Help keep transfer fees to save the referral system and help Bitshares grow!

[jakub]

Yes I say look at crypto and relevant competitors, valuable shareholder feedback and possibly a price survey to determine the acceptable upper limits of the transfer fees as a good starting point.

In normal circumstances I would agree with it - we should get in line with our competitors, not try to invent our own way.

But these are not normal circumstances - we have a referral program which we think is brilliant and which is truly unique, no other competitor has it.
And to support this unique referral program we need a unique pricing strategy, one which is driven by the referral program businesses, not by our competitors or our feelings about "acceptable" price levels.

Our referral program is unique -> the pricing strategy needs to be unique as well to match it

In other words, we should either fully trust the referral program (including its ability to figure out the best pricing strategy) or scrap it altogether.
(And when I say  "pricing strategy" I mean both the price levels and decisions how to hide the fees or keep them visible)

@bytemaster, please listen to your sales force (i.e. the referral program businesses), not to a random Joe you meet on plane.
If the sales people say they can sell at these prices (and without hiding them), at least let's give them a chance.
If they got it wrong, they will be the ones who will cry the loudest to lower the fees or hide them.

[BTSdac]

Disagree

[merivercap]

BM,
I think we can think of making p2p fees free down the road and have some merchant identification system, but I think it's a bit early to focus on cost rather than value. Fees help us validate value propositions and identify certain demographics that really need this solution.  It may be that we go after the unbanked/anti-bank crowd who may not be sensitive to fees.  Otherwise most people will use Square cash, Paypal or Venmo for p2p transactions and for now most people are probably happy with those solutions.   We can go after them after we get our foot in the door with more targeted demographics who we'll be solving a real problem for.

Merchants won't really care that much if someone  is a LTM or not.. 20 cents is already cheap.  If there was an easy way to give back 16 cents per transaction after every 10 transactions ($1.60) to a LTM consumer as part of a loyalty program I'm sure merchants will do it and if all merchants did that then consumers will have extra incentive to upgrade.  Otherwise using the LTM as a requirement to participate in the referral program should be enough to encourage users to upgrade.    Lastly in p2p transactions users will recognize there is a 20 cent fee so it's up to the giver/receiver to determine who pays it...people may end up splitting the fee... also if someone likes our system and does enough p2p transactions, the person may be motivated to upgrade and cover the fee when sending his friends money and likewise in the future his friends might reciprocate and cover the 20 cent fees until they decide to upgrade.   

It's probably much easier to keep the transfer fees as they are at 20 cents and come back when we have thousands of actual data points from real consumers and real merchant and as Steve Blank says 'Get out of the building..'  we plan to do that... and a lot of the discussion is probably going to be about 'What is this Bitshares/blockchain thing?'  'How can I trust it?" " How do I buy BitUSD?"  "How do I get out?"  etc and the actual conversations will have little to do with fees. 

[xiahui135]

https://bitsharestalk.org/index.php/topic,19749.30.html have you read this?

Excellet!

[bytemaster]

The fee for the "user to merchant" transaction is paid by the user, so from the merchant point of view, a cut from that fee is an income. (or I am missing something)

The user doesn't see the fee (shouldn't see the fee).  If the user sees the fee, then giving a cut to the merchant is the same as not giving a cut to the merchant and having the merchant charge a higher price.
If the user sees the fee, then the merchant has incentive to create P2P accounts rather than a merchant account.
If the user doesn't see the fee, then and the merchant "pays" the fee then the merchant still has incentive to create P2P accounts.

The only way to incentivise merchant identification is to make it more profitable for the merchant to identify themselves than not.  If they don't identify themselves they (and their customers) pay nothing (P2P fees are 0), therefore the only way to force merchants to identify themselves is to actually PAY THEM (charge negative fees).

[Bhuz]

Considering we cannot share the fee with the merchant as an incentive because that is economically equivalent to simply lowering the fee.

Why you say that is equivalent to simply lowering the fee?
The fee for the "user to merchant" transaction is paid by the user, so from the merchant point of view, a cut from that fee is an income. (or I am missing something)
If the merchant uses that cut to lower the price of the product he is selling, then yes, is equivalent to lower that fee.
But the cut that the merchant would earn, could be used in a different way... just as a plus neat earn, or as a merchant fund for ads his business and attract new consumers --> more earning (ex: give huge discounts every month using the collected monthly fees)

So this gets to the real question, what is the value of a Life Time Membership to end users? The primary value must be Discounts offered by merchants. Merchants would offer every customer who is a LTM a discount on their products proportional to the savings the merchant is getting on fees.

Can we "force" the merchants to make discounts to LTM ?

Because the point was that we can not force the merchant to use a merchant account type, so we probably cannot neither force them to give discounts.

The point to add that fee income to merchant was just to make them willing to use a merchant account (since we cannot force them), because it will give them some advantage. (more earning or free fund for ads/discount, or anything else)

[jakub]

Who are the professional referral program businesses? I'm only aware of Max Wright, who has both referral programme experience and good knowledge of BitShares. While I value & heavily weight his opinion in these matters it is just one.

Whoever they are, they are the ones who are in the best position to find the sweet spot for the pricing strategy as they realize this:
- if the price is too high, I earn more but the product is harder to sell (but at the same time the probability of LT upgrade is higher)
- if the price is too low, I earn less but the product is a bit easier to sell (but at the same time the probability of LT upgrade is lower)
So they have a natural incentive to come up with the best price not only for them but for all of us.

Currently we have Max Wright but you are right that finding a perfect consensus among multiple referral program operators might be difficult due to regional and cultural differences.

But maybe this is a simple solution to keep everyone happy: those of referral program operators who think the product is overpriced (and thus too difficult to sell) can always offer to prefund their newly acquired customers with their own money and this way compensate them, at least initially, for the steep pricing. This way they will lower their profits but will be able to sell more.

[SpiritofJefferson]

There are two businesses here:

1. Payments
2. Exchange
...

What about differentiate the Payments business in
A: user to user (lower fee nexto to 0, if not 0 at all)
B: user to merchant (higher fee)

There will be need of a new account type for merchant, with different setting on fees.
And maybe also some pros attached to this new type of account...

Would be this feasible ?!

Well if we were to put a transaction cap per day on individual accounts (which I think bytemaster listed as a possible alternative), we could encourage merchants to buy lifetime memberships. The transaction cap per day should be reasonable so that everyday users can send, say, up to 10 transactions a day. If a merchant were to do more than that they could upgrade their membership to do more transactions a day. In the meantime though, I feel like we should focus on the exchange first and keep transaction fees for a while and adjust accordingly, but in the future we could for sure differentiate them in some similar way.

[bytemaster]

If there was a merchant account it would be identified by the relative number of times it received funds compared to sending funds. It would be trivial to work around by creating new accounts frequently.

That is the problem with decentralized solutions, it becomes very hard to discriminate.

What about driving merchant to create and use merchant's accout type instead of normal one?
For "driving" I mean make the merchant account better than the normal one (from a merchant point of view ofc)

We should try to think and identify some particular features that almost all merchant would like to have, something that they need or that can be profitable for them also, and attach these features to the merchant account type.
I am sure we could find something like that...

As you already said, we could discriminate the new account type by
1. the number of allowed received transaction per hours/days or what fit best
or 2. relative number of received compared to sent
Edit: making a cap limit to the normal account, and unlimited to merchant

How prevent the problem of merchant using several normal account instead?
-thanks to the pros features they would get with the merchant type of account

For example the "high fee" for "user to merchant" transactions could be divided into 20%network - 60% referrer - 20% merchant (values only for example, idk what could be the best division)
The point is to redirect a small part of that fee to the merchant itself, making the merchant account type profitable.

The merchant at this point could even use that little earn to bring new costumers to him.
-He could deduct that fee from the price of the product he's selling
-or even collect the fees's monthly income to give huge discount on some products and attract new costumers

This could be a feature that merchant could be willing to have/use...we just need some others like this that make the merchant account very attractive for merchant!

Would love some thinking and discussion about all of this

Considering we cannot share the fee with the merchant as an incentive because that is economically equivalent to simply lowering the fee.  It boils down to simple economics, if we want merchants to self-identify they must be compensated. This means a new expense on the network. We cannot simply lower their fees or everyone would identify themselves as a merchant.

So lets consider the simple case of paying merchants.

1. A merchant must receive funds an order of magnitude more than they send funds (and have a diversity of accounts that they receive funds from)
2. Any account with a merchant profile is generating business for the network and should be rewarded along with the referrer of those users

The only way to reward both the referrer and the merchant in this case is dilution because the transfer in the P2P case is free. So the only problem that needs to be solved is the one of people "mining" by having fake merchant accounts.

One way of preventing "mining" is by only counting purchases by lifetime members. In this case, the lifetime membership fee would need to be divided among the following players:

1. Network
2. Registrar
3. Referrer
4. Affiliate
5. Merchants

Because an attacker can arrange for all of his accounts to qualify for 2, 3, and 4 the cost of a LTM for an attacker is only 1 and 5. If they are an attacker attempting to claim most of 5 for themselves, it leaves only 1.

In other words, we want merchants to incentivise users to upgrade to a lifetime member. The part of the LTM fee that goes to merchants would be a pool that is divided proportional to what percent of LTM accounts utilized each merchant.

So this gets to the real question, what is the value of a Life Time Membership to end users? The primary value must be Discounts offered by merchants. Merchants would offer every customer who is a LTM a discount on their products proportional to the savings the merchant is getting on fees. 

My conclusion from this is that the network should take 33% merchants should take 33% and referrers should take 33%. 

At the end of the day the Merchant is the one that wants to incentivise payment via BTS.

I am done rambling, not sure I have solved the problem.

[Empirical1.2]

I was saying you can't follow a line of logic that says we need to charge X for a product to make the referral programme lucrative and generate network effect. As if X overprices the product then it won't work.

You say:
Let's set the price at a level acceptable by customers (in our unprofessional opinion) and if the referral program businesses say they don't have enough incentive to operate, so be it. Our judgement regarding pricing overrules the referral program businesses' judgment as they are not smart enough to realize that they won't sell much because the product is overpriced.

Yes I say look at crypto and relevant competitors, valuable shareholder feedback and possibly a price survey to determine the acceptable upper limits of the transfer fees as a good starting point.

And I say:
Let's set the price at a level recommended by the referral program businesses (in their professional opinion) and let's give them a chance to access whatever customers they can. If after a while they come back to us saying they can't sell because the product is overpriced, we will lower the price (but we will also lower their financial incentive) and we will see if it helps.

