The Benefits of Proof of Work [BLOG POST]

[btswildpig]

The effect of dilution in a ill-liquid market is not linear . Dilution at the scale of 15% does not mean only 15% value drop .
Diluting 15% of the shares to sell on the market could cost 100% or more price drop . And the chain reaction begins , where more people will sell after trigger a certain point of stop-loss .

Even only 1 million BTS sell pressure at 0.08 CNY could directly responsible for BTS to drop to 0.03 CNY if we use the theory in the stock market . Anyone decent trader who can read a candle chart could tell you that .

I'm surprised you have not figure this out yet , not even one year after the merger.

[morpheus]

Agree 80%.  First of all, the speculator often gets a bad wrap, but she plays a vital role in bootstrapping these systems.  Investors are really just long-term speculators.  I believe in fact that successful speculators, the 5% that succeed (95% of traders fail), have the best understanding of money, markets, and finance than any other demographic and are an excellent group to bring to the table.

I like the idea of incentivizing stake-locked voting and I also think it could possibly be taken a step further.  Bts is a digital commodity with uses other than just currency or as a share in a company or blockchain.  For instance, a user could lock up some bts for 1 year but also create bitassets out of that locked bts to be traded on the dex for that period of 1 year.  A margin call would cancel this contract.  Perhaps users who do this could be paid more.  This would give the network the full benefit of those bts by also providing liquidity to the dex.

[roadscape]

Interesting post. I agree with you on this 100%.

[tonyk]

Interesting...

What are the benefits from "speculator workers"* in your view and do you find the virtually complete lack of them in the real world indicative of anything?




speculator worker"*  - person paid in company shares in a start up and being the only entity allowed to sell its shares before IPO.


PS
I mean if this was written by anybody else, it would have been pretty frontal attack on the claim that  BTS workers are blockchain's self-'funding' model.

[Empirical1.2]

  Interesting blog, I agree with most of the points.

What are you views on requiring locked up stake to vote frequently as well in order to receive maximum reward?

As you say...

"When power is in the hands of users who have a long-term capital commitment to a project they have greater incentive to vote because they cannot sell for months or years."

So when you ask those users who have made a long term commitment as investors to BTS to vote as part of the requirement it's likely those investors will make quality votes especially when there is an incentive to do so. (Perhaps using a proxy should be rewarded slightly less.) 

I think it has a good chance of achieving a lot of positive results, though it should probably start with A LOT of advance notice so that the market is prepared for it. (If it was ever applied to BTS)  While it should work, if it doesn't work in practice to substantially increase active voting stake but ends up mostly rewarding the small minority that are already long term investors who are actively voting, then it would be paying for work that is currently received for 'free' and hence reduce the value of BTS, in which case it should be stopped. So perhaps there should be some sort of voting stake target to aim for.

[Ben Mason]

Very exciting post and totally agree with method-X and donkeypong.

[donkeypong]

It's a well-written article. Thank you.

[Method-X]

Interesting post. I agree with you on this 100%.

[bytemaster]

http://bytemaster.github.io/article/2016/01/04/The-Benefits-of-Proof-of-Work/