Author Topic: [BitShares 2.0 Technologies] Referral Rewards Program (Discussion)  (Read 10958 times)

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Offline Permie

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32:22: fuzzy : How will wallet host be compensated?

32:59: bytemaster : Wallet host will end up registered the most users and will be compensated by the referral program.

I worry about the referral program being used as the only funding method for wallet hosts. I presume a user can always take their identity with them and go to another wallet host. A user will likely to keep their account and associated metadata (web-of-trust, reputation) for life. But it is silly to think they will use the wallet provided by the same wallet provider for life, or perhaps even for more than a year. However, the wallet host that first signs up that user will be the one to get 80% of all the fees that account pays for life (or 80% of the lifetime member upgrade fee). What happens if a user signs up with one wallet provider, uses it for a few months and then switches to another wallet provider that the user uses for years? All of the transactions during those years will have 80% of their fees still go to the original wallet provider even though they are no longer the ones provide the service the user uses or investing in the development of the wallet to keep the user using their wallet. The incentives are broken.

This is why I suspect that wallet providers will still need to create (and only accept) transactions that also pay an additional small fee to the provider with each transaction (like the LightWallet did) as a better aligned revenue source. This is a little troubling because the fees are already pretty high for the sake of funding the referral program (although I guess the stakeholders can always reduce it). But if my suspicions are true, the high fees of the referral program will only be used to compensate marketers bringing in the new users (which is fine and what the purpose of the referral program should be) but not as a long-term solution for funding wallet providers.

In today's mumble, BM clarified that wallets will rely on other monetization strategies (subscriptions, ads, security/services) and will want to avoid charging extra tx fees. The referral program is a bonus.
There are plenty of different bitcoin wallets around so a referral program will give the best bitshares wallets even more profit to build into a better wallet/UX.

How do bitcoin wallets make money anyway?

Edit: Why will the user choose to download the wallet from a referral code rather than quickly search the app store?
Does the referred user get something extra? If you're telling your friends about bts over the phone or some other situation where you don't have your respective phones right next to eachother then it's potentially easier to just search the app-store for 'BitShares wallet' than to enter any referral codes. Maybe I've missed something but I can't see a referral benefit to the newly referred user (User #2).

Maybe User #1 can choose a variable % of his referral fee that will be paid back to referred User #2 if they use his code, with the caveat that for every % paid back to User #2 an equal % must be returned to the funding pool ("burned").
User #1 would obviously prefer to give User #2 0% (as it comes out of his pocket and not BitShares) and the referral code when presented to User #2 post-% decision should not indicate that it could have been possible to get up to 40% cash-back for User #2 (leaving User #1 with no referral bonus of course).
The remaining 60% in this situation would be sent to the funding-pool.
The more User #2 receives as cash-back the higher percentage of total fees are paid to the BitShares network and less to individual users in referral-related fees.
The cash-back is only returned when User #2 upgrades to an annual or lifetime membership anyway, so it would be a net benefit to BitShares however much User #1 gets paid in referral fees wouldn't it?

EDIT: I forgot all about the cost to create an account!
« Last Edit: June 13, 2015, 08:01:49 pm by Permie »
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Offline roadscape

32:22: fuzzy : How will wallet host be compensated?

32:59: bytemaster : Wallet host will end up registered the most users and will be compensated by the referral program.

I worry about the referral program being used as the only funding method for wallet hosts. I presume a user can always take their identity with them and go to another wallet host. A user will likely to keep their account and associated metadata (web-of-trust, reputation) for life. But it is silly to think they will use the wallet provided by the same wallet provider for life, or perhaps even for more than a year. However, the wallet host that first signs up that user will be the one to get 80% of all the fees that account pays for life (or 80% of the lifetime member upgrade fee). What happens if a user signs up with one wallet provider, uses it for a few months and then switches to another wallet provider that the user uses for years? All of the transactions during those years will have 80% of their fees still go to the original wallet provider even though they are no longer the ones provide the service the user uses or investing in the development of the wallet to keep the user using their wallet. The incentives are broken.

This is why I suspect that wallet providers will still need to create (and only accept) transactions that also pay an additional small fee to the provider with each transaction (like the LightWallet did) as a better aligned revenue source. This is a little troubling because the fees are already pretty high for the sake of funding the referral program (although I guess the stakeholders can always reduce it). But if my suspicions are true, the high fees of the referral program will only be used to compensate marketers bringing in the new users (which is fine and what the purpose of the referral program should be) but not as a long-term solution for funding wallet providers.