Who are the professional referral program businesses? I'm only aware of Max Wright, who has both referral programme experience and good knowledge of BitShares. While I value & heavily weight his opinion in these matters it is just one.

I've also said fine keep it high then...

As it stands BTS is near an ATL vs. USD and BTC. If you're going to keep it high for a while (Which may counter-intuitively be damaging the referral programme.) At least come up with a time frame and some other measurement, so at some point you can say, 'OK, I think it's time we should try lower fees'. As I don't want to be arguing in 3 months & at a $5 million CAP that it just needs more time.

However just sending the tokens back and forth doesn't seem to justify a high transfer fee based on industry examples and forum feedback thus far.

Describe to me why would I want to "send the tokens back and forth" for other reasons than shopping, if I'm an online consumer (not a trader).

Just like on PayPal to 'Send or receive money between friends and family'
Or just for inter-account transfers.  (moving and transferring your money between your various accounts) like on Uphold  'Move and hold your money. Instant and free, for any member, anywhere.'

I'm also not advocating 'free'. I'm just pointing out that in crypto, BitAsset competitors and even PayPal, basic transfers usually have a low/free fee so relatively speaking $0.2 may be high.

Anyway, I think I've said as much as I can here for a while.

[jakub]

(b) is not known. In fact as explained previously the referral programme may be far more lucrative with lower fees. As a thumbsuck example, if $0.15 dissuades 90% of Chinese users but $0.05 only dissuades 50%. Then referrers will attract 5x more users and generate 66% more in referral income with a $0.05 fee. (Those users may also make a lot more transfers when the fee is in the 'acceptable range' too, making it even more lucrative.)

Having 5x more users who may then go onto refer others will then generate exponentially more network effect over time too.

OK, find me one referral business operator on this forum who supports your way of thinking.

However just sending the tokens back and forth doesn't seem to justify a high transfer fee based on industry examples and forum feedback thus far.

Describe to me why would I want to "send the tokens back and forth" for other reasons than shopping, if I'm an online consumer (not a trader).

[tonyk]

...., low payment fees will not help boost the exchange business nor will low exchange fees help boost the payment business. ..

Good you understand that!

And this is one of my several major points, up this thread!

[Bhuz]

If there was a merchant account it would be identified by the relative number of times it received funds compared to sending funds. It would be trivial to work around by creating new accounts frequently.

That is the problem with decentralized solutions, it becomes very hard to discriminate.

What about driving merchant to create and use merchant's accout type instead of normal one?
For "driving" I mean make the merchant account better than the normal one (from a merchant point of view ofc)

We should try to think and identify some particular features that almost all merchant would like to have, something that they need or that can be profitable for them also, and attach these features to the merchant account type.
I am sure we could find something like that...

As you already said, we could discriminate the new account type by
1. the number of allowed received transaction per hours/days or what fit best
or 2. relative number of received compared to sent
Edit: making a cap limit to the normal account, and unlimited to merchant

How prevent the problem of merchant using several normal account instead?
-thanks to the pros features they would get with the merchant type of account

For example the "high fee" for "user to merchant" transactions could be divided into 20%network - 60% referrer - 20% merchant (values only for example, idk what could be the best division)
The point is to redirect a small part of that fee to the merchant itself, making the merchant account type profitable.

The merchant at this point could even use that little earn to bring new costumers to him.
-He could deduct that fee from the price of the product he's selling
-or even collect the fees's monthly income to give huge discount on some products and attract new costumers

This could be a feature that merchant could be willing to have/use...we just need some others like this that make the merchant account very attractive for merchant!

Would love some thinking and discussion about all of this

[bytemaster]

I was saying you can't follow a line of logic that says we need to charge X for a product to make the referral programme lucrative and generate network effect. As if X overprices the product then it won't work.

You say:
Let's set the price at a level acceptable by customers (in our unprofessional opinion) and if the referral program businesses say they don't have enough incentive to operate, so be it. Our judgement regarding pricing overrules the referral program businesses' judgment as they are not smart enough to realize that they won't sell much because the product is overpriced.

And I say:
Let's set the price at a level recommended by the referral program businesses (in their professional opinion) and let's give them a chance to access whatever customers they can. If after a while they come back to us saying they can't sell because the product is overpriced, we will lower the price (but we will also lower their financial incentive) and we will see if it helps.

This is a great summary.  The people who should be setting prices are those who are building businesses and trying to attract customers.  If someone can create a business that convinces people to pay $0.20 for transfers then that is a huge win for everyone. If they conclude that despite all of their marketing no one will pay that, then they will need to come up with a new business model.

Lower fees will not generate new users on its own. No incentive, no advertising, no users.

The proper question to ask is how does BitShares incentivise adoption and investment in marketing and user acquisition. 

[jakub]

I was saying you can't follow a line of logic that says we need to charge X for a product to make the referral programme lucrative and generate network effect. As if X overprices the product then it won't work.

You say:
Let's set the price at a level acceptable by customers (in our unprofessional opinion) and if the referral program businesses say they don't have enough incentive to operate, so be it. Our judgement regarding pricing overrules the referral program businesses' judgment as they are not smart enough to realize that they won't sell much because the product is overpriced.

And I say:
Let's set the price at a level recommended by the referral program businesses (in their professional opinion) and let's give them a chance to access whatever customers they can. If after a while they come back to us saying they can't sell because the product is overpriced, we will lower the price (but we will also lower their financial incentive) and we will see if it helps.

[Empirical1.2]

You made me spit out my coffee 'Who are you to know'  lol. https://www.youtube.com/watch?v=7LyfwHYB8xw  (Putin Laughing)

I didn't say I knew $0.15 was more than customers are willing to pay for basic transfers. I was saying you can't follow a line of logic that says we need to charge X for a product to make the referral programme lucrative and generate network effect. As if X overprices the product then it won't work.

We've already discussed the various ways of determining prices. Atm the approach seems to be keep them high for a while so that it can be tested.

I'm glad I've made you laugh
And I'm even more glad that finally we have something we seem to agree: we both don't know if $0.15 is more than customers are willing to pay for basic transfers. It might be too much but maybe not.

So we have these two statements:
(a) We don't really know if $0.15 exceeds our online consumers' tolerance level.
(b) We do know that $0.15 (or maybe $0.10) is the minimum for the referral program to work effectively.

Therefore, by combining (a) & (b) and using nothing else but rational thinking, we can safely come to the conclusion that we should stick to $0.15 for a while and give the referral program a chance to prove itself.
If you agree with (a) & (b) and still arrive at a different conclusion, then I rest my case.

Again I've already explained that's incorrect thinking.

(a) is correct but (b) is not known. In fact as explained previously the referral programme may be far more lucrative with lower fees. As a thumbsuck example, if $0.15 dissuades 90% of Chinese users but $0.05 only dissuades 50%. Then referrers will attract 5x more users and generate 66% more in referral income with a $0.05 fee. (Those users may also make a lot more transfers when the fee is in the 'acceptable range' too, making it even more lucrative.)

Having 5x more users who may then go onto refer others will then generate exponentially more network effect over time too.

As it stands BTS is near an ATL vs. USD and BTC. If you're going to keep it high for a while (Which may counter-intuitively be damaging the referral programme.) At least come up with a time frame and some other measurement, so at some point you can say, 'OK, I think it's time we should try lower fees'. As I don't want to be arguing in 3 months & at a $5 million CAP that it just needs more time.

As for the bet on the two ways of thinking, I think B for Non US and Western European customers definitely, they are sensitive to a dollar in fees given their lower incomes and I'm lead to believe from forum feedback that Chinese banks and online services make many of their fees appear free to the end user.   

Nope. The assumption was that both A and B spend over $100 per month on online payments (roughly 10 online payments a month) so they are similarly well-off, regardless of their geographical location.
So a potential difference in price sensitivity might only stem from cultural background. But this is highly unlikely as $0.75 (=$1.00-$.25) is objectively a small amount if you are rich enough to spend over $100 to buy things online on a regular basis. 

Also for US and Western European customers given that many purchase fees are often hidden and that as I mentioned PayPal and Uphold two moderately relevant examples, advertise free basic transfers as a key selling point.

Hiding fees is not the same as lowering them - so this is a different topic.
Personally I am against hiding fees (for ideological reasons) but this is irrelevant here.

The assumption was that both A and B spend over $100 per month on online payments (roughly 10 online payments a month) so they are similarly well-off, regardless of their geographical location.
So a potential difference in price sensitivity might only stem from cultural background. But this is highly unlikely as $0.75 (=$1.00-$.25

It doesn't change my answer but roughly 10 purchases at $0.15 vs. $0.05 the difference is $1.00 ($1.50 - $0.5)

Also the critical difference is you're making a purchase in that example, not just a basic transfer. Similarly to how traders are happy to pay a fee when their order is filled, customers are more happy to pay a fee when BTS is used to help them make a purchase and at a cheaper price than competitors. However just sending the tokens back and forth doesn't seem to justify a high transfer fee based on industry examples and forum feedback thus far.

Edit: Unfortunately distinguishing between merchant accounts seems to be no easy task according to BM above.

[bytemaster]

There are two businesses here:

1. Payments
2. Exchange
...

What about differentiate the Payments business in
A: user to user (lower fee nexto to 0, if not 0 at all)
B: user to merchant (higher fee)

There will be need of a new account type for merchant, with different setting on fees.
And maybe also some pros attached to this new type of account...

Would be this feasible ?!

If there was a merchant account it would be identified by the relative number of times it received funds compared to sending funds. It would be trivial to work around by creating new accounts frequently.

That is the problem with decentralized solutions, it becomes very hard to discriminate.

[jakub]

You made me spit out my coffee 'Who are you to know'  lol. https://www.youtube.com/watch?v=7LyfwHYB8xw  (Putin Laughing)

I didn't say I knew $0.15 was more than customers are willing to pay for basic transfers. I was saying you can't follow a line of logic that says we need to charge X for a product to make the referral programme lucrative and generate network effect. As if X overprices the product then it won't work.

We've already discussed the various ways of determining prices. Atm the approach seems to be keep them high for a while so that it can be tested.

I'm glad I've made you laugh
And I'm even more glad that finally we have something we seem to agree: we both don't know if $0.15 is more than customers are willing to pay for basic transfers. It might be too much but maybe not.

So we have these two statements:
(a) We don't really know if $0.15 exceeds our online consumers' tolerance level.
(b) We do know that $0.15 (or maybe $0.10) is the minimum for the referral program to work effectively.

Therefore, by combining (a) & (b) and using nothing else but rational thinking, we can safely come to the conclusion that we should stick to $0.15 for a while and give the referral program a chance to prove itself.
If you agree with (a) & (b) and still arrive at a different conclusion, then I rest my case.

