[DAC] Possible financial focus for the next few months

[xeroc]

@xeroc
Would you explain why the committee is aiming to give in to bitcrab's demands, instead of making sure that all other options are considered first?
And by giving in to his demands I mean proposing anything lower than the current $0.10 as the flat transfer rate.
Who made the decision that transfers are no longer part of the referral program? I have not seen any discussion about it at all.

Transfers are still part of the referral program. They just pay less
into it. Given that the "transfer" operation as well as the trading
operations represent a core functionality of BitShares that have quite
some competition, the idea was to reduce those to attract some new basic
members and encourage them to stay and provide the so needed liquidity
and usability for smartcoins.

Secondly, no final decision has been made yet and there was quite some
discussion within the committee (7 days straight). At this stage,
everything is a proposal. But we felt the need to

a) act now and not way for any hard fork to bring (even) more flexibility (e.g. bsip#10)
b) encourage outside traders to start trading within BitShares
c) encourage microtransaction businesses to look deeper into our platform.

Furthermore, no change will be implemented without asking for feedback
from the community. And to present a fee schedule that most of committee
can live with, we first developed the schedule behind the scene. You
must understand that there are quite some members around that do not
(yet) understand the full functionality of BitShares and only focus on
one particular operation fee. But we now have a proposal that seems to
fit many committee members, business and will hopefully help BitShares
to gain more traction.

Just because we propose to lower the trading flat fee and the transfer
flat fee, does not necessarily mean that we
a) give up the referral program, or
b) want no profit for BitShares itself.
En contraire. We just switched over from pricing the core features high
to pricing advanced features higher.

The committee didn't "just scetch a new fee schedule", instead every
single fee has been discussed and tweaked to fit as many entities as
possible.

And there will be a roadmap that has the purpose to give businesses some
stability so that they can run their numbers while leaving some
flexibility to tweak some fees if it turns out that they didn't result
in what we wanted them to.

Another major thing is, that we will probably agree in denoting the fees
in USD and track/change them as the valuation of BTS changes.

Even though I can't yet reveal the whole fee schedule to you, I hope it
makes sense to you.

[jakub]

That's true. What is also true is this: there are a thousand other things they could write about.

And does any of the other things pay them a penny? We do, even if it seems to be not much at first.

That's the point. We do now. But not any more *if* the new fee schedule is introduced.
What about online merchants? We don't care any more about incentivizing them?

I know this is not the right place and time to discuss this (we have to wait till the committee makes a formal announcement) but I'm very concerned about the way this whole thing is going.

A flat transfer fee below $0.05 has two very important consequences:
(1) %-based fee scheme does not make much sense any more
(2) the referral program is only targeted for the advanced-user elite

Regarding (1):
This does not seem to bother some of the committee members @BunkerChain Labs

This all seems fine.. though your worry over the % based fee has no real reasoning. I understand that it was initially sought out as a means of lower fees, however, if it doesn't get used it really won't have any negative consequence to Bitshares.

I don't get it.
So you want to spend 4m BTS on a feature that "doesn't get used" and say that "it really won't have any negative consequence to Bitshares".
And you say this as a committee member?

Regarding (2):
If the committee wants to propose a major change to the referral program (switching focus from all users to advanced users only is a major change) then this issue should be discussed first and only as a next step a substantial reduction in the flat transfer fee can be considered. Instead, what is happening now is that this new fee schedule is going to be presented, which makes this behind-the-scenes assumption that the nature of the referral program is going to change.

@xeroc
Would you explain why the committee is aiming to give in to bitcrab's demands, instead of making sure that all other options are considered first?
And by giving in to his demands I mean proposing anything lower than the current $0.10 as the flat transfer rate.
Who made the decision that transfers are no longer part of the referral program? I have not seen any discussion about it at all.

[xeroc]

That's true. What is also true is this: there are a thousand other things they could write about.

And does any of the other things pay them a penny? We do, even if it seems to be not much at first.

[jakub]

I don't see what fav is doing as a real "business".

That's interesting.

Anyway I still could argue that if they do not have resources to invest for their hosted wallet, maybe they are not so serious with their business at all.

And again, if they run blogs and make videos, there are thousand other ways to make some additional revenue from them.

Bitshares referral program can help them in both short term and long term.
That doesn't mean it has to be the only way to make a living

So in other words, we lose them - the only alternative for them is a worker proposal or a private deal with an owner of some existing hosted wallet service.
This might work for the big fish but all the little fish is lost.

And again, if they run blogs and make videos, there are thousand other ways to make some additional revenue from them.

That's true. What is also true is this: there are a thousand other things they could write about.

[Bhuz]

Businesses should never found their success, win, and revenue merely on referral system. It can be a plus for sure, but not the backbone.

@Bhuz
One more issue has crossed my mind: what is your proposal for people like fav or Max Wright?
They run blogs and make educational videos but don't have the resources to run their own hosted wallet service.
The majority of their audience does not include advanced users.

What is your solution for them?

I don't see what fav is doing as a real "business".

Anyway I still could argue that if they do not have resources to invest for their hosted wallet, maybe they are not so serious with their business at all.

And again, if they run blogs and make videos, there are thousand other ways to make some additional revenue from them.

Bitshares referral program can help them in both short term and long term.
That doesn't mean it has to be the only way to make a living

[jakub]

Businesses should never found their success, win, and revenue merely on referral system. It can be a plus for sure, but not the backbone.

@Bhuz
One more issue has crossed my mind: what is your proposal for people like fav or Max Wright?
They run blogs and make educational videos but don't have the resources to run their own hosted wallet service.
The majority of their audience does not include advanced users.

What is your solution for them?

[bitcrab]

currently the account upgrade volume is too low, about 0.3 account
everyday, if the volume grow to high enough, the "CoinHoarder's machine"
will appear, just like surely speculators will appear for arbitrage if
there are big price gap between different exchanges.

If you take a look at
http://cryptofresh.com/charts
and display the account updates, you will see that they are way more
than 0.3 per day, more like 5-10.

oh sorry I made a mistake, even based on abit's data - network got 6k BTS revenue from account update everyday, there should be at least 1.5 accounts  update everyday.

[jakub]

Also, to those who say the referral program is "wrong" because it enforces high prices while we should have low prices by default.
I agree that this is wrong, if we call this thing "the referral program". This behavior has nothing to do with referring users.

But if we call this "the subscription program" it all begins to make sense.
All major mobile companies are using this model and it works for them.

That may work for mobile compnies, but not for me. They give you free phone, but then rob you with fees. Exactly like bitshares does. That is why the choice of millions of people is unlocked phone and no commitment service.

Unfortunately, it only matters whether it works for mobile companies, not for you. You are not that important.

This issue has little to do with a phone device offered for "free". That's another matter.

I can still have my own unlocked phone, but when I use it on a pay-as-you-go basis, I pay substantially higher rates than I would, if I bought an annual subscription.

You say you have an unlocked phone and a non-commitment service.
But I'm pretty sure that with most mobile operators, you would pay lower rates, if you decided to opt for a commitment service (i.e. subscription).

[xeroc]

currently the account upgrade volume is too low, about 0.3 account
everyday, if the volume grow to high enough, the "CoinHoarder's machine"
will appear, just like surely speculators will appear for arbitrage if
there are big price gap between different exchanges.

If you take a look at
http://cryptofresh.com/charts
and display the account updates, you will see that they are way more
than 0.3 per day, more like 5-10.

[bitcrab]

he may do not want to kill, but the referral program may be really killed by him.

How to Kill Referral Businesses:
Charlie wants the referral business to die because he thinks the inflated fees are bad for the future of Bitshares. He sets up a business that works like the rakeback business in poker [1]. Anyone that signs up under him, he gives 100% of the fees back to them that he earns. It costs him very little to set this up. It mostly just costs him the time it takes to program an automated solution. Assuming everyone acts in their own self-interest, they would register for an account with Charlie as their referrer because they will save a lot of BTS on the fees. No one can compete with 100% rakeback, and all referral businesses that rely on the referral program for profit would die off.

Actually, this "Kill Referral Businesses" example proofs exactly the opposite than @CoinHoarder intended.

The facts are these:
- CoinHoarder's idea has not been executed by anyone so far.
- Not a single referral business demands protection from it.
Why is that?
Maybe because the referral businesses *believe* they are able to add some value for the user after all.

