Author Topic: [DAC] Possible financial focus for the next few months  (Read 17705 times)

0 Members and 1 Guest are viewing this topic.

Offline bitcrab

  • Committee member
  • Hero Member
  • *
  • Posts: 1928
    • View Profile
  • BitShares: bitcrab
  • GitHub: 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.
Email:bitcrab@qq.com

Offline Bhuz

  • Committee member
  • Sr. Member
  • *
  • Posts: 467
    • View Profile
  • BitShares: 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

  • Guest
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

  • Guest

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.
« Last Edit: February 03, 2016, 03:55:14 pm by jakub »

Offline Bhuz

  • Committee member
  • Sr. Member
  • *
  • Posts: 467
    • View Profile
  • BitShares: 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).

Offline bitcrab

  • Committee member
  • Hero Member
  • *
  • Posts: 1928
    • View Profile
  • BitShares: bitcrab
  • GitHub: 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.
Email:bitcrab@qq.com

Offline yvv

  • Hero Member
  • *****
  • Posts: 1186
    • View Profile


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

  • Guest
LTM pay 5 instead of 10. 50% reduction

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

jakub

  • Guest
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.

Offline Bhuz

  • Committee member
  • Sr. Member
  • *
  • Posts: 467
    • View Profile
  • BitShares: 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!

Offline bitcrab

  • Committee member
  • Hero Member
  • *
  • Posts: 1928
    • View Profile
  • BitShares: bitcrab
  • GitHub: 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?
Email:bitcrab@qq.com

jakub

  • Guest
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

  • Guest
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?

Offline Bhuz

  • Committee member
  • Sr. Member
  • *
  • Posts: 467
    • View Profile
  • BitShares: 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
« Last Edit: February 03, 2016, 02:51:07 pm by Bhuz »

Offline bitcrab

  • Committee member
  • Hero Member
  • *
  • Posts: 1928
    • View Profile
  • BitShares: bitcrab
  • GitHub: bitcrab
agree +5%
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
Email:bitcrab@qq.com