As for the bet on the two ways of thinking, I think B for Non US and Western European customers definitely, they are sensitive to a dollar in fees given their lower incomes and I'm lead to believe from forum feedback that Chinese banks and online services make many of their fees appear free to the end user.   

Nope. The assumption was that both A and B spend over $100 per month on online payments (roughly 10 online payments a month) so they are similarly well-off, regardless of their geographical location.
So a potential difference in price sensitivity might only stem from cultural background. But this is highly unlikely as $0.75 (=$1.00-$.25) is objectively a small amount if you are rich enough to spend over $100 to buy things online on a regular basis. 

Also for US and Western European customers given that many purchase fees are often hidden and that as I mentioned PayPal and Uphold two moderately relevant examples, advertise free basic transfers as a key selling point.

Hiding fees is not the same as lowering them - so this is a different topic.
Personally I am against hiding fees (for ideological reasons) but this is irrelevant here.

[Empirical1.2]

The two businesses are  fairly independent.  High transfer fees will not impact the Exchange business and High exchange fees will not impact the payment business.

...whatever the fees are set to are unlikely to impact the decentralized exchange business.

Yunbi may prove to be the exception. But why then did they actively seek to set their BTS withdrawal fee lower and advertise it as a benefit unless they felt high transfer fees impacted their centralized exchange business?

• Lowered the withdrawal fee to 10 BTS!

they get 80% back of their tx fees anyways. that's why the can do it.

Yes... I understand that.

The point is if the high transfer fees didn't impact their exchange business they'd charge the standard transfer fee and keep the difference.  But obviously they feel their exchange users care about transfer fees so they pass their LTM discount onto the customers and make their revenue from trading fees instead.

do you know that for sure or is this just another assumption? yunbi is only operatively working since a few days, they're far behind every other working exchange. that's why there's a need for promotion in my opinion.

Possibly, we'll have to wait and see. That's why I also said Yunbi may prove to be the exception. But my 'assumption' is we'd see Chinese exchanges like BTC38 if they upgraded,  lower the fee because their customers might be sensitive to it based on the feedback I've seen and Yunbi's actions which as you say might just be a promotion.

[Empirical1.2]

Similarly if you're charging more than customers are willing to pay for basic transfers everything after is moot.

Who are you to know that? How do you know that $0.15 is "more than customers are willing to pay for basic transfers"?

You made me spit out my coffee 'Who are you to know'  lol. https://www.youtube.com/watch?v=7LyfwHYB8xw  (Putin Laughing)

I didn't say I knew $0.15 was more than customers are willing to pay for basic transfers. I was saying you can't follow a line of logic that says we need to charge X for a product to make the referral programme lucrative and generate network effect. As if X overprices the product then it won't work.

We've already discussed the various ways of determining prices. Atm the approach seems to be keep them high for a while so that it can be tested.

Imagine two customers:

Customer A way of thinking:
I've spent over $100 this month for online shopping and I can't be really bothered too much whether I've paid $1 extra for the transfer fees or just $.25 extra. This makes no f** difference me.

Customer B way of thinking:
I've spent over $100 this month for online shopping but wait a minute..., what? I am now really pissed off that I needed to pay $1 extra for the transfer fees. If it was $.25 that would be fine but $1? No way. They f*** me by $0.75. I'm not gonna use it any more.

And now tell me, @Empirical1.2, how much would you bet that in a random sample of 1000 people you would find more B-type customers than A-type customers?

Apparently PayPal can, that's why they don't charge for basic transfers to friends and family. "Send or receive money between friends and family and we won’t charge you anything,"

PayPal does it because it can and because it does not do any damage to their core business or referral program.
And PayPal doing this does not mean that if it was not free, people would not do it. So there is no logic in your argument.

Looking at what others in the payments and BitAsset business such as PayPal or Uphold charge for similar products and services is obviously relevant &  I believe I've seen you reference the fees other services charge for trading when it suits your argument.

As for the bet on the two ways of thinking, I think B for Non US and Western European customers definitely, they are sensitive to a dollar in fees given their lower incomes and I'm lead to believe from forum feedback that Chinese banks and online services make many of their fees appear free to the end user.   

Also for US and Western European customers given that many purchase fees are often hidden and that as I mentioned PayPal and Uphold two moderately relevant examples, advertise free basic transfers as a key selling point.

[Bhuz]

There are two businesses here:

1. Payments
2. Exchange
...

What about differentiate the Payments business in
A: user to user (lower fee nexto to 0, if not 0 at all)
B: user to merchant (higher fee)

There will be need of a new account type for merchant, with different setting on fees.
And maybe also some pros attached to this new type of account...

Would be this feasible ?!

[fav]

The two businesses are  fairly independent.  High transfer fees will not impact the Exchange business and High exchange fees will not impact the payment business.

...whatever the fees are set to are unlikely to impact the decentralized exchange business.

Yunbi may prove to be the exception. But why then did they actively seek to set their BTS withdrawal fee lower and advertise it as a benefit unless they felt high transfer fees impacted their centralized exchange business?

• Lowered the withdrawal fee to 10 BTS!

they get 80% back of their tx fees anyways. that's why the can do it.

Yes... I understand that.

The point is if the high transfer fees didn't impact their exchange business they'd charge the standard transfer fee and keep the difference.  But obviously they feel their exchange users care about transfer fees so they pass their LTM discount onto the customers and make their revenue from trading fees instead.

do you know that for sure or is this just another assumption? yunbi is only operatively working since a few days, they're far behind every other working exchange. that's why there's a need for promotion in my opinion.

[Empirical1.2]

The two businesses are  fairly independent.  High transfer fees will not impact the Exchange business and High exchange fees will not impact the payment business.

...whatever the fees are set to are unlikely to impact the decentralized exchange business.

Yunbi may prove to be the exception. But why then did they actively seek to set their BTS withdrawal fee lower and advertise it as a benefit unless they felt high transfer fees impacted their centralized exchange business?

• Lowered the withdrawal fee to 10 BTS!

they get 80% back of their tx fees anyways. that's why the can do it.

Yes... I understand that.

The point is if the high transfer fees didn't impact their exchange business they'd charge the standard transfer fee and keep the difference.  But obviously they feel their exchange users care about transfer fees so they pass their LTM discount onto the customers and make their revenue from trading fees instead.

[jakub]

Similarly if you're charging more than customers are willing to pay for basic transfers everything after is moot.

Who are you to know that? How do you know that $0.15 is "more than customers are willing to pay for basic transfers"?

Imagine two customers:

Customer A way of thinking:
I've spent over $100 this month for online shopping and I can't be really bothered too much whether I've paid $1 extra for the transfer fees or just $.25 extra. This makes no f** difference me.

Customer B way of thinking:
I've spent over $100 this month for online shopping but wait a minute..., what? I am now really pissed off that I needed to pay $1 extra for the transfer fees. If it was $.25 that would be fine but $1? No way. They f*** me by $0.75. I'm not gonna use it any more.

And now tell me, @Empirical1.2, how much would you bet that in a random sample of 1000 people you would find more B-type customers than A-type customers?

Apparently PayPal can, that's why they don't charge for basic transfers to friends and family. "Send or receive money between friends and family and we won’t charge you anything,"

PayPal does it because it can and because it does not do any damage to their core business or referral program.
And PayPal doing this does not mean that if it was not free, people would not do it. So there is no logic in your argument.

[fav]

The two businesses are  fairly independent.  High transfer fees will not impact the Exchange business and High exchange fees will not impact the payment business.

...whatever the fees are set to are unlikely to impact the decentralized exchange business.

Yunbi may prove to be the exception. But why then did they actively seek to set their BTS withdrawal fee lower and advertise it as a benefit unless they felt high transfer fees impacted their centralized exchange business?

• Lowered the withdrawal fee to 10 BTS!

they get 80% back of their tx fees anyways. that's why the can do it.

[Empirical1.2]

The two businesses are  fairly independent.  High transfer fees will not impact the Exchange business and High exchange fees will not impact the payment business.

...whatever the fees are set to are unlikely to impact the decentralized exchange business.

Yunbi may prove to be the exception. But why then did they actively seek to set their BTS withdrawal fee lower and advertise it as a benefit unless they felt high transfer fees impacted their centralized exchange business?

• Lowered the withdrawal fee to 10 BTS!

[bytemaster]

There are two businesses here:

1. Payments
2. Exchange

The two businesses are  fairly independent.  High transfer fees will not impact the Exchange business and High exchange fees will not impact the payment business.

Likewise, low payment fees will not help boost the exchange business nor will low exchange fees help boost the payment business.  I guess technically, there is some overlap of migrating users onto the platform.

So if we were to completely remove the Exchange from the system, how would we grow as a Payment network?  We would have to charge fees on transfers. 

Setting those fees is more of an art than science, but whatever the fees are set to are unlikely to impact the decentralized exchange business.

[Empirical1.2]

@carpet ride
How do you get merchants to begin with?

You only get merchants if you have some users.

How do you get users?

Only if you have network effect.

How do you get network effect?

By creating an effective referral program. An effective referral program will attract marketers and wallets that live from the referral fee. If you remove that from the equation, how do you gain network effect? A referral program on 2% of the traders will not have as much transaction as on 100% of the users, I presume.

I would say one of the ways to start to gain merchant adoption is to get picked up by payment processors. As I mentioned earlier in the thread, expanding processor, Coinify might be a good start, they accept 16 blockchain tokens including BitUSD competitors NuBIts and TetherUSD. https://news.coinify.com/coinify-merchants-can-now-accept-16-blockchain-currencies/

As for the rest of your reasoning, I disagree. That's like saying we need to charge $20 for cups of coffee otherwise the referral program won't work and we won't generate network effect. Unfortunately people won't pay $20 for a cup of coffee, so everything else falls apart. Similarly if you're charging more than customers are willing to pay for basic transfers everything after is moot.

Can you imagine a person who can afford to make 10 online purchases a month and at the same time cannot afford $1 to pay for transfer fees?
Why are we so fixated to satisfy this non-existent customer? Just to maintain the perception of being cheap?

Apparently PayPal can, that's why they don't charge for basic transfers to friends and family. "Send or receive money between friends and family and we won’t charge you anything,"

There's clearly a difference in the market between sending tokens back and forth and doing something more useful with it like making a purchase/currency conversion etc.

In an ideal world you would do what payment processors do (including crypto payment processors) and make distinctions between merchant accounts and individual accounts.

