Author Topic: At least BTS outlasted NuShares  (Read 4799 times)

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Offline tonyk

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Re: At least BTS outlasted NuShares
« Reply #15 on: June 09, 2016, 04:42:06 pm »

So this comes with the disadvantage that there may potentially be a much smaller supply of SD than the demand for it. If this is still true despite dropping interest rates to 0%, then SD will have a large premium over the dollar. This is nothing to new to the BitShares community. Even with the shorting-to-existence ability, BitUSD has experienced premiums over the USD as well. But with stronger limits to the supply of SD, I wonder how it will manifest in SD's ability to maintain the peg.


I for one expect myself to be in the market for SD at least to the 7-10x ratio (that is 7x worth of steem at current feed prices for 1 SD)




So let me get this right...  They sold their collateral to take dividends ?

Anyone have any links to the grand thread that explains this stuff?

There is no collateral in Nubits.... They have always been like - "we print Nubits cause we have appointed ourselves to do so"....much like the FED.
 Those were money they had (acquired by selling and or giving NuShares to people; supposed 'profits' from market making spreads on NuBits, etc).

Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline Empirical1.2

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Re: At least BTS outlasted NuShares
« Reply #16 on: June 09, 2016, 05:03:03 pm »
So this comes with the disadvantage that there may potentially be a much smaller supply of SD than the demand for it. If this is still true despite dropping interest rates to 0%, then SD will have a large premium over the dollar. This is nothing new to the BitShares community. Even with the shorting-to-existence ability, BitUSD has experienced premiums over the USD as well. But with stronger limits to the supply of SD, I wonder how it will manifest in SD's ability to maintain the peg.

I've hardly looked at it but I would guess Steem & SBD should fail faster than any stable currency to date imo.

Either it will fail in the sense that Steem can't support the redemption of the SBD that's been awarded prior to July 4th & Steem will become fairly worthless or if there's some limiting mechanism which I believe there is, it will fail in the sense that you can only redeem your SBD at 0.1% a day or some other non viable amount. (In which case Steem will seem like a soon to be bankrupt bank no-one would want to have dollars in and shareholders would be racing for the exits too.)
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Offline tonyk

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Re: At least BTS outlasted NuShares
« Reply #17 on: June 09, 2016, 05:23:23 pm »
So this comes with the disadvantage that there may potentially be a much smaller supply of SD than the demand for it. If this is still true despite dropping interest rates to 0%, then SD will have a large premium over the dollar. This is nothing new to the BitShares community. Even with the shorting-to-existence ability, BitUSD has experienced premiums over the USD as well. But with stronger limits to the supply of SD, I wonder how it will manifest in SD's ability to maintain the peg.

I've hardly looked at it but I would guess Steem & SBD should fail faster than any stable currency to date imo.

Either it will fail in the sense that Steem can't support the redemption of the SBD that's been awarded prior to July 4th & Steem will become fairly worthless or if there's some limiting mechanism which I believe there is, it will fail in the sense that you can only redeem your SBD at 0.1% a day or some other non viable amount. (In which case Steem will seem like a soon to be bankrupt bank no-one would want to have dollars in and shareholders would be racing for the exits too.)

You quite unfairly took all the choices... :) but let me try to grab the last one... steem will fall because it is idiotic...
and no, there is no limit on how much SD you can redeem (after you wait 7 days and redeem at the median price during that period that is)
but redeeming at 0.15 usd / steem and waiting in line to sell at 0.015 or 0.001 will provide enough entertainment... I think.
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline arhag

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Re: At least BTS outlasted NuShares
« Reply #18 on: June 09, 2016, 05:30:05 pm »
it will fail in the sense that you can only redeem your SBD at 0.1% a day or some other non viable amount.

We have different definitions of failure. Let's say a huge BitUSD holder force settled into BTS and then dumped it all in a low liquidity BTC/BTS market. How much (in dollar value of BTC) would they receive compared to the nominal dollar value of their original BitUSD holdings? Obviously, when liquidity is low you can't just exit quickly. So you convert and then sell small portions at a time to maximize the value you are able to convert to fiat starting from your smartcoins.