If they are wrong in this belief, the referral program will die eventually.
So why do you put so much effort into fighting the referral program, instead of simply getting rid of it (at least in your country) by executing CoinHoarder's machine?

currently the account upgrade volume is too low, about 0.3 account everyday, if the volume grow to high enough, the "CoinHoarder's machine" will appear, just like surely speculators will appear for arbitrage if there are big price gap between different exchanges.

Currently the network need to pay out 43k BTS to witnesses and 80k BTS to workers every day, but average daily income is only 8k BTS or so, among it about 900 come from transfers, 6k come from account upgrades.

no referral business demands protection from it perhaps because they are not aware of this. I believe their service provide some add-value, but the problem is, should/would they try to differentiate LTMs with different referrers? if not how can they defend their profit after the "CoinHoarder's machine" appear?

that is the flaw of the RP: it conflict with the "I pay to the service I use" principle, whether it is a continuable model is doubtful.

[yvv]

Also, to those who say the referral program is "wrong" because it enforces high prices while we should have low prices by default.
I agree that this is wrong, if we call this thing "the referral program". This behavior has nothing to do with referring users.

But if we call this "the subscription program" it all begins to make sense.
All major mobile companies are using this model and it works for them.

That may work for mobile compnies, but not for me. They give you free phone, but then rob you with fees. Exactly like bitshares does. That is why the choice of millions of people is unlocked phone and no commitment service.

[jakub]

Anyway, I don't fully understand how the network would lose 20%... the net would always take his cut, and shareholoders/committee should try to maximize his revenue.

You are right when you say the network will always take its 20% cut.
What I meant is that when the transfer fee gets really small (e.g. $0.02) a 20% cut is quite worthless.
So theoretically you are right but practically a business earns might earn its profit without sharing it with the network in any substantial way. Something like 1% of the total profit ends up going to the network.
[/quote]

Shareholders/committee can do that by requesting ltm for some operation or for some desired features (bond market and such)

These changes affect business dealing with advanced users. Most businesses will not be in this category.

This could make sense....but the 20% of the network isn't already this? A kind of subscription you have to pay to use the service?
So, how would you justify another additional 80% paid to the referrer?

If the referrer brings any value to the network than the network needs to reward him.
And the network can only reward somebody from funds that arise from fees collected from users.

So if we treat the current referral program as a combination of an actual referral program and a subscription program - then all begins to make sense.

Referrers bring value to the network -> so they need to be rewarded by the network -> the network gets revenue from the subscription program -> to reward the referrers the network offers 80% of the revenue received from the subscription program.

[Bhuz]

Regarding aspects (2) and (3) - actually, this *should* be the backbone for most "value-added" businesses (e.g. mobile apps).
And if we don't offer in-built tools for that, those businesses will start doing this on their own (e.g. kenCode is already gravitating towards this model) but this is quite unfortunate because:
- each business ends up adding a piece of functionality that should be shared across all similar businesses
- the network loses its 20% cut in the profits made by the busineses

I am not sure of fully understand your point here, so my reply could be "off-topic".

When you say that the RP should be the backbone for most value-added business...are you talking about the 20/80 split for every transaction, or the 20/80 split on account_upgrade?

I mean, are those businesses interested in keep their userbase as normal-user to have revenues from the operations-fee, or those businesses really would like to see all their users to upgrade to LTM and take the higher one-time fee from account_upgrade operation?

From what I understood reading this forum (mean: what I think ppl thinks about this), they really care about LTM-fee, so we could even have the RP working (20/80 split) "only" on the account_upgrade op?!

Anyway, I don't fully understand how the network would lose 20%... the net would always take his cut, and shareholoders/committee should try to maximize his revenue.
Shareholders/committee can do that by requesting ltm for some operation or for some desired features (bond market and such)

But if we call this "the subscription program" it all begins to make sense.
All major mobile companies are using this model and it works for them.

This could make sense....but the 20% of the network isn't already this? A kind of subscription you have to pay to use the service?
So, how would you justify another additional 80% paid to the referrer?

[xeroc]

But if we call this "the subscription program" it all begins to make sense.
All major mobile companies are using this model and it works for them.

This ^^

[jakub]

Businesses should never found their success, win, and revenue merely on referral system. It can be a plus for sure, but not the backbone.

@Bhuz
I think the source of the problem is that currently this mechanism which we call "the referral program" is trying to do too many things at the same time:
(1) incentivize attracting new users to the system
(2) offer a choice between the pay-as-go option and the subscription option
(3) give access to advanced features

If we treat the RP purely as (1) - I agree, no business should treat it as a backbone, unless this is an intentional choice of its business model. For a BitShares blogger or website this might be a reasonable choice.

Regarding aspects (2) and (3) - actually, this *should* be the backbone for most "value-added" businesses (e.g. mobile apps).
And if we don't offer in-built tools for that, those businesses will start doing this on their own (e.g. kenCode is already gravitating towards this model) but this is quite unfortunate because:
- each business ends up adding a piece of functionality that should be shared across all similar businesses
- the network loses its 20% cut in the profits made by the busineses

So ideally the current referral program should be split into those three distinct features (1), (2) and (3), and each of them should have its own price, set by the registrar and with 20% cut for the network in each case.

Also, to those who say the referral program is "wrong" because it enforces high prices while we should have low prices by default.
I agree that this is wrong, if we call this thing "the referral program". This behavior has nothing to do with referring users.

But if we call this "the subscription program" it all begins to make sense.
All major mobile companies are using this model and it works for them.

[jakub]

(2) Set the flat transfer fee at a level that is considered acceptable by China but still allows some space for %-based fees. IMO, this level is something around 10 BTS or $0.03. If we don't leave this space for %-based fees, no issuer (except the committee) will have any incentive to switch to the %-based scheme. Another advantage of maintaining this slightly higher level, is that this way there is still some incentive left to buy LTM for users who don't need any advanced features but just do a lot of transfers.

as discussed in committee, $0.018 is an acceptable flat fee.
committee can set all public smartcoins to percent fee scheme.

So that your TCNY can stay on the flat rate.
I agree, from bitcrab's point of view this is a brilliant idea.

[jakub]

This all seems fine.. though your worry over the % based fee has no real reasoning. I understand that it was initially sought out as a means of lower fees, however, if it doesn't get used it really won't have any negative consequence to Bitshares.

I don't get it.
So you want to spend 4m BTS on a feature that "doesn't get used" and say that "it really won't have any negative consequence to Bitshares".
And you say this as a committee member?

I do believe as we go forward the fees will increase, and for operators the % could be an option they want/need. Still, not having lower fees just because there is the % proposal under way doesn't really give justification.

How so? I thought xeroc has just created a tool that aims to prevent just that - an increase in fees due to BTS appreciation.
So going forward the fees will *not* increase unless you have a plan to magically convince the Chinese fraction of the committee that this is a good idea for them.

Having the choice is still good.

What you propose is actually the opposite to having a choice:
- Certainly there will be no choice for the issuers - all right-minded issuers will stick to the flat fees. No choice there.
- As for the committee - well, this is the actual option they will have: use the %-based scheme as a way to enforce higher transfer fees on public SmartCoins so that the private ones (e.g. TCNY) can get unfair competitive advantage. No wonder bitcrab is pleased with this.

[bitcrab]

(2) Set the flat transfer fee at a level that is considered acceptable by China but still allows some space for %-based fees. IMO, this level is something around 10 BTS or $0.03. If we don't leave this space for %-based fees, no issuer (except the committee) will have any incentive to switch to the %-based scheme. Another advantage of maintaining this slightly higher level, is that this way there is still some incentive left to buy LTM for users who don't need any advanced features but just do a lot of transfers.

as discussed in committee, $0.018 is an acceptable flat fee.
committee can set all public smartcoins to percent fee scheme.

[BunkerChainLabs-DataSecurityNode]

I think these are our only options:

(1) Leave the 80/20 split unchanged, as this is the network's main source of revenue. Going to 90/10 will not change the referrers situation significantly but will reduce network's income by 50%.