Then when customers do something useful to them like make a purchase, they will pay a larger fee, which will often be hidden in the purchase price (which will still be cheaper than competitors)

Uphold (previously BitReserve) which has 'supposedly' done >$0.5 Billion transfers this last year on their centralized BitAssets advertises "0% Free & Instant. Move, convert and hold your money. Instant and free, for any member, anywhere."
https://uphold.com/


BitAssets though are at least a useful product so there is some argument for charging higher transfer fees for those.  I would consider increasing the transfer fee for a specific BitAsset, like BitSilver/BitGold to $0.3. By your theory that would incentive wallet providers and referrers to promote BitSilver more than other BitAssets and if customers are price insensitive in that range then BitSilver should gain network effect very fast.

In my opinion, we still need a sizeable transfer fees, not nescessary 20 cents, but it should be at least 5-10 cents so a wallet provider has an incentive to run its business.

Yeah, I understand that it can't realistically be much cheaper than 5 cents at this stage.

[jakub]

I think that adding the referral system to the trading fees is a good idea, so the referral can earn money when one of their referred users trades. However, in the realworld  only maybe 1-2% of all users are active traders, the rest are casual users.

Please tell me, if the transfer fee is set to next to zero - what is the incentive for a wallet/payment provider to refer new users?

Casual users (98% of the userbase) are only interested in using their wallet to transfer money around, much like Paypal. They use their wallet to pay Merchants.

Under the new system, it's almost impossible to sustain a wallet/payment provider business. Only 2% of all referred users by this wallet provider are traders, the rest will only use the "money transfer" option.

In my opinion, we still need a sizeable transfer fees, not nescessary 20 cents, but it should be at least 5-10 cents so a wallet provider has an incentive to run its business.

Also, under the current system, people have an incentive to buy a lifetime upgrade, and the referral gets parts of this too. The fee must be high enough that the user is still incentivized to buy their LT upgrade.

How will we get main stream users when there's no incentive to run a wallet/payment service for the common users? I'm not talking about traders.

lowering transfer fees below $0.10 -> there is no incentive for LT upgrade for non-traders -> the referral program's incentive becomes weak -> our offer for merchants becomes less attractive -> merchants are not interested -> SmartCoins are useless because there is not much you can buy with them

In other words, we reach these two "goals":
- we deprive ourselves of an income stream
- we undermine our core product (i.e. SmartCoins) and our core incentive scheme (i.e. the referral program)

And all this just to satisfy this imaginary customer group: people who do online shopping on a regular basis but cannot afford to spend $1 a month for transfer fees.
How can we devise our pricing strategy if we have not put any effort into defining who our target customer is.

Can you imagine a person who can afford to make 10 online purchases a month and at the same time cannot afford $1 to pay for transfer fees?
Why are we so fixated to satisfy this non-existent customer? Just to maintain the perception of being cheap?

[mindphlux]

@carpet ride
How do you get merchants to begin with?

You only get merchants if you have some users.

How do you get users?

Only if you have network effect.

How do you get network effect?

By creating an effective referral program. An effective referral program will attract marketers and wallets that live from the referral fee. If you remove that from the equation, how do you gain network effect? A referral program on 2% of the traders will not have as much transaction as on 100% of the users, I presume.

[carpet ride]

Reduce the transfer fee if you must, but do not reduce it to 0, you kill the the merchants, the normal users and the wallet providers with that. There must be incentive to use the referral program for transfers for a functioning eco-system.

Merchants may be able to choose their fee structure regardless of the blockchain fee.  They have 30c plus 3% to play with.  The question may be do merchants really need the referral program or will they be happy enough being able to play with the additional margin.

[mindphlux]

I think traders will make up 70-80% of users for bitshares.  The exchange is what gives bts value, and it needs to be tailored for traders.  There really isn't a reason for Joe sixpack to use bts just for moving money around.

Yes, there is. He can hold USD, EUR, GBP without counterparty risk and use it like paypal with compatible merchants. Those merchants save fees and thus can offer discounts. He can even refer users to his wallet provider and gets a profit cut. He can also buy GOLD or SILVER within the same wallet and store his wealth inside BTS.

It's still a long stretch, but this is where we want to be heading.

If you cut the transfer fee, none of this will happen, and BTS will remain to be suited to traders only, and not Joe sixpack. Reducing fees is always possible, raising them in the future to have a sustainble referral program for normal users is a big PR disaster, and should be avoided at all costs.

EDIT:
No transfer fee - no incentive for wallet providers to open shop, and nobody refers joe sixpack users then, and thus no merchants too since there is no userbase. No need to have a referral program then too, since the product has no users except traders. No users = NO NETWORK EFFECT!

Reduce the transfer fee if you must, but do not reduce it to 0, you kill the the merchants, the normal users and the wallet providers with that. There must be incentive to use the referral program for transfers for a functioning eco-system.

[wallace]

I think that adding the referral system to the trading fees is a good idea, so the referral can earn money when one of their referred users trades. However, in the realworld  only maybe 1-2% of all users are active traders, the rest are casual users.

Please tell me, if the transfer fee is set to next to zero - what is the incentive for a wallet/payment provider to refer new users?

Casual users (98% of the userbase) are only interested in using their wallet to transfer money around, much like Paypal. They use their wallet to pay Merchants.

Under the new system, it's almost impossible to sustain a wallet/payment provider business. Only 2% of all referred users by this wallet provider are traders, the rest will only use the "money transfer" option.

In my opinion, we still need a sizeable transfer fees, not nescessary 20 cents, but it should be at least 5-10 cents so a wallet provider has an incentive to run its business.

Also, under the current system, people have an incentive to buy a lifetime upgrade, and the referral gets parts of this too. The fee must be high enough that the user is still incentivized to buy their LT upgrade.

How will we get main stream users when there's no incentive to run a wallet/payment service for the common users? I'm not talking about traders.

for a well-established non-crypto world product, you're right, only 2% users are active traders. but face the reality, we're talking about a crypto world, except the active users in our forum, I would say over 50% users are traders. I know our target is the real world not a crypto world, but we need step by step. we need strategy to sell our product to the real world.

[lil_jay890]

I think that adding the referral system to the trading fees is a good idea, so the referral can earn money when one of their referred users trades. However, in the realworld  only maybe 1-2% of all users are active traders, the rest are casual users.

Please tell me, if the transfer fee is set to next to zero - what is the incentive for a wallet/payment provider to refer new users?

Casual users (98% of the userbase) are only interested in using their wallet to transfer money around, much like Paypal. They use their wallet to pay Merchants.

Under the new system, it's almost impossible to sustain a wallet/payment provider business. Only 2% of all referred users by this wallet provider are traders, the rest will only use the "money transfer" option.

In my opinion, we still need a sizeable transfer fees, not nescessary 20 cents, but it should be at least 5-10 cents so a wallet provider has an incentive to run its business.

Also, under the current system, people have an incentive to buy a lifetime upgrade, and the referral gets parts of this too. The fee must be high enough that the user is still incentivized to buy their LT upgrade.

How will we get main stream users when there's no incentive to run a wallet/payment service for the common users? I'm not talking about traders.

I think traders will make up 70-80% of users for bitshares.  The exchange is what gives bts value, and it needs to be tailored for traders.  There really isn't a reason for Joe sixpack to use bts just for moving money around.

[mindphlux]

I think that adding the referral system to the trading fees is a good idea, so the referral can earn money when one of their referred users trades. However, in the realworld  only maybe 1-2% of all users are active traders, the rest are casual users.

Please tell me, if the transfer fee is set to next to zero - what is the incentive for a wallet/payment provider to refer new users?

Casual users (98% of the userbase) are only interested in using their wallet to transfer money around, much like Paypal. They use their wallet to pay Merchants.

Under the new system, it's almost impossible to sustain a wallet/payment provider business. Only 2% of all referred users by this wallet provider are traders, the rest will only use the "money transfer" option.

In my opinion, we still need a sizeable transfer fees, not nescessary 20 cents, but it should be at least 5-10 cents so a wallet provider has an incentive to run its business.

Also, under the current system, people have an incentive to buy a lifetime upgrade, and the referral gets parts of this too. The fee must be high enough that the user is still incentivized to buy their LT upgrade.

How will we get main stream users when there's no incentive to run a wallet/payment service for the common users? I'm not talking about traders.

[jakub]

Everyone claiming Bm didn't communicate is full of it.  He clearly stated that order matching fees were reserved for asset issuers to incentivize them. Bts has a 0% trading fee and it has been that way in every test net. Just because you didn't know doesn't mean it was not communicated many times in many ways.

We cannot treat forum posts as official source of information for our business partners.
Business people do not have time & resources to follow every post on this forum.

[Akado]

I was hoping to purchase a metatrader 4 trading license and configuring it to work with bitshares. I wanted to make the platform free to use and collect money from trading fees by being the referrer of each account.  Sounds like that business model is a non starter since trading fees don't go to the referrer??

See above. It seems the plan is to make trading fees go to the referrer.

[sittingduck]

The plan is to change it so that trading fees go to referrer.  Currently the order create and cancel fees go to referrer

[lil_jay890]

I was hoping to purchase a metatrader 4 trading license and configuring it to work with bitshares. I wanted to make the platform free to use and collect money from trading fees by being the referrer of each account.  Sounds like that business model is a non starter since trading fees don't go to the referrer??

[vlight]

I haven't exactly followed everything about BTS in the past months. But today when i tried to transfer BTS between my accounts i had a WTF moment when discovered 40 bts fee for a transfer between my accounts. If i have found this absurdity earlier i might have dumped this whole thing. This is like the stupidest idea second only to merger.

So you paid $0.15 for the service of moving your funds from one account to another.
I think your time devoted to write this post was worth more than the amount you are crying about.

It is. I'm providing the feedback. No micros-transactions is complete bs. imo anyway

[sittingduck]

Everyone claiming Bm didn't communicate is full of it.  He clearly stated that order matching fees were reserved for asset issuers to incentivize them.  Bts has a 0% trading fee and it has been that way in every test net.   Just because you didn't know doesn't mean it was not communicated many times in many ways.

[jakub]

I haven't exactly followed everything about BTS in the past months. But today when i tried to transfer BTS between my accounts i had a WTF moment when discovered 40 bts fee for a transfer between my accounts. If i have found this absurdity earlier i might have dumped this whole thing. This is like the stupidest idea second only to merger.

So you paid $0.15 for the service of moving your funds from one account to another.
I think your time devoted to write this post was worth more than the amount you are crying about.

