The General Theory of Privately Funded Blockchain Features

[Ben Mason]

And this is where IP becomes a thorny issue that is ultimately slowing us down. If we try to compete based upon IP it is like a country trying to compete by placing tariffs on imports/exports. Ultimately the only thing that "protectionism" does is increase costs to the citizens of the country while hurting the competitiveness of the country and subsidizing unprofitable businesses.

  I'm glad to hear you take this stance.

Indeed, well said

[SpiritofJefferson]

I really like the idea of people buying shares in features and getting dividends through lifetime fees. If we were to automate the creation of shares for a proposal like this one, the person/people investing the money or work-hours would own all of them, and if they'd like, they could go public to make some of their money back by selling shares. I think the ability to trade the ownership of the fees could help us with the centralization issue here, as well as give us a way to measure the profitability of different features. I guess it could be argued this could be done with the existing framework but I still like the idea of having it right on the blockchain.

[rgcrypto]

I am down with any private investor willing to invest in features they need.

Lifetime royalties? Absolutely. As long as we have the transaction fees, I dont care if someone gets rich because on stealth transaction. Its his $45K. Someone who is willing to spend that kind of money in a feature DEFINITELY has a plan to market it and get users to use it.

If the person is willing to pay 100%, he should receive the maximum benefit he can get from it. We profit from transaction fees and WE DIDNT HAVE TO PAY FOR THE ADDED FEATURE.

As an investor, I would like if the person split the investment opportunity with the community. The person who wants to pay for the feature, would benefit to offer this has a marketing opportunity and to secure himself people who would want to promote his project.

For stealth transaction, the individual could create STEALTH (UIA)  and then sell lets say 50% of the UIA and buyback shares over time. This way, he gets 50% of all fees for a lifetime fees and we do too. Everybody win.

One thing is that this new feature need to be available for everyone to use in the future.

[TravelsAsia]

And this is where IP becomes a thorny issue that is ultimately slowing us down. If we try to compete based upon IP it is like a country trying to compete by placing tariffs on imports/exports. Ultimately the only thing that "protectionism" does is increase costs to the citizens of the country while hurting the competitiveness of the country and subsidizing unprofitable businesses.

  I'm glad to hear you take this stance.

[onceuponatime]

For me it's not clear how that lifetime thing would work. Are we selling a monopoly for a certain feature or is some competition possible? What if shareholders later want to abandon that particular code in favour of a different implementation? It just feels to me like this could cause a lot of political trouble. But maybe I'm wrong.

It seems to me that it is easy enough to abandon. Just stop using it! I'm sure that many people will never use it at all anyway.

And if someone comes up with a proposal for another stealth method, better and/or cheaper - well, competition is what it's all about.

[bytemaster]

We should try to separate two independent issues:

1.  If an entrepreneur develops a new DAPP and offers it to BitShares with a revenue sharing model, are we going to vote to install it? 

     (The first time we turn down such an offer will probably be the last time we get one.)

2.  What are all the insanely great ideas for funding such upgrades to BitShares?

We should care about any upgrade's safety, use of resources, and impact on BitShares reputation, etc..  We should not care about how the developer raised funds to develop it or speculate on her motivations for doing so.    Most especially, it is none of our business what method they use to raise their development funds.  Encourage them to innovate.

We should go forth and tell the world about all the ways there are for investors and developers to make money using the BitShares platform.  This should build interest in BitShares more than anything I can think of.  What's the  best thing about Ethereum?  Its attractive to developers.  What's most attractive to developers?  A way to profit from their efforts.

Folks who want to confiscate their profits or cap their upside are being penny wise and pound foolish.

In general, the more a developer/investor can earn from starting a new business on our blockchain, the more they are likely to reinvest in that business to make it more profitable.  That means more features, more polish, and more promotion effort from the developer/investor.  As long as BitShares is getting a cut to cover network costs and earn a profit for its own investors, everybody wins.

The more profitable businesses that are motivated to build on our platform, the more customers will use it, and the more attractive it will be for other businesses.

A virtuous cycle.

I'm sure no one really cares how they raise their funds... The biggest contention here is using funds from a worker proposal and then selling that feature to other chains.  If a company (say cnx) were to create a worker proposal for prediction markets, bts should have a right to profits from the selling that feature to any of the other chains (muse, identabit, etc) since bts is an investor.

