Initial Witness Pay & Number of Witnesses

[Ander]

Well we definitely shouldn't pay 101 witnesses $300 each imo.

"At today's market cap the network has a maximum spending rate of about $65,000 per month which can go toward witnesses and workers."

This is the maximum rate, which would be around 6.3% inflation, which we should try to stay well below, imo, because of the perception impact that it has on the price.  If you inflate at 6% and it causes people to dump back to 1400 sats, you will get less money that if we inflate at current 2% level and the price is a lot higher.  The price is our #1 marketing tool right now, and having it collapse again would be really bad for the project.

Given that we plan to no longer pay for marketing workers, and that cuts our inflation down a bit, I think we should aim for inflating at only 25% of out allowed maximum.  This is a bit less than current, and is what I plan to vote for.

At that rate we have around $16000 a month to pay workers + witnesses.  If we are paying witnesses $300 a month for 17 witnesses, thats $5100, or almost 1/3 of the total budget. 

It seems a bit high to me.  I know that we WANT people to be well paid, but I think maybe the reality is that while the network is not yet being heavily utilized, it may be premature.  As soon as transaction volume starts picking up, then would be the time to increase pay to $300 I think.

[EstefanTT]

I think BM numbers are good but for people outside of BitShares, 17 may seem too little, even scary. People from Bitcoin use to think they are fully decentralised, even if it's not the case with pooling.

Maybe increasing a little the number of witness wouldn't add a lot of security but it would give a better perception of security for anyone outside of this community.

Maybe we can dicrease a little the price so we don't hurt us too much with the cost for these extra.

Something like 250$ / witness and   25 or 31 of them.

Just my 2 bts

[abit]

Good point.

[38PTSWarrior]

Am I qualified for one of the 84 left positions? I say let's do it like bytemaster recommends.

[clayop]

I think 17 is too low and somewhat risky IMO. What about decreasing witness payment to $150 or $200 and increasing the number of witnesses to around 25~35?

[bytemaster]

In the most recent Mumble session we discussed the witness pay and witness count for BTS 2.0 and today I would like to bring the discussion to the forum.

The job of a witness is the following:

1.  Have 99.9% uptime
2.  Maintain Low Latency connections
3.  Rapidly upgrade in response to bug fixes.
4.  Identify and help fix issues that may occur.

At a minimum this will require $40 per month to host a Digital Ocean (or equivalent machine).  It will also require at least 10 hours of work per month to keep up to date, especially at first.  The labor required is skilled labor.

I suggested that each witness should receive $300 per month for 100% uptime.   This should make the job very competitive and therefore result in higher quality witnesses with an eye toward keeping their job rather than relying on volunteer witnesses with nothing to lose if they have less than 99.9% reliability.   

At today's market cap the network has a maximum spending rate of about $65,000 per month which can go toward witnesses and workers.   If we were to maintain 101 witnesses it would cost the network $30,000 per month at $300 per witness.

In my opinion we should aim for around 17 witnesses rather than 101 for the following reasons:

1. It would only cost the network about $5100 per month
2. It is a number that is small enough for voters to reason about and evaluate
3. It is a number that is large enough to be geographically / politically diverse
4. Is greater than the number of slices in the Bitcoin mining distribution: https://blockchain.info/pools
5. It is similar to the number of validators Ripple has:  https://validators.ripple.com/#/validators 

While we are small having more witnesses does not buy us anything.  The probability that an extra 84 witnesses will have any impact on the security of the network is so close to 0 that the price we  pay for that extra redundancy does not make economic sense.


I would recommend that we instead diversify the other 84 positions into a combination of:

Committee Members, Workers, and Proxy Voters.   

Having a core group of active proxy voters will help make the network more responsive and more secure than having more witnesses.

Cryptonomex will not be a witness so has no skin in the game of setting this price.   We just want to offer the best advice we know of and then let you all decide how many you can actually vote for and are willing to pay for.