depressing...

[nomoreheroes7]

Sorry to see this OP.  I guess my subtle hints were too subtle...

Ahh, the old "trough of sorrow"...brings back memories.

...painful, painful memories...

Curious to see if a "product/market fit" will truly be found.

...or if BitShares will forever be lost in the "Chasm of Startup Doom"...



 ...

[Stan]

Sorry to see this OP.  I guess my subtle hints were too subtle...

[Empirical1.2]

Just because the bitshares network gets popular and is useful... doesn't mean the bitshares token will get any more valuable.

Holding the token doesn't do anything except give you voting rights.  Plus the network is operating at a huge loss right now because of witness pay and worker proposals.  Until fee's are brought back into the fold and the network becomes profitable, there's not really a point to holding the token.  In fact many of the projects using the BTS exchange for their UIA's accept funding outside of the DEX and distribute their token after they receive actual bitcoin or cash... this means there is literally no reason to buy bts to enter the ecosystem.

Once the merger is over, the downward pressure on price will be much less.

If BTS backed SmartCoins grow in popularity as a product they will create net BTS demand for many years to come and as a result increase the value of BTS. As the product matures, the SmartCoin market can then be monetized via trading fees.   

However the primary business model for BTS continues to be SmartCoins imo but they do require BTS to introduce liquidity subsidies and continue to make the DEX as user friendly as possible. (I'm also in favour of Yield subsidies for the period of time SmartCoin growth outpaces it.)

If demand for Smartcoins (Backed by BTS) grow over time then demand for BTS will grow with it until such time as the SmartCoin market reaches maturity. (Possibly many years in the future.) At that stage you would monetize your customer base through transaction fees in order to generate a return for shareholders like a more a traditional business. (As well as sell them other related products and services on BTS.)



Another business model on BTS is also a pure DEX model with trading fees for a range of user issued assets. While less lucrative imo, with CEX's like Coinbase valued at >$500 million there's also some potential there by growing that market to become the leading DEX & monetizing that customer base.

(We also don't need to add trading fees for the DEX model immediately either, user numbers increasing will increase the value of BTS because the market will price in their future monetization value provided they believe it's credible we can charge and still retain them in the future.)

I don't believe that an increase in demand for smart coins will ultimately lead to an increase demand and price for the BTS token...

Aside from the lack of acceptance and fungibility of smart coins the key problem is that there is no reason to create coins.

The only reason to create smart coins is if you think that the value of BTS will increase relative to the value of the smart coin.  Since the network (workers and witness's) are currently being paid in inflating BTS there is constant negative pressure on the BTS price.  If I'm a rational investor, there is no way I'm going to short with a naturally depreciating asset as collateral.  The only reason I would consider using BTS as collateral would be if I could somehow discount getting future profits from the BTS token.  The network needs to figure out a way to make money to sustain itself...  if it does, then the BTS token will rise significantly in value.  Just having an active network does not mean it's profitable or valuable.

Basically the bitshares holders are paying all the transaction costs for UIA and smart coin traders.  It's the strategy now to attempt to gain users, but it will need to change in order for the network to survive. 

Personally I think focusing on a few smart coin markets to add ample liquidity and then adding higher trading fee's to those markets.  Promote those markets to forex traders (I am a forex trader).  Forex traders would have no problem paying say a 5 or 10 cent transaction cost as long as there is liquidity and security.  This creates revenue for BTS, which will increase the value of the token, which will increase speculation that bts will rise vs smart coins, which will increase smart coin supply, which will increase liquidity, which will attract more traders, which will increase network revenue.... virtuous circle

I would be reluctant to short Smartcoins currently too, given the forced settlement requirements and as you say there is a lot of downward price pressure and low user and SmartCoin growth. 

However if the merger was over, SmartCoins were liquid and subisidzing yield. Then I would want to have a small portion of my fiat/gold in SmartCoins. Even a small portion would require me to purchase a lot of BTS, if others felt the same way that would be a lot of demand for BTS.

That trend, popularity and growth of SmartCoins would incentivize me to short SmartCoins too so I could take a leveraged position on BTS.

2. Subsidizing Yield and Exchange liquidity

Centralized Companies: If Coinbase offered their customers a bit of yield on their balance & subsidized liquidity that promotion would represent a massive loss to them for an extended period of time with no near term benefit. (For example if they had obligations of 3% on exchange balances annually they would be losing $300 000 a year per $10 million on their exchange with no income coming in.) The more successful that promotion was, the more money would be flowing out of their business every month over the next 1-3 years. This would not be a good way for them to bootstrap their exchange.

