Author Topic: Economic Abstraction and Network Fees  (Read 4776 times)

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Offline pc

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You can pay the network fee for any operation using any (unrelated) asset if it has BTS in its fee pool and a "core exchange rate" defined.

For example, Alice can transfer bitBTC to Bob and pay the fee in bitUSD. What happens then is that the blockchain takes the bitUSD from Alice's account, exchanges them for BTS (using the bitUSD fee pool), and pays the network fee in these BTS. That's what xeroc meant with "implicit exchange".
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Offline spark

that unfortunately only works in "liquid" markets - as such, a reason for having the issuer provide the BTS in the fee pool for an implicite exchange

Please help me understand why there are BTS in the fee pool? I thought it was to pay network fees, but it sounds like the BTS can be taken by any coin holder whatsoever by 'implicit exchange' so I am unsure about my understanding.

Offline xeroc

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At the end of the day the fees, which are collected in bitFiat or open.BTC should be used to buy back BTS. Therefore is a demand for BTS independent of the currency fees are paid.   
that unfortunately only works in "liquid" markets - as such, a reason for having the issuer provide the BTS in the fee pool for an implicite exchange

Offline bench

At the end of the day the fees, which are collected in bitFiat or open.BTC should be used to buy back BTS. Therefore is a demand for BTS independent of the currency fees are paid.   
« Last Edit: September 27, 2018, 02:29:08 am by bench »
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Offline armin

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ya that's exactly what we are saying @johnr

Offline JohnR

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One of the best things about BitShares is the economic freedom it provides.  A user can freely transact in CNY/USD/EUR assets independent of their nationality.  Maybe we will agree to disagree on this point but I don't think most users feel an explicit allegiance to the fiat monetary system under which they were born.

Offline armin

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Ya I think abits point make sense, BTS is the "community token for everyone in this community" but a certain fiat may  not be applicable to all Bitshares users

Offline JohnR

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Thanks @abit.  I would not go so far as to say it would devalue BTS.  bitCNY is at the end of the day a future claim on BTS, nothing more.

I don't think setting in USD vs CNY would ruffle too many feathers.  Speaking for myself, whether the fee was set at 0.01 USD of 0.06 CNY would not make much difference to me whether I paid fees in USD or EUR. 

Very concerned about unexecuted transactions though.  When you say fee schedule changes do you mean the regular fluctuation of bts:fiat?  If you mean fee schedule changes I suppose the solution is that we set fees once in fiat and could be satisfied enough not to change unless something major happens.  Many stakeholders are working and hoping for greater adoption and supply of bitassets.  If fees are fixed in fiat terms then it may incentivize the community to focus more on bitassets?  People holding bts is good, people holding bitassets is better.

I think fees should still be paid in BTS, however the fees should peg against USD|CNY to be a fixed FIAT value instead of being detached from their intended value when BTS price is volatile (until the committee manually adjusts them). If the committee could set the fee values once then forget about them (until economic policy changes are proposed) that'd be great.
Apparently, if we set a fixed fee schedule, it can only be in BTS, or one of the smart coins. Using BTS is the least bias solution. If we peg fee schedule to one currency, E.G. USD, why not use CNY or EUR? IMHO this will cause division of the community. Because, even if some people can pay fee in USD at a fixed value, other people who don't use USD will still need to pay fee at a float value. The worst thing is people who prefer to pay fee in BTS (read: most of existing users) need to calculate the rate when building transactions, which is not funny at all. The chance of failing to execute transactions would be much higher due to fee schedule changes. IMHO using any asset other than BTS as default fee will effectively devalue BTS the core token.

Offline abit

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I think fees should still be paid in BTS, however the fees should peg against USD|CNY to be a fixed FIAT value instead of being detached from their intended value when BTS price is volatile (until the committee manually adjusts them). If the committee could set the fee values once then forget about them (until economic policy changes are proposed) that'd be great.
Apparently, if we set a fixed fee schedule, it can only be in BTS, or one of the smart coins. Using BTS is the least bias solution. If we peg fee schedule to one currency, E.G. USD, why not use CNY or EUR? IMHO this will cause division of the community. Because, even if some people can pay fee in USD at a fixed value, other people who don't use USD will still need to pay fee at a float value. The worst thing is people who prefer to pay fee in BTS (read: most of existing users) need to calculate the rate when building transactions, which is not funny at all. The chance of failing to execute transactions would be much higher due to fee schedule changes. IMHO using any asset other than BTS as default fee will effectively devalue BTS the core token.
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Offline armin

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I don't think the OP means this @abit, I think they're talking about the price of BTS/CNY or BTS/USD over longer periods of time. Don't think daily fixed exchange rate will fix the longer period of time issue

Offline abit

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Just came with an idea.

In a macro perspective, we don't care much about fees paid to the network during a day is a bit more or a bit less.

Since CER of smart coins are fed by witnesses, how about asking witnesses to change them less frequently? E.G. change once every day. On 00:00-01:00 of every day, each witness publish a new CER; on other hours, don't update it. With this, the smart coins will effectively have fixed exchange rate all day long except that hour.

Now BSIP26 is in place, we don't need to worry about that the fee pools of smart coins will get drain due to slightly "incorrect" CER.

With this approach, IMHO user experience (UX) of an average Joe who wants to pay fee in bitCNY or bitUSD would get greatly improved.

Thoughts?
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Offline armin

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the worker reserves can/are held by blockchainprojectsbv

Offline JohnR

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Thank you for the thoughtful reply CM.  I think it's not the pegging that's the trouble.  This can be handled through the core exchange rate function of bitUSD/CNY 's respective fee pool.  I think the larger issue is do we want to tie fee revenue in fiat terms or stick with the bts denomination (it has pros/cons).  The more I think about it, one of the most important reasons for fees in the first place is to support the reserve pool from which workers draw upon.  Workers want bitUSD/CNY so there is a nice symmetry to charging network fees in these assets.  It minimizes volatility risk that workers won't get paid.

The pegging thing can be solved with a program all committee members run that adjusts the fees daily to peg to USD/CNY. Obviously there's hassle in running that program and key safety is a concern as well
After BSIP 40 (https://github.com/bitshares/bsips/blob/master/bsip-0040.md) is implemented, the committee members could potentially create a key for this purpose so as to not risk the rest of their committee account's permissions/functionality.

Such a program wouldn't require a powerful VPS, and perhaps it could be run by one committee member to propose the variable change operation & be manually approved by the committee at their discretion? It'd at least take half the effort out of proposing new fees.

Offline armin

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@Customminer yeah the idea could work if the committee is up for it, these problems aren't that big in a bear market they matter more in a bull market

Offline armin

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@johnr I'm saying hypothetically but it's a really simple program to code lol