Author Topic: Number of Bitshares X at launch  (Read 26921 times)

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Offline Agent86

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Pendragon3, you are wrong about dilution.   Dilution is not "easy and cheap" it is an extremely powerful force that if harnessed correctly (not easy) is VERY hard to compete against.  The advent of approval voting has made effective, targeted, democratic dilution very close to reality imo.  I don't think it would take much to implement DAC employees (paid through dilution during the growth phase of a DAC); this likely could be coded in a week.  This is a KILLER APP that is so important and powerful it is hard to overstate.  Yes, the word dilution will scare off some unimaginative investors but those are not the investors we need to attract.  You are WAY underestimating how big a role dilution will play in successful DACs.  An "alpha" DAC owned by investors who don't understand dilution will need an amazing amount of luck and lack of competition to stay "alpha"; an amount I don't think is realistic to expect.

The "CPOS" thread kind of turned into a dilution discussion so some info is also there: https://bitsharestalk.org/index.php?topic=4713.msg60250#msg60250

Offline Stan

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The nascent industry needs a paragon, a "Bitcoin" for the Bitshares world. The best, surest way to create one is to give the world an upgradable chain that has transparency and predictability for shareholders. One that minimizes confusion and doubt for investors. We want a chain that investors will see as a blue chip, best of breed, an Alpha--no dilution needed. We want to achieve that go-to status that Bitcoin was able to achieve. Dilution is easy and cheap; the best things in business and life rarely come for free. If BitShares must experiment with dilution, then let it be with experimental future chains. Official and non-official Clones will likely follow, but it will be near impossible for them to dislodge the Alpha if it has not been cheapened with the possibility of future dilution. If a Clone commits to no dilution, it will be seen as second on the scene. If it tries to compete by employing dilution strategies, it will just be perceived as a cheap knock-off.

In the longer term, maybe another chain will come that will overtake and supplant the Alpha. But by that time, the industry will have blossomed, and the Alpha's purpose and mission will have been fulfilled.

 +5%  This is our approach.
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Offline toast

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The nascent industry needs a paragon, a "Bitcoin" for the Bitshares world. The best, surest way to create one is to give the world an upgradable chain that has transparency and predictability for shareholders. One that minimizes confusion and doubt for investors. We want a chain that investors will see as a blue chip, best of breed, an Alpha--no dilution needed. We want to achieve that go-to status that Bitcoin was able to achieve. Dilution is easy and cheap; the best things in business and life rarely come for free. If BitShares must experiment with dilution, then let it be with experimental future chains. Official and non-official Clones will likely follow, but it will be near impossible for them to dislodge the Alpha if it has not been cheapened with the possibility of future dilution. If a Clone commits to no dilution, it will be seen as second on the scene. If it tries to compete by employing dilution strategies, it will just be perceived as a cheap knock-off.

In the longer term, maybe another chain will come that will overtake and supplant the Alpha. But by that time, the industry will have blossomed, and the Alpha's purpose and mission will have been fulfilled.

 +5%  This is our approach.
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Offline pendragon3

We have only this one chance to establish an upgradable alpha chain that will be like a Bitcoin among altcoins. If we start with a dilutable flagship chain, maybe PTS and AGS holders will be protected to some extent, but this is only a short-sighted type of protection. Opening the door to dilution of the flagship will forevermore make it much, much harder for BitShares to achieve a long-lasting  competitive advantage with critical mass and Bitcoin-like network effects. Competition can be a good thing, but it is even better if you're positioned for success. Let's not mess up this one opportunity by creating doubts in the minds of present and future investors about whether dilution will rear its ugly head sometime in the future.

Offline pendragon3

The nascent industry needs a paragon, a "Bitcoin" for the Bitshares world. The best, surest way to create one is to give the world an upgradable chain that has transparency and predictability for shareholders. One that minimizes confusion and doubt for investors. We want a chain that investors will see as a blue chip, best of breed, an Alpha--no dilution needed. We want to achieve that go-to status that Bitcoin was able to achieve. Dilution is easy and cheap; the best things in business and life rarely come for free. If BitShares must experiment with dilution, then let it be with experimental future chains. Official and non-official Clones will likely follow, but it will be near impossible for them to dislodge the Alpha if it has not been cheapened with the possibility of future dilution. If a Clone commits to no dilution, it will be seen as second on the scene. If it tries to compete by employing dilution strategies, it will just be perceived as a cheap knock-off.

In the longer term, maybe another chain will come that will overtake and supplant the Alpha. But by that time, the industry will have blossomed, and the Alpha's purpose and mission will have been fulfilled.

