[Referral Program] Lower Socialist Taxes. Increase Capitalist Opportunities

[merivercap]

I can see your point but then this comes down to what is Bitshares? Is it a neutral platform or DAC.

1) Bitshares is a platform that is revenue neutral. Profits are made and disturbed by businesses build on top it. Users must invest in those business or just hold and wait for potential increase in BTS price.
2) Bitshares is a made a for profit business and makes profits from users and businesses that use the platform by receiving a fee of every transaction above neutral cost.

@Pheonike
I think this is an important point to keep in mind.  As a platform the goal is to just get as many people and businesses on as possible and charge a basic network fee.  Whether it's 1 cent or 20 cents BTS owners should just keep it simple and just try to attract as many businesses as possible.

@Xeldal  I agree with the general proposition and something like what you suggested is a good long term solution.  Also wouldn't it be easier to someone allow business accounts to charge a fee on the blockchain?  Isn't that being done for FBA assets already?   If fees can be set on an account-by-account basis in addition to assets that might work even better.  I think this is a better approach than adding a fee on the GUI because that may open up more vulnerabilities.  At least you can verify fees on the blockchain.    That way businesses can more easily earn money charging a %-based fee or 20 cents first and use whatever proceeds to fund a referral program. 

Example.  Let's assume the network fee is set at 2 cents per transaction for all assets.  If a business account XYZ wanted to use the USD Smartcoin and CNY Smartcoin it could create an XYZ.USD or XYZ.CNY and charge anything.... 0.1%, 0.3%, 1% as long as it's above the network fee.  Businesses can later use the net proceeds for the referral marketing features we already have on the system.

[jakub]

If I wanted to use the in-built subscription model but just sell it at a different price - I could not do it with your setup.
These are my only options:
- use the existing subscription model priced globally by the committee
- skip the subscription model
- build my own subscription model outside the blockchain

You can, just like today.  I can offer up-to 80% off the price of LTM without any cost to me, by giving the 80% I earn from the upgrade back to the user.

OK, that's true.
So maybe ideally we could combine my approach with yours, as the they seem to be quite complementary after all.
I would add this option: for the subscription model, instead of charging $100 and giving back $80, just let the registrar set the price at $20.
And if we had your solution in place, we could enforce the minimum price for LTM at $20 and give it no upper limit.

This way we would have the best features from both solutions:
- if a business was able to sell LTM above $100, it could do so and make more money for itself and the network.
- if a business wanted to sell LTM below $20 or did not want to use subscription at all, it could easily switch to your subscription-less model.

It's quite complex but I think it makes sense.

[Xeldal]

If I wanted to use the in-built subscription model but just sell it at a different price - I could not do it with your setup.
These are my only options:
- use the existing subscription model priced globally by the committee
- skip the subscription model
- build my own subscription model outside the blockchain

You can, just like today.  I can offer up-to 80% off the price of LTM without any cost to me, by giving the 80% I earn from the upgrade back to the user.

 

[jakub]

BitShares should not be making that decision for every business to pursue.

If every business can easily opt out from this "decision" this is not much of a problem.

But I agree, your approach could be considered as more generic.
However I do not agree that every marketing strategy could be replicated this way.

If I wanted to use the in-built subscription model but just sell it at a different price - I could not do it with your setup.
These are my only options:
- use the existing subscription model priced globally by the committee
- skip the subscription model
- build my own subscription model outside the blockchain

[Xeldal]

(3) I think it works both ways and depends on what your paying for.  If I'm just trying to move money from this account to that account.  I can do that anywhere and the quality of transfer is pretty much consistent wherever you go.  I'm looking for the cheapest price.  Paying more doesn't give me the feeling of it being better.  However paying for a product like a watch, that the quality can very drastically, I agree with you that paying more gives the impression that it is of higher quality.

Well, I understand the distinction but I think we are more like the watch here.

If you try to sell BitShares as an ordinary payment system - your cards are very weak. You cannot compete on price. You cannot compete on UX.
So you need to add some story to it, something special that differentiates BitShares from other payment systems.

Let's assume your customer "buys" this story, but just after the first transfer (or even before making the first transfer) s/he concludes that the system is cool but too expensive. So you explain that it has cost a lot of effort to set up & maintain this system and that's why it cannot be free. And this explanation perfectly fits with "the story" that got the customer interested in the first place.

Then you go on like this:
"But you know what? Here is a special promotion for you. Just for $2 (or whatever) you can upgrade to AM and get all this cool stuff almost for free."