(2) Set the flat transfer fee at a level that is considered acceptable by China but still allows some space for %-based fees. IMO, this level is something around 10 BTS or $0.03. If we don't leave this space for %-based fees, no issuer (except the committee) will have any incentive to switch to the %-based scheme. Another advantage of maintaining this slightly higher level, is that this way there is still some incentive left to buy LTM for users who don't need any advanced features but just do a lot of transfers.

(3) In China open a non-profit faucet that offers LTM upgrade at an 80% discount. BTS funds needed to run such a faucet could be offered by the committee (those funds are only needed due to the 90-day LTM vesting so they are absolutely safe).

This all seems fine.. though your worry over the % based fee has no real reasoning. I understand that it was initially sought out as a means of lower fees, however, if it doesn't get used it really won't have any negative consequence to Bitshares. I do believe as we go forward the fees will increase, and for operators the % could be an option they want/need. Still, not having lower fees just because there is the % proposal under way doesn't really give justification. Having the choice is still good.

[merivercap]

@jakub  Setting up the referral program for specific US/Eur assets makes perfect sense. BSIP10 was designed to be optional per issuer/asset anyways.  All of us referral program users are mostly in the US and Europe and the largest advocates for low fees are in China.   It will make everybody happy.  If I want to use TCNY I'll have low fees.  If I want to use Smartcoin USD fees will be higher.  No big deal.   If someone really wants low fees for Smartcoin USD I'm sure people will donate for an LTM account as charity.

What about more universal assets like gold or BTC?
There will always be assets used by both China and US/Europe - if not, what's the point of having a common blockchain?

The committee can decide gold & BTC...I don't think many will businesses would mind those assets having the low fee option but who knows... wouldn't the committee have to decide %-based or flat fee anyways?  If it's privatized smartcoin let the business decide.  The point of the common blockchain is that you can use all the assets.  It doesn't matter that each asset has varying fees.  Diversity is good.  We can all see what works and each demographic and business case is different.   

[jakub]

I think these are our only options:

(1) Leave the 80/20 split unchanged, as this is the network's main source of revenue. Going to 90/10 will not change the referrers situation significantly but will reduce network's income by 50%.

(2) Set the flat transfer fee at a level that is considered acceptable by China but still allows some space for %-based fees. IMO, this level is something around 10 BTS or $0.03. If we don't leave this space for %-based fees, no issuer (except the committee) will have any incentive to switch to the %-based scheme. Another advantage of maintaining this slightly higher level, is that this way there is still some incentive left to buy LTM for users who don't need any advanced features but just do a lot of transfers.

(3) In China open a non-profit faucet that offers LTM upgrade at an 80% discount. BTS funds needed to run such a faucet could be offered by the committee (those funds are only needed due to the 90-day LTM vesting so they are absolutely safe).

[jakub]

@jakub  Setting up the referral program for specific US/Eur assets makes perfect sense. BSIP10 was designed to be optional per issuer/asset anyways.  All of us referral program users are mostly in the US and Europe and the largest advocates for low fees are in China.   It will make everybody happy.  If I want to use TCNY I'll have low fees.  If I want to use Smartcoin USD fees will be higher.  No big deal.   If someone really wants low fees for Smartcoin USD I'm sure people will donate for an LTM account as charity.

What about more universal assets like gold or BTC?
There will always be assets used by both China and US/Europe - if not, what's the point of having a common blockchain?

[merivercap]

really? I think if I just leave one sentence in my forum signature, users will pass the info one by one. no ad needed.
people like to save money and help others to save money.

So you're talking about the crypto crowd. This market is tiny and extremely tough.

I'm talking about "normal" customers who don't really care about the technology part. And this market is huge.

so is a solution such as below acceptable to you? it limit referral program to some assets.

in the updated plan, there will be 3 mode, both mode A and mode C are flat fee, but for A the fee totally go to network, for C referrer will take 80%, the flat fee will be set by committee, but I think A will own a lower fee than B. BTS is the fundamental asset in the system, need to be applied mode A with transfer fee as low as possible.

for public smartcoins, as now there are privatized smartcoins, so its ok for public smartcoins to be applied mode B. users do not like referral program/high fee can play with privatized smartcoins.

I think it's hard to limit the referral program to some assets because you never know which assets the user will eventually choose to use the most.

Let's assume my asset participates in the referral program and your asset does not, and I refer a user to the system but s/he ends up using your asset, not mine.
This way I'll be upset as I've paid to bring the user to the system but it's you who has made profit on this user.

But on the other hand limiting the referral program to some demographics does make sense, IMO.
The crypto crowd generally does not need it, so if CoinHoarder's machine effectively dismantles the referral program on this market, it will not hurt a business targeting "normal" users.

I honestly encourage you to set up a CoinHoarder's machine.
It's worth the effort, if it brings more harmony and less fighting into our community.

@jakub  Setting up the referral program for specific US/Eur assets makes perfect sense. BSIP10 was designed to be optional per issuer/asset anyways.  All of us referral program users are mostly in the US and Europe and the largest advocates for low fees are in China.   It will make everybody happy.  If I want to use TCNY I'll have low fees.  If I want to use Smartcoin USD fees will be higher.  No big deal.   If someone really wants low fees for Smartcoin USD I'm sure people will donate for an LTM account as charity.   

[yvv]

That's funny how you insist to take away almost all revenue from the referrers and yet you expect them to do more.

This is not what I say. I say, if referrers want to be payed more, then they should do some more work than just signing up users who never use the network.

There is no such concept as "duty" in this crypto world.
Saying somebody "should" do something does not work here.

Either you align the incentives properly and get the job done, or you end up without getting the job done.

This is what I say. If you don't do work for me, I shouldn't pay no fees to you.

[jakub]

That's funny how you insist to take away almost all revenue from the referrers and yet you expect them to do more.

This is not what I say. I say, if referrers want to be payed more, then they should do some more work than just signing up users who never use the network.

There is no such concept as "duty" in this crypto world.
Saying somebody "should" do something does not work here.

Either you align the incentives properly and get the job done, or you end up without getting the job done.

[abit]

@Bhuz One concern about the built-in referral program is about how new business benefit from existed user bases, and share benefits to whom brought in those existed users, and how businesses share benefits with other businesses built on top of the same platform.

[jakub]

Or you just have to make 2 transaction:
-the first one as requested by the user (with only the network fee)
-the second one from the user to the business account (it is hidden from the user side, so he see it as an higher fee charged on the first transaction)

I'm not sure but I think the hiding part might be the main difficulty - this is what the in-built referral program does perfectly for you.

The built in referral program allows a referrer to charge a shit out of a real user, who actually brings volume to the network, to cover the cost of creating spam accounts, which are 95% of all accounts. Nice approach.

This is exactly how any marketing-based business works.

[jakub]

really? I think if I just leave one sentence in my forum signature, users will pass the info one by one. no ad needed.
people like to save money and help others to save money.

So you're talking about the crypto crowd. This market is tiny and extremely tough.

I'm talking about "normal" customers who don't really care about the technology part. And this market is huge.

so is a solution such as below acceptable to you? it limit referral program to some assets.

in the updated plan, there will be 3 mode, both mode A and mode C are flat fee, but for A the fee totally go to network, for C referrer will take 80%, the flat fee will be set by committee, but I think A will own a lower fee than B. BTS is the fundamental asset in the system, need to be applied mode A with transfer fee as low as possible.

for public smartcoins, as now there are privatized smartcoins, so its ok for public smartcoins to be applied mode B. users do not like referral program/high fee can play with privatized smartcoins.

I think it's hard to limit the referral program to some assets because you never know which assets the user will eventually choose to use the most.

Let's assume my asset participates in the referral program and your asset does not, and I refer a user to the system but s/he ends up using your asset, not mine.
This way I'll be upset as I've paid to bring the user to the system but it's you who has made profit on this user.

But on the other hand limiting the referral program to some demographics does make sense, IMO.
The crypto crowd generally does not need it, so if CoinHoarder's machine effectively dismantles the referral program on this market, it will not hurt a business targeting "normal" users.

I honestly encourage you to set up a CoinHoarder's machine.
It's worth the effort, if it brings more harmony and less fighting into our community.

[yvv]

Or you just have to make 2 transaction:
-the first one as requested by the user (with only the network fee)
-the second one from the user to the business account (it is hidden from the user side, so he see it as an higher fee charged on the first transaction)

I'm not sure but I think the hiding part might be the main difficulty - this is what the in-built referral program does perfectly for you.

