The Currency Distribution Problem [BLOG POST]

[Samupaha]

I'd like to see that people stop talking about inflation in the case of Bitshares. We don't have any inflation, there is a fixed supply of 3.7 billion BTS and that's it.

If somebody wants to decrease the active supply, there are two possibilities:
- vote for refund/burn worker
- get more paying customers, because part of the part of the transaction cost will go to reserve pool

It's really this simple, let's not complicate the message. After all, this is also very important metric to see if Bitshares is working as it should be. If active supply is decreasing, it's a clear sign that things are working well. Customers are paying more for Bitshares than Bitshares is spending for maintenance and development.

[Musewhale]

  do it

[valzav]

Just a reminder that BM's blog is included into BitShares referral program.
Please use a link like this to reffer it http://bytemaster.github.io/article/2016/02/09/The-Currency-Distribution-Problem/?r=some-ltm-account-name

If somebody with good reddit or hacker new karma could submit it, it's interesting to see how much traffic we can get.

[roadscape]

Interesting points in your post, thanks for the writeup!

Having less choice is always good, as long as you able to successfully identify the ones that are net losses. Or also if you can combine several choices into one that's just as expressive. But it's tricky to make the correct sacrifices.

If pay is a consistent flow, is the challenge then to channel it efficiently? Would pay need to be defined in terms of percentages/weights rather than absolutes?

What if voters had just a series of sliders representing continuous choices:
1. Reserve release rate (100% = 5BTS/s)  ____100____ (%)
2. Worker pay proportion (the rest is split by witnesses) ____95____(%)
3. Pay priority for worker1 ____30____ (1-100)
4. Pay priority for worker2 ____80____ (1-100)
These values would then be weighed with each voter's stake when building the final "flow tree".

[bytemaster]

We are not robots that need to agree on everything.  Debating and arguing has played a pivotal role in the development of society.

I am not suggesting that we all must agree, simply that having too many decisions slows things down and frustrates everyone.

However, the more choices a website or web application offers, the harder it is to understand the interface. Studies show that having too many options often leads to decision paralysis and frustration. As a general rule, people only value an abundance of features before they actually start using the given product. After they have started using it, the simpler solution wins with higher satisfaction.

If we can remove one "decision" from the list of options by recognizing what CLains said, then it could dramatically focus everyone on how to allocate the resources for growth.

. We have to accept the rational argument that if we are to increase in value from 10 million to 1 billion within 2-3 years, then thinking per cent per year in profitability/inflation is missing the mark by an order of magnitude.

In my opinion, "waiting for everyone to come to us" is not a winning strategy. 

[CLains]

We're slowly growing but don't quite have sufficient network effect yet.  The more people work on projects for this platform the better. People either don't know about the worker proposals, or are scared about putting themselves out there and ask for pay. The better we encourage the worker system, the better I think we will do long term.

Bytemaster: Profitability comes from network effect more than anything else. The tiny little amounts that we're collecting in fees are insignificant to (last/lost?) network effect and our complexity.

The same holds true for inflation. We have to accept the rational argument that if we are to increase in value from 10 million to 1 billion within 2-3 years, then thinking per cent per year in profitability/inflation is missing the mark by an order of magnitude.

[xeroc]

We are not robots that need to agree on everything.  Debating and arguing has played a pivotal role in the development of society.

This "we all need to agree" on something is never going to happen.  People are different.  Embrace difference and embrace the right that you have to express your opinion that may me different from someone else's.

Really what do you expect when the only form of communication this community has is writing text on a forum that is read by someone else hours later?  Of course context will be lost, but I still believe this is one of the most active and valuable communities in crypto.  There's no need to try to stymie it's creativity.

 

We are learning, about each other, about how to co-operate efficiently, about this technology and what it means. We are continually improving the quality of information available and therefore the potential quality of each discussion leading hopefully to an increasing tendency for more of us to agree, more rapidly, more of the time on the most appropriate course.

Lil_jay890 is quite right in pointing out the reality of working with different opinions. The passion and dynamism generated by discussion are nothing to fear as long as we have the bedrock of a corruption resistant network to stabilise us while we work things out. It is in all our interests to improve the quality of information which frames our opinions, to challenge each other, to solve problems through innovation.

I would much rather we allocate inflation by reaching consensus each time. We have the opportunity to adapt, change our minds if the value or cost/benefit  proposition changes.  Thanks for the blog BM.  It is important to continually challenge the semantics of blockchain features like currency to ensure more accurate analysis.

