BTS is the best option for the reserve asset because it is the only one that will exist always. Market Pegged Assets can have a black swan event and become worthless. User Issued Assets are even worse option because there is a counterparty risk.
You're thinking of it as if it's Bitshares 1.0. We have private BitAssets now, we have UIAs also, like TradeBTC, and in general people don't want to get paid in BTS because it's too volatile and is supposed to be volatile. People want to get paid in USD or even BTC, but not in BTS, so you will just pay people in BTS which they'll immediately cash out for fiat driving the price down.
The reserve also has to diversify for risk. You cannot diversify by holding stock in yourself, it makes no sense. Any programmer is going to think about it like it's one of those loops that are recursive, it will loop against itself, but just because you loop into yourself it doesn't change the overall structure. Basically it's making the network more fragile to have BTS backed by BTS.
BTS backed by an array of different assets is the only way to make the reserve fund function as it should. This would mean you'd accept the risk of a black swan along with the risk of someone not redeeming TradeBTC, along with the risk of someone not redeeming TradeETH, along with the risk of the UIAs not being redeemed, because the whole strategy is diversification of risk.
They aren't all going to fail at the same time, unless everyone colludes for the downfall of Bitshares. Whoever is offering TradeBTC, why shouldn't the reserve fund hold some TradeBTC from them and several others? When private assets get set up then there could be centralized exchanges like Coinbase offering CoinbaseBTC, or ShapeshiftBTC, or anything like that, so that Bitshares can hold BTC.
If Bitshares can hold BTC, it's far more stable as a store of value than holding BTS. If Bitshares holds a bit of BTC, ETH, Storj, Safecoin, Muse, Lottoshares, etc, then you have the most stable form of value you can get because then you have a diversified fund.
If we were talking about stocks everything I said would make sense but somehow when we talk about the cryptocurrency space people start to get irrational about it and think Bitshares is somehow different from every other stock. BTS is just like any other stock and you never want to have your whole portfolio as just one stock if you're managing a fund.
And people don't want to get paid in BTS either so even if you could somehow make some excuse for exclusively holding it, no one is going to want to get paid in it. I wouldn't want to get paid in BTS when I could get paid in BitUSD. I would accept the risk of the black swan because so far BitUSD under Bitshares 1.0 has held close enough to peg that it's more stable than Bitcoin was for the same time period. If a composite asset representing the fund itself which held an array of underlying assets were created then you'd have a basket currency similar the special drawing rights of the IMF.
Traditional investing company is much more suitable for this kind of operation. It doesn't make any sense for a DAC to hire people to store cryptocurrencies (my understanding is that a blockchain cannot hold a secret, so it is impossible for it to hold private keys of other cryptos).
If we can't use the power of Bitshares 2.0 why create it? What traditional investment companies? You mean Goldman Sachs? But if we can do the same thing decentralized but better, what reason is there not to? If Bitshares can be a decentralized "investment" bank and exchange why shouldn't it? Private assets are a feature of Bitshares 2.0, as are gateways, and I don't see why we can have TradeBTC for use in the gateways but we can't use it in the reserve fund. If we can have a reserve fund, if we can have TradeBTC, then why can't we store private assets in the reserve fund?
And why we even should buy bitcoins and other cryptos? I'm invested in BTS because it is the best one right now. Diversifying to other cryptos would be unnecessary risk without much potential upside, it would make Bitshares less valuable.
Because it's the rational thing to do. It might not feel emotionally right to you but it's smart to own stakes in other crypto. How many of us only own stake in Bitshares and nothing else? If Bitshares 2.0 has the power to be a stakeholder in other DACs then it's a unique advantage and Bitshares 2.0 can be first mover on it. If Bitshares 2.0 wont do it then I'm sure the folks over at Ethereum will have no problem with the idea.
Why let Ethereum do something which Bitshares pioneered?
Topic: What to do with Revenue? (Read 3937 times)