Now, because such a huge lump sum will be rewarded on July 4th, I do think there will likely be some craziness in the markets on July 11th. But going forward, the rate of daily SD issuance will be far more sane.

Offline Empirical1.2

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Re: At least BTS outlasted NuShares
« Reply #19 on: June 09, 2016, 06:29:25 pm »
it will fail in the sense that you can only redeem your SBD at 0.1% a day or some other non viable amount.

We have different definitions of failure. Let's say a huge BitUSD holder force settled into BTS and then dumped it all in a low liquidity BTC/BTS market. How much (in dollar value of BTC) would they receive compared to the nominal dollar value of their original BitUSD holdings? Obviously, when liquidity is low you can't just exit quickly. So you convert and then sell small portions at a time to maximize the value you are able to convert to fiat starting from your smartcoins.

Now, because such a huge lump sum will be rewarded on July 4th, I do think there will likely be some craziness in the markets on July 11th. But going forward, the rate of daily SD issuance will be far more sane.

I agree, but I believe they could be world's apart in terms of viability. Any existing SmartCoin whale could probably cash out over a few days or a week whereas I would imagine for SBD even people with relatively small amounts will likely be looking at much longer?

In the case of BTS, a whale would have initially created BTS demand in order to purchase BitUSD and made a judgement call as to whether BTS would be liquid enough to support redeeming it in future. Whereas with Steem a high $ amount of SBD seems to have been created out of thin air without corresponding Steem demand at any stage in the process, made available at the same time and with no evidence of available liquidity to support it. So I think the redemption process will be so slow as to make it non viable.

Assuming it gets passed that craziness, I'm not sure how sane future SBD issuance will be?

If after July 4th/11th, the SBD awarded is somehow based on Steem demand/liquidity then it would likely be extremely low, a few cents per user assuming current market conditions. In which case their users will hardly be incentivized and new users/content other will significantly drop.

If on the other hand they intend to continue award new users a few dollars and be fairly generous in their rewards then the same problem will persist that more SBD is being awarded than the market can rapidly redeem/support at a time when people are struggling to redeem the large amount of SBD already awarded.

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Offline fuzzy

Re: At least BTS outlasted NuShares
« Reply #20 on: June 10, 2016, 10:31:24 am »
I hope the steem guys learn something from this...
Is that comparison fair?

Afaik SteemUSD are always liquid and still pay you interest ..

It is fair to make the comparison in the same way it is fair to make the comparison to BitShares smartcoins. But I think the critical difference is that there are hard-coded safeguards in Steem to prevent users from making reckless decisions that lead to a dangerous debt-to-equity ratio. As far as I am aware, there is no limit to how many NuBits can be printed other than self-enforced community policy. In Steem, hard-coded features continually drive the debt-to-equity ratio towards a very conservative equilibrium value of approximately 2%. And conversions only work in one direction: the blockchain can convert SD to STEEM for you, but it will not convert STEEM to SD at a user's request.

So this comes with the disadvantage that there may potentially be a much smaller supply of SD than the demand for it. If this is still true despite dropping interest rates to 0%, then SD will have a large premium over the dollar. This is nothing new to the BitShares community. Even with the shorting-to-existence ability, BitUSD has experienced premiums over the USD as well. But with stronger limits to the supply of SD, I wonder how it will manifest in SD's ability to maintain the peg.

Anyway, that and the fact that it would force all token holders effectively into a short position, is why I am against using the Steem Dollar mechanism for BitShares smartcoins (at least as the primary mechanism for the peg, I think it is fine as a last resort insurance mechanism similar to what MakerDao is doing with the Dai, but again not via printing BTS but instead with some other token whose holders have chosen to take on that risk).