[Ben Mason]

We are learning, about each other, about how to co-operate efficiently, about this technology and what it means. We are continually improving the quality of information available and therefore the potential quality of each discussion leading hopefully to an increasing tendency for more of us to agree, more rapidly, more of the time on the most appropriate course.

Lil_jay890 is quite right in pointing out the reality of working with different opinions. The passion and dynamism generated by discussion are nothing to fear as long as we have the bedrock of a corruption resistant network to stabilise us while we work things out. It is in all our interests to improve the quality of information which frames our opinions, to challenge each other, to solve problems through innovation.

I would much rather we allocate inflation by reaching consensus each time. We have the opportunity to adapt, change our minds if the value or cost/benefit  proposition changes.  Thanks for the blog BM.  It is important to continually challenge the semantics of blockchain features like currency to ensure more accurate analysis.

[Riverhead]

We are not robots that need to agree on everything.  Debating and arguing has played a pivotal role in the development of society.

This "we all need to agree" on something is never going to happen.  People are different.  Embrace difference and embrace the right that you have to express your opinion that may me different from someone else's.

Really what do you expect when the only form of communication this community has is writing text on a forum that is read by someone else hours later?  Of course context will be lost, but I still believe this is one of the most active and valuable communities in crypto.  There's no need to try to stymie it's creativity.

 

[clemahieu]

For RaiBlocks we identified that captchas make sure a human is on the other end and make sure it takes a small amount of time to process.

We use this as our primary distribution mechanism because it doesn't favor any person or group of people who can invest in hardware.

[lil_jay890]

We are not robots that need to agree on everything.  Debating and arguing has played a pivotal role in the development of society.

This "we all need to agree" on something is never going to happen.  People are different.  Embrace difference and embrace the right that you have to express your opinion that may me different from someone else's.

Really what do you expect when the only form of communication this community has is writing text on a forum that is read by someone else hours later?  Of course context will be lost, but I still believe this is one of the most active and valuable communities in crypto.  There's no need to try to stymie it's creativity.

[Akado]

"The economic impact of new mining rewards is identical to inflation or a tax and transfer. We can conclude from this that inflation is not an impediment toward a currency gaining value."

"I can conclude from this that distribution of a currency and its inflation cannot be dependent upon any one party or even a relatively small group of elected individuals. Voters are unable to vote reasonably on issues for which they are rationally ignorant. "

Does this mean there is a preference towards pow instead of voting?
Is this related to a previous mention of POW in BitShares (I don't remember what was said honestly) or something along those lines ?

Really at the end I don't get why it needs to be either one extreme or the other. Everything can be solved through voting in the end. Or is that argument simply because people disagree with each other when a decision has to be made and that is bad for the community? I think there's really not a choice there. Imagine this is done and you can avoid controversial times during a voting period. You'll face the exact same thing during future hardforks, the same way Bitcoin is experiencing. I think you can't really escape from this and it's bound to happen. Sooner or later the community will need to make decisions and every single decision is vulnerable to his exact same "hostile environment". If we want to evolve, decisions will need to be made one way or another. Some will agree, some will disagree. There will be arguments from both sides, it's like everything in life I guess, there's not really a way to escape from this.

What's better is to cultivate a self productive community instead of a self destructing one. To learn from other's and past mistakes. Each time there is this "hostile environment", people learn, the community will eventually create a self automated process, similar to a consensus, on how things should be handled and they will be eventually solved, hopefully in a more gentle way.

It's just up to everyone to try to create this self productive culture. I think that's the way towards creating a better environment during the more sensitive times where a tough decision has to be made.

It seems like you're trying to "hard code" an utopian community in some way. We can't really hard code "not having any more hostile times" via going no-inflation or maximum inflation. There will be always times like those and eventually the best communities who are less "politically irrational" will thrive. With time and as communities grow this becomes virtually impossible. Look at bitcoin. How the community was and how it is now.

It's better to have a huge discussion and be able to solve it via a proper voting method (bitshares) than have endless arguments in a loop that lead nowhere (bitcoin). Sure the inflation stuff doesn't implicate not being able to vote any more, but I really don't see the need for such an extreme action, especially when we are just in the beginning and people did not get enough time to adapt yet.

I know this is just your opinion, it's not a proposal and you're not saying we must do this (you missed the big red bold letters warning people about that before they panic  ), but I just wanted to give my opinion.

[bytemaster]

http://bytemaster.github.io/article/2016/02/09/The-Currency-Distribution-Problem/