Again, it's only a rough indicator and worse in small markets.
฿://1CBxm54Ah5hiYxiUtD7JGYRXykT5Z6ZuMc

Offline btswildpig

  • Hero Member
  • *****
  • Posts: 1424
    • View Profile

I think there should be 4 : if I agree with the value proposition the delegate proposes , do I need him right here , right now ?

We actually have limited funding space though inflation , how to spend it wisely (not just on the right people , but the right project ) is a important matter . Of course we can take baby steps by falling over and over again and learn from it . But why should we do that when we can think harder and harder ten steps ahead . If it turns out after ten times of hard thinking and we still makes the same mistake , then at least we can tell the world :  That failure is out of our hand , because we did though it through .

I agree 100%. 

For the question 'do I need him right now', I say preparation time is needed right now for the certain propositions to come into fruition in time for maximum cost-efficieny.  The market cap argument goes both ways.  It's easier to lower it when its small, but its also easier for marketing to increase it.  $1000 well spent while the market cap is tiny has much more impact than $1000 well spent when the market cap is larger.

A final factor I would actually add, is:
What is the cost of voting against?  (not voting)

Yes . That's the right factor for me to voted for BM and Toast in the first place . Because I don't see any possible scenario the project can success without this two for a long time .
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 matt608

  • Hero Member
  • *****
  • Posts: 878
    • View Profile

I think there should be 4 : if I agree with the value proposition the delegate proposes , do I need him right here , right now ?

We actually have limited funding space though inflation , how to spend it wisely (not just on the right people , but the right project ) is a important matter . Of course we can take baby steps by falling over and over again and learn from it . But why should we do that when we can think harder and harder ten steps ahead . If it turns out after ten times of hard thinking and we still makes the same mistake , then at least we can tell the world :  That failure is out of our hand , because we did though it through .

I agree 100%. 

For the question 'do I need him right now', I say preparation time is needed right now for the certain propositions to come into fruition in time for maximum cost-efficieny.  The market cap argument goes both ways.  It's easier to lower it when its small, but its also easier for marketing to increase it.  $1000 well spent while the market cap is tiny has much more impact than $1000 well spent when the market cap is larger.

A final factor I would actually add, is:
What is the cost of voting against?  (not voting)

Offline btswildpig

  • Hero Member
  • *****
  • Posts: 1424
    • View Profile
Right now I'm in favor of voting in anyone with any demonstrable coding or marketing skills.

Then whether they should stay in depends on if we see any results from them.


When the market cap goes up and the pay is worth more, and we have more people trying for spots, then its time to make it more competitive.

Well , if you want competition , I can easily put up several hundred teams to aim for it . (3000USD alone is like the top income in third world countries , you can hire many capable people with that price , even rocket scientists ) . Be careful what you wish for , because that may happen over night ......


$3000 a month doesn't pay for the rocket the rocket scientist is working on, that would just be his salary.  Paying for a rocket scientist with all their equipment would cost more like 100 x that.

I certainly encourage scepticism as the starting point in all analysis, I'm glad we have critical thinkers like you on board.

For delegates entrusted with spending responsibilities I will base my votes on the following 3 factors:

1.  Do I agree with the value proposition the delegate proposes? (is their spending plan cost-effective)
2.  Is he capable of getting it done?
3.  Do I trust the delegate to honstly spend on what he says?

If the answer is yes to all three, he/she gets my vote.

I think there should be 4 : if I agree with the value proposition the delegate proposes , do I need him right here , right now ?

The reason I'm bring this 4th question up is I suddenly though of KeyHotee . The project that wasted a lot of money on it then did not get result . Of course the failure was due to development difficulty . But even if KeyHotee was done , would that cost pay off with it's original task ?

We actually have limited funding space though inflation , how to spend it wisely (not just on the right people , but the right project ) is a important matter . Of course we can take baby steps by falling over and over again and learn from it . But why should we do that when we can think harder and harder ten steps ahead . If it turns out after ten times of hard thinking and we still makes the same mistake , then at least we can tell the world :  That failure is out of our hand , because we did though it through .
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 matt608

  • Hero Member
  • *****
  • Posts: 878
    • View Profile
Right now I'm in favor of voting in anyone with any demonstrable coding or marketing skills.

