Author Topic: Why BitShares isn't Taking off and What we are doing about it.  (Read 49526 times)

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Offline Helikopterben

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emulating Bitfinex would be a good place to start IMO



The concept is quite simple really.  Copy the user experience of centralized exchanges.  The difference being a backend controlled by the bitshares blockchain instead of a centrally managed database. 

I like to think of it as similar to http vs https.  Users are trained to look for the 's' at the end to know they are on a secure website.  They have no idea what is going on behind the scenes.  They see no difference when interacting with the secure vs non-secure site.  They just know that general consensus is that the 's' means it is secure. 

Users should see no difference between interacting with a centralized exchange vs a decentralized exchange.  Perhaps they see something that says 'Powered by Bitshares' to confirm security, just as they see an 's' to confirm security.  They have no idea what is going on behind the scenes, they just know that 'Powered by Bitshares' means they are in a secure environment, and that secure environment utilizes the bitshares blockchain as the backend instead of a centrally managed database as the backend.


@arhag
advanced orders could be added later.  A simple web-based interface for trading between bitcoin and USD would be enough to have a working product that could get things up and running.
« Last Edit: April 13, 2015, 11:37:58 pm by Helikopterben »

Offline Fox

We need a roadmap and backlog! that everyone can contribute with ideas.

I follow this:
https://github.com/BitShares/bitshares/milestones

Been disappointed of late with slipping dates. Awaiting updates for 8.2 and 9.0 now past due. I endevour to make contributions as well.
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Offline arhag

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1)  Direct exchange between assets.  From what I understand, this is tricky to do but it is absolutely necessary to compete with centralized exchanges.  A BTC/USD asset pair is essential and could be the focus to begin with for a real, working product.  Bitfinex alone had over 1.2 million bitcoin exchange volume in February.

I agree that direct exchange between assets (really it is an exchange of IOUs that one can use to redeem the underlying asset) is a big deal. I am a fan of using the delegate system as a multisig (and/or threshold sig) to hold the reserves of cryptocoins (like BTC) backing official IOUs of those cryptocoins on the BitShares blockchain. However, if you want "direct" exchange against fiat (like USD) then we must wait until fiat gateways come online. Who knows when that will happen.

2)  Advanced order types.  These order types are very useful to traders.  Coinbase exchange does not have these order types, only bare bones buy and sell, yet monthly volume in February was over 320,000 BTC - and this is only their 4th month trading.

I am a fan of adding "limit order" types to the DEX. I have discussed this elsewhere but the idea is that it would actually be an Immediate or Cancel limit order (not a regular limit order which is why I put it in quotes) to prevent front running. Then the client can automatically place any remaining unfilled amounts as a regular YGWYAF order in the next block. This would effectively simulate a limit order while removing the risk of front running.

As for the other fancy order types (stop, trailing stop), I believe we should leave that to smart contracts. Once a DApp / Smart contract / Turing complete script mechanism is on the blockchain, traders can utilize those to do all kinds of fancy order that haven't even been thought of yet. The smart contract would be responsible for actually placing and canceling the limit orders on behalf of the trader according to the programmable script. The obvious scripts (like stop and trailing stop) would initially be made available for traders, but in theory people could design their own.

Offline xh3

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emulating Bitfinex would be a good place to start IMO


Offline betax

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Fantastic, this is the Bitshares community getting involved. Bytemaster starts an idea (referrals), and now we are all talking again.
It is pointless that developers (bytemaster) cannot talk, as long as we don't do another merger.

I love the feedback:

1. Finish the product
2. Bonds, lending (can be done in parallel to point 1?, to no stop innovation... do we need resource)
3. Shorts 30 days not working.
4. Light wallet

My random points:

We need a roadmap and backlog! that everyone can contribute with ideas.

We should collaborate and complement bitcoin and other chains, stop competing where possible. (Bitcoin killer, bank killer, anything else killer...)

I don't think referral is important, what is important is a business value to continue using the product. If I can make money by p2p lending, I will use it. If my crypto currency investment is protected in USD (other currency) and I can easy (liquidity) exchange it I will use it. If I can easily convert to Fiat my bit(Asset) earned in my website, I will use it, and once I have confidence on the product I might keep it here. (we also have already plugins for ecommerce but without a full working product we cannot "sell" them).