[Akado]

I still am a bit confused why trading fees were not part of the referral program as it stands now, that was a bit surprising to find out yesterday since I read these pages and no where got the impression that trading fees are not considered 'transaction fees'.

https://bitshares.org/technology/referral-rewards-program/
https://bitshares.org/referral-program/
https://bitshares.org/referral-program-terms-and-conditions/

The total trading volume in BTS is about $100K  (recently) meaning the network could be earning $150 per day or $54,000 per year just by moving all BTS trading on chain.   
If we can get the daily volume on the exchange up to $1,000,000  (something BTS has achieved in the past) and simply sustain it then the network would be earning $540,000 per year  (6% yield) on current valuations. 
That is just the trading volume of BTS.   Throw in the trading volume of all the other assets on the BTS chain and the total volume of the exchange will be much higher.

Under the current referral program none of that money would be going to referrers.   Under the new referral program 80% of that money would be going to referrers. 

So which is going to generate more referral income?  Trading or Transfers?   To generate 540,000 per year from transfers would require a sustained 5 transfers per minute on the network.

What use case do you want to support, an exchange or a currency?

That means they're working on improving the referral system to include trading fees right?

[vlight]

I haven't exactly followed everything about BTS in the past months. But today when i tried to transfer BTS between my accounts i had a WTF moment when discovered 40 bts fee for a transfer between my accounts. If i have found this absurdity earlier i might have dumped this whole thing. This is like the stupidest idea second only to merger.

[clayop]

If we can implement percentage fee for each trade, and DEX has a high volume, revenue from trading fee will be much more than transfer fee.
In this case, why we have to keep transfer fee high and make customer's perception bad?

When you say "customer's perception" who is the customer? What kind of customer?  A trader? A merchant? Or an online consumer?
Each kind of them has a different business model and different incentives.
What's good for a merchant might be bad for a consumer and vice versa.

We need to be very specific and must not treat the customer concept as a big lump of people.

No customer dislikes lowering fees. Only shareholders care about it.

And your conclusion is?
I've asked a very simple question (who do you mean when you say "customer"?) and there seems to be no answer.

All types of customer except who are shareholders at the same time.

[clayop]

If we can implement percentage fee for each trade, and DEX has a high volume, revenue from trading fee will be much more than transfer fee.
In this case, why we have to keep transfer fee high and make customer's perception bad?

When you say "customer's perception" who is the customer? What kind of customer?  A trader? A merchant? Or an online consumer?
Each kind of them has a different business model and different incentives.
What's good for a merchant might be bad for a consumer and vice versa.

We need to be very specific and must not treat the customer concept as a big lump of people.

No customer dislikes lowering fees. Only shareholders care about it.

scenario:

merchant sells product 1 for 10 USD
thanks to the referral program and the fees he makes, he is able to offer 10% discount on said product.

Product 1 costs now $9

what would you like more? $0.20 TX fee or get discounts at many merchants?

we have to run a business here, many of you have to start thinking outside of the box ASAP.

If I were a merchant, I will charge $9.04 (9+0.2*20%) under the current fee system, and will charge $9.0001 under the new fee system.
A cost of fee is always included in merchants' price.

[jakub]

If we can implement percentage fee for each trade, and DEX has a high volume, revenue from trading fee will be much more than transfer fee.
In this case, why we have to keep transfer fee high and make customer's perception bad?

When you say "customer's perception" who is the customer? What kind of customer?  A trader? A merchant? Or an online consumer?
Each kind of them has a different business model and different incentives.
What's good for a merchant might be bad for a consumer and vice versa.

We need to be very specific and must not treat the customer concept as a big lump of people.

No customer dislikes lowering fees. Only shareholders care about it.

And your conclusion is?
I've asked a very simple question (who do you mean when you say "customer"?) and there seems to be no answer.

[fav]

If we can implement percentage fee for each trade, and DEX has a high volume, revenue from trading fee will be much more than transfer fee.
In this case, why we have to keep transfer fee high and make customer's perception bad?

When you say "customer's perception" who is the customer? What kind of customer?  A trader? A merchant? Or an online consumer?
Each kind of them has a different business model and different incentives.
What's good for a merchant might be bad for a consumer and vice versa.

We need to be very specific and must not treat the customer concept as a big lump of people.

No customer dislikes lowering fees. Only shareholders care about it.

scenario:

merchant sells product 1 for 10 USD
thanks to the referral program and the fees he makes, he is able to offer 10% discount on said product.

Product 1 costs now $9

what would you like more? $0.20 TX fee or get discounts at many merchants?

we have to run a business here, many of you have to start thinking outside of the box ASAP.

[clayop]

If we can implement percentage fee for each trade, and DEX has a high volume, revenue from trading fee will be much more than transfer fee.
In this case, why we have to keep transfer fee high and make customer's perception bad?

When you say "customer's perception" who is the customer? What kind of customer?  A trader? A merchant? Or an online consumer?
Each kind of them has a different business model and different incentives.
What's good for a merchant might be bad for a consumer and vice versa.

We need to be very specific and must not treat the customer concept as a big lump of people.

No customer dislikes lowering fees. Only shareholders care about it.

[jakub]

If we can implement percentage fee for each trade, and DEX has a high volume, revenue from trading fee will be much more than transfer fee.
In this case, why we have to keep transfer fee high and make customer's perception bad?

When you say "customer's perception" who is the customer? What kind of customer?  A trader? A merchant? Or an online consumer?
Each kind of them has a different business model and different incentives.
What's good for a merchant might be bad for a consumer and vice versa.

We need to be very specific and must not treat the customer concept as a big lump of people.

[jakub]

I don't think you'll receive a trivial result. Companies ask their customers these questions and it works even though you might think customers would respond with options that were too cheap. 

I did not say you will receive a trivial result.
What I said was you might receive a trivial result IF you don't do it in a professional way using quite advanced market research methods, e.g. the Conjoint Analysis.

In this case the community are not only customers but also shareholders, so they should be able to take into account all the factors and if anything they will over-estimate what someone is willing to pay because they think BitShares is better than it really is.

I don't agree. I think the effect I described is much stronger. But it's hard to prove - it's just my opinion against yours.

Do you have any information on potential merchants?

Pure logic on my side. Merchants mostly receive payments so in most cases they are not the ones who pay the transfer fees.


*********************************
I'll shut up now. As I said before I think this whole transfer fee debate is counterproductive and we cannot afford it anymore.
All I care about at this stage, is to make these 3 groups of stakeholders happy:
- the traders
- the merchants
- and the referral program businesses
If you represent any them and can logically prove that high transfer fees are hurting them - I will listen.
If you represent the online consumers point of view - I just don't care (at this stage).

[clayop]

If we can implement percentage fee for each trade, and DEX has a high volume, revenue from trading fee will be much more than transfer fee.
In this case, why we have to keep transfer fee high and make customer's perception bad?

[jakub]

I still am a bit confused why trading fees were not part of the referral program as it stands now, that was a bit surprising to find out yesterday since I read these pages and no where got the impression that trading fees are not considered 'transaction fees'.

https://bitshares.org/technology/referral-rewards-program/
https://bitshares.org/referral-program/
https://bitshares.org/referral-program-terms-and-conditions/

The total trading volume in BTS is about $100K  (recently) meaning the network could be earning $150 per day or $54,000 per year just by moving all BTS trading on chain.   
If we can get the daily volume on the exchange up to $1,000,000  (something BTS has achieved in the past) and simply sustain it then the network would be earning $540,000 per year  (6% yield) on current valuations. 
That is just the trading volume of BTS.   Throw in the trading volume of all the other assets on the BTS chain and the total volume of the exchange will be much higher.

Under the current referral program none of that money would be going to referrers.   Under the new referral program 80% of that money would be going to referrers. 

So which is going to generate more referral income?  Trading or Transfers?   To generate 540,000 per year from transfers would require a sustained 5 transfers per minute on the network.

What use case do you want to support, an exchange or a currency?

You have to keep your words if you want to build confidence in your product. No idea why trading fees are not in the ref program

I also agree. And I was also unaware of this "feature".

@bytemaster,  this is yet another example of quite terrible communication with your own community.
I understand you might not have time now to write proper documentation of your own code but a simple (unofficial) list of all major features like this one would greatly alleviate the problem.

How do you expect us to build businesses based on the referral program if this kind of information is not available to us?
And how can we treat the BTS blockchain as a manifestation of community consensus if we are not aware what's inside this black box?
First we had the margin call rules surprise and now we discover this.

[fav]

I still am a bit confused why trading fees were not part of the referral program as it stands now, that was a bit surprising to find out yesterday since I read these pages and no where got the impression that trading fees are not considered 'transaction fees'.

https://bitshares.org/technology/referral-rewards-program/
https://bitshares.org/referral-program/
https://bitshares.org/referral-program-terms-and-conditions/

The total trading volume in BTS is about $100K  (recently) meaning the network could be earning $150 per day or $54,000 per year just by moving all BTS trading on chain.   
If we can get the daily volume on the exchange up to $1,000,000  (something BTS has achieved in the past) and simply sustain it then the network would be earning $540,000 per year  (6% yield) on current valuations. 
That is just the trading volume of BTS.   Throw in the trading volume of all the other assets on the BTS chain and the total volume of the exchange will be much higher.

Under the current referral program none of that money would be going to referrers.   Under the new referral program 80% of that money would be going to referrers. 

So which is going to generate more referral income?  Trading or Transfers?   To generate 540,000 per year from transfers would require a sustained 5 transfers per minute on the network.

What use case do you want to support, an exchange or a currency?

You have to keep your words if you want to build confidence in your product. No idea why trading fees are not in the ref program

[mint chocolate chip]

I still am a bit confused why trading fees were not part of the referral program as it stands now, that was a bit surprising to find out yesterday since I read these pages and no where got the impression that trading fees are not considered 'transaction fees'.

https://bitshares.org/technology/referral-rewards-program/
https://bitshares.org/referral-program/
https://bitshares.org/referral-program-terms-and-conditions/

The total trading volume in BTS is about $100K  (recently) meaning the network could be earning $150 per day or $54,000 per year just by moving all BTS trading on chain.   
If we can get the daily volume on the exchange up to $1,000,000  (something BTS has achieved in the past) and simply sustain it then the network would be earning $540,000 per year  (6% yield) on current valuations. 
That is just the trading volume of BTS.   Throw in the trading volume of all the other assets on the BTS chain and the total volume of the exchange will be much higher.

Under the current referral program none of that money would be going to referrers.   Under the new referral program 80% of that money would be going to referrers. 

So which is going to generate more referral income?  Trading or Transfers?   To generate 540,000 per year from transfers would require a sustained 5 transfers per minute on the network.