DACs/Alt-Coins: If a DAC/Alt offered their customers a bit of yield on their balance & subsidized liquidity that promotion would need to be funded via BTS sales which would represent a loss in value (Due to BTS being sold to fund it) unless those sales were offset by equal/greater BTS demand as the result of the same promotion.   

Example:

Lets say the obligations amounted to 3% per year. For every $30 000 of BTS put up for sale to fund the obligation over the next 12 months ($2500 a month) there would have been $1 000 000 in new BTS demand (To purchase the BitUSD to be entitled to that obligation) So rather than the short term valuation loss experienced with Sharedrops/Bonuses, BTS would experience very large BTS demand growth & so the promotion would rapidly increase the value of BTS in the near term.

In fact until such time as annual new BTS demand attracted by that specific promotion was less than 3% of BitAssets currently in circulation it would be a net gain to BTS.

So during the bootstrapping phase of the DEX's product life-cycle you can actually offer yield and some conservative liquidity subsidies which a centralized exchange never could.

As the product matures you decrease and ultimately remove the incentives (yield and liquidity subsidies) so your monthly obligation goes down to zero.

While that example isn't entirely accurate (because a yield promotion will also create yield harvesting) During the growth phase I would probably be both a holder of SmartCoins and a shorter.

[lil_jay890]

Just because the bitshares network gets popular and is useful... doesn't mean the bitshares token will get any more valuable.

Holding the token doesn't do anything except give you voting rights.  Plus the network is operating at a huge loss right now because of witness pay and worker proposals.  Until fee's are brought back into the fold and the network becomes profitable, there's not really a point to holding the token.  In fact many of the projects using the BTS exchange for their UIA's accept funding outside of the DEX and distribute their token after they receive actual bitcoin or cash... this means there is literally no reason to buy bts to enter the ecosystem.

Once the merger is over, the downward pressure on price will be much less.

If BTS backed SmartCoins grow in popularity as a product they will create net BTS demand for many years to come and as a result increase the value of BTS. As the product matures, the SmartCoin market can then be monetized via trading fees.   

However the primary business model for BTS continues to be SmartCoins imo but they do require BTS to introduce liquidity subsidies and continue to make the DEX as user friendly as possible. (I'm also in favour of Yield subsidies for the period of time SmartCoin growth outpaces it.)

If demand for Smartcoins (Backed by BTS) grow over time then demand for BTS will grow with it until such time as the SmartCoin market reaches maturity. (Possibly many years in the future.) At that stage you would monetize your customer base through transaction fees in order to generate a return for shareholders like a more a traditional business. (As well as sell them other related products and services on BTS.)



Another business model on BTS is also a pure DEX model with trading fees for a range of user issued assets. While less lucrative imo, with CEX's like Coinbase valued at >$500 million there's also some potential there by growing that market to become the leading DEX & monetizing that customer base.

(We also don't need to add trading fees for the DEX model immediately either, user numbers increasing will increase the value of BTS because the market will price in their future monetization value provided they believe it's credible we can charge and still retain them in the future.)

I don't believe that an increase in demand for smart coins will ultimately lead to an increase demand and price for the BTS token...

Aside from the lack of acceptance and fungibility of smart coins the key problem is that there is no reason to create coins.

The only reason to create smart coins is if you think that the value of BTS will increase relative to the value of the smart coin.  Since the network (workers and witness's) are currently being paid in inflating BTS there is constant negative pressure on the BTS price.  If I'm a rational investor, there is no way I'm going to short with a naturally depreciating asset as collateral.  The only reason I would consider using BTS as collateral would be if I could somehow discount getting future profits from the BTS token.  The network needs to figure out a way to make money to sustain itself...  if it does, then the BTS token will rise significantly in value.  Just having an active network does not mean it's profitable or valuable.

Basically the bitshares holders are paying all the transaction costs for UIA and smart coin traders.  It's the strategy now to attempt to gain users, but it will need to change in order for the network to survive. 

Personally I think focusing on a few smart coin markets to add ample liquidity and then adding higher trading fee's to those markets.  Promote those markets to forex traders (I am a forex trader).  Forex traders would have no problem paying say a 5 or 10 cent transaction cost as long as there is liquidity and security.  This creates revenue for BTS, which will increase the value of the token, which will increase speculation that bts will rise vs smart coins, which will increase smart coin supply, which will increase liquidity, which will attract more traders, which will increase network revenue.... virtuous circle

[bitsharesbrazil]

Holding the token doesn't do anything except give you voting rights.

You need BTS collateral to borrow smart coins. And it is also used as bridge currency de facto.

If fees are paid in bts, if bts is.a.bridge, if token is exchangeble in a decentrilised way, if  a good number of people hold.it n trade it certainly has some value

[Empirical1.2]

Just because the bitshares network gets popular and is useful... doesn't mean the bitshares token will get any more valuable.