I would love to see crosschain integration, will the moonstone wallet allow this?
« Last Edit: April 13, 2015, 08:32:51 pm by betax »
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Offline Method-X

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bugs still exist in the market place, according to the designed rules, some BitUSD/BTS orders should be traded but now they do not, even the old  users are disappointed for this, please try to fix the bugs ASAP.

 +5%

we are selling top notch bicycles without wheels and we are wondering why we have not enough sells...

I guarantee you:
1)even if we raise the salary of our bicycle sellers (we already tried that with the merge)
2)even if we use fancy colors to attract more buyers
3)even
4)even
5)...
6)...
7)...
...
...

I bet we will not have much better results if we don't...
Install the fu#@# wheels >:(
Think simple NOT complicated



 +5%

Offline Shentist

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Bitshares hasn't taken off yet because there isn't a working product yet, IMO.  End users are not going to use a resource-intensive full client.  They will use a web or mobile client.  Only delegates need to run full nodes.  We are very close to the end user solution. 

I have used many exchanges:  bitstamp, bitfinex, coinbase, bter, poloniex, mtgox, btc-e, vircurex, mcxnow.  Bitfinex is by far the best as far as functionality and ease of use IMO.   Maybe I can explain this graphically:



1)  Direct exchange between assets.  From what I understand, this is tricky to do but it is absolutely necessary to compete with centralized exchanges.  A BTC/USD asset pair is essential and could be the focus to begin with for a real, working product.  Bitfinex alone had over 1.2 million bitcoin exchange volume in February.

2)  Advanced order types.  These order types are very useful to traders.  Coinbase exchange does not have these order types, only bare bones buy and sell, yet monthly volume in February was over 320,000 BTC - and this is only their 4th month trading.

3)  Deposit/withdrawal.  This is necessary and could go through direct links to on/off ramps such as metaexchange. 



As others have stated, leverage is something traders absolutely want.  Bitfinex uses 2.5:1 and OKCoin goes all the way up to 20:1.  Bitfinex uses a P2P style lending between users.  This may also be tricky to do in a blockchain-based system, but is necessary to compete.  A P2P lending market may be the easiest to implement.



A simple web-based platform for buying and selling bitcoin and USD would be a good start.  The key selling point would be that you are trading in a trust-minimized, blockchain-based environment with no third party risk.  A report as of April 2013 states that 45% of all bitcoin exchanges fail.  That rate may be higher by now.  If you percieve the risk of catastrophic systemic failure (where everyone loses all of their money) from bitshares at less than 45%, then the decentralized exchange is your best option, and bitshares has been in existence for nearly one year now without systemic failure in which you lose all of your money and that type of failure has never really been a threat.

This should lead to other markets being bootstrapped for trading.  Eventually, the web-based interface could have a similar user experience to something like TD Ameritrade, without the threat of third-party risk or censorship from using the system for any reason.  End user security is very important with 2fa or something similar being mandatory. 

Also, I don't like the rule requiring shorts to cover after 30 days.  This was done to increase liquidity in the system, but may be taking liquidity from the system as users don't like the time limit on their trade, therefore they are being discouraged from initiating a short in the first place.  I would like to see this rule removed completely or at least scaled back quite a bit.



tl;dr - We need to mimic the user experience of centralized exchanges such as bitfinex while using the bitshares blockchain as the backend to create a trust-minimized trading and asset storage environment.  We should start by bootstrapping the BTC/USD market, which had a monthly trade volume of over 15 million coins in February alone.  Just 0.5% of that market should be plenty to bootstrap the entire bitshares system with a healthy market cap and reasonable pay for developers.  Then, more functionality can be added.

thanks for the time to analyse this.

most of the points i agree with you.

we should really rethink the 30 day rule. It hurt me a lot, because i couln't cover my short exposure because of existing market bugs. the 30 day rule was integrated to help increase liquidity, but in reality i just shorted most of the time to my self with 0.0 yield.

1. we should remove the 30 day rule
2. we should take a minimum fee for shorting - say 2%. Maybe the contract will run 30 days and if i not cover he will prolonged for .5% more interest to pay - so for the second period i would have to pay 2.5% to let my short active our cover and start a new short.

Offline NewMine

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We need a business opportunity inside the wallet, one is lending business for traders.
Like I can lend my bitUSD so traders can short any market trading bitUSD at any price they want with no cover expiration as long as they continue to pay the % fee daily.
Then I can earn daily % of interest with % fee to bitshares as well.  Like how bitfinex,com works, but it is better from decentralized exchanger.