Really do have to say wackou is spot on wackou[/member]/re-fuzzyvest-beyond-bitcoin-bitshares-allstar-awards--w-hangouts-20160608t103851398z]describing you and why you are a bitshares leader
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Offline starspirit

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Re: At least BTS outlasted NuShares
« Reply #21 on: June 10, 2016, 11:43:28 am »
Smartcoins have potentially wide uses, but I don't think that fiat-pegged stable currency is the killer app, not least because the mainstream seems unlikely to trust their savings to "stable" pegged currencies backed by inherently volatile collateral (which Nubits has demonstrated so poignantly). In parallel as these pegged currencies flounder with poor demand, any non-pegged crypto that sees enough network effect build over time and wins the race toward mainstream usage will also see declining volatility as a result, in turn promoting increased usage, in a self-reinforcing cycle. Therefore the volatility that most people today see as a problem to be fixed ends up fixing itself as adoption grows. Bitcoin for example continues down that path and is now at new lows in rolling 1 year price volatility, and still probably heading up the early part of its S-curve of adoption. I'm not claiming that Bitcoin is the ultimate victor in the crypto-money competition, only that whatever the victor is will inevitably see volatility fall to levels on par with fiat currencies (and possibly less), although this may take a couple of decades.

I think bitUSD has been an amazing experiment, leading to other cool developments, but unfortunately is probably not the killer app people want it to be. At best it is a stepping stone whose window of opportunity is closing. The crypto creations of central banks when they come in the next few years will directly compete but with a stamp of authority that gives many people comfort. But then eventually pure decentralised global crypto-money will gain enough confidence to make all of these variations obsolete.

I feel the focus ought to be on realising the fuller potential of the Bitshares platform, and defining how the Bitshares technology can be made flexible and useful enough to masses of developers and entrepreneurs to do the job of building killer apps we can't yet imagine. This is Ethereum's promise and I hope Bitshares can carve its own niche in this landscape.

Offline cube

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Re: At least BTS outlasted NuShares
« Reply #22 on: June 10, 2016, 12:12:26 pm »
Smartcoins have potentially wide uses, but I don't think that fiat-pegged stable currency is the killer app, not least because the mainstream seems unlikely to trust their savings to "stable" pegged currencies backed by inherently volatile collateral (which Nubits has demonstrated so poignantly). In parallel as these pegged currencies flounder with poor demand, any non-pegged crypto that sees enough network effect build over time and wins the race toward mainstream usage will also see declining volatility as a result, in turn promoting increased usage, in a self-reinforcing cycle. Therefore the volatility that most people today see as a problem to be fixed ends up fixing itself as adoption grows. Bitcoin for example continues down that path and is now at new lows in rolling 1 year price volatility, and still probably heading up the early part of its S-curve of adoption. I'm not claiming that Bitcoin is the ultimate victor in the crypto-money competition, only that whatever the victor is will inevitably see volatility fall to levels on par with fiat currencies (and possibly less), although this may take a couple of decades.

I think bitUSD has been an amazing experiment, leading to other cool developments, but unfortunately is probably not the killer app people want it to be. At best it is a stepping stone whose window of opportunity is closing. The crypto creations of central banks when they come in the next few years will directly compete but with a stamp of authority that gives many people comfort. But then eventually pure decentralised global crypto-money will gain enough confidence to make all of these variations obsolete.

I feel the focus ought to be on realising the fuller potential of the Bitshares platform, and defining how the Bitshares technology can be made flexible and useful enough to masses of developers and entrepreneurs to do the job of building killer apps we can't yet imagine. This is Ethereum's promise and I hope Bitshares can carve its own niche in this landscape.

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Offline Empirical1.2

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Re: At least BTS outlasted NuShares
« Reply #23 on: June 10, 2016, 03:45:36 pm »
Smartcoins have potentially wide uses, but I don't think that fiat-pegged stable currency is the killer app, not least because the mainstream seems unlikely to trust their savings to "stable" pegged currencies backed by inherently volatile collateral (which Nubits has demonstrated so poignantly).