And this is where IP becomes a thorny issue that is ultimately slowing us down. If we try to compete based upon IP it is like a country trying to compete by placing tariffs on imports/exports. Ultimately the only thing that "protectionism" does is increase costs to the citizens of the country while hurting the competitiveness of the country and subsidizing unprofitable businesses.

[Frodo]

For me it's not clear how that lifetime thing would work. Are we selling a monopoly for a certain feature or is some competition possible? What if shareholders later want to abandon that particular code in favour of a different implementation? It just feels to me like this could cause a lot of political trouble. But maybe I'm wrong.

[lil_jay890]

We should try to separate two independent issues:

1.  If an entrepreneur develops a new DAPP and offers it to BitShares with a revenue sharing model, are we going to vote to install it? 

     (The first time we turn down such an offer will probably be the last time we get one.)

2.  What are all the insanely great ideas for funding such upgrades to BitShares?

We should care about any upgrade's safety, use of resources, and impact on BitShares reputation, etc..  We should not care about how the developer raised funds to develop it or speculate on her motivations for doing so.    Most especially, it is none of our business what method they use to raise their development funds.  Encourage them to innovate.

We should go forth and tell the world about all the ways there are for investors and developers to make money using the BitShares platform.  This should build interest in BitShares more than anything I can think of.  What's the  best thing about Ethereum?  Its attractive to developers.  What's most attractive to developers?  A way to profit from their efforts.

Folks who want to confiscate their profits or cap their upside are being penny wise and pound foolish.

In general, the more a developer/investor can earn from starting a new business on our blockchain, the more they are likely to reinvest in that business to make it more profitable.  That means more features, more polish, and more promotion effort from the developer/investor.  As long as BitShares is getting a cut to cover network costs and earn a profit for its own investors, everybody wins.

The more profitable businesses that are motivated to build on our platform, the more customers will use it, and the more attractive it will be for other businesses.

A virtuous cycle.

I'm sure no one really cares how they raise their funds... The biggest contention here is using funds from a worker proposal and then selling that feature to other chains.  If a company (say cnx) were to create a worker proposal for prediction markets, bts should have a right to profits from the selling that feature to any of the other chains (muse, identabit, etc) since bts is an investor.

[Stan]

We should try to separate two independent issues:

1.  If an entrepreneur develops a new DAPP and offers it to BitShares with a revenue sharing model, are we going to vote to install it? 

     (The first time we turn down such an offer will probably be the last time we get one.)

2.  What are all the insanely great ideas for funding such upgrades to BitShares?

We should care about any upgrade's safety, use of resources, and impact on BitShares reputation, etc..  We should not care about how the developer raised funds to develop it or speculate on her motivations for doing so.    Most especially, it is none of our business what method they use to raise their development funds.  Encourage them to innovate.

We should go forth and tell the world about all the ways there are for investors and developers to make money using the BitShares platform.  This should build interest in BitShares more than anything I can think of.  What's the  best thing about Ethereum?  Its attractive to developers.  What's most attractive to developers?  A way to profit from their efforts.

Folks who want to confiscate their profits or cap their upside are being penny wise and pound foolish.

In general, the more a developer/investor can earn from starting a new business on our blockchain, the more they are likely to reinvest in that business to make it more profitable.  That means more features, more polish, and more promotion effort from the developer/investor.  As long as BitShares is getting a cut to cover network costs and earn a profit for its own investors, everybody wins.

The more profitable businesses that are motivated to build on our platform, the more customers will use it, and the more attractive it will be for other businesses.

A virtuous cycle.

[Samupaha]

A simple way to think about it.

A group of investors owns a shopping mall.  Someone approaches them and offers to build a parking garage on their property.  She offers to pay the mall owners a never-ending share of her garage's profits (after expenses) and give them the benefit of her garage making the mall more attractive for everybody's customers.

It's not about the mall owners paying her "royalties" forever, it's about her paying the mall a share of her revenue forever in exchange for rights to build on the mall's property.

Meanwhile, she has established a wonderful precedent for the mall owners who start looking for more ways to apply this model to generate more revenue and attractive features for the mall.

And yes, other projects could be crowd-funded using the same model, where those who donate are guaranteed a lifetime share of the revenue generator they helped to fund.

i like the idea

but would suggest some changes

1. make it possible that a UIA is created for the investor
2. the UIA can be in control of the committee members and the investor
3. create a automated buyback mechanism etc.
4. the fees for this UIA should only be paid on top of a normal transaction. so if a normal transaction costs 20 cent and the stealth fees say 30 cents and then split the 30 cent like discribed.