In today's mumble, BM clarified that wallets will rely on other monetization strategies (subscriptions, ads, security/services) and will want to avoid charging extra tx fees. The referral program is a bonus.
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Offline fav

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5. I am surprised to see that only a couple people have 'referred' a user recently for their first all-time referral, you would think that getting a free lifetime membership would have everyone scrambling to 'refer' a new account :) hint hint
I'm pretty sure you had to refer someone before the June 8th announcement.

correct

Offline Permie

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5. I am surprised to see that only a couple people have 'referred' a user recently for their first all-time referral, you would think that getting a free lifetime membership would have everyone scrambling to 'refer' a new account :) hint hint
I'm pretty sure you had to refer someone before the June 8th announcement.
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Offline mint chocolate chip

1. How does this work, if someone refers a user and they register a name. Then that user creates another account(s), the transactions on that account would they also be connected to the referrer?

2. If we are credited with the specific users we referred over the past 6 months as Stan has said we would be, are we thus eligible for the cut of the fees those users produce going forward?

3. The diagram shows the 80/20 split, but in the case a user is not referred, does the 80% go to the Reserve Pool... i.e. Many users will possibly not be referred by anyone, many of them may even upgrade to annual or lifetime memberships, all of these fees go where?

4.
Quote
Annual Members pay a subscription fee of $20/year and earn 50% cash back on every fee they pay. They also qualify for up to 50% of the fees paid by anyone they refer to the network until their subscription expires. 30% of every fee paid by an annual member or any account they refer is paid to a Lifetime Member.
--- What happens if there is no lifetime member, where does that 30% go?
--- Is the wording of this quote correct, I read this as saying that a lifetime member who refers an annual member who refers other members gets 2nd tier referral "or any account they refer"?

5. I am surprised to see that only a couple people have 'referred' a user recently for their first all-time referral, you would think that getting a free lifetime membership would have everyone scrambling to 'refer' a new account :) hint hint

Offline starspirit

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How will subscription fees get paid (i.e. what are the mechanics)?

Offline fav

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* how and where can we check referral stats? (on chain I guess?)
* can we expect some tutorials?

Offline Permie

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Interesting.  What if the referral fee commitment can change after roughly a year?  So if a user switches wallets to another provider, if the account stays within the wallet for one year, all their transaction fees will go to that referrer.  Therefore it incentizies referrers not only to sign up new users, but also to retain their users over time.
+5%

Would this require wallet providers to somehow attach their ID to every transaction made with their wallet?
I'm not sure exactly how wallet providers are going to work, do they just host a full-node and allow users to broadcast their signed transactions via their network? What can they do with the transactions made with their service?

I'm trying to work out how much wallet providers can actually compete on or change.
I'm thinking the main features and focus would be on user experience and the skins available but could they compete in other ways?
What about bundling transactions together in a coinjoin and charging less transaction fee per user?
Perhaps a particular wallet will target privacy and bundle every transaction together and attempt anonymity that way. Although I'm not sure what is possible now with user ID's rather than stealth addresses. 

Is there an economy of scale in hosting a wallet?
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Offline topcandle

32:22: fuzzy : How will wallet host be compensated?

32:59: bytemaster : Wallet host will end up registered the most users and will be compensated by the referral program.

I worry about the referral program being used as the only funding method for wallet hosts. I presume a user can always take their identity with them and go to another wallet host. A user will likely to keep their account and associated metadata (web-of-trust, reputation) for life. But it is silly to think they will use the wallet provided by the same wallet provider for life, or perhaps even for more than a year. However, the wallet host that first signs up that user will be the one to get 80% of all the fees that account pays for life (or 80% of the lifetime member upgrade fee). What happens if a user signs up with one wallet provider, uses it for a few months and then switches to another wallet provider that the user uses for years? All of the transactions during those years will have 80% of their fees still go to the original wallet provider even though they are no longer the ones provide the service the user uses or investing in the development of the wallet to keep the user using their wallet. The incentives are broken.

This is why I suspect that wallet providers will still need to create (and only accept) transactions that also pay an additional small fee to the provider with each transaction (like the LightWallet did) as a better aligned revenue source. This is a little troubling because the fees are already pretty high for the sake of funding the referral program (although I guess the stakeholders can always reduce it). But if my suspicions are true, the high fees of the referral program will only be used to compensate marketers bringing in the new users (which is fine and what the purpose of the referral program should be) but not as a long-term solution for funding wallet providers.