The built in referral program allows a referrer to charge a shit out of a real user, who actually brings volume to the network, to cover the cost of creating spam accounts, which are 95% of all accounts. Nice approach.

[jakub]

Or you just have to make 2 transaction:
-the first one as requested by the user (with only the network fee)
-the second one from the user to the business account (it is hidden from the user side, so he see it as an higher fee charged on the first transaction)

I'm not sure but I think the hiding part might be the main difficulty - this is what the in-built referral program does perfectly for you.

[bitcrab]

really? I think if I just leave one sentence in my forum signature, users will pass the info one by one. no ad needed.
people like to save money and help others to save money.

So you're talking about the crypto crowd. This market is tiny and extremely tough.

I'm talking about "normal" customers who don't really care about the technology part. And this market is huge.

so is a solution such as below acceptable to you? it limit referral program to some assets.

in the updated plan, there will be 3 mode, both mode A and mode C are flat fee, but for A the fee totally go to network, for C referrer will take 80%, the flat fee will be set by committee, but I think A will own a lower fee than B. BTS is the fundamental asset in the system, need to be applied mode A with transfer fee as low as possible.

for public smartcoins, as now there are privatized smartcoins, so its ok for public smartcoins to be applied mode B. users do not like referral program/high fee can play with privatized smartcoins.

[Bhuz]

So you can forget about any significant income from LTM upgrades  - of course all this applies only in case of "non-advanced" referral businesses like kenCode's.

Why is that?

e.g: If kencode ask 30 BTS for normal users (overcharging the transaction fee) but 1 BTS for LTM (using only the requested fee from the network without overcharge), doesn't this tempt users to upgrade?

But with this freedom comes the burden of setting up some kind of referral program yourself, as the standard in-built referral program will no longer work for you.

This is true, but we are talking about business with developers!

Plus, my example of simply overcharge the fee in the transaction is a very easy way to achive that and basically do not need any development
I think you can use the built-in referral program, but changing the fee as you like (it need to be higher than what the network ask)

Or you just have to make 2 transaction:
-the first one as requested by the user (with only the network fee)
-the second one from the user to the business account (it is hidden from the user side, so he see it as an higher fee charged on the first transaction)

[jakub]

really? I think if I just leave one sentence in my forum signature, users will pass the info one by one. no ad needed.
people like to save money and help others to save money.

So you're talking about the crypto crowd. This market is tiny and extremely tough.

I'm talking about "normal" customers who don't really care about the technology part. And this market is huge.

[jakub]

My example was just an example.
The point is that with low fee, the business's owner himself can really decide what fee apply.

If he, like you, thinks that his business can make more money charging a standard fee of 12 BTS (or 15, or 30) and than "sell" the available discount for LTM, he is free to do so!
Instead, with an higher fee on the network side, he lose that freedom.

I agree with you that lowering the transfer fee to 6 BTS means more freedom for "non-advanced" referral businesses (i.e. businesses targeting non-advanced users).

But with this freedom comes the burden of setting up some kind of referral program yourself, as the standard in-built referral program will no longer work for you.
So you can forget about any significant income from LTM upgrades  - of course all this applies only in case of "non-advanced" referral businesses like kenCode's.

[Bhuz]

LTM pay 5 instead of 10. 50% reduction

Below certain price level, even 90% reduction does not change a customer's behavior.

As already stated, the business is free to chose that price level! Not only the % reduction!
But only if the network allows him (low fee).

[bitcrab]

it's possible for me to build such a machine, but before doing it I need to do some more detailed evaluation and preparation.
if I really release such a machine, when you refer your friend to be a LTM, will you suggest him to set you  or me as referrer?

Assuming we are talking about a friend of mine about whom I care:
- I'd suggest myself, provided I can somehow justify that. And the justification can be e.g. educational. I could help her/him to find out how the GUI works and what is the best fiat gateway etc.
- On the other hand, if I felt could not offer any added value, I'd refer her/him to you.

This applies to a friend only. Any other customer would be refereed to me. If the customer finds out about you, that's tough luck for me.
But there will be a small chance for that as you'll have no money to advertise. So I'll feel be quite assured that most people don't find out about your machine.

Once you start advertising, you'll have costs and you'll no longer be able to run your machine.

really? I think if I just leave one sentence in my forum signature, users will pass the info one by one. no ad needed.
people like to save money and help others to save money.

[yvv]

That's funny how you insist to take away almost all revenue from the referrers and yet you expect them to do more.

This is not what I say. I say, if referrers want to be payed more, then they should do some more work than just signing up users who never use the network.

[jakub]

LTM pay 5 instead of 10. 50% reduction

Below certain price level, even 90% reduction does not change a customer's behavior.

[jakub]

it's possible for me to build such a machine, but before doing it I need to do some more detailed evaluation and preparation.
if I really release such a machine, when you refer your friend to be a LTM, will you suggest him to set you  or me as referrer?

Assuming we are talking about a friend of mine about whom I care:
- I'd suggest myself, provided I can somehow justify that. And the justification can be e.g. educational. I could help her/him to find out how the GUI works and what is the best fiat gateway etc.
- On the other hand, if I felt could not offer any added value, I'd refer her/him to you.

This applies to a friend only. Any other customer would be refereed to me. If the customer finds out about you, that's tough luck for me.
But there will be a small chance for that as you'll have no money to advertise. So I'll feel be quite assured that most people don't find out about your machine.

Once you start advertising, you'll have costs and you'll no longer be able to run your machine.

[Bhuz]

So you say that thanks to upgrading to LTM I'll pay 10 BTS fee instead of 5 BTS fee.
Not a very attractive offer. If I was a non-advanced user, I'd never buy LTM. There will be practically no demand for it among non-advanced users.

LTM pay 5 instead of 10. 50% reduction

The point is: there is a certain level (e.g. 12 BTS) and if we set the flat transfer fee below this level, there is no way referral business, targeted to non-advanced users, can count on any income from LTM.
If they are fine with that, I'm fine with it too.

My example was just an example.
The point is that with low fee, the business's owner himself can really decide what fee apply.

If he, like you, thinks that his business can make more money charging a standard fee of 12 BTS (or 15, or 30) and than "sell" the available discount for LTM, he is free to do so!
Instead, with an higher fee on the network side, he lose that freedom.

Indeed, I can see that kenCode is already drifting in this direction - he does not treat LTM as the basis of his income any more.
(So why did he attack bitcrab's 1BTS proposal so passionately? There must have been some misunderstanding.)

I think kencode did not really understand what that proposal meant for his business. He probably do not know how many things he could do on top of bts and on top of the basic fee asked from the network.

I also think that unrational fear and personal attacks on bitcrab led others to continue to react very aggressively...

There was no reason at all to speak about "forking bts", "destroying bts", "destroying the referral program", "replacing all the committee members", "replacing the witnesses" and so on.
...and I am very sad that some of this absurd statements that led to an higher sense of fear, come from some committee member too...

But I think and hope we all have overcome that now!

[bitcrab]

he may do not want to kill, but the referral program may be really killed by him.

How to Kill Referral Businesses:
Charlie wants the referral business to die because he thinks the inflated fees are bad for the future of Bitshares. He sets up a business that works like the rakeback business in poker [1]. Anyone that signs up under him, he gives 100% of the fees back to them that he earns. It costs him very little to set this up. It mostly just costs him the time it takes to program an automated solution. Assuming everyone acts in their own self-interest, they would register for an account with Charlie as their referrer because they will save a lot of BTS on the fees. No one can compete with 100% rakeback, and all referral businesses that rely on the referral program for profit would die off.

Actually, this "Kill Referral Businesses" example proofs exactly the opposite than @CoinHoarder intended.

The facts are these:
- CoinHoarder's idea has not been executed by anyone so far.
- Not a single referral business demands protection from it.
Why is that?
Maybe because the referral businesses *believe* they are able to add some value for the user after all.

If they are wrong in this belief, the referral program will die eventually.
So why do you put so much effort into fighting the referral program, instead of simply getting rid of it (at least in your country) by executing CoinHoarder's machine?

it's possible for me to build such a machine, but before doing it I need to do some more detailed evaluation and preparation.
if I really release such a machine, when you refer your friend to be a LTM, will you suggest him to set you  or me as referrer?

