bitSHARES - As True Shares and Not a Currency!

[tbone]

Making a bitUSD a special bitAsset is bad idea. It should not be different from any other asset pegged to fiat.

That's my only concern for me too... I like TonyK idea very much but we should not focus on bitUSD only...
What happens if real USD or Euro collapses?(it will....) We must focus on a basket of top bitAssets that includes the major assets (euro,dollars.pound etc...)
like the SDR for example...https://www.imf.org/external/np/fin/data/rms_sdrv.aspx  and we should add bitBTC and bitETH (or whatever crypto are @ top of the CMC list)
... since I expect the FIAT money will loose value hardly the next months....


PS tonyk unites us again!     

I don't think anyone is advocating to totally ignore other BitAssets, but to at least have primary focus on one (probably USD) until it has healthy/robust liquidity.  Then we can work on others.  As for real USD collapsing, that's not happening anytime soon!

[liondani]

Making a bitUSD a special bitAsset is bad idea. It should not be different from any other asset pegged to fiat.

That's my only concern for me too... I like TonyK idea very much but we should not focus on bitUSD only...
What happens if real USD or Euro collapses?(it will....) We must focus on a basket of top bitAssets that includes the major assets (euro,dollars.pound etc...)
like the SDR for example...https://www.imf.org/external/np/fin/data/rms_sdrv.aspx  and we should add bitBTC and bitETH (or whatever crypto are @ top of the CMC list)
... since I expect the FIAT money will loose value hardly the next months....


PS tonyk unites us again!     

[jakub]

The only difference would be that in order to transfer BTS to their own wallets, users would have to sell their exchange.BTS for BitUSD, transfer that to their own wallet, and then repurchase BTS on the DEX.  I'm not sure this is the best user experience, and as mentioned the main goal of having BTS trade ONLY on the DEX is not achieved. 

We are giving up our right to transfer BTS for the privilege of having liquidity for SmartCoins.
It's a trade-off.
Which do you prefer: transferability of BTS or liquidity for bitUSD?
For me, the choice is quite obvious. I prefer liquidity.

[tbone]

Interesting discussion.  One of the core concepts of the OP is that a better BitUSD peg can be achieved by disabling transfer of BTS and forcing all BTS trading onto the DEX. On the surface, this sounds promising.  But as a couple of people (@Riverhead , @xeroc?) have already pointed out, there's no real way to stop exchanges from continuing to have their users trade exchange.BTS exactly as they do now.

The only difference would be that in order to transfer BTS to their own wallets, users would have to sell their exchange.BTS for BitUSD, transfer that to their own wallet, and then repurchase BTS on the DEX.  I'm not sure this is the best user experience, and as mentioned the main goal of having BTS trade ONLY on the DEX is not achieved. 

However, I do think the OP focus on BitUSD (vs. BTS) as the core token people would hold and use to pay fees and as primary collateral, etc. would be helpful.  Not sure if the OP spoke to this, but I also think it would be helpful to limit most trading pairs to BitUSD:XXX, at least until liquidity is robust.  I believe this is a suggestion originally made by BM in a mumble several weeks ago, and which myself and a couple others advocated in @JonnyBitcoin's recent liquidity thread. 

Speaking of which, hopefully we can really start focusing on liquidity now that the fees debate is no longer raging out of control and actually seems to be heading in a positive direction, especially in light of the newly discovered possibility of eliminating spam prevention fees.

[puppies]

This thread has exploded in just one day!

Haven't had the time to read it all to catch up, but I recall one comment to the effect: "How do we set the price of BTS if it isn't sold anywhere else than our DEX?

Perhaps an experiment could be setup to use the current ratio of BTS to bitUSD as a starting point, and set the size of the total bitUSD as a fixed quantity, but that wouldn't allow the "M1" to expand to fit the volume of currency exchange to support a dynamic economy.

This does sound like a  v e r y  novel & innovative idea, very unique. It will indeed be extremely interesting to see how it evolves.