So for me BitShares sells like a good watch offered at a generous discount. Not like a simple payment system to move money from A to B.

BitShares should not be making that decision for every business to pursue.  BitShares just provides the platform as cheaply and efficiently as possible with as little friction as possible to allow for every conceivable opportunity/angle/service.  Every business can decide how to price their wallet/service to capitalize on consumer psychology, stories and what not.

The approach you describe can be used by any business using this setup.  They can set their fee however high they want to maximize that angle.  with the extra income they may offer other special promotions of incentives as well, but the point is its not up to me.  They do as they wish and will be competing with other bitshares businesses that have lower fees and different offering and the market would decide which offers the better incentives/UX/back story/psychology etc.

[jakub]

(3) I think it works both ways and depends on what your paying for.  If I'm just trying to move money from this account to that account.  I can do that anywhere and the quality of transfer is pretty much consistent wherever you go.  I'm looking for the cheapest price.  Paying more doesn't give me the feeling of it being better.  However paying for a product like a watch, that the quality can very drastically, I agree with you that paying more gives the impression that it is of higher quality.

Well, I understand the distinction but I think we are more like the watch here.

If you try to sell BitShares as an ordinary payment system - your cards are very weak. You cannot compete on price. You cannot compete on UX.
So you need to add some story to it, something special that differentiates BitShares from other payment systems.

Let's assume your customer "buys" this story, but just after the first transfer (or even before making the first transfer) s/he concludes that the system is cool but too expensive. So you explain that it has cost a lot of effort to set up & maintain this system and that's why it cannot be free. And this explanation perfectly fits with "the story" that got the customer interested in the first place.

Then you go on like this:
"But you know what? Here is a special promotion for you. Just for $2 (or whatever) you can upgrade to AM and get all this cool stuff almost for free."

So for me BitShares sells like a good watch offered at a generous discount. Not like a simple payment system to move money from A to B.

[Xeldal]

@Xeldal , I like your approach.

But have some doubts:
(1) If you eliminate subscriptions entirely (LTM & AM), what does you proposal offer me if I'm a heavy user and do a lot of stuff on your platform?
I think I'll get the same treatment as a user who does one transfer per year.

(2) Is it doable? This would require that all witnesses accept a transfer, if whatever fee is paid as long as it is above the minimum level.
This is probably the case but I'm not sure.

(3) I don't agree with your theory about psychological turn offs. If something is expensive and I get a huge discount for a very small price (or even for free due to some "promotion") - for me this is not a psychological turn off. Quite the opposite. I get the impression that I'm smart and I've made a very good deal.

(1) subscriptions would remain.  no change there.  Using a site that has a RP fee I would get the discount just as I do now.
(2) yes there would be no other restriction.  Pay the base fee, anything above that fee is part of the RP fee to be distributed to referrer and registrar
(3) I think it works both ways and depends on what your paying for.  If I'm just trying to move money from this account to that account.  I can do that anywhere and the quality of transfer is pretty much consistent wherever you go.  I'm looking for the cheapest price.  Paying more doesn't give me the feeling of it being better.  However paying for a product like a watch, that the quality can very drastically, I agree with you that paying more gives the impression that it is of higher quality.

[jakub]

@Xeldal , I like your approach.

But have some doubts:
(1) If you eliminate subscriptions entirely (LTM & AM), what does you proposal offer me if I'm a heavy user and do a lot of stuff on your platform?
I think I'll get the same treatment as a user who does one transfer per year.

(2) Is it doable? This would require that all witnesses accept a transfer, if whatever fee is paid as long as it is above the minimum level.
This is probably the case but I'm not sure.

(3) I don't agree with your theory about psychological turn offs. If something is expensive and I get a huge discount for a very small price (or even for free due to some "promotion") - for me this is not a psychological turn off. Quite the opposite. I get the impression that I'm smart and I've made a very good deal.

[Xeldal]

If you charge no fee's who is going to produce blocks?  people are not going to do it for free.

Your description is actually making bitshares much more socialist.  The blockchain should be compensated for doing the work of producing blocks.  Your proposal expects the blockchain to do this for free.  Free doesn't work and bts will fail if this plan is implemented.

I have had objections to how reserve funds have been controlled and spent, but the ability for a blockchain to fund itself is uniqe and valuable.  Neutering Bitshare's ability to fund itself takes away a major invest-able advantage.

You might have missed what I said. 
I'm suggesting BitShares should be non-profit.  I didn't say bitshares should be free.
Committee determines what it costs to pay the witnesses and any other costs, just as they do now, and set the fee accordingly.   In addition there is a huge supply of BTS for workers.  I'm not suggesting changing any of that.