Nubits didn't poignantly demonstrate the problems of inherently volatile collateral. Their product had extremely low collateral that wouldn't have been nearly sufficient even it had been completely stable.

On the contrary as well, I think it shows people are likely to trust a portion of their savings to stable pegged currencies especially if centralized risk factors worsen, considering NBT managed to do 5 figure volumes for years on end with a farcical low/no collateral system and only experienced a mass exodus when people tried to move into the BTC surge.

In parallel as these pegged currencies flounder with poor demand, any non-pegged crypto that sees enough network effect build over time and wins the race toward mainstream usage will also see declining volatility as a result, in turn promoting increased usage, in a self-reinforcing cycle. Therefore the volatility that most people today see as a problem to be fixed ends up fixing itself as adoption grows.

I agree to an extent. The popularity and network effect created by a successful crypto-currency can be phenomenal and doesn't need a lot of development, this is why I was against losing BTSX. The notion that we could lose crypto-currency status and buy more users as the 'what is a new user worth' suggested was absurd. I'm watching the same wrong thinking play out in Steem. Paying for users by share-dropping and hoping your highly illiquid start-up DAC will absorb the cost, (A strategy that has failed a hundred times + in crypto) to compound their error they're share-dropping/awarding stable currency so the size of that burden in dollar terms they've paid to acquire users stays the same even as the share price craters.   

(The strategy of paying for users is valid in some business models, not that they have a business model for that matter, but requires funds set aside so that redemptions don't eat directly into the share price.)

Therefore the volatility that most people today see as a problem to be fixed ends up fixing itself as adoption grows. Bitcoin for example continues down that path and is now at new lows in rolling 1 year price volatility, and still probably heading up the early part of its S-curve of adoption. I'm not claiming that Bitcoin is the ultimate victor in the crypto-money competition, only that whatever the victor is will inevitably see volatility fall to levels on par with fiat currencies (and possibly less), although this may take a couple of decades.

I think bitUSD has been an amazing experiment, leading to other cool developments, but unfortunately is probably not the killer app people want it to be. At best it is a stepping stone whose window of opportunity is closing. The crypto creations of central banks when they come in the next few years will directly compete but with a stamp of authority that gives many people comfort. But then eventually pure decentralised global crypto-money will gain enough confidence to make all of these variations obsolete.

I feel the focus ought to be on realising the fuller potential of the Bitshares platform, and defining how the Bitshares technology can be made flexible and useful enough to masses of developers and entrepreneurs to do the job of building killer apps we can't yet imagine. This is Ethereum's promise and I hope Bitshares can carve its own niche in this landscape.

From a merchant POV, Even with volatility at historical lows I believe the vast majority of merchants offering Bitcoin payment options still use BitPay/other to immediately convert to fiat. Their margins are so low that any trade not in their national currency probably needs to be immediately converted or hedged.  As a result there is a large market for stable national pegged crypto-currencies like USD or CNY. Given black market trade accounts for 20% of global GDP there's also many businesses that wouldn't want to go through the traditional financial system either but still have their expenses priced in their respective national currencies. (So couldn't stay in a crypto-currency either even if their products are sold in it.)

From a saving POV people still want Gold, Silver and national currency options. SmartCoins have the potential to offer a Swiss Bank on the blockchain type solution. (If centralized risk factors worsen, escalation of war on cash,  increased capital controls, negative interest rates, crazy taxes, precious metals ban etc. then the potential for SmartCoins becomes even greater.)

I also see a bright future for crytpo-currencies and see their volatility decreasing over time but for the forseeable future the major national currency and gold markets will make up 99%+ of international business and the first to offer a solution that is effectively decentralized, private, liquid and effectively backed will be extremely successful and BTS is close to being able to offer that.