Correct. When [quantity of gold] * [price of gold] is not enough to support M1, the governments abandoned Gold Standard, but not let the price of gold to the moon. How about BTS?

A number of years ago I heard Jan Irvin of Gnostic Media interview Gene O'Dening about the history of money and it was then I realized why a gold standard wouldn't work if the rate of gold production was slower than the rate of economic expansion. M1 and GDP need to be directly correlated. M1 > GDP = inflation,  and M1 < GDP = deflation. Granted it's a simplistic view but generally correct. Start talking about what constitutes GDP and things get complicated pretty fast.

Please read or listen to "what is money" by  Bastiat.

If you have please tell me why an ever expanding money supply is at all necessary.

Tony.  Ill  respond to your counter arguments tomorrow.  I still think there is a possible negative feedback loop.  I'm still hoping I'm wrong.

[Thom]

This thread has exploded in just one day!

Haven't had the time to read it all to catch up, but I recall one comment to the effect: "How do we set the price of BTS if it isn't sold anywhere else than our DEX?

Perhaps an experiment could be setup to use the current ratio of BTS to bitUSD as a starting point, and set the size of the total bitUSD as a fixed quantity, but that wouldn't allow the "M1" to expand to fit the volume of currency exchange to support a dynamic economy.

This does sound like a  v e r y  novel & innovative idea, very unique. It will indeed be extremely interesting to see how it evolves.

Correct. When [quantity of gold] * [price of gold] is not enough to support M1, the governments abandoned Gold Standard, but not let the price of gold to the moon. How about BTS?

A number of years ago I heard Jan Irvin of Gnostic Media interview Gene O'Dening about the history of money and it was then I realized why a gold standard wouldn't work if the rate of gold production was slower than the rate of economic expansion. M1 and GDP need to be directly correlated. M1 > GDP = inflation,  and M1 < GDP = deflation. Granted it's a simplistic view but generally correct. Start talking about what constitutes GDP and things get complicated pretty fast.

[CoinHoarder]

The BTS order book, volume, and liquidity will be split in between ~20 SmartCoins, with a maximum of 1/20th the liquidity in each market. Realistically, you can expect at least around 1/3 of the liquidity if bitUSD, bitCNY, and bitBTC are the only SmartCoins used as on/off ramps. To get the best price on BTS, someone would have to sell/buy a small amount in all 3 (or 20) SmartCoin markets, then sell/buy all of those on centralized exchanges... what a pain in the ass. Those that don't take the time to do that will be taxed.

There will be spreads among the centralized exchanges and decentralized exchange for SmartCoins, effectively taxing the on/off ramps.

If someone was buying BTS (Smartcoins on a centralized exchange -> DEX) then they will need to pay the centralized exchanges' withdrawal fees, increasing the tax of purchasing BTS.

Then you get into the issues about BTS left on centralized exchanges after this goes into effect. Like sharedropping, some exchanges would be happy pass on the new tokens to their owners and some won't. Do you guys really expect exchanges to cooperate and go wayyy out of their way to facilitate the transition? You guys expect them to take the time, not considering the headache this would cause, to work this out for BTS shareholders for free? They then need to go through all the politics and get in the middle of the situation... what price do they sell at on the DEX? what bitAsset should their users get? If there's not much liquidity, do they sell at a discount or sell them slowly over time? The issues go on and on when it comes to exchanges and the transitioning period.

People buy BTS to speculate in BTS, not to use Smartcoins. Smartcoins are seen as being risky derivatives subject to systematic risks. If people are forced to enter what they see as a risky derivative subject to systematic risks, will they decide simply not to enter at all? What if someone doesn't like the risks involved with Smartcoins, but wants to use Bitshares for other reasons? Like: prediction markets, stealth transfers, quick confirmation times, etc.. (surely there are many features to come like MAS etc...) So, because someone doesn't want to use SmartCoins they will not enter the Bitshares ecosystem at all.