Same issue with faucets.. a 3rd-party faucet could collect 80% and leave wallet providers with nothing.

I too suspect that wallet providers will need to charge an extra fee per transaction to be sustainable long-term.
Unless wallets have alternate monetization strategies. But as arhag said, the incentives appear to be broken.

Interesting.  What if the referral fee commitment can change after roughly a year?  So if a user switches wallets to another provider, if the account stays within the wallet for one year, all their transaction fees will go to that referrer.  Therefore it incentizies referrers not only to sign up new users, but also to retain their users over time. 
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Offline roadscape

32:22: fuzzy : How will wallet host be compensated?

32:59: bytemaster : Wallet host will end up registered the most users and will be compensated by the referral program.

I worry about the referral program being used as the only funding method for wallet hosts. I presume a user can always take their identity with them and go to another wallet host. A user will likely to keep their account and associated metadata (web-of-trust, reputation) for life. But it is silly to think they will use the wallet provided by the same wallet provider for life, or perhaps even for more than a year. However, the wallet host that first signs up that user will be the one to get 80% of all the fees that account pays for life (or 80% of the lifetime member upgrade fee). What happens if a user signs up with one wallet provider, uses it for a few months and then switches to another wallet provider that the user uses for years? All of the transactions during those years will have 80% of their fees still go to the original wallet provider even though they are no longer the ones provide the service the user uses or investing in the development of the wallet to keep the user using their wallet. The incentives are broken.

This is why I suspect that wallet providers will still need to create (and only accept) transactions that also pay an additional small fee to the provider with each transaction (like the LightWallet did) as a better aligned revenue source. This is a little troubling because the fees are already pretty high for the sake of funding the referral program (although I guess the stakeholders can always reduce it). But if my suspicions are true, the high fees of the referral program will only be used to compensate marketers bringing in the new users (which is fine and what the purpose of the referral program should be) but not as a long-term solution for funding wallet providers.

Same issue with faucets.. a 3rd-party faucet could collect 80% and leave wallet providers with nothing.

I too suspect that wallet providers will need to charge an extra fee per transaction to be sustainable long-term.
Unless wallets have alternate monetization strategies. But as arhag said, the incentives appear to be broken.
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Offline BunkerChainLabs-DataSecurityNode

New user registers TODAY. His name is harrypothead

Later down the road 2.0 launches.

Same user registers a new name called harrypothead2 under the refer program of someone.

He decides to move his harrypothead name to his new harrypothead2 account that is under the refer program.

Will all the transactions for harrypothead now be counted in the refer program?

First off if  he decides to move "harrypothead name "  to his new "harrypothead2 account" he will need to do it in some other platform than BTS 2.0

This should remove some of the crazy scenarios you have come up with...

Hope this helps.

@arhag I am pretty sure as well, that one will be able to move/put his private keys in as many wallets as one likes...and if some wallet does not allow it, well it just will mean less people using it.

Nope.. didn't help one bit.

Anyone else? The details I got from the site about how the name transfer works and in relation to the topic here regarding the referral program is unclear.

If someone with more technical grasp of how it will operate can share, that would be great.
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Offline tonyk

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New user registers TODAY. His name is harrypothead

Later down the road 2.0 launches.

Same user registers a new name called harrypothead2 under the refer program of someone.

He decides to move his harrypothead name to his new harrypothead2 account that is under the refer program.

Will all the transactions for harrypothead now be counted in the refer program?

First off if  he decides to move "harrypothead name "  to his new "harrypothead2 account" he will need to do it in some other platform than BTS 2.0

This should remove some of the crazy scenarios you have come up with...

Hope this helps.

@arhag I am pretty sure as well, that one will be able to move/put his private keys in as many wallets as one likes...and if some wallet does not allow it, well it just will mean less people using it.
« Last Edit: June 11, 2015, 06:20:22 am by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline BunkerChainLabs-DataSecurityNode

I will tell you what might be a solution to this, and something I have been thinking on and likely will happen unless we see changes to the program.

If wallet provider WP1 referred a new user they get all their transactions in the program.

WP2 comes along that includes a kitchen sink. That user at WP1 wants to go there, but WP2 is only offering the kitchen sink for newly referred users. So they will either FORCE new user registration for their wallet using their refer.