What use case do you want to support, an exchange or a currency?

[Empirical1.2]

So we just do a forum survey and ask members to say what transfer fee is 'too cheap', 'a bargain', 'expensive' and 'too expensive'. This survey works well with regular customers to find the 'optimal pricing space'. Given we are shareholders and will also be taking into account the referral programme and the impact on the value of their shares, with a decent sample size, the results should be fairly accurate.

Even if you take the approach of keeping high fees for a while, it may be useful to do this survey and see if we end up settling on a price predicted anyway. If so we may consider using it to help price other products and services in the future.

I'm all in favor of such market research approach.

But we need to take into account two important factors:
(1) You need to be smart about the way you ask the question. Because if you do it in a straight-forward way you'll receive a trivial result - it's obvious that users will want lower prices if they are given the choice. The tricky part is to determine how much they are still willing to pay before they start considering the product to be too overpriced to be worth buying.
(2) If we do the survey among this community the result will be very biased because almost all of us have a long position on BTS which means we perceive BTS value much higher than its actual market value. So a transfer fee of 40 BTS means for us much more than $0.15 - probably something like $0.50 or even $1.00. Whereas outside the community 40 BTS is just $0.15, nothing more.

I don't think you'll receive a trivial result. Companies ask their customers these questions and it works even though you might think customers would respond with options that were too cheap. 

In this case the community are not only customers but also shareholders, so they should be able to take into account all the factors and if anything they will over-estimate what someone is willing to pay because they think BitShares is better than it really is.

The only thing I think could be an issue is that we will price it optimally for the crypto-currency space but lower than outsiders might be willing to pay once we have comparable products and services.

(2) Merchants - not sensitive to transfer fees, very sensitive to the referral program working (and the referral program to work requires a perceivable difference between pay-as-you-go fees and LTM fees)

Do you have any information on potential merchants?

I see payment processor Coinify seems to be expanding and also accepts 16 blockchain currencies including TetherUSD and NuBits.
https://news.coinify.com/coinify-merchants-can-now-accept-16-blockchain-currencies/

[Tuck Fheman]

Where a crypto-company will make it's money is on the products, services & purchases. (Even PayPal doesn't charge for basic transfers)

they do.

No fee to transfer to family & friends with PayPal.

[jakub]

So we just do a forum survey and ask members to say what transfer fee is 'too cheap', 'a bargain', 'expensive' and 'too expensive'. This survey works well with regular customers to find the 'optimal pricing space'. Given we are shareholders and will also be taking into account the referral programme and the impact on the value of their shares, with a decent sample size, the results should be fairly accurate.

Even if you take the approach of keeping high fees for a while, it may be useful to do this survey and see if we end up settling on a price predicted anyway. If so we may consider using it to help price other products and services in the future.

I'm all in favor of such market research approach.

But we need to take into account two important factors:
(1) You need to be smart about the way you ask the question. Because if you do it in a straight-forward way you'll receive a trivial result - it's obvious that users will want lower prices if they are given the choice. The tricky part is to determine how much they are still willing to pay before they start considering the product to be too overpriced to be worth buying.
(2) If we do the survey among this community the result will be very biased because almost all of us have a long position on BTS which means we perceive BTS value much higher than its actual market value. So a transfer fee of 40 BTS means for us much more than $0.15 - probably something like $0.50 or even $1.00. Whereas outside the community 40 BTS is just $0.15, nothing more.

[Empirical1.2]

We've already had the discussion where lowering transfer fees doesn't mean necessarily mean less income.

If only 10% of Chinese users will pay $0.2 but 80% will pay $0.04 then $0.4 will earn the blockchain a lot more money. Also when the fee is in the 'acceptable range' people might make a lot more transfers, more frequently and so end up spending a similar amount as a higher fee would have generated anyway.

Well, this might be a valid argument. There must be a point where the optimal fee value is but to figure it out we need to know the price sensitivity curve. As BM rightly said a few days ago, in order to find out the price sensitivity of our users we need to experience high fees for some time and then lower them and observe how the transaction volume changes. I am not aware of a different way to do it.

That approach takes time and may not show statistically significant results.

I think I'm in favour of an approach that is apparently called the Van Westendorp price sensitivity monitor.

Respondents are asked four questions to determine what prices are too cheap, where a price is a bargain, when a price is expensive and where a price is too expensive. By plotting the cumulative curves for each of the four prices, the crossing points are deemed to be optimum points - for instance where the expensive and bargain price curves cross The resultant price "space" helps to determine the range of acceptable prices - and so pricing tactics - available.

http://www.dobney.com/Research/pricing_research.htm




So we just do a forum survey and ask members to say what transfer fee is 'too cheap', 'a bargain', 'expensive' and 'too expensive'. This survey works well with regular customers to find the 'optimal pricing space'. Given we are shareholders and will also be taking into account the referral programme and the impact on the value of their shares, with a decent sample size, the results should be fairly accurate.

Even if you take the approach of keeping high fees for a while, it may be useful to do this survey and see if we end up settling on a price predicted anyway. If so we may consider using it to help price other products and services in the future. 

[Xeldal]

Well I'll take it that you concede to a degree traders may be sensitive to transfer fees, given Yunbi's actions and current exchange standards.

Regards paying for witnesses and worker proposals.

I think many worker proposals like the prediction market should be crowd-funded & also possibly need to be run separately (Similar to Augur on Ethereum.) 

We've already had the discussion where lowering transfer fees doesn't mean necessarily mean less income.

If only 10% of Chinese users will pay $0.2 but 80% will pay $0.04 then $0.4 will earn the blockchain a lot more money. Also when the fee is in the 'acceptable range' people might make a lot more transfers, more frequently and so end up spending a similar amount as a higher fee would have generated anyway.

Also you can see Yunbi lowered the withdrawal fee, so obviously they feel they make more $ per customer & attract more customers by keeping the transfer fee as low as possible. So crypto-exchange comparable trading fees plus lower transfer fees could equal higher income.

So to finance costs, I suggest following the exchange model who presumably make the vast majority of their revenue from filled order fees.

I would also be in favour of adding anything that's simple, low cost and generates high transactions. eg. Blockchain dice. (Which I know is an issue.)

Edit: At the early stages while liquidity is an issue like you mentioned, I still think lower transfer fees could potentially generate comparable income as higher transfer fees for reasons stated above.

  Good stuff.  I agree

The demo net may be a good example case for drastic increased activity leading to wider adoption, showcasing games like dice or BM Bingo. 

Lower fees may not directly result in more transactions but having lower transfer fees might allow certain products to exist and flourish, bringing more users as well as more transactions, where they might otherwise have been impossible or unattractive, even if only psychologically.

[jakub]

Well I'll take it that you concede to a degree traders may be sensitive to transfer fees, given Yunbi's actions and current exchange standards.

I don't know about Yunbi in particular but to cover their costs centralized exchanges need to charge their customers at some stage, they usually do it when you try to withdraw your funds.
So their business model is not directly comparable to ours as we don't have the withdrawal stage.

Traders definitely do much more trading operations than transfers so in that sense they don't' really care about transfer fees too much as it is not a significant part of their business.

My point is that we need to charge fees on something or have inflation.
Having high transfer fees does the least damage, as the only people who are unhappy about it are those who are the least important to us at this stage. So we can afford to hurt them and get away with it.

We've already had the discussion where lowering transfer fees doesn't mean necessarily mean less income.

If only 10% of Chinese users will pay $0.2 but 80% will pay $0.04 then $0.4 will earn the blockchain a lot more money. Also when the fee is in the 'acceptable range' people might make a lot more transfers, more frequently and so end up spending a similar amount as a higher fee would have generated anyway.

Well, this might be a valid argument. There must be a point where the optimal fee value is but to figure it out we need to know the price sensitivity curve. As BM rightly said a few days ago, in order to find out the price sensitivity of our users we need to experience high fees for some time and then lower them and observe how the transaction volume changes. I am not aware of a different way to do it.

[Empirical1.2]

I'm using Poloniex at the moment and they don't charge anything extra, I don't know what the market accepted rate is. But if they're not charging it's because customers are sensitive to it and they make their money elsewhere.

We have to somehow pay for witnesses and worker proposals.
We can finance them by:
(a) Transfer fees
(b) Trading fees
(c) Other fees (e.g. new accounts, new assets, voting etc)
(d) Inflation
What do you choose?

This how I suggest to finance our costs:
For the initial stage (i.e. now, when liquidity is an issue)
(a) 60%
(b) 20%
(c) 20%
(d) only if we have no other choice

For the production stage (i.e. when liquidity is high)
(a) 10%
(b) 80%
(c) 10%
(d) never

Well I'll take it that you concede to a degree traders may be sensitive to transfer fees, given Yunbi's actions and current exchange standards.

Regards paying for witnesses and worker proposals.

I think many worker proposals like the prediction market should be crowd-funded & also possibly need to be run separately (Similar to Augur on Ethereum.) 

We've already had the discussion where lowering transfer fees doesn't mean necessarily mean less income.

If only 10% of Chinese users will pay $0.2 but 80% will pay $0.04 then $0.4 will earn the blockchain a lot more money. Also when the fee is in the 'acceptable range' people might make a lot more transfers, more frequently and so end up spending a similar amount as a higher fee would have generated anyway.

Also you can see Yunbi lowered the withdrawal fee, so obviously they feel they make more $ per customer & attract more customers by keeping the transfer fee as low as possible. So crypto-exchange comparable trading fees plus lower transfer fees could equal higher income.

So to finance costs, I suggest following the exchange model who presumably make the vast majority of their revenue from filled order fees.

I would also be in favour of adding anything that's simple, low cost and generates high transactions. eg. Blockchain dice. (Which I know is an issue.)

Edit: At the early stages while liquidity is an issue like you mentioned, I still think lower transfer fees could potentially generate comparable income as higher transfer fees for reasons stated above.

[jakub]

I'm using Poloniex at the moment and they don't charge anything extra, I don't know what the market accepted rate is. But if they're not charging it's because customers are sensitive to it and they make their money elsewhere.

We have to somehow pay for witnesses and worker proposals.
We can finance them by:
(a) Transfer fees
(b) Trading fees
(c) Other fees (e.g. new accounts, new assets, voting etc)
(d) Inflation
What do you choose?