Another business opportunity  is insurance to lenders. 

How nice to invest more fiat money if we have this features in the wallet.

just my +5%

We also need margin trading, and some composite indexes.

You can't lend to other traders because of risk and trust issues. You might be able to lend to the blockchain though.
« Last Edit: April 13, 2015, 10:50:48 pm by NewMine »

Offline Volker

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From what you all tell me of Dark, it looks like they are supporting their price NuBits style, offering interest to encourage holding.  As long as the interest rate is above the long-term price decline everyone holding is breaking even.

I got to thinking about why it is so hard to bootstrap a business in crypto and it is because NEW investors are always bailing out OLD investors which sucks up all of the capital.   We can easily resolve all of this by placing unclaimed BTS from delegates INTO a yield fund for BTS holders.   Having a yield fund would encourage people to move their money off of exchanges and to hold it for longer periods of time. 

The side effect of a yield fund is that it wouldn't actually debase ANYONE except those who are looking to cash out short term. IE: transfer of value from those who want short term liquidity to those who are in this for the long run.

In effect YIELD == DRK model.  Whether or not this is a good idea remains to be seen.

This is an interesting idea.

Unclaimed delegate funds would otherwise not be in circulation, right? Wouldn't adding a yield introduce new dilution? The idea is to reduce BTS in circulation so that unchanged demand results in higher prices.

Offline Helikopterben

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Bitshares hasn't taken off yet because there isn't a working product yet, IMO.  End users are not going to use a resource-intensive full client.  They will use a web or mobile client.  Only delegates need to run full nodes.  We are very close to the end user solution. 

I have used many exchanges:  bitstamp, bitfinex, coinbase, bter, poloniex, mtgox, btc-e, vircurex, mcxnow.  Bitfinex is by far the best as far as functionality and ease of use IMO.   Maybe I can explain this graphically:



1)  Direct exchange between assets.  From what I understand, this is tricky to do but it is absolutely necessary to compete with centralized exchanges.  A BTC/USD asset pair is essential and could be the focus to begin with for a real, working product.  Bitfinex alone had over 1.2 million bitcoin exchange volume in February.

2)  Advanced order types.  These order types are very useful to traders.  Coinbase exchange does not have these order types, only bare bones buy and sell, yet monthly volume in February was over 320,000 BTC - and this is only their 4th month trading.

3)  Deposit/withdrawal.  This is necessary and could go through direct links to on/off ramps such as metaexchange. 



As others have stated, leverage is something traders absolutely want.  Bitfinex uses 2.5:1 and OKCoin goes all the way up to 20:1.  Bitfinex uses a P2P style lending between users.  This may also be tricky to do in a blockchain-based system, but is necessary to compete.  A P2P lending market may be the easiest to implement.



A simple web-based platform for buying and selling bitcoin and USD would be a good start.  The key selling point would be that you are trading in a trust-minimized, blockchain-based environment with no third party risk.  A report as of April 2013 states that 45% of all bitcoin exchanges fail.  That rate may be higher by now.  If you percieve the risk of catastrophic systemic failure (where everyone loses all of their money) from bitshares at less than 45%, then the decentralized exchange is your best option, and bitshares has been in existence for nearly one year now without systemic failure in which you lose all of your money and that type of failure has never really been a threat.

This should lead to other markets being bootstrapped for trading.  Eventually, the web-based interface could have a similar user experience to something like TD Ameritrade, without the threat of third-party risk or censorship from using the system for any reason.  End user security is very important with 2fa or something similar being mandatory. 

Also, I don't like the rule requiring shorts to cover after 30 days.  This was done to increase liquidity in the system, but may be taking liquidity from the system as users don't like the time limit on their trade, therefore they are being discouraged from initiating a short in the first place.  I would like to see this rule removed completely or at least scaled back quite a bit.



tl;dr - We need to mimic the user experience of centralized exchanges such as bitfinex while using the bitshares blockchain as the backend to create a trust-minimized trading and asset storage environment.  We should start by bootstrapping the BTC/USD market, which had a monthly trade volume of over 15 million coins in February alone.  Just 0.5% of that market should be plenty to bootstrap the entire bitshares system with a healthy market cap and reasonable pay for developers.  Then, more functionality can be added.

Offline luckybit

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From what you all tell me of Dark, it looks like they are supporting their price NuBits style, offering interest to encourage holding.  As long as the interest rate is above the long-term price decline everyone holding is breaking even.