[jakub]

Instead, IF the network charge only 1 BTS:
-he could charge an additional fee on top of that
-he would have the *freedom* to chose the total fee his users should pay
-he could temp and encourage users to upgrade to LTM thanks to that freedom.

e.g. -normal users pay an additional fee of 9 BTS -> 10 BTS for transaction.
       -LTM users pay a lower additional fee of 4 BTS -> 5 BTS total
       -users that upgraded to LTM *thanks to his wallet* pay no additional fee!
All of this could also work on top of % based fee (bsip#10) since all works from the business/application side that is built on top of bts platform

So you say that thanks to upgrading to LTM I'll pay 10 BTS fee instead of 5 BTS fee.
Not a very attractive offer. If I was a non-advanced user, I'd never buy LTM. There will be practically no demand for it among non-advanced users.

The point is: there is a certain level (e.g. 12 BTS) and if we set the flat transfer fee below this level, there is no way referral business, targeted to non-advanced users, can count on any income from LTM.
If they are fine with that, I'm fine with it too.
Indeed, I can see that kenCode is already drifting in this direction - he does not treat LTM as the basis of his income any more.
(So why did he attack bitcrab's 1BTS proposal so passionately? There must have been some misunderstanding.)

But this needs to be clearly stated, instead of distracting "non-advanced" referral businesses with the 10/90 offer.
This offer has no real meaning for them, as in their case there will be almost no money to be split in the first place.

[jakub]

he may do not want to kill, but the referral program may be really killed by him.

How to Kill Referral Businesses:
Charlie wants the referral business to die because he thinks the inflated fees are bad for the future of Bitshares. He sets up a business that works like the rakeback business in poker [1]. Anyone that signs up under him, he gives 100% of the fees back to them that he earns. It costs him very little to set this up. It mostly just costs him the time it takes to program an automated solution. Assuming everyone acts in their own self-interest, they would register for an account with Charlie as their referrer because they will save a lot of BTS on the fees. No one can compete with 100% rakeback, and all referral businesses that rely on the referral program for profit would die off.

Actually, this "Kill Referral Businesses" example proofs exactly the opposite than @CoinHoarder intended.

The facts are these:
- CoinHoarder's idea has not been executed by anyone so far.
- Not a single referral business demands protection from it.
Why is that?
Maybe because the referral businesses *believe* they are able to add some value for the user after all.

If they are wrong in this belief, the referral program will die eventually.
So why do you put so much effort into fighting the referral program, instead of simply getting rid of it (at least in your country) by executing CoinHoarder's machine?

[Bhuz]

For me the 10/90 or 20/80 choice is a bit artificial and only hides the underlying problem.

And the underlying problem is this: if we reduce the transfer fees to something like 6 BTS, businesses like @kenCode or @merivercap get this:
- their customers are pleased because the default transfer fee becomes really low - so their mobile apps become more useful for small payments
- on the other hand the motivation to upgrade to LTM drops drastically for most of their customers - so their referral income is likely to drop

Therefore, if I put myself in kenCode's shoes, the switch from 20/80 to 10/90 split is less important than maintaining a healthy balance between the low transfer fee and the expected drop in LTM sales.
I guess it's a little consolation for kenCode to be on 10/90 split if there is a general drop in his referral income and this drop in LTM sales is much bigger than the benefits from the 10/90 split.

I'm not saying it's such a bad idea to rebrand LTM from a product for *frequent* users to a product for *advanced* users, and thus offer low transfer fees by default as a non-advanced feature.
But I think 6 BTS is too low, it should be more like 10 or 12 BTS to leave some space for LTM.

Paying 10 BTS per transfer is still very cheap but if I'm a frequent user I might still be tempted to lower it to 2 BTS by buying LTM.
Whereas if I pay 6 BTS by default, the temptation to reduce it further is almost non-existent.

I think the referral system is bringing confusion and false certainties.


First, I would like to underline that the referral system is not the backbone of bts, it is not the product of bts, it is not a core or even a main feature of this platform.
A DEX without a referral program built-in, still is a DEX.
A product that offers Bond Market, Prediction Market, payment system etc without a referral program still is a product that offers BM, PM, payment etc.
A product that offers something usefull can bring and attract users.

On the other hand, referral system without any other product to sell, is nothing at all, and "nothing at all" can not bring and attract users.
Well, it could probably be a ponzy scheme actually and so capture a lot of naive/gullible pleople... but no one here want that, right?

So, can we finally come to the conclusion that the referral system is just a "bonus feature"?
A bonus feature that private users and business's owners can utilize as an *additional stream of revenue* and as an *additional way to attract even more people*!

Everyone should be very grateful and thankful for this basic referral program.
Everyone should thanks the network for cutting his potential revenue by 80%. 80% is huge!
And still someone here want to see it even higher, at the expenses of the entire platform?!
IMO all this related discussion is absurd and ridiculous. And I would rather argue for a reduction of the referral cut to help and meet the needs of network profitability.

Businesses should never found their success, win, and revenue merely on referral system. It can be a plus for sure, but not the backbone.


It seems that finally even KenCode realized this! Finally he stated that he sees the POS rewards as the main income for their revenue!

AFAIK every purchase done with the mobile wallet will actually charge a little % fee. 50% of these revenues will be distributed to OPENPOS's owners.
They (as kencode and the team/business behind him) probably should:
   1) invest to OPENPOS and
   2) reserve for themselves another cut on the other 50% side.
This is the right way to build a business, not just hoping to survive by getting something out of a basic and already built-in referral program.


About the fees... I am not sure you guys realize how the fees can actually affect business.
Your example on how a lower transfer fee would/could negatively affect business is not true. I will try to explain what I mean.

IF the network charge an high fee, the business will be forced to charge *at least* that fee to their users.
This could have as result
1) oodles disgruntled users that do not want to pay such an high fee
2) business blaming the need of such an high fee to the referral system that overcharges the network fee by an additional 80%
3) preventing business to be built in the first place (e.g business on micro-tx)

On the other side, IF the network charge a very low fee:
1) no one prevents businesses to charge, on their side, an higher fee on top of the one that the network ask.
2) no one prevents businesses to create an additional and "private" referral system for their product, on top of the one given by bts platform.

High fees prevent and hamper diversity and business ability to choose what they think is best for them and their users.

Low fees give a lot more freedom to business without stopping them to buid a more profitable referral program or charge higher fees to their users if they want to.


An easy example about KenCode business:
Right now, for every transaction, he have to charge the users 30 BTS. Even If he would like to make it cheaper he would need to pay the difference and would actually lose money to satisfy customers.

Instead, IF the network charge only 1 BTS:
-he could charge an additional fee on top of that
-he would have the *freedom* to chose the total fee his users should pay
-he could temp and encourage users to upgrade to LTM thanks to that freedom.

e.g. -normal users pay an additional fee of 9 BTS -> 10 BTS for transaction.
       -LTM users pay a lower additional fee of 4 BTS -> 5 BTS total
       -users that upgraded to LTM *thanks to his wallet* pay no additional fee!
All of this could also work on top of % based fee (bsip#10) since all works from the business/application side that is built on top of bts platform


As you can see, low fees do not kill business or the possibility of referral programs.

Low fees only enhance business's ability and freedom on how to build those things.

Edit: I also fully agree on @Xeldal posts

[bitcrab]

agree

Is the referral system built on top of the network as an additional feature to be used for *maximize and generate an *additional stream of profit, OR is the network built on top of the referral system to steal people's money from their "hard" work in making others people join a ponzi scheme?

I was pretty sure the first case was the one we were working on... But now that people seem to treat the referral system as the *real, *only, *major income for their business's revenue... I am lost.

Or maybe those people think bts can't do and offer nothing better then that?
If so, why are you here in the first place?

This! raised a valuable problem.

I think the whole referral implementation is flawed and we're trying to tweak the wrong things.
I think the problem is we're trying to build a public mandatory referral system and tax, when it should be left to private business, private interest to offer these thing if they are useful.

I am interested in exploring options that completely reduce the friction for users, reducing the fees, reducing the tax.  Where you've got a wide open ridiculously efficient platform with little to no cost at the core and offering innumerable optional features with many incentives to participate or utilize, like a variety of optional referral programs, built into privately created assets like FBAs or smart contracts, or just webservices etc. that might be completely separate from bitshares core. 