Holding the token doesn't do anything except give you voting rights.  Plus the network is operating at a huge loss right now because of witness pay and worker proposals.  Until fee's are brought back into the fold and the network becomes profitable, there's not really a point to holding the token.  In fact many of the projects using the BTS exchange for their UIA's accept funding outside of the DEX and distribute their token after they receive actual bitcoin or cash... this means there is literally no reason to buy bts to enter the ecosystem.

Once the merger is over, the downward pressure on price will be much less.

If BTS backed SmartCoins grow in popularity as a product they will create net BTS demand for many years to come and as a result increase the value of BTS. As the product matures, the SmartCoin market can then be monetized via trading fees.   

However the primary business model for BTS continues to be SmartCoins imo but they do require BTS to introduce liquidity subsidies and continue to make the DEX as user friendly as possible. (I'm also in favour of Yield subsidies for the period of time SmartCoin growth outpaces it.)

If demand for Smartcoins (Backed by BTS) grow over time then demand for BTS will grow with it until such time as the SmartCoin market reaches maturity. (Possibly many years in the future.) At that stage you would monetize your customer base through transaction fees in order to generate a return for shareholders like a more a traditional business. (As well as sell them other related products and services on BTS.)



Another business model on BTS is also a pure DEX model with trading fees for a range of user issued assets. While less lucrative imo, with CEX's like Coinbase valued at >$500 million there's also some potential there by growing that market to become the leading DEX & monetizing that customer base.

(We also don't need to add trading fees for the DEX model immediately either, user numbers increasing will increase the value of BTS because the market will price in their future monetization value provided they believe it's credible we can charge and still retain them in the future.)

[bitsharesbrazil]

Just because the bitshares network gets popular and is useful... doesn't mean the bitshares token will get any more valuable.

Holding the token doesn't do anything except give you voting rights.  Plus the network is operating at a huge loss right now because of witness pay and worker proposals.  Until fee's are brought back into the fold and the network becomes profitable, there's not really a point to holding the token.  In fact many of the projects using the BTS exchange for their UIA's accept funding outside of the DEX and distribute their token after they receive actual bitcoin or cash... this means there is literally no reason to buy bts to enter the ecosystem.

Now consider a token like OPENPOS which can be bought on the DEX (or I'm sure off the DEX as well), which gives you rights to future profits from POS terminals and perhaps shares in a profitable company.  Those are real reasons to own a token.... unlike BTS.

Hi jay
Where I can.see the numbers of network huge loss? If you could point me in a detailed explanation I would thank you.

[yvv]

Holding the token doesn't do anything except give you voting rights.

You need BTS collateral to borrow smart coins. And it is also used as bridge currency de facto.
 

[lil_jay890]

Just because the bitshares network gets popular and is useful... doesn't mean the bitshares token will get any more valuable.

Holding the token doesn't do anything except give you voting rights.  Plus the network is operating at a huge loss right now because of witness pay and worker proposals.  Until fee's are brought back into the fold and the network becomes profitable, there's not really a point to holding the token.  In fact many of the projects using the BTS exchange for their UIA's accept funding outside of the DEX and distribute their token after they receive actual bitcoin or cash... this means there is literally no reason to buy bts to enter the ecosystem.

Now consider a token like OPENPOS which can be bought on the DEX (or I'm sure off the DEX as well), which gives you rights to future profits from POS terminals and perhaps shares in a profitable company.  Those are real reasons to own a token.... unlike BTS.

[bitsharesbrazil]

Now fella? Bitcoin is in his bull run, soon peoe will jump like crazy in bts.....noway to dump right now

[Empirical1.2]

I think you could see BTS start to do very well again by November once the expensive merger/vesting period comes to an end.

Tweak some SmartCoin parameters, add the liquidity subsidies some in the community have been working on and possibly also a yield promotion. Ideally margin trading too. And you have a very low inflation, powerful DEX with popular and liquid BTS backed SmartCoins which I think will be the driving force behind BTS growth and bootstrapping the DEX for a range of other products and services.

Thank you Bytemaster for finalizing a roadmap...

step 1: implement zero fees
step 2: subsidize liquidity
step 3: implement margin trading and simplify initial visible smartcoin markets to:

bitUSD/BTS
bitGOLD/BTS
bitGOLD/bitUSD

  Sounds good

[MrJeans]

The original vision was to create a decentralized exchange...

...shortly thereafter, and at a low development cost (because developers worked for free a lot of the time)....

we have a decentralized exchange.

[patrickb323]

I just dumped all of my BTS at a massive loss.  I was an early investor of PTS.  Bitshares had such vision, promise, and energy.  Now this is just depressing.   I'm out.  Good luck!