You will likely just see a situation where accounts are left abandoned. With the ability to be able to transfer names as I understand it so far, I can have joeblow1 at WP1 and then needing to register a new user at WP2, I create joeblow2 and then transfer my name joeblow1 over (I may not have that right.. I haven't dived into how that works yet). The original BTS address is left abandoned on WP1 system.. jowblow goes about his merry way.

This is what the refer program is going to encourage in the wallet space at least the way I see it.

I would fine this very annoying. First, you could transfer the account name from one account ID to another. Let me even assume there is a way to do that without even losing your web-of-trust and reputation. Then all other balances assets could also be moved from the original account ID to the new one.

Even with all of this inconvenience, there is the incredibly annoying and costly fact that if you had upgraded to lifetime member, you would have to reupgrade with the new account. So you would pay WP1 $80 even though you used their services for a short time before moving to a much better service. Then, to keep the low 4 cent fees in the new wallet, you have to pay another $100 ($80 going to WP2)! The switching costs would be too high which is not good for incentivizing innovation in a free market with low barriers to entry.

I think you should absolutely be able to move your existing account from one wallet host to another (or have the same account coexist in multiple wallets at the same time) by simply importing in your brain key. I am confident this will be done (I would be surprised and disappointed if the intended culture in BitShares 2.0 was to not have this be the case). But that does mean that even if a business provides a really good wallet, they cannot rely on revenue purely from referral fees.

Yes.. if the wallet does include the kitchen sink then they can charge something for it. Perhaps take a hybrid approach where someone can either signup new as a refer.. or they can pay to import their existing account. Or go through the shenanigans you described if they don't want to pay. :)

Or.. we could see a situation where a new layer is developed among wallet makers where they share their transaction profits. So if someone from WP1 goes to WP2 and they are part of the walletwebwhatever, WP1 will send maybe 50% of whatever they get from transactions to WP2. Bad players get kicked out of the WWW and get left in the cold...that or they are so popular that they don't need to play nice with any of the competition and not participate in the WWW.

I just thought of that really quick so I don't know how workable that is. :)
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Offline BunkerChainLabs-DataSecurityNode


Will all the transactions for harrypothead now be counted in the refer program?

no, if you move an account to another wallet everything will be wiped. see http://bitshares.github.io/technology/transferable-named-accounts/

I read that page.. and I do not get what you are saying from it. It's referring to the web-of-trust.. not 'everything'. This doesn't mean the same in my scenario.

As far as I can tell, the user transferred would adopt the refer of the account it is transferred to. Otherwise you will have people having to pay over again.

This needs clarification.
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Offline arhag

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I will tell you what might be a solution to this, and something I have been thinking on and likely will happen unless we see changes to the program.

If wallet provider WP1 referred a new user they get all their transactions in the program.

WP2 comes along that includes a kitchen sink. That user at WP1 wants to go there, but WP2 is only offering the kitchen sink for newly referred users. So they will either FORCE new user registration for their wallet using their refer.

You will likely just see a situation where accounts are left abandoned. With the ability to be able to transfer names as I understand it so far, I can have joeblow1 at WP1 and then needing to register a new user at WP2, I create joeblow2 and then transfer my name joeblow1 over (I may not have that right.. I haven't dived into how that works yet). The original BTS address is left abandoned on WP1 system.. jowblow goes about his merry way.

This is what the refer program is going to encourage in the wallet space at least the way I see it.

I would fine this very annoying. First, you could transfer the account name from one account ID to another. Let me even assume there is a way to do that without even losing your web-of-trust and reputation. Then all other balances assets could also be moved from the original account ID to the new one.

Even with all of this inconvenience, there is the incredibly annoying and costly fact that if you had upgraded to lifetime member, you would have to reupgrade with the new account. So you would pay WP1 $80 even though you used their services for a short time before moving to a much better service. Then, to keep the low 4 cent fees in the new wallet, you have to pay another $100 ($80 going to WP2)! The switching costs would be too high which is not good for incentivizing innovation in a free market with low barriers to entry.

I think you should absolutely be able to move your existing account from one wallet host to another (or have the same account coexist in multiple wallets at the same time) by simply importing in your brain key. I am confident this will be done (I would be surprised and disappointed if the intended culture in BitShares 2.0 was to not have this be the case). But that does mean that even if a business provides a really good wallet, they cannot rely on revenue purely from referral fees.
« Last Edit: June 11, 2015, 05:55:18 am by arhag »