 
« Last Edit: June 10, 2016, 03:53:14 pm by Empirical1.2 »
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Offline Akado

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Re: At least BTS outlasted NuShares
« Reply #24 on: June 10, 2016, 09:16:28 pm »
Does this even count as a victory for BitShares? Given its current state
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Offline crypto4ever

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Re: At least BTS outlasted NuShares
« Reply #25 on: June 10, 2016, 09:30:58 pm »
Does this even count as a victory for BitShares? Given its current state

Crypto thinks its competing against itself, and it may very well be..

However, if you look outside of the box, we're not even making a tiny dent in the real fiat market, and that's all crypto technologies combined.

So, a victory?  I don't think so. No more than if BitUSD fell, it wouldn't be a victory for Nubits either.

Offline gamey

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Re: At least BTS outlasted NuShares
« Reply #26 on: June 10, 2016, 11:29:40 pm »
Does this even count as a victory for BitShares? Given its current state

Crypto thinks its competing against itself, and it may very well be..

However, if you look outside of the box, we're not even making a tiny dent in the real fiat market, and that's all crypto technologies combined.

So, a victory?  I don't think so. No more than if BitUSD fell, it wouldn't be a victory for Nubits either.

Nubits is one of those projects that hacked together a lot of things and was not a pure trustless blockchain solution.  We warned people repeatedly back when they came out. It is a victory but not really in a competition that exists.
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Offline Ander

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Re: At least BTS outlasted NuShares
« Reply #27 on: June 11, 2016, 08:44:57 pm »
Nubits are 50 cents now.  lol!
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Offline crypto4ever

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Re: At least BTS outlasted NuShares
« Reply #28 on: June 12, 2016, 06:09:45 pm »
[I'm watching the same wrong thinking play out in Steem. Paying for users by share-dropping and hoping your highly illiquid start-up DAC will absorb the cost, (A strategy that has failed a hundred times + in crypto) to compound their error they're share-dropping/awarding stable currency so the size of that burden in dollar terms they've paid to acquire users stays the same even as the share price craters.   

I think the Steem experiment is trying to find out, if value in content-creation is enough to make the Steem social network valuable enough, that the general public will want to support and become part of steem.

This is why there is a delay until July 4th.  We have to fill steem with good quality (and valuable) content, that makes it into Google's search results.

Unlike other places like Yahoo answers and About.com, which are full of ads and annoying to read, this is a completely different business model than can serve a similar benefit.

Personally, I think the July 4th launch date is very premature.  We need an additional 6 months, maybe longer.

P.S. I know we're considering reddit as a lateral solution to steem.  But some mention of facebook is there too. Without those stupid flash games that has everyone addicted, steem will never attract much of the facebook crowd ?

« Last Edit: June 12, 2016, 06:13:24 pm by crypto4ever »

Offline Empirical1.2

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Re: At least BTS outlasted NuShares
« Reply #29 on: June 14, 2016, 04:56:14 pm »
[I'm watching the same wrong thinking play out in Steem. Paying for users by share-dropping and hoping your highly illiquid start-up DAC will absorb the cost, (A strategy that has failed a hundred times + in crypto) to compound their error they're share-dropping/awarding stable currency so the size of that burden in dollar terms they've paid to acquire users stays the same even as the share price craters.   

I think the Steem experiment is trying to find out, if value in content-creation is enough to make the Steem social network valuable enough, that the general public will want to support and become part of steem.

This is why there is a delay until July 4th.  We have to fill steem with good quality (and valuable) content, that makes it into Google's search results.

Unlike other places like Yahoo answers and About.com, which are full of ads and annoying to read, this is a completely different business model than can serve a similar benefit.

The annoying ads you see on other sites are a form of content which advertisers create and pay the site to display.

In Steem the advertisers can create the content and then pay themselves to upvote it?

If so, the Steem front page could in theory become a wall of annoying adverts and politically or other sponsored content.

If this self paying is possible, besides an increase in demand for Steem the users will derive little benefit from an already low revenue business model (Reddit forecasts $20 million revenue 2016) & the user experience should be even worse than the sites you describe.

I think there are ways to turn a lot of the work they've done into a more viable business model but I wouldn't hold my breath.
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