Then whether they should stay in depends on if we see any results from them.


When the market cap goes up and the pay is worth more, and we have more people trying for spots, then its time to make it more competitive.

Well , if you want competition , I can easily put up several hundred teams to aim for it . (3000USD alone is like the top income in third world countries , you can hire many capable people with that price , even rocket scientists ) . Be careful what you wish for , because that may happen over night ......


$3000 a month doesn't pay for the rocket the rocket scientist is working on, that would just be his salary.  Paying for a rocket scientist with all their equipment would cost more like 100 x that.

I certainly encourage scepticism as the starting point in all analysis, I'm glad we have critical thinkers like you on board.

For delegates entrusted with spending responsibilities I will base my votes on the following 3 factors:

1.  Do I agree with the value proposition the delegate proposes? (is their spending plan cost-effective)
2.  Is he capable of getting it done?
3.  Do I trust the delegate to honstly spend on what he says?

If the answer is yes to all three, he/she gets my vote. 

« Last Edit: December 01, 2014, 09:06:08 am by matt608 »

Offline gamey

  • Hero Member
  • *****
  • Posts: 2253
    • View Profile
70 full paid delegates ? It's a wishful thinking , esp. if the price go up like stan expected by 4X .
Then you'll have 3000USD*4*70=0.84 million USD in salary a month .

You think if the price goes up 4X , the revenue in the system will go up 4X ?  Nope , the salary will still be taking out of the the market cap by the factor of 20X . Unless those 70 full paid delegates can raise the revenue by 4X their salary , 4 months later , we'll still having this conversation .

25-30 full paid delegates is what stan expected if the inflation rate maintain at 1-2% a year .

There is a whole different issue about expectation of pay going forward.  This is why I've been for transparent burning that is integrated into all this stuff.  That way a delegate can say "I cap my pay at X BitUSD or X CNY" and then burn the excess.  This really shouldn't be an issue. 
I speak for myself and only myself.

Offline btswildpig

  • Hero Member
  • *****
  • Posts: 1424
    • View Profile
I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.
+5%
I do not know how to explain this but it is 'that the minimalistic (conservative) view is not the way to go.'
I am pretty  sure that if we vote 70 possibly good choices, we will have 5 delegates that produce 100x the value... and this will way outweigh the 10 bad actors, that we will vote out in 3 mo. or less.

70 full paid delegates ? It's a wishful thinking , esp. if the price go up like stan expected by 4X .
Then you'll have 3000USD*4*70=0.84 million USD in salary a month .

You think if the price goes up 4X , the revenue in the system will go up 4X ?  Nope , the salary will still be taking out of the the market cap by the factor of 20X . Unless those 70 full paid delegates can raise the revenue by 4X their salary , 4 months later , we'll still having this conversation .

25-30 full paid delegates is what stan expected if the inflation rate maintain at 1-2% a year .
« Last Edit: December 01, 2014, 07:55:29 am by btswildpig »
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 Ander

  • Hero Member
  • *****
  • Posts: 3506
    • View Profile
  • BitShares: Ander

I do not know how to explain this but it is 'that the minimalistic (conservative) view is not the way to go.'
I am pretty  sure that if we vote 70 possibly good choices, we will have 5 delegates that produce 100x the value... and this will way outweigh the 10 bad actors, that we will vote out in 3 mo. or less.

And we can also vote out the ones that dont do much.
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

zerosum

  • Guest
I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.
+5%
I do not know how to explain this but it is 'that the minimalistic (conservative) view is not the way to go.'
I am pretty  sure that if we vote 70 possibly good choices, we will have 5 delegates that produce 100x the value... and this will way outweigh the 10 bad actors, that we will vote out in 3 mo. or less.

Offline btswildpig

  • Hero Member
  • *****
  • Posts: 1424
    • View Profile
I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.

What I'm talking about is not a specific person .
Because mark my words , you'll have hundreds of people to vote for in a short term .

By then , you'll know why preparing the community for education in economical thinking are necessary . It's the basic steps for active voting .

