Am I the only one that thinks referral system is Bitshares largest mistake ever?

[r0ach]

I wouldn't care about the referral program if it was a benign entity, but it's currently holding the entire network hostage.  I could understand 5-20% higher transaction fees to fund the thing, but going from 5 to 20 transaction fee is a 400% increase, not 5% to 20%.

[gamey]

When the outside world looks at this thing, they don't even know the fee rate can be changed over time, so they're thinking, "nice, if this coin hits 3 billion market cap like Bitcoin, I get to pay $15 in fees per transaction ! "

When people are framing this issue within a market cap of 3 billion, BTS has already won them over.

[fav]

Look at it this way:

1.  User issued assets can set any core-exchange-rate they like and lower the fees for users of the UIA to close to 0
2.  UIAs can charge market fees similar to exchanges
3.  $0.10 for a normal user or $0.02 cents for a lifetime member are so close to $0 that few would even think about it for a transaction over $10
4.  BTS is not meant to be payment currency.  How many people buy less than $10 worth of stock in a company?  What is the transaction fee on that?

In other words, the ability of users to do "price discrimination" falls apart at values this low.   Unless you are executing 1000's of transactions there is almost no perceivable difference.  Most people won't even bend over to pick up a DIME on the ground.

In other words from a customer perspective  $0.01 and $0.10 are effectively the SAME in low volumes.   At high volumes the price approaches $0.02 for lifetime members which is cheaper than Bitcoin. 

While the difference in price is insignificant to individual users, it is HUGE for the network.   The network is a party to every transaction and thus sees a 5x increase in revenue while the user perceives almost no difference in cost.

 

[luckybit]

Would it be good to have something display the number of bitshares being burnt per day?

Yes, that would be awesome.

Honestly, this number (and the corresponding inflation or deflation rate) probably matters to investors more than anything else.  Show people that their ownershake stake is no longer being diluted, and that in fact they are owning a larger and larger portion of BTS every day that they hold, and they will want to buy more and hold their BTS!

Great ideas! We could add this data to indexes and revolutionize how altcoins are traded. If we knew for example the deflation rate, burn rate, etc of every coin on coinmarketcap or if we had a DAC Index which had clear fundamentals, then we could really bring big smart money into it.

If a DAC is deflationary, and you have a number which represents the rate of deflation.

If you have a DAC which shows you the percentage ownership you have of it at any time.

If you have the ability to trade or invest in the DAC Index itself, or only in DACs which have a high enough deflation rate, as represented by a number, then your bots could buy and sell based on "profitability" of the DACs, measured by deflation rate number on an index, so that the top 10 for example get the most liquidity.

Tidy up these ideas and present them to Bytemaster in the form of a worker proposal. Make it some sort of Bitshares UX improvement proposal because UX is what is missing the most and these will improve on it dramatically. It's not hard to attract liquidity when you create certainty and reduce certain kinds of risks, and by having additional metrics you can reduce risks.

[r0ach]

There's my post to Ander about it:

I don't see it as a referral system.  The gap in fees between members and non-members is so large it's more like a hostage system.  20 vs 5?  Come on?  A real referral system would have the referrer gaining some small percent  like 5-20% of fees, not this extortion system that exists now.  The gap between the two needs to be far smaller.

Even if you believe the referral system is a good idea, there's obviously a point at which subsidizing the referrer through astronomical taxation is counter productive to growth.  The referral system should have been designed under the assumption that most people will not become members.  The current system does not look enticing to anyone that doesn't become a member.

[julian1]

The referral system creates strong incentives, cuts through politics, and rewards anyone who can find a way to genuinely grow the system. I'm a big fan.

Honestly generated revenue from fees is totally superior to inflating supply and using dilution to fund activity.

[r0ach]

20 BTS is too scary number for people.

Yep, right after BTS 2.0 was released, the first thing I saw someone type was "20 BTS transaction fee??? What the #%@#%???"  I feel the spread between member and non-member fees is WAY too huge.  20 BTS vs 5 BTS?  If you plan to keep this referral system, the spread needs to be much lower, something like 10 vs 5 instead.  Even then I still don't like it.

When the outside world looks at this thing, they don't even know the fee rate can be changed over time, so they're thinking, "nice, if this coin hits 3 billion market cap like Bitcoin, I get to pay $15 in fees per transaction ! "

[xiahui135]

I disagree with reducing fees for two main reasons:

1) It makes the referral program a lot less interesting if you dont expect the users you bring in to generate much of any fees.  So then it will fail.

2) A big reason why the BTS price has been trending down for a year is that the supply is increasing, that is, the blockchain is operating at a loss instead of being profitable.  As soon as we can demonstrate a blockchain making a profit over a reasonable period of time, even a small profit, it will attract a lot of attention.  Everyone is used to inflating blockchains that hemmorhage money (through PoW or whatever), but if you change that around and are actually making a profit, then a lot of investors will want to jump on board.  And helping the price break its downtrend is going to help adopting a LOT, because a major inhibitor to adoption right now is that everyone who buys in loses money and gets disillusioned.

 

If we could advertise ourselves as being profitable more people would join in as holders.
Would it be good to have something display the number of bitshares being burnt per day? or if we are operating at a profit or at loss? It sounds nice while we're operating at profit, but at a loss it seems it could create some psychological panic, I dunno. But showing the fees burnt per day or month would be nice I guess

I think the referral system is good.  I also think we should increase the fee,  but we should be more clever to do it:

Lower the transaction fee, fee for place/cancel orders. This makes strong and deep order book.
Increase trade fee rate to 0.0005(more or less) when order success. So a average 20000 bts order will create 20 bts profit. Why? Because of a simple research result: both side of a trade feel themself is winner, when they trade totally freely. In this situation, people are willing to pay more.
(I have many experice in this, that i am willing to pay hundreds of bts to central exchanges as fee when i feel making a good deal. 0.005 fee rate is not high for me in this case). We have plenty of knowledge to learn from the central exchange.