This how I suggest to finance our costs:
For the initial stage (i.e. now, when liquidity is an issue)
(a) 60%
(b) 20%
(c) 20%
(d) only if we have no other choice

For the production stage (i.e. when liquidity is high)
(a) 10%
(b) 80%
(c) 10%
(d) never

[Empirical1.2]

These are our users listed by priority:
(1) Traders - not sensitive to transfer fees, might be sensitive to trading fees
(2) Merchants - not sensitive to transfer fees, very sensitive to the referral program working (and the referral program to work requires a perceivable difference between pay-as-you-go fees and LTM fees)
(3) Consumers (i.e. normal users) - sensitive to transfer fees and the referral program working

Right now we are in phase (1) and maybe a bit of (2).

Transfer fees are not worth discussing until we are in phase (3), now it is just an unnecessary distraction and referral program killer.
And in phase (3) we will be in a position to actually lower the transfer fees as the revenue will start coming from trading.

'(1) Traders - not sensitive to transfer fees, might be sensitive to trading fees'

How much does the average crypto exchange charge you to deposit, withdraw and move funds within their exchange?

I'm using Poloniex at the moment and they don't charge anything extra, I don't know what the market accepted rate is. But if the standard is not to charge it's because customers are sensitive to it and they make their money elsewhere.

In fact it seems businesses know traders are so sensitive about transfer fees that Yunbi made an effort to lower theirs...

• Lowered the withdrawal fee to 10 BTS!

[jakub]

Let's get our priorities right.

This is our user-base listed by priority:
(1) Traders - not sensitive to transfer fees, might be sensitive to trading fees
(2) Merchants - not sensitive to transfer fees, very sensitive to the referral program working (and for the referral program to work a perceivable difference between pay-as-you-go fees and LTM fees is required)
(3) Consumers (i.e. normal users) - sensitive to transfer fees (especially in countries like China) but also sensitive to the referral program working

Right now we are in phase (1) and maybe a bit of (2).

Transfer fees are not worth discussing until we are in phase (3), now it is just an unnecessary distraction and referral program killer.
And in phase (3) we will actually be in a position to lower transfer fees as the revenue will start coming from trading fees.

[Xeldal]

...
If BitShares doesn't yet have any useful products and services then the potential is limited. The solution for the referral programme is to fast track a product (if you can't artificially stimulate BitAsset liquidity)  But charging high transfer fees won't aid adoption or the referral programme imo.


REFERRER: Hey dude do you wanna join BitShares?

DUDE: Is BitShares a crypto-currency like Bitcoin that the whole world may end up using like a digital gold?

REFERRER: No. BitShares is a crypto-company! 

DUDE. OK? What's the point?

REFERRER: Well we're able to use profits and shareholder directed dilution to fund development of awesome decentralised products and services!

DUDE: Cool you mean like Gambling and Silk Road, all on a blockchain!? 

REFERRER: Well unfortunately, BitShares decentralization is just a thin veil so we can't actually offer those..

If you are suggesting that the big idea is to skirt regulations by hiding behind the thin veil of decentralization, that will come to a quick end.

I would recommend NXT or Augur on Etherum for that. What we do offer though is a decentralised exchange and BitAssets, so you can hold currencies like BitUSD on the blockchain!

DUDE: Cool, I'll take a 1000 BitUSD!

REFERRER: Whoa, steady on there buddy, our markets aren't actually liquid or very active yet.

DUDE: Ok so what can I do on this BitShares?
...

Thats a pretty good summary.  There isn't yet a functional product and the low hanging home run options for whatever reason are off limits.  Its pretty sad, given the core ideal of bitshares is supposedly immutable unstopable freedom and voluntary choice, free market solutions etc.   yet we're not allowed to do all sorts of peaceful, voluntary, valuable exchanges because we're scared someones ignorance will paint us in a poor light.   Better that someone shines a light at all on bitshares lest it gets even darker around here. 

That discussions probably best for another thread though.

[Tuck Fheman]

At this stage we need traders and trading bots, not small users who will just send a token back and forth a few times and get bored after a week.
Those small users will not bring liquidity to SmartCoins.

Nor will a bunch of whales sitting on their stacks waiting to cash out one day.

[Empirical1.2]

Yeah. I know that's why in the intro I said we need to fast track a product/service that makes BitShares more useful given that the markets are still not very active.

I think a cheaper fee is better at the moment. You will get more people into the system, experimenting with what little is on offer at the moment. It also means you can give out free samples to try it out, whereas atm 100 BTS just covers two transactions.

This whole transaction fee debate is doing two things:
(1) distracting us from the real problem (i.e. how to make SmartCoins useful)
(2) undermining the referral program

At this stage we need traders and trading bots, not small users who will just send a token back and forth a few times and get bored after a week.
Those small users will not bring liquidity to SmartCoins. Traders will.

I agree to an extent for the Western market that whether the fee is $0.05 or $0.2 the real problem is how to make Smartcoins useful and until we have an immediately useful product and service neither will be particularly successful.

However I think we've gotten a lot of feed back that a $0.2 fee will be a barrier to adoption in China. (Previously our biggest market and the market currently driving the Bitcoin rally.)

So I lean toward trying lower fees, which may be sufficient to make the referral programme lucrative in China and when we have products and services we can charge higher for those which will make it more lucrative globally.

[jakub]

Yeah. I know that's why in the intro I said we need to fast track a product/service that makes BitShares more useful given that the markets are still not very active.

I think a cheaper fee is better at the moment. You will get more people into the system, experimenting with what little is on offer at the moment. It also means you can give out free samples to try it out, whereas atm 100 BTS just covers two transactions.

This whole transaction fee debate is doing two things:
(1) distracting us from the real problem (i.e. how to make SmartCoins useful)
(2) undermining the referral program

At this stage we need traders and trading bots, not small users who will just send a token back and forth a few times and get bored after a week.
Those small users will not bring liquidity to SmartCoins. Traders will.

[Empirical1.2]

REFERRER: Well if you join today and go through the whole process of buying BitShares we'll let you send these currently useless tokens back and forth for $0.2

DUDE: Wow! Golly, golly gosh! Only $0.2 to send useless tokens back and forth! I can't wait to tell my friends about BitShares!

@Empirical1.2, if the tokens are useless will your DUDE be more happy to send them back and forth for $0.01?

We need figure out how to make the token useful, and not how make transferring them back and forth cheaper.

Yeah. I know that's why in the intro I said we need to fast track a product/service that makes BitShares more useful given that the markets are still not very active.

I think a cheaper fee is better at the moment. You will get more people into the system, experimenting with what little is on offer. It also means you can give out free samples to try it out, whereas atm 100 BTS just covers two transactions.

Where a crypto-company will make it's money is on the products, services & purchases. (Even PayPal doesn't charge for basic transfers)

they do.

I don't use Paypal myself but I was saw this on their UK website.

Send or receive money between friends and family and we won’t charge you anything, unless the payment is funded by a credit card, involves a currency conversion or is a cross-border payment.

https://www.paypal.com/uk/webapps/mpp/paypal-fees

[jakub]

REFERRER: Well if you join today and go through the whole process of buying BitShares we'll let you send these currently useless tokens back and forth for $0.2

DUDE: Wow! Golly, golly gosh! Only $0.2 to send useless tokens back and forth! I can't wait to tell my friends about BitShares!

@Empirical1.2, if the tokens are useless will your DUDE be more happy to send them back and forth for $0.01?

We need figure out how to make the tokens useful, and not how to make transferring them back and forth cheaper.

[fav]

Where a crypto-company will make it's money is on the products, services & purchases. (Even PayPal doesn't charge for basic transfers)

they do.

[Empirical1.2]

With crypto-currency the token is the product, so they can justify a transfer fee, yet they still keep it as cheap as possible because they want to get as many people into the system as possible.

Where a crypto-company will make it's money is on the products, services & purchases. (Even PayPal doesn't charge for basic transfers)

If BitShares doesn't yet have any useful products and services then the potential is limited. The solution for the referral programme is to fast track a product (if you can't artificially stimulate BitAsset liquidity)  But charging high transfer fees won't aid adoption or the referral programme imo.


REFERRER: Hey dude do you wanna join BitShares?

DUDE: Is BitShares a crypto-currency like Bitcoin that the whole world may end up using like a digital gold?

REFERRER: No. BitShares is a crypto-company! 

DUDE. OK? What's the point?

REFERRER: Well we're able to use profits and shareholder directed dilution to fund development of awesome decentralised products and services!

DUDE: Cool you mean like Gambling and Silk Road, all on a blockchain!? 

REFERRER: Well unfortunately, BitShares decentralization is just a thin veil so we can't actually offer those..

If you are suggesting that the big idea is to skirt regulations by hiding behind the thin veil of decentralization, that will come to a quick end.

I would recommend NXT or Augur on Etherum for that. What we do offer though is a decentralised exchange and BitAssets, so you can hold currencies like BitUSD on the blockchain!

DUDE: Cool, I'll take a 1000 BitUSD!

REFERRER: Whoa, steady on there buddy, our markets aren't actually liquid or very active yet.

DUDE: Ok so what can I do on this BitShares?

REFERRER: Well if you join today and go through the whole process of buying BitShares we'll let you send these currently useless tokens back and forth for $0.2

DUDE: Wow! Golly, golly gosh! Only $0.2 to send useless tokens back and forth! I can't wait to tell my friends about BitShares!

[jakub]

The problem with this logic is that this assume they have not come yet, because of the "high" fees. Which is totally not the reason why, im[not so]ho.
There are a  ton of other far more important factors - being way too yearly, hard to transfer accounts [why did  you not spend the time to have o.9.x export keys that take 30 sec to import, instead of days to move to 2.0???]; Not only poorly documented API but one missing essential functions for the simplest bot, and that when we needed one so powerful that everybody can as easily as possible make his version of a  wallet or integrate/move his exchange on the BTS blockchain ; I will not talk about the badly reinvented margin call rules, here... although they do no faviours to liquidity to such extend that having those rules mean never having liquidity; Having  an 'official' gui that is missing so much important functions - why for example one cannot yet claim his vested balances? It is a button and calling one api function, isn't it?

I agree with that. First we need to fix all the other show-stoppers and only then we should revisit the fee problem.

Why not do it like this:
(1) Eliminate all the existing bottlenecks for trading in terms of functionality (e.g. migration issues, API for trading bots, margin call rules, troll-box etc).
(2) Make the trading fees very low (only for LTM, to keep the incentive to buy LTM).
(3) Keep the trading fees low (for LTM) as long as liquidity is low (this is to make sure the fees are not blocking liquidity).
(4) Only when liquidity starts appearing gradually increase the trading fees and observe how it affects liquidity.

[Tuck Fheman]

The general idea must be - we lower the fees to practically zero so they come in bunches, some of them start to trade and we earn trading fees from the volume traders. Do not get me wrong, the trading fees can and should be vastly improved as a design.