Could we not have many different (optional)referral programs built on top of bitshares?  User can choose the one they like, or none at all. 
Does the referral program need to be centralized as a core universal unavoidable feature/tax?
Couldn't businesses develop their own referral programs, incentives for using their wallet, their service, etc that don't rely on a core design mechanism that has a significant measurable effect on every user and every use case?

If a referral system has merit people will voluntarily use it.  I think business should design their own programs with their own source of income from their own services and not rely on a core tax on bitshares system wide.  It's a burden and inefficient.

A business might create a bitshares smart contract or a new type of transaction or feature or process or game or service etc that they design to collect a tax/fee that feeds their particular referral program.  But they would be subject to competition from competing services or competing referral programs and no one would be forced to fund them or participate in them while using the bitshares platform.

I don't like that this referral tax is unavoidable.  I think referral programs are a great idea but they should be built on top of, and in addition to bitshares, maybe not baked in the core.

Anyway, that is the direction of my thoughts lately.  I could be wrong.

I think some day the below described service will appear, the provider may do not want to kill referrer program, but just want to make profit, he do not need to pay 100% back, about 70% - 80% is attractive enough, and then he can make profit.

he may do not want to kill, but the referral program may be really killed by him.

How to Kill Referral Businesses:
Charlie wants the referral business to die because he thinks the inflated fees are bad for the future of Bitshares. He sets up a business that works like the rakeback business in poker [1]. Anyone that signs up under him, he gives 100% of the fees back to them that he earns. It costs him very little to set this up. It mostly just costs him the time it takes to program an automated solution. Assuming everyone acts in their own self-interest, they would register for an account with Charlie as their referrer because they will save a lot of BTS on the fees. No one can compete with 100% rakeback, and all referral businesses that rely on the referral program for profit would die off.

[1] https://en.wikipedia.org/wiki/Rake_(poker)#Rakeback

[kenCode]

I'll take what i can get when it comes to referral income but I think using bitassets or even a btsbasket of bitassets would be a solid way to handle the fees, bts is just so volatile.

IMO fees should range from 1 cent to 1%, accomodating every size POS purchase from gumballs to yachts charged as a stable mpa, an average across 5 or more mpa's including gold and other relatively stable assets so people don't get taken in fees by market fluctuations.
 
Yes, i need some income, but i see POS rewards rewarding us much more than referral income will in the long run. We need mass adoption, places to get smartcoins, spend smartcoins, and earn smartcoins.
 
And thank you @jakub for the kind words, this discussion has turned around nicely, great work!!

[jakub]

For me the 10/90 or 20/80 choice is a bit artificial and only hides the underlying problem.

And the underlying problem is this: if we reduce the transfer fees to something like 6 BTS, businesses like @kenCode or @merivercap get this:
- their customers are pleased because the default transfer fee becomes really low - so their mobile apps become more useful for small payments
- on the other hand the motivation to upgrade to LTM drops drastically for most of their customers - so their referral income is likely to drop

Therefore, if I put myself in kenCode's shoes, the switch from 20/80 to 10/90 split is less important than maintaining a healthy balance between the low transfer fee and the expected drop in LTM sales.
I guess it's a little consolation for kenCode to be on 10/90 split if there is a general drop in his referral income and this drop in LTM sales is much bigger than the benefits from the 10/90 split.

I'm not saying it's such a bad idea to rebrand LTM from a product for *frequent* users to a product for *advanced* users, and thus offer low transfer fees by default as a non-advanced feature.
But I think 6 BTS is too low, it should be more like 10 or 12 BTS to leave some space for LTM.

Paying 10 BTS per transfer is still very cheap but if I'm a frequent user I might still be tempted to lower it to 2 BTS by buying LTM.
Whereas if I pay 6 BTS by default, the temptation to reduce it further is almost non-existent.

[Zapply]

No. Make it opposite, 95% to network, 5% to referral.
 

[jakub]

No. Make it opposite, 95% to network, 5% to referral.

Imo, referrers should do some better job, to deserve to be payed.

Imo, it is a responsibility of referrer to reach them and figure out why.

That's funny how you insist to take away almost all revenue from the referrers and yet you expect them to do more.
They have no "responsibility" nor obligation to "do some better job".
Only the financial incentive can make them try harder.

Those people clearly showed interest in bitshares and spent efforts to create account, but something stopped them from using the network.

I guess this "something" is liquidity or lack of it.
A non-crypto & non-trader user has no reason to use BitShares at this stage.
Until we have liquidity, efficient fiat gateways and a cool mobile app, BitShares is almost impossible to sell to "normal" users.

EDIT: And we can expect that at least two of those (i.e. fiat gateways and mobile apps) will only come into existence thanks to the referral financial incentive.
So anyone who wants the referral income to be at 5%, please be serious and let us know this: What is the alternative way you suggest to incentivize the creation of an infrastructure around BitShares?

[Xeldal]

a user friendly system is our main target, the referal program is a plugin.
remember this point before you make a decition

I agree

I'd like to see the platform wide open and extremely efficient with little to no friction(cost)
Every function from there can be however you like, and in as many different forms. 
Let the market.
Referral program is one of many addons with its own characteristics.  A tool if you want to use it.

I think 100% should go to the network.  A wallet can add to this whatever amount they want for a referral program.
Ideally this referral addon would be turn key and as easy as creating an asset.

Logically, the network should just earn the amount it costs to set up a referral system so it should be closer to 0% in the long run.

If transfer fees are reduced to whatever people are deciding at the moment, lets say 6BTS or 2 cents, a  wallet/gateway business can charge 20 cents per transaction (or 1%) and earn a profit.   That business can implement it's own referral system that works exactly the same way it currently does and the network will get 0%.   The reason a business may not want to do that is because of the cost of implementing its own referral program.   Otherwise the program should just be looked at as purely an add-on for businesses to attract users and replace marketing costs. 

  on all points, if i understand you.

[merivercap]

Also I was thinking about the spam aspect and the network doesn't have to worry about spam because faucets pay to create new accounts.  Faucets need to set a minimum amount either through the referral program or have some measures to prevent spam.  New accounts are roughly about $1 each so if someone spams a faucet for 100,000 accounts the faucet pays $100k.  The network doesn't care because it gets the money.

Also in terms of vesting and LTM 'farming'... it's also possible for someone to create massive amounts of LTMs and sell those at a discounted rate.  I think that's another reason why the vesting is there.  That's why it's better for the faucet to maintain some fee to prevent this. 

[merivercap]

No. Make it opposite, 95% to network, 5% to referral.

No. Make it opposite, 95% to network, 5% to referral.

personally I can accept less than 10% to referral.
if somebody have a great contribution to marketing, committee can award them from network's income

I agree. All it takes is one angry BTS shareholder to kill the referral system. Businesses should not rely on it, and we should not make decisions based off of catering to businesses that rely on it.

Logically, the network should just earn the amount it costs to set up a referral system so it should be closer to 0% in the long run.

If transfer fees are reduced to whatever people are deciding at the moment, lets say 6BTS or 2 cents, a  wallet/gateway business can charge 20 cents per transaction (or 1%) and earn a profit.   That business can implement it's own referral system that works exactly the same way it currently does and the network will get 0%.   The reason a business may not want to do that is because of the cost of implementing its own referral program.   Otherwise the program should just be looked at as purely an add-on for businesses to attract users and replace marketing costs. 

[freedom]

I support  network 0%/referrer0%/burn 100%

[alt]

If somebody really like a high transfer fees,
they can issue a private asset XEUR,
and set XEUR's rate much lower, such as 10 BTS/XEUR,
we can add a new option for asset, don't accept BTS as fees.
if people want to transfer XEUR, he will pay the transfer fees: 0.1 XEUR(equal 1BTS)

[yvv]

As one of the topics on this forum states, which I am too lazy to search, the most successful referrer in bitshares, excluding ccedk, brought in 100 accounts, 95 of which were never used. Imo, referrers should do some better job, to deserve to be payed. Those people clearly showed interest in bitshares and spent efforts to create account, but something stopped them from using the network. Imo, it is a responsibility of referrer to reach them and figure out why. Send them fee+0.00001 BTS with a message like "Thank you for signing up to bitshares. If you would like to share your opinion about using this wonderful network, please send 0.00001 BTS back to this address with your feedback in the transaction message". Or come up with other way to collect feedback.