With this we can finance many more project in the pipline

you want a prediction market? done, create UIA get the project funded

with this we can create multiple automated UIA assets on our blockchain who will be traded and give our bitshares exchange some unic assets.

This is exactly what we discussed over lunch today. It seems like a great way to crowdfund features. After all the value of a feature is the present value of its projected future revenue to the network. With a few small changes it could even be set up such that a minimum amount of funding must be achieved or the BTS are returned. Very much like an automated kickstarter.

[Samupaha]

yes this would be good but the private investors should never get eternal royalties.

They should get royalties until they have made a good return on their investment for example doubled their money. But there has to be an end date so that bts share holders can make money from it in the future.

Yeah, this is important question. But I wouldn't throw away lifetime royalties yet.

The investor could decide how the profits are paid. It could be based on:
- time (royalties are paid only a certain time, then shares become worthless)
- payback of invested money (royalties are paid until investors have got back what they paid plus some profit)
- lifetime royalties (royalties are paid forever)
- combinations?
- any other possibilities?

Just because the lifetime royalties opportunity exists, that doesn't mean it will be used very time. BTS-holders should vote on every proposal and propably not many would accept lifetime royalties. That would force most of the proposals to implement some other way to collect profits.

Propably lifetime royalties would be used only if somebody comes up with a totally unique invention that is desperately wanted by everybody, and he wont implement it in the Bitshares if he doesn't get lifetime royalties.

[tonyk]

But there has to be an end date so that bts share holders can make money from it in the future.

But that's the beauty of it -- BTS shareholders do profit from it, by getting exponentially improved features and a flood of new users who are drawn to BTS by the new features. So I'm also in the lifetime revenue camp; no end date necessary. It really does seem to be win-win-win all around, and I feel this could prove to be the most exciting BTS development in a long while.

+ 1

on a different note. Someone copy here @Shentist original post (and BM's response as well maybe.)

[nomoreheroes7]

But there has to be an end date so that bts share holders can make money from it in the future.

But that's the beauty of it -- BTS shareholders do profit from it, by getting exponentially improved features and a flood of new users who are drawn to BTS by the new features. So I'm also in the lifetime revenue camp; no end date necessary. It really does seem to be win-win-win all around, and I feel this could prove to be the most exciting BTS development in a long while.

[JonnyB]

yes this would be good but the private investors should never get eternal royalties.

They should get royalties until they have made a good return on their investment for example doubled their money. But there has to be an end date so that bts share holders can make money from it in the future.

[Samupaha]

Go see the New Stealth Transfer Worker ($1000) thread if you haven't yet. Somebody got an absolutely brilliant idea: he will fund the development of the stealth transfer GUI if he gets royalties from every stealth transfer after it's implemented.

We should discuss this idea in more broadly. How can we use private funding to accelerate the development of other new features for Bitshares? Can we agree on a standardized process?

I think best way to make this happen would be to issue UIA that acts like a share for the feature. The person/group/company that funds the feature gets all the shares and profits that those shares will collect in the future. When somebody uses the feature and pays for it, part of that money goes to the share-UIA and part to the blockchain.

Can anybody come up with a good name for it? Dappcoin? Featureshare?

Investor can be just one person (or a company), who develops the feature himself and then offers it to Bitshares in exchange for share-UIA. Or investor can be crowdfund group that uses the money to pay for the code.

Investor can define how many shares there will be, how much they will get profits and how long they are valid (might be forever). BTS owners then decide if this is a good deal and accept or decline it. How the process should go? Worker proposal?

Of course the share-UIA can be traded in the Bitshares exchange, if the investor wants to sell it. This should be also possible in advance for the crowdfunded projects.

This should be our highest top priority!

Why? Because right now we can fund only very few projects at a time. We get out 5 bts/s from reserve pool and that's not much with current shareprice.

With privately funded blockchain features we could develop dozens of projects at a same time! That would give an enormous boost to the development process!

We'll get lots of new users who want to buy shares for these features because they can make money with them: just buy and hold and get revenue automatically – who could resist that? We'll get lots of new developers who will earn money by coding these features. So incentives are very much in place.

I'm getting really, really nice mindblowingfullness feelings from this, anyone else?

But first we should decide how exactly this process would work, what kind of hardforks it will need, etc.