[Akado]

I think the fee for placing/cancel of an order and transaction should be very cheap. But the fee for trade success should be more, such as 0.0005 of the    liquild.
People are willing to pay when trade success, because both seller and buyer feel earn something at the moment they trade.

I think that the current market fee should be split into maker fee and taker fee. So we have order placing fee, cancel fee, maker fee and taker fee where [maker fee percentage]+[taker fee percentage] >= 0. The order placing/cancel fee should be as low as possible just to avoid spamming. To improve the liquidity, we can set the maker fee to -0.2% and taker fee to 0.2%, or maybe -0.1% and 0.2% to get some profit from trades like normal exchanges.

The fee to place an order is high,  I am unwilling to place an order, because the order may not make a deal. Lower the fee, can attract more people place order to make a stronger and deeper order book.

unless placing orders can create some kind of spam attack, I agree with this,

[xiahui135]

I think the fee for placing/cancel of an order and transaction should be very cheap. But the fee for trade success should be more, such as 0.0005 of the    liquild.
People are willing to pay when trade success, because both seller and buyer feel earn something at the moment they trade.

I think that the current market fee should be split into maker fee and taker fee. So we have order placing fee, cancel fee, maker fee and taker fee where [maker fee percentage]+[taker fee percentage] >= 0. The order placing/cancel fee should be as low as possible just to avoid spamming. To improve the liquidity, we can set the maker fee to -0.2% and taker fee to 0.2%, or maybe -0.1% and 0.2% to get some profit from trades like normal exchanges.

The fee to place an order is high,  I am unwilling to place an order, because the order may not make a deal. Lower the fee, can attract more people place order to make a stronger and deeper order book.

I have plenty of experience that i am willing pay houndreds of bts fee to trade in the centered exchange, because of the market deep. I feel i made a good deal, so even 0.5 percent is not high for me.

[Ander]

Would it be good to have something display the number of bitshares being burnt per day?

Yes, that would be awesome.

Honestly, this number (and the corresponding inflation or deflation rate) probably matters to investors more than anything else.  Show people that their ownershake stake is no longer being diluted, and that in fact they are owning a larger and larger portion of BTS every day that they hold, and they will want to buy more and hold their BTS!

[Akado]

I disagree with reducing fees for two main reasons:

1) It makes the referral program a lot less interesting if you dont expect the users you bring in to generate much of any fees.  So then it will fail.

2) A big reason why the BTS price has been trending down for a year is that the supply is increasing, that is, the blockchain is operating at a loss instead of being profitable.  As soon as we can demonstrate a blockchain making a profit over a reasonable period of time, even a small profit, it will attract a lot of attention.  Everyone is used to inflating blockchains that hemmorhage money (through PoW or whatever), but if you change that around and are actually making a profit, then a lot of investors will want to jump on board.  And helping the price break its downtrend is going to help adopting a LOT, because a major inhibitor to adoption right now is that everyone who buys in loses money and gets disillusioned.

 

If we could advertise ourselves as being profitable more people would join in as holders.
Would it be good to have something display the number of bitshares being burnt per day? or if we are operating at a profit or at loss? It sounds nice while we're operating at profit, but at a loss it seems it could create some psychological panic, I dunno. But showing the fees burnt per day or month would be nice I guess

[luckybit]

Ander 

Did you see my point about how the interface should switch to percentage display? Bytemaster talked about it over a year ago but never implemented it. Now that he's writing the interface it's a perfect opportunity for him to implement it and I know it's not hard to implement it.

It would take one day of coding to implement it, probably not even a whole day for someone as skilled as him. And it will dramatically improve the psychology, because when people care about their percentages instead of meaningless numbers people will buy more to maintain their percentage of ownership. Because of the referral program and other expenses, the percentage of ownership may change slightly, but people need to know.


There needs to be an interface titled "expenses" or something similar. And an interface titled "profit" or something similar. Profit should be then organized by per hour, per day, per week, per year, or whatever the user wants to see. There also needs to be an interface titled "ownership" with percentages and graphs showing how much of each DAC they own.

[Tuck Fheman]

1.  User issued assets can set any core-exchange-rate they like and lower the fees for users of the UIA to close to 0
2.  UIAs can charge market fees similar to exchanges

Not currently, but in the future, correct? 

Or the commands are there to do it, but not documented?

I guess what I'm saying is, I can't do this currently that I'm aware of and previously you stated it was something that would be added in the future.

[Ander]

I disagree with reducing fees for two main reasons:

1) It makes the referral program a lot less interesting if you dont expect the users you bring in to generate much of any fees.  So then it will fail.

2) A big reason why the BTS price has been trending down for a year is that the supply is increasing, that is, the blockchain is operating at a loss instead of being profitable.  As soon as we can demonstrate a blockchain making a profit over a reasonable period of time, even a small profit, it will attract a lot of attention.  Everyone is used to inflating blockchains that hemmorhage money (through PoW or whatever), but if you change that around and are actually making a profit, then a lot of investors will want to jump on board.  And helping the price break its downtrend is going to help adopting a LOT, because a major inhibitor to adoption right now is that everyone who buys in loses money and gets disillusioned.