The non-profit thing is more of a side note anyway.  The primary issues I'm addressing is the referral program.

[lil_jay890]

If you charge no fee's who is going to produce blocks?  people are not going to do it for free.

Your description is actually making bitshares much more socialist.  The blockchain should be compensated for doing the work of producing blocks.  Your proposal expects the blockchain to do this for free.  Free doesn't work and bts will fail if this plan is implemented.

I have had objections to how reserve funds have been controlled and spent, but the ability for a blockchain to fund itself is uniqe and valuable.  Neutering Bitshare's ability to fund itself takes away a major invest-able advantage.

[Xypher]

btw, I have 2 lifetime membership accounts I will no longer need... deeply discounted prices...looking to generally cover the account transfer fee and whatever is vesting.

 make an offer.

I bid 100 bts

[Xeldal]

Is this the same discussion we are having on the other thread or would your proposal be substantively different?

https://bitsharestalk.org/index.php/topic,21314.msg276990.html#msg276990

It is different. 

I believe my suggestion eliminates both psychological and actual friction for every user while maintaining the referral incentives for business and users.   Reducing the cost of LTM to zero seems to be a roundabout way, with extra steps and complexity of trying to achieve a similar thing while also missing the mark.  It still retains the negative psychological effects of paying a higher fee to begin with, on every transfer.   I suppose you could, in addition, allow registrars to set the LTM price as per the discussion at the link, I havn't fully considered it.  My first thought is, what is the value of LTM if it is free, why even have it? what prevents everyone just grabbing LTM from that registrar?  I would ultimately like to see some kind of market driven price for LTM but I don't know how that would work.

For this proposal, the user/app/webapp/service provider sets the referral fee for every transaction. default is 0.  No extra fee is ever applied unless you're using a service that requires it. 

For a user running their own wallet, transfers would not have any fee above what it costs to maintain the network.  This is a psychological benefit as you're not paying a big fee and expecting something back later.

If that user is using a webwallet or some 3rd party service the fee would be determined by the business running the service, and the referral program would operate just as it does now.

I think bitshares operating as a for profit business is a turn off to other business as it adds to baseline cost. 
Instead I think bitshares should operate as a non-profit neutral platform for business to make their own profit.
Collect what is necessary to pay operating cost and that is it. IMO.

Why would anyone want to develop and maintain BTS as a non-profit platform?
The one thing that BitShares is really good at is a strong incentive structure for maintaining and expanding the chain. I absolutely don't get why we would want to kill that off.

Bitcoin operates at a loss.  It doesn't seem to be a detractor for business building on top of it.   
In the same way, BitShares is useful, and requires BTS to use.  BTS holders profit in terms of buying power by the use and proliferation of the system, they don't need an additional BTS profit to see a monetary gain.  BitShares can operate at a BTS loss and BTS holders can still profit from the exchange rate/buying power.

[Frodo]

I think bitshares operating as a for profit business is a turn off to other business as it adds to baseline cost. 
Instead I think bitshares should operate as a non-profit neutral platform for business to make their own profit.
Collect what is necessary to pay operating cost and that is it. IMO.

Why would anyone want to develop and maintain BTS as a non-profit platform?
The one thing that BitShares is really good at is a strong incentive structure for maintaining and expanding the chain. I absolutely don't get why we would want to kill that off.

Don't you love those bitAsset being backed by not assets but by participation certificates in a charity?

Now that you mention it, that does sound like a great idea. Just think of all the media hype we would get!

[tonyk]

I think bitshares operating as a for profit business is a turn off to other business as it adds to baseline cost. 
Instead I think bitshares should operate as a non-profit neutral platform for business to make their own profit.
Collect what is necessary to pay operating cost and that is it. IMO.

Why would anyone want to develop and maintain BTS as a non-profit platform?
The one thing that BitShares is really good at is a strong incentive structure for maintaining and expanding the chain. I absolutely don't get why we would want to kill that off.

Don't you love those bitAsset being backed by not assets but by participation certificates in a charity?

[Frodo]

I think bitshares operating as a for profit business is a turn off to other business as it adds to baseline cost. 
Instead I think bitshares should operate as a non-profit neutral platform for business to make their own profit.
Collect what is necessary to pay operating cost and that is it. IMO.

Why would anyone want to develop and maintain BTS as a non-profit platform?
The one thing that BitShares is really good at is a strong incentive structure for maintaining and expanding the chain. I absolutely don't get why we would want to kill that off.