The problem with this logic is that this assume they have not come yet, because of the "high" fees. Which is totally not the reason why, im[not so]ho.
There are a  ton of other far more important factors - being way too yearly, hard to transfer accounts [why did  you not spend the time to have o.9.x export keys that take 30 sec to import, instead of days to move to 2.0???]; Not only poorly documented API but one missing essential functions for the simplest bot, and that when we needed one so powerful that everybody can as easily as possible make his version of a  wallet or integrate/move his exchange on the BTS blockchain ; I will not talk about the badly reinvented margin call rules, here... although they do no faviours to liquidity to such extend that having those rules mean never having liquidity; Having  an 'official' gui that is missing so much important functions - why for example one cannot yet claim his vested balances? It is a button and calling one api function, isn't it?

And after all this  and more essential stuff is missing, we will have a worker proposal, so we can jump and pivot and spend  6 mo. fighting the imaginary main cause of all ills?  Because after 3 days we discovered that the high fees are the main reason for no instant adoption?

You're making too much sense dude, stawp it!  Let us breathe the Hopium for a few days first.

BTW I've been working on a new marketing campaign : BitShares - Change all the things, all the time! 

[jakub]

And after all this  and more essential stuff is missing, we will have a worker proposal, so we can jump and pivot and spend  6 mo. fighting the imaginary main cause of all ills?  Because after 3 days we discovered that the high fees are the main reason for no instant adoption?

I agree. We have not given the current fee configuration enough time to prove its value. It's barely 3 weeks old and yet we are already conceiving a plan to rearrange it.

We have very limited resources and plenty of things on our list of priorities to make the 2.0 launch complete - yet we open another area which will drain our limited energy.
Constant lack of stability and constantly changing rules - seems to be our well-earned fame.

I'm not against quick interventions regarding rules which clearly cause undesired effects (e.g. margin call rules).
But changing rules and configurations which have not had a chance to fully come into existence - that's unreasonable for me.

[tonyk]

On the other thread I did not really get why we have to lower all other fees if we are trying to attract traders? Seems like a contradiction, doesn't it?

I have a similar feeling. I see a contradiction between our trying to be competitive in the trading business and at the same time trying to make it our main source of revenue from the very beginning.
Those two are hard to reconcile and we need to make a choice. The trading business can be and will be our main source of revenue but not at this initial stage when we are in the middle of this difficult process of jump-starting liquidity.

We need to earn profit to maintain the referral program. And if we cannot rely on trading for generating enough revenue (at this initial stage), there is only one option left: we need to charge extra on our non-core business which is money transfers.

So keep the transfers fees high as they are now. Let them carry the weight of keeping us profitable at this stage. And let us take advantage of this situation: if a BTS user has a valid reason to make a transfer he will make the transfer no matter if it costs $0.20 or $0.05. His main concern is not the transfer fee but whether a SmartCoin can be easily converted to fiat without incurring a big spread. So the conversion spread is the crux of the matter here, not the transfer fee. And to keep the conversion cost low we need to have healthy liquidity, which brings us back to realization that the trading business is sacred and cannot be expected to be highly profitable at this initial stage.

If BTS users keep crying about high transfer fees - so be it. Those users are not important at this stage, we can survive without them (while we cannot survive without traders & trading bots).
It's a bit tough but currently we are not in a position to please everyone.

The general idea must be - we lower the fees to practically zero so they come in bunches, some of them start to trade and we earn trading fees from the volume traders. Do not get me wrong, the trading fees can and should be vastly improved as a design.

The problem with this logic is that this assume they have not come yet, because of the "high" fees. Which is totally not the reason why, im[not so]ho.
There are a  ton of other far more important factors - being way too yearly, hard to transfer accounts [why did  you not spend the time to have o.9.x export keys that take 30 sec to import, instead of days to move to 2.0???]; Not only poorly documented API but one missing essential functions for the simplest bot, and that when we needed one so powerful that everybody can as easily as possible make his version of a  wallet or integrate/move his exchange on the BTS blockchain ; I will not talk about the badly reinvented margin call rules, here... although they do no faviours to liquidity to such extend that having those rules mean never having liquidity; Having  an 'official' gui that is missing so much important functions - why for example one cannot yet claim his vested balances? It is a button and calling one api function, isn't it?

And after all this  and more essential stuff is missing, we will have a worker proposal, so we can jump and pivot and spend  6 mo. fighting the imaginary main cause of all ills?  Because after 3 days we discovered that the high fees are the main reason for no instant adoption?

[jakub]

On the other thread I did not really get why we have to lower all other fees if we are trying to attract traders? Seems like a contradiction, doesn't it?

I have a similar feeling. I see a contradiction between our trying to be competitive in the trading business and at the same time trying to make it our main source of revenue from the very beginning.
Those two are hard to reconcile and we need to make a choice. The trading business can be and will be our main source of revenue but not at this initial stage when we are in the middle of this difficult process of jump-starting liquidity.

We all agree that we need to earn profit somewhere to maintain the referral program. And if we cannot rely on trading for generating enough revenue (at this initial stage), there is only one option left: we need to charge extra on our non-core business which is money transfers.

So keep the transfers fees high as they are now. Let them carry the weight of keeping us profitable at this stage. And let us take advantage of this situation: if a BTS user has a valid reason to make a transfer he will make the transfer no matter if it costs $0.20 or $0.05. His main concern is not the transfer fee but whether a SmartCoin can be easily converted to fiat without incurring a big spread. So the conversion spread is the crux of the matter here, not the transfer fee. And to keep the conversion spread low, we need to have healthy liquidity, which brings us back to the realization that the trading business is sacred so it cannot be expected to be highly profitable at this initial stage.

To sum it up: the trading business is our sacred cow and we must not try to milk it too early before it has a chance to mature a bit.

If BTS users keep crying about high transfer fees - so be it. Those users are not crucial at this stage, we can survive without them (while we cannot survive without traders & trading bots).
It's a bit tough but currently we are not in a position to please everyone.

[tonyk]

I think Bytemaster was very clear that there is no intention to reduce profitability of DAC. The point is to think how much and when we can collect fees so that users are still paying enough but don't have a negative experience.

Yes, experience has taught me to ask exactly how BM is planning to do something, after a vague and general statement like that. His intentions are always good, his decisions 15-20% of the time are...

[jakub]

https://bitsharestalk.org/index.php/topic,19749.30.html have you read this?

Maybe it's because I'm on tapatalk but your link send me to the forum homepage.

I think @carpet ride meant this post by BM:
https://bitsharestalk.org/index.php/topic,19749.msg254574.html#msg254574

[Samupaha]

I think Bytemaster was very clear that there is no intention to reduce profitability of DAC. The point is to think how much and when we can collect fees so that users are still paying enough but don't have a negative experience.

[julian1]

  revenue and incentives are essential to help Bitshares grow.

[fav]

  at least I'm not the only one

[tonyk]

I would urge the community to keep transfer fees in the US the same.  I think regional pricing is a good idea. 

As someone who is building a real US-based payments business on top of Bitshares the transfer fees are important to keep the business sustainable.   Otherwise it will probably take hundreds of millions of VC money, hundreds of millions of users, 10 years to even get the cash flow in the black, much less pay back the cost of capital.  Free or close to free is not a great business model unless you plan to show a 30-sec video ad before you send every payment.  I'm certainly not interested in pursuing a business like this.  I would argue without the payments side, the exchange side is far less valuable. 

We shouldn't compete with other cryptos on cost.  Bitcoin and other cryptos are already essentially 'free'.  But ask yourself how are business that build on those ecosystems going to grow?  What is the revenue business model of anyone who builds on other cryptos?  I would tell you most have no sustainable business model. 

We can do well with peer to peer payments, but this should be a secondary focus because the perception and reality for the mainstream public is that payments are already free.  I would even recommend Venmo, Square cash, traditional online bank transfers via email/phone # as much better solutions for the average consumer.  I'm saying this as a competitor to those payment solutions.  We are naturally going to need and get a good % of unbanked, anti-bank, be-your-own-bank crowd that don't like traditional solutions and the fees aren't going to be a deal breaker.

We should be focused on merchants.  They are desperate for a solution because they have to pay 3 - 8% transaction fees,  annual/monthly fees,  hidden fees,  and deal with the headache of chargebacks.   When I tell merchants the cost for them is  20 cents  they are immediately sold.  The question I get from merchants is why and how are we so cheap?  I got a question from a merchant (who actually worked in payment processing before) about if we are going to be around in the future because 20 cents doesn't sound sustainable for any payment business.   I agree.   I assume if we want we can structure payments so that merchants are 'paying' the cost so that should allow users to feel like they aren't paying anything in transaction fees. 

I think low transfer fees will also render the referral system ineffective.   There would be very little reason to upgrade memberships and people won't be incentivized by getting a few cents trickling in each month from referrals.

 
I am with this guy.

On the other thread I did not really get why we have to lower all other fees if we are trying to attract traders? Seems like a contradiction, doesn't it?

[EstefanTT]

https://bitsharestalk.org/index.php/topic,19749.30.html have you read this?

Maybe it's because I'm on tapatalk but your link send me to the forum homepage.

[EstefanTT]

I think the idea of BM has been misunderstood.

The idea is to restructure the fees system so the user has not the feeling that when you use BitShares you are all the time having to pay fees. Which is a good think.

The plan is not to disable all fees. We still need to make the blockchain profitable.

If you used a small % on filled order and no fees on creating orders and cancelled orders, you end up producing more money in fees. The trader is happy because he feel like it's cheap, BitShares produce more fees and the referrer wins more .... win-win-win !

Let's wait and see what BM propose as new structure, I'm sure it's gonna be well thought

[carpet ride]

https://bitsharestalk.org/index.php/topic,19749.30.html have you read this?

[merivercap]

Hey guys.  Just listened to the mumble session and I do understand that eliminating many of the fees can help improve some perceptions of our ecosystem, but it is extremely important for us to maintain transfer fees!  It is important to have a sustainable business model for both of our core value propositions as a decentralized exchange and as a Smartcoin payment platform.  The referral system is the main driving force and incentive structure to enable us to bring blockchain technology mainstream as a payment platform and that's the main purpose of BitCash, our hosted wallet solution.  We want to bring blockchain/Bitcoin technology to the millions!

In any case, I urge the community to support keeping transfer fees.  We can eliminate memo fees for simplicity and also try to find a solution for regional pricing, but the 20 cent tranfer fees for the US is appropriate.  Please show your support on this thread to keep transfer fees and help us as a company and we as a community to keep the incentives that can bring Bitshares to the millions!