Offline pendragon3


So there will be two chains?  BTS1   AGS holders 50%   PTS holders 50%   
another one BTS2   AGS holders 10%  PTS holders 10%    delegate 80%

or maybe more? BTS 3\4\5\6………………………………

I feel quite doubtful about the whole thing, and I cannot see any promising future about the whole thing

First of all, with so many chains, if there is someone who wants to buy BTS, which one should he buy? he will be confused and he will be not sure which one to buy and will not want to buy because he will be not sure which one will be the final version.

second, before, all the people thought AGS\PTS would get 50%\50%, so they made the investment, but now they were told they might only get 10% or 10%?  plus, if you said you would let the market decide, the fact woule be that, if PTS AGS holders only get 10% instead of 50%,  the other people could get the rest 80%, of course people would like this plan. it is just like if the people who originally have a lot of money now have to spare their money to the poor people. of course this plan would be more welcome by the people, because poor people are much more.

sorry for my words, i am just very very XX right now.

The key point you are missing is that we do not control what variants others will make.  Neither does Bitcoin.
What is different here, is you get ownership in all the honorable variations.  You win if any one of them wins.  Maybe more than one will be successful.

Imagine you had been following Bitcoin for a while, but had not been following BitShares. You then start to hear a lot of talk about this bank & exchange which has been launched so you decide to look into it. If you discovered several variants, all competing with one another, would you not be deterred from using one out of fear of picking the wrong one?

I think this scenario could majorly hinder adoption by anyone not already invested into BitShares, at a time when an influx of new money is needed.
Ideally BitShares would launch a product good enough that it picks up a strong network effect so quickly that any competing chains would fall by the wayside. This would give people enough confidence to pour money in, seeing it as the REAL and ORIGINAL chain, like Bitcoin compared with flaky altcoins, (even if competitors come along with slight advantages).


This is key. All of us, the devs, investors, and community, should think carefully about how we want things to proceed when Bitshares X bursts out of the gate. Others have stated that there will be many chains, and at least one of them will not be dilutable. But which one should be the non-dilutable chain, the rallying point for would-be investors?

If simple is good, and a single, upgradable chain is simple, then how can we best ensure that this one chain quickly achieves preeminence and a critical mass of users and investors? How can we minimize confusion and doubt among investors to achieve maximum buy-in? I argue that we need to commit not to dilute investors on the flagship chain. Not ever. Dilution is a slippery slope. Once a chain has the purposeful machinery in place to enable future dilution, even if dilution is not planned at the current time, this creates doubt in the minds of investors. It is like a fiat currency--regardless of how good original intentions are, exigencies and unforeseen contingencies will sooner or later lead to debasement, if the protocol is structured to allow for it.

Offline toast

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You want to put the BTS completely fragmented?!
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For this reason we have decided to recommend that all future chains based upon the concept behind BitShares X be initialized with a snapshot (100%) of the state of BitShares XT around the time of their launch.

Key word here is initialized with snapshot. All chains BM plans to make will still do this. Some will print new shares because he thinks that will make that chain more likely to be worth more overall. Some will not to appease investors. In either case, you have a stake in them all.

I'll make a few chains too, some initialized with some shares to the altcoins that'll be traded on them, some airdropped on real-world organizations (partnerships with traditional businesses). Whatever.

You have stake in them all.
What I would really like to see is this:

1) A single chain that upgrades over time and adds new features supported via the dilution method once this chain gains traction then clones can pop up on their own to compete.

The challenges with this approach is:

1) Not everyone supports the dilution approach
2) How do you handle different snapshot dates



You guys will no doubt find the best, or one of the best, ways to proceed. I don't want to ruffle feathers needlessly or waste anyone's time here. But I still don't understand the current line of thinking.

"A single chain that upgrades over time and adds new features supported via the dilution method..."
My question is, would new features really be that costly to implement? Isn't there another way to support development other than by diluting shareowners?

To your point 2), "Not everyone supports the dilution approach".. I'd say that is a bit too mild. More accurate to say, "very few support the dilution approach, and many are vehemently against it."

If you're going to consider dilution (which is not advisable), then at least consider how it's done in the finance world. In the case of stocks, dilution is a byproduct of capital raising. Selling shares to fund a project lets the market be the final arbiter. If the market doesn't like the proposed use of funds, then the share price will drop, voila, instant feedback mechanism.

Here, giving delegates or developers carte Blanche by diluting so much in advance is very, very different. It's just plain arbitrary and asking for trouble.

Which is better?

1.  Use mining to gradually release the last 80% of shares along some front-loaded curve that burns all the money people are willing to pay for those shares.

2.  Have a developer keep the last 80% of shares to be spent along some front-loaded curve as the developer thinks is best to achieve success..

3.  Have the last 80% put in 101 spigots that dispense along some front-loaded curve as 101 elected delegates campaign and shareholders vote to get control of one of the spigots.

4.  Release all the shares up front leaving no operating budget and hope that someone will donate to maintain and grow the assets.

You don't have to choose.  All four are likely to be tried