Then you also say that workers will get paid in SmartCoins. So, you will be printing BTS to short SmartCoins into existence? Which is similar to my idea for SmartCoin liquidity that I received so much hate from (ironically from tonyk himself). This will ruin the integrity of the peg... it can be manipulated... etc.... (insert all of the arguments you guys brought up against my proposal here) ...

This proposal seems a bit desperate and risky. This adds extra taxes to casual users that don't want to spend the time to do all these extra steps cost efficiently. Taxing casual users and speculators doesn't seem too smart. There are a lot of random issues that pop up with this as well. I am sure I am only scratching the surface here.

[Riverhead]

- another chain

dexSHARES

Excitement and valid concerns in the mix!  dexShares seems to be a way to test it out.

Agreed.

[cube]

- another chain

dexSHARES

Excitement and valid concerns in the mix!  dexShares seems to be a way to test it out.

[abit]

This thread has exploded in just one day!

Haven't had the time to read it all to catch up, but I recall one comment to the effect: "How do we set the price of BTS if it isn't sold anywhere else than our DEX?

Perhaps an experiment could be setup to use the current ratio of BTS to bitUSD as a starting point, and set the size of the total bitUSD as a fixed quantity, but that wouldn't allow the "M1" to expand to fit the volume of currency exchange to support a dynamic economy.

This does sound like a  v e r y  novel & innovative idea, very unique. It will indeed be extremely interesting to see how it evolves.

Correct. When [quantity of gold] * [price of gold] is not enough to support M1, the governments abandoned Gold Standard, but not let the price of gold to the moon. How about BTS?

[Thom]

This thread has exploded in just one day!

Haven't had the time to read it all to catch up, but I recall one comment to the effect: "How do we set the price of BTS if it isn't sold anywhere else than our DEX?

Perhaps an experiment could be setup to use the current ratio of BTS to bitUSD as a starting point, and set the size of the total bitUSD as a fixed quantity, but that wouldn't allow the "M1" to expand to fit the volume of currency exchange to support a dynamic economy.

This does sound like a  v e r y  novel & innovative idea, very unique. It will indeed be extremely interesting to see how it evolves.

[BunkerChainLabs-DataSecurityNode]

There are a number of concerns about this idea right now, and rightly so.

I think that the only way to overcome them would be for us to do some proper growing first and no longer run on speculation. cypto_p mentioned a year from now, and tonyk said months and months of vote time. I think we are looking at something like that where we are in a place where we have had a lot of growth and we are no longer easily commanded by speculators in our price.

For this to execute in a way that avoids all the suggested pitfalls like black swans etc.. we just need to be big enough to handle it. By then of course liquidity of assets isn't going to be a big deal.

If someone wants to take the time to create something like this in a new chain just to test it out it certainly wouldn't hurt.

[CryptoPrometheus]

The op could describe the evolution of BitShares, but IMO we are at least 1 year away from such a move.

First, the network/DAC needs to become consistently profitable. If profits are paid out as dividends to shareholders as suggested, then ownership incentives would become similar to a stock - hold for future value potential (speculation) or hold for regular dvidend payments. Currently, bitshares doesnt have much to offer as far as dividend payment potential. Future value IMO is great, but we all know the dangers of building your house upon speculation.

Of course, there will be additional ownership incentives like "hold for utility", but again, our utility is limited until we have more businesses interacting with the chain.

[donkeypong]

- another chain

dexSHARES

[yvv]

Sounds like a closed loop and an even higher barrier to entry than the current system.
What is the benefit to business if we are all just trading shares between ourselves?

I would prefer an open free market with dynamic tools to promote trade.

Because shares aren't the product, bitUSD, butCNY, etc are and those would be more used from what I understood. It's only a higher entry barrier if you want to get shares, not to use the products people are already supposed to use but don't.

Yes but you still have to get shares to have collateral for bitUSD, correct?

Not necessarily. In my proposal everything else, exept bitUSD, is collateralized by bitUSD [probably at  lower ratio than the 1.75x ]

Making a bitUSD a special bitAsset is bad idea. It should not be different from any other asset pegged to fiat.