Because if people don't know what their votes can do and what kind of affect the votes will have for the eco-system , they would not want to vote actively .
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 gamey

  • Hero Member
  • *****
  • Posts: 2253
    • View Profile
I think the biggest problem in this area is the lack of understanding between the East and West.  I think it will be hard to communicate about the delegates from the 2  and so each side will be a little bit less trustful of the other side.  I'd like to see as many Chinese delegates and I assume Chinese community would do a good job vetting them.

I'm talking about a economical situation in general .
Weather a delegate is capable and weather he can bring actual value to the system is two different thing .
The major concern is not vetting the delegate himself , but vetting the position and potential value for the system .

If this guy is good , do we want him ?  Oh wait , let's see , the system already has 2 great guys are doing things in the same direction , can you joint them instead of applying a independent position ?

If this guy is good , but what he does can only gain value for the system maybe after 1 year or so , do we want to pay him to gamble the future ? We should think about it , and if we want to gamble , we'll vote for him .

If this guy sounds bad , but what he propose may actually gain value for the system in big time , do we want him ?

Votes can only be worth something if the ones voting it are thinking from every aspect .
Every company has votes , good employees at some point , but not every one of them survived .
By voting , we are not just voting for a person , we're voting for the future and direction of the system .

If everyone thinks "it should not be any doubt to vote for somebody" , then what will we become ? 
If we lost the power or incentive for even a single doubt , then what is the voting for ?

My position is that anyone who was doing valuable work or looks like they might have a decent proposal to something should be given the chance.

Which delegate proposals are you against?  It is really all a judgement call and I might very well agree with you on a particular case.

I've never said vote in anyone.  I do think that there is a lot more to be lost by being very demanding for what amounts to part time job for most Western countries. This is especially true when you are drawing from a pool of known Bitshares supporters.  Some will not provide enough value, some may provide value 100 x what they were paid.

This changes a lot later on.

People will be motivated to vote out bad actors quicker than they'll vote them in.
I speak for myself and only myself.

Offline btswildpig

  • Hero Member
  • *****
  • Posts: 1424
    • View Profile
Right now I'm in favor of voting in anyone with any demonstrable coding or marketing skills.

Then whether they should stay in depends on if we see any results from them.


When the market cap goes up and the pay is worth more, and we have more people trying for spots, then its time to make it more competitive.

Well , if you want competition , I can easily put up several hundred teams to aim for it . (3000USD alone is like the top income in third world countries , you can hire many capable people with that price , even rocket scientists ) . Be careful what you wish for , because that may happen over night ......

But what income will the system to pay to these capable people ?  Because if capable people can only bring in price rise in market cap by speculative money instead of revenue income , then the cash would burn out eventually , just like those start up companies which burn out all the venture capital .

That's what I'm talking about . We laughed at Bitcoin for being costing more than it's earning , we don't want to be another Bitcoin . If we just wan increment at market cap , we don't need to hire people at all , just keep talking about great news .

We used to think about these things rationally , but after the crazy pump 6x in August , we tend to forget how poor we actually are .
That was a perfect example why money in terms of market cap can not be views as money of ours to spend .
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 Ander

  • Hero Member
  • *****
  • Posts: 3506
    • View Profile
  • BitShares: Ander
Right now I'm in favor of voting in anyone with any demonstrable coding or marketing skills.

Then whether they should stay in depends on if we see any results from them.


When the market cap goes up and the pay is worth more, and we have more people trying for spots, then its time to make it more competitive.
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

Offline btswildpig

  • Hero Member
  • *****
  • Posts: 1424
    • View Profile
The right move for every delegate is to ease the doubt and gain trust and vote , if someone is doubting you , ask them why , listen to them , try to change their mind by reasoning . Do not feel it's ok to tell them stop doubting . Because if the voters are not doubting you , they might not doubt somebody else in the future , sooner or later , you'll be pushed out by some actors or some good guy but has no value for the system just because people don't know how to doubt any more .  Always remember , there are only 101 delegates seats , to limit at the 1-2% inflation there will only be 30 100% delegate seats , those who got elected by simply blind faith may easily be replaced by other people who voted in with blind faith .

Doubting for the delegate-to-be may be the solid shield for the delegate himself to gain long term position in the system .

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.