Non-transferable BTS & BitBTS – We need to make Bitshares more resilient

[yvv]

Leave the BTS alone. Voting by money concept has its flaws which are well known since far ago. If it is a problem for us, we have to separate wealth and reputation. For example by introducing a reputation token(s) which are non-transferable and non-tradable, but can be earned by certain types of activity (i.g. creating a trade volume on dex), and burn at certain pace in inactive accounts. These reputation tokens would give a voting power to holders. You are busy with useful activity - you have voting power, otherwise, you don't.

[Ben Mason]

There are alternatives to hard fork. A new Graphene based blockchain complete with new rules and a new share-drop  based on everything learned to date. Maximum supply could be set....a percentage of the sharedrop could be allocated for core feature development & maintenance, thereafter FBA's and such could build the rest.....

Yeah.. this is what I said above, a new chain, aka a fork.

Sorry if I've misunderstood or mixed up my terminology.....I meant that you don't need votes in order to launch a new chain and try to incentivise the building of a new network. i'm not saying that is the best thing to do (isn't there a Chinese chap doing exactly that?) just that it's an option. If a new Graphene network was launched which adequately compensated all the BitShares holders but had a new and improved configuration, both networks may survive or one will survive or both may fail. It depends on a lot of things but the closer the code gets to a stable core feature set and  the easier the tools become.....you could test a greater number of configurations and let market forces decide. It depends on your definition of community and If all Graphene based blockchains would be able to trade on the Dex.  There's no reason we can't have a super community dedicated to Graphene blockchain tech rather than one flavour. It's in our favour to break down silos anyway.

Feel free to shoot this lot down.....I may well be tying myself up in knots thinking about this stuff!

[abit]

There are alternatives to hard fork. A new Graphene based blockchain complete with new rules and a new share-drop  based on everything learned to date. Maximum supply could be set....a percentage of the sharedrop could be allocated for core feature development & maintenance, thereafter FBA's and such could build the rest.....

Yeah.. this is what I said above, a new chain, aka a fork.

[Samupaha]

5. Make BTS non-transferable

When most of the transfers outside our internal exchange are happening with BitBTS, it won't be difficult to just disallow BTS transfers entirely.

I don't understand this part... how do you prevent me from sending my BTS from my account to the account of external exchange (e.g. from paliboyqqq to poloniexwallet)?

It will be in blockchain level. After the feature is implemented, nobody can make any BTS transfers because blockchain doesn't allow it.

There will be only two ways how ownership of BTS is changed: either trading on our internal exchange (selling/buying) or force settlement (owner of BitBTS is able to change BitBTS to BTS, should cost a little bit so that there is no incentive to spam the blockchain).

[paliboy]

5. Make BTS non-transferable

When most of the transfers outside our internal exchange are happening with BitBTS, it won't be difficult to just disallow BTS transfers entirely.

I don't understand this part... how do you prevent me from sending my BTS from my account to the account of external exchange (e.g. from paliboyqqq to poloniexwallet)?

[Ben Mason]

There are alternatives to hard fork. A new Graphene based blockchain complete with new rules and a new share-drop  based on everything learned to date. Maximum supply could be set....a percentage of the sharedrop could be allocated for core feature development & maintenance, thereafter FBA's and such could build the rest.....

[abit]

You mean fork? Impossible to hard fork due to no enough votes/support.

Why shareholders wouldn't support this? This solves two problems: Other exchanges can't attack Bitshares anymore with BTS of their customers (this doesn't apply only for Yunbi at the moment but all other exchanges also which can vote badly in the future) and voter apathy (well, not necessarily solve it completely but at least helps a lot).

As far as I can see, this will solve the problems that Bytemaster saw with tonyk's original proposal.

You need to get a worker voted in to be able to apply hard hork. Impossible atm.

[Samupaha]

You mean fork? Impossible to hard fork due to no enough votes/support.

Why shareholders wouldn't support this? This solves two problems: Other exchanges can't attack Bitshares anymore with BTS of their customers (this doesn't apply only for Yunbi at the moment but all other exchanges also which can vote badly in the future) and voter apathy (well, not necessarily solve it completely but at least helps a lot).

As far as I can see, this will solve the problems that Bytemaster saw with tonyk's original proposal.

[abit]

You mean fork? Impossible to hard fork due to no enough votes/support.

[Ben Mason]

Yes Samupaha, I'm very unhappy about the short-sightedness of those not prepared to pay for workers who are clearly adding value. Yunbi using customer funds to vote is an affront that must be countered.

[Samupaha]

A while ago there was discussion if BTS should be made non-transferable. A lot of good arguments have said in defence of the idea, but it has also some problems (mainly how it would be difficult to implement). Here I'm trying to find a reasonable, step-by-step process how non-transferableness could be enabled.

This has become important when chinese exchange Yunbi started an attack against Bitshares development by voting with it's customers BTS to stop all development (including documentation and bug fixes).

Badly behaving exchanges are not anymore just a theoretical threat to Bitshares. It's real threat, already in use. To make Bitshares more resilient against attacks like this we should disable transferableness of BTS. It will force users to withdraw their BTS out from exchanges and solves the problem.

1. Free transactions for shareholders

Free transactions feature is probably coming in the near future because it has a lot of support in the forum. Thanks to abit we already have a simple and elegant implementation proposal. This will mean that users can make free transactions depending on how much they own BTS.

2. Creation of BitBTS

BitBTS is a derivative of BTS that is backed with 100 % of BTS so it tracks the price of BTS. The biggest difference is that BitBTS owner doesn't have voting power.

BitBTS is borrowed into existence just like any other smartcoin. Borrowers can use more than 100 % collateral if they want to decrease the risk of force settlement.

Borrowers will retain the voting power for the collateral. When they sell BitBTS for BTS they will have double voting power and BitBTS owner has none.

If BitBTS owner wants to vote, he must either force settle or buy BTS with BitBTS (exchange rate will be very close to 1:1).

When BitBTS is created, we can inform all other exchanges that it will replace BTS everywhere else exept Bitshares internal exchange, so they have time to make necessary changes.

BitBTS is also elegant solution for the voter apathy problem. There are lots of investors who just want to make profit when BTS price goes up, but they are not interested in voting because they don't have time to keep up with everything that's happening in Bitshares. With BitBTS they will give up their voting power for those who borrow BitBTS into existence. It is becoming clear by now that proxies alone are not a sufficient solution for voter apathy, disinterested shareholders don't use even those.

3. Disable free transactions feature for BTS

We can reduce the incentive of using BTS as a currency by disabling the free transactions feature for it's transfers. Users could use the subvention credits for BTS trading in the DEX but not for transfers. This will reduce a little bit the incentive to send BTS to traditional, centralized exchanges.

4. Raise the price of BTS transfers

This will create bigger incentive to use BitBTS for everything outside our internal exchange. If users want to trade in other exchanges, they would rather send BitBTS for free than BTS with expensive fee. Little by little we will make it more expensive.

5. Make BTS non-transferable

When most of the transfers outside our internal exchange are happening with BitBTS, it won't be difficult to just disallow BTS transfers entirely.