[Empirical1.2]

No. Make it opposite, 95% to network, 5% to referral.

personally I can accept less than 10% to referral.
if somebody have a great contribution to marketing, committee can award them from network's income

Yes because the marketing delegates in BTS1 added so much value to BitShares.... 

(It is better to pay people only for the marketing results they achieve imo, which is what the referral programme does, this is why I like it, even though it can be improved.)

[CoinHoarder]

No. Make it opposite, 95% to network, 5% to referral.

personally I can accept less than 10% to referral.
if somebody have a great contribution to marketing, committee can award them from network's income

I agree. All it takes is one angry BTS shareholder to kill the referral system. Businesses should not rely on it, and we should not make decisions based off of catering to businesses that rely on it.

How to Kill Referral Businesses:
Charlie wants the referral business to die because he thinks the inflated fees are bad for the future of Bitshares. He sets up a business that works like the rakeback business in poker [1]. Anyone that signs up under him, he gives 100% of the fees back to them that he earns. It costs him very little to set this up. It mostly just costs him the time it takes to program an automated solution. Assuming everyone acts in their own self-interest, they would register for an account with Charlie as their referrer because they will save a lot of BTS on the fees. No one can compete with 100% rakeback, and all referral businesses that rely on the referral program for profit would die off.

[1] https://en.wikipedia.org/wiki/Rake_(poker)#Rakeback

[alt]

No. Make it opposite, 95% to network, 5% to referral.

personally I can accept less than 10% to referral.
if somebody have a great contribution to marketing, committee can award them from network's income

[yvv]

No. Make it opposite, 95% to network, 5% to referral.
 

[alt]

if we have low fee, we have a user friendly system,
there are tons of people who really love this system would like to be a free referral,
they don't need profit from referral indeed,
they care about BTS's price, and want to  get profit from shares

a user friendly system is our main target, the referal program is a plugin.
remember this point before you make a decition

[merivercap]

I understand this 90/10 idea is meant to be some sort of compensation for the referral businesses for the lost income, in case transfer fees are no longer part of the LTM deal.
(This will effectively happen *IF* the flat transfer fee is lowered to 6 BTS, as the new fee schedule proposes)

I'm not sure this 6-BTS-transfer-fee idea is compatible with BSIP10.

If we lower the flat transfer fee to 6 BTS, and BSIP10 gets implemented, it will be hard to fit into this the minimum and maximum limit for the percentage-based fees.

The min limit is meant to be the minimum the network wants to earn to cover its costs and prevent spam.
And it also needs to be significantly lower than the 6 BTS flat fee - otherwise the %-based fee system will not be popular with issuers.

So if the flat fee becomes 6 BTS, the minimum limit for %-based fees needs to be something like 1 or 2 BTS.
Are we sure it is enough to prevent spam?

If the transfer fee is lowered to 6BTS now, later on when BSIP is implemented we can have 1% fees for Smartcoin US & Eur.  The minimum fee for that can be 2BTS if you want to make it even for the various modes, but even if it was a minimum of 6BTS that shouldn't make the referral program that much less attractive.   Remember you were talking about how the referral program can be seen as optional?  LTMs would be attractive if people want to use Smartcoin US & Eur.  I'll use 1% for the privatized Smartcoin.  It would be nice to have a 2BTS minimum for the %-based models to make it more 'even' and allow LTMs to have the lowest fee, but even if it was a 6BTS minimum I'd still use the 1% fee schedule. 

[jakub]

I understand this 90/10 idea is meant to be some sort of compensation for the referral businesses for the lost income, in case transfer fees are no longer part of the LTM deal.
(This will effectively happen *IF* the flat transfer fee is lowered to 6 BTS, as the new fee schedule proposes)

I'm not sure this 6-BTS-transfer-fee idea is compatible with BSIP10.

If we lower the flat transfer fee to 6 BTS, and BSIP10 gets implemented, it will be hard to fit into this the minimum and maximum limit for the percentage-based fees.

The min limit is meant to be the minimum the network wants to earn to cover its costs and prevent spam.
And it also needs to be significantly lower than the 6 BTS flat fee - otherwise the %-based fee system will not be popular with issuers.

So if the flat fee becomes 6 BTS, the minimum limit for %-based fees needs to be something like 1 or 2 BTS.
Are we sure it is enough to prevent spam?

[btswolf]

As participant of the referral program I am fine with 20/80.
IMHO transfer and market fees should be low as possible only set to prevent spam but other special operations should be charged a bit more and that is enough incentive for me (now).

[xeroc]

I see your point but think think the op needs discussion anyway.
I would love to demonstrate stability in the fee schedule but a) want to improve the current fee schedule while b) not putting pressure on the bsip10 dev(s).

[merivercap]

I generally support the lower network fees proposal. 

I'm not sure what 'accept the reduced transfer fee' means.  We can still maintain transfer fees for Smartcoin USD & Smartcoin Eur (either 1% or 20 cents) so most referral businesses will be unaffected.  I think all we need to do is reduce transfer fees for specific assets (specifically Smartcoin CNY/TCNY) to support the Chinese community.  Maybe I'm missing something?

The current implementation cant distinguish transfer fees for different assets .. they are the same for every asset

When you say current implementation, aren't we assuming BSIP10 is passed. (It currently has the votes.)  Also I would assume we can distinguish between assets because even Mode B (percentage-based fees) was supposed to be optional for each asset. 

It also seems that we can distinguish from this response here:
https://bitsharestalk.org/index.php/topic,21080.msg275845.html#msg275845

Afaik bsip10 will take some more weeks and is (unfortunatelly) not yet approved.
Thats why i focused on 'current' implementation

Lol @xeroc!  Shouldn't we wait since this will make a huge difference?   I hope the committee is not trying to decide lower fees right now because it seems very unncessary to do it so soon.  We can just wait for BSIP10.  I guess it's not really that big a deal since we can revert back to higher transfer fees when BSIP10 arrives.

BSIP10: http://cryptofresh.com/workers  It seems to have 77% approval.  (BTW I'm assuming BSIP will allow Mode A without any additional code work.  It seems the committee just has to decide that's one of the options.)  When does it become official?

In general I think the 90/10 split is fine, but mainly to encourage even more referrals and make it easier for the committee to decide the fees between Mode A/B/C.

BTW great to hear you'll be on the committee!

[CoinHoarder]

Is the referral system built on top of the network as an additional feature to be used for *maximize and generate an *additional stream of profit, OR is the network built on top of the referral system to steal people's money from their "hard" work in making others people join a ponzi scheme?


I was pretty sure the first case was the one we were working on... But now that people seem to treat the referral system as the *real, *only, *major income for their business's revenue... I am lost.

Or maybe those people think bts can't do and offer nothing better then that?
If so, why are you here in the first place?

Good point 

[xeroc]

I generally support the lower network fees proposal. 

I'm not sure what 'accept the reduced transfer fee' means.  We can still maintain transfer fees for Smartcoin USD & Smartcoin Eur (either 1% or 20 cents) so most referral businesses will be unaffected.  I think all we need to do is reduce transfer fees for specific assets (specifically Smartcoin CNY/TCNY) to support the Chinese community.  Maybe I'm missing something?

The current implementation cant distinguish transfer fees for different assets .. they are the same for every asset

When you say current implementation, aren't we assuming BSIP10 is passed. (It currently has the votes.)  Also I would assume we can distinguish between assets because even Mode B (percentage-based fees) was supposed to be optional for each asset. 

It also seems that we can distinguish from this response here:
https://bitsharestalk.org/index.php/topic,21080.msg275845.html#msg275845

Afaik bsip10 will take some more weeks and is (unfortunatelly) not yet approved.
Thats why i focused on 'current' implementation

[Bhuz]

Is the referral system built on top of the network as an additional feature to be used for *maximize and generate an *additional stream of profit, OR is the network built on top of the referral system to steal people's money from their "hard" work in making others people join a ponzi scheme?


I was pretty sure the first case was the one we were working on... But now that people seem to treat the referral system as the *real, *only, *major income for their business's revenue... I am lost.

Or maybe those people think bts can't do and offer nothing better then that?
If so, why are you here in the first place?