I got to thinking about why it is so hard to bootstrap a business in crypto and it is because NEW investors are always bailing out OLD investors which sucks up all of the capital.   We can easily resolve all of this by placing unclaimed BTS from delegates INTO a yield fund for BTS holders.   Having a yield fund would encourage people to move their money off of exchanges and to hold it for longer periods of time. 

The side effect of a yield fund is that it wouldn't actually debase ANYONE except those who are looking to cash out short term. IE: transfer of value from those who want short term liquidity to those who are in this for the long run.

In effect YIELD == DRK model.  Whether or not this is a good idea remains to be seen.

This is an interesting idea.
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Offline joele

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In the coming 1.0
  Does the 30 days short auto cover going to remove?
  Can we short below the peg?


Offline fav

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I am glad I am not the only one, who finds this idea attractive. Is there enough liquidity? I don't know, but I will tell my perspective: I am a conservative investor in BTS terms, but I trust the bitUSD peg to hold and I believe, it would hold also for other assets (if they were useful - such as indexes). And indexes are far less speculative investment than BTS, so I could invest like 2x - 3x more than I am currently in BTS

To me, a referral program is completely worthless. At present I don't tell my friends/family about BitShares, because there is nothing useful for them here (I just discuss with them the theoretical aspects of BS, mostly without mentioning it). And a referral program won't change it. On the other hand, as soon as there appears something useful for them in BitShares, I will begin spreading the word WITH or WITHOUT the referral program.

My priorities:

1) Finish 1.0 and introduce other pegged assets (stocks, indexes, commodities)
2) Wait for the word to spread + use ordinary marketing channels
3) If this doesn't help, start referral program


#1 is a must. #'s 2 and 3 could be done together. For many successful businesses, building a robust referral network IS part of ordinary marketing.

 +5%

I don't see any reason not to add an affiliate program. some may not like it on personal level, but it's a cheap and incredible tool to get the ball rolling.

Offline carpet ride

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I am glad I am not the only one, who finds this idea attractive. Is there enough liquidity? I don't know, but I will tell my perspective: I am a conservative investor in BTS terms, but I trust the bitUSD peg to hold and I believe, it would hold also for other assets (if they were useful - such as indexes). And indexes are far less speculative investment than BTS, so I could invest like 2x - 3x more than I am currently in BTS

To me, a referral program is completely worthless. At present I don't tell my friends/family about BitShares, because there is nothing useful for them here (I just discuss with them the theoretical aspects of BS, mostly without mentioning it). And a referral program won't change it. On the other hand, as soon as there appears something useful for them in BitShares, I will begin spreading the word WITH or WITHOUT the referral program.

My priorities:

1) Finish 1.0 and introduce other pegged assets (stocks, indexes, commodities)
2) Wait for the word to spread + use ordinary marketing channels
3) If this doesn't help, start referral program


#1 is a must. #'s 2 and 3 could be done together. For many successful businesses, building a robust referral network IS part of ordinary marketing.

+5%
Referrals are ordinary marketing.  There are really only two steps. 1) and 2).


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Offline davidpbrown

I am glad I am not the only one, who finds this idea attractive. Is there enough liquidity? I don't know, but I will tell my perspective: I am a conservative investor in BTS terms, but I trust the bitUSD peg to hold and I believe, it would hold also for other assets (if they were useful - such as indexes). And indexes are far less speculative investment than BTS, so I could invest like 2x - 3x more than I am currently in BTS

To me, a referral program is completely worthless. At present I don't tell my friends/family about BitShares, because there is nothing useful for them here (I just discuss with them the theoretical aspects of BS, mostly without mentioning it). And a referral program won't change it. On the other hand, as soon as there appears something useful for them in BitShares, I will begin spreading the word WITH or WITHOUT the referral program.

My priorities:

1) Finish 1.0 and introduce other pegged assets (stocks, indexes, commodities)
2) Wait for the word to spread + use ordinary marketing channels
3) If this doesn't help, start referral program


This makes the most sense from everything i have read so far. Practical and realistic IMO.


 +5% +5% +5% +5%

Those 1.2.3. priorities (and in that order) are exactly what I've been looking for .. simple to understand and easy to communicate.
If those are then backed up in the marketing narrative, with or without milestones, such clear focus will go a long way to maintaining interest and confidence.
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