[santaclause102]

A very simple argument that makes sense independent of to which content it is applied:

90/10 (as compared to 80/20) would reduce the second parameter (in our case the network income) by 100% for a mere 12.5% increase in referral income. These numbers speak for themselves I guess.

Hmm .. that argument is mathematically valid but IMHO misleading .. the profit in absolute amounts that is removed from the network is added to the referral system ...

Of course but it's about the decision which function within the system should get what. You could always say that the greater system both parties/functions are part of maintains the 100%... If it doesnt matter how the 100% are alloacted the initial question about 80/20 vs 90/10 also is obsolete.

[merivercap]

I generally support the lower network fees proposal. 

I'm not sure what 'accept the reduced transfer fee' means.  We can still maintain transfer fees for Smartcoin USD & Smartcoin Eur (either 1% or 20 cents) so most referral businesses will be unaffected.  I think all we need to do is reduce transfer fees for specific assets (specifically Smartcoin CNY/TCNY) to support the Chinese community.  Maybe I'm missing something?

The current implementation cant distinguish transfer fees for different assets .. they are the same for every asset

When you say current implementation, aren't we assuming BSIP10 is passed. (It currently has the votes.)  Also I would assume we can distinguish between assets because even Mode B (percentage-based fees) was supposed to be optional for each asset. 

It also seems that we can distinguish from this response here:
https://bitsharestalk.org/index.php/topic,21080.msg275845.html#msg275845

[xeroc]

A very simple argument that makes sense independent of to which content it is applied:

90/10 (as compared to 80/20) would reduce the second parameter (in our case the network income) by 100% for a mere 12.5% increase in referral income. These numbers speak for themselves I guess.

Hmm .. that argument is mathematically valid but IMHO misleading .. the profit in absolute amounts that is removed from the network is added to the referral system ...

[xeroc]

I generally support the lower network fees proposal. 

I'm not sure what 'accept the reduced transfer fee' means.  We can still maintain transfer fees for Smartcoin USD & Smartcoin Eur (either 1% or 20 cents) so most referral businesses will be unaffected.  I think all we need to do is reduce transfer fees for specific assets (specifically Smartcoin CNY/TCNY) to support the Chinese community.  Maybe I'm missing something?

The current implementation cant distinguish transfer fees for different assets .. they are the same for every asset

[santaclause102]

A very simple argument that makes sense independent of to which content it is applied:

90/10 (as compared to 80/20) would reduce the second parameter (in our case the network income) by 100% for a mere 12.5% increase in referral income. These numbers speak for themselves I guess.

[merivercap]

I generally support the lower network fees proposal. 

I'm not sure what 'accept the reduced transfer fee' means.  We can still maintain transfer fees for Smartcoin USD & Smartcoin Eur (either 1% or 20 cents) so most referral businesses will be unaffected.  I think all we need to do is reduce transfer fees for specific assets (specifically Smartcoin CNY/TCNY) to support the Chinese community.  Maybe I'm missing something?

[Xeldal]

I think the whole referral implementation is flawed and we're trying to tweak the wrong things.
I think the problem is we're trying to build a public mandatory referral system and tax, when it should be left to private business, private interest to offer these thing if they are useful.

I am interested in exploring options that completely reduce the friction for users, reducing the fees, reducing the tax.  Where you've got a wide open ridiculously efficient platform with little to no cost at the core and offering innumerable optional features with many incentives to participate or utilize, like a variety of optional referral programs, built into privately created assets like FBAs or smart contracts, or just webservices etc. that might be completely separate from bitshares core. 

Could we not have many different (optional)referral programs built on top of bitshares?  User can choose the one they like, or none at all. 
Does the referral program need to be centralized as a core universal unavoidable feature/tax?
Couldn't businesses develop their own referral programs, incentives for using their wallet, their service, etc that don't rely on a core design mechanism that has a significant measurable effect on every user and every use case?

If a referral system has merit people will voluntarily use it.  I think business should design their own programs with their own source of income from their own services and not rely on a core tax on bitshares system wide.  It's a burden and inefficient.

A business might create a bitshares smart contract or a new type of transaction or feature or process or game or service etc that they design to collect a tax/fee that feeds their particular referral program.  But they would be subject to competition from competing services or competing referral programs and no one would be forced to fund them or participate in them while using the bitshares platform.

I don't like that this referral tax is unavoidable.  I think referral programs are a great idea but they should be built on top of, and in addition to bitshares, maybe not baked in the core.

Anyway, that is the direction of my thoughts lately.  I could be wrong.

[pc]

Currently the network need to pay out 43k BTS to witnesses and 80k BTS to workers every day, but average daily income is only 8k BTS or so, among it about 900 come from transfers, 6k come from account upgrades. If we decrease transfer fee for LTM from 6 BTS to 1 BTS, it means we need at least 6x volume to keep same revenue. If we decrease account upgrade fee to 0, it means we need 54x transfer volume to keep same revenue.

Thanks!

So this poll boils down to do we accept 119kBTS dilution per day instead of the current 115?
I think this doesn't make much of a difference. If these 4kBTS/day attract more users I'm all for it.

[fuzzy]

I can say that @fav says the current referral system is not making him enough to be worth it.  Though I am unsure how the other tokens he works with are, that is another discussion.  I am glad he brought this up, however, because it brings us to the question of how much more can all the businesses being currently built like --- OpenLedger.info (Obits), Sharebits.io (Sharebits), OPENPOS...etc, that rely on these fees to reward those who donated to their cause, if we make it more difficult for them. 

I am actually wondering why we don't go with something like 50/50 where referrers get more. And before people begin thinking I am saying this because of my involvement with sharebits, I want you to consider how much competition businesses like ours would receive coming in from the crypto ecosystem if the referral rewards went significantly higher. 

I mean there are multiple ways to skin a cat of course, but I personally think it is another angle worth discussing. 

[abit]

Can we have some numbers? How many fees were collected in the past [week, month, since 2.0], how much was spent on witnesses + workers in the same time?

Currently the network need to pay out 43k BTS to witnesses and 80k BTS to workers every day, but average daily income is only 8k BTS or so, among it about 900 come from transfers, 6k come from account upgrades. If we decrease transfer fee for LTM from 6 BTS to 1 BTS, it means we need at least 6x volume to keep same revenue. If we decrease account upgrade fee to 0, it means we need 54x transfer volume to keep same revenue.

[xeroc]

Can we have some numbers? How many fees were collected in the past [week, month, since 2.0], how much was spent on witnesses + workers in the same time?

I am working on those .. will need more time

[pc]

Can we have some numbers? How many fees were collected in the past [week, month, since 2.0], how much was spent on witnesses + workers in the same time?

[jakub]

Also, would you consider changing the second option in the poll to this:

No, keep it at 80%

This way it's directly comparable with the first option (and also less confusing).

[Bhuz]

I just want to point out that a shift from 20/80 to 10/90 for the referral system, really means a cut of 50% on network revenues.

[xeroc]

Even though I am not yet an official member of the committee yet, there is quite some discussion about how to achieve several goals at the same time concerning the fee schedule.
I would like to seek input from the broader community.

See this as an input thread - no decisions have been made - the results may or may not be incorporated in a feed schedule!

The thoughts currently are, if we should reduce the 20% cut from fees and give it to the referral business instead.

Advantages:
 - This will give a 10% extra for the referral business and will make it easier for most to accept a reduced transfer fee.
 - This might bring in a shitload of users because we could possible be way cheaper than competition
 - We would see our network run on higher transactions throughput
 - transaction fees could be reduced by more than just 10% because the referral business profits from many other operations aswell

Drawbacks:
 - The drawback of course is that we reduce the DACs revenue from transaction fees by 10%.
 - The offer should be timely limited by at least 6 and maybe at most 12 months (IMHO)
 - STEALTH (in order to reach ROI) will have require more than just 3x transfer fees

@onceuponatime
@ccedk
@BunkerChain Labs
@bitcrab
@kenCode


Would an additional 10% in the referral program be motivation enough for you to continue your efforts on the BTS blockchain even though the transfer fee is reduced?

@shareholders / @all

Would the shareholders agree with a 10%50% cut in transaction fees given that we can potentially draw more attention with
a) higher marketing benefits
b) lower transfers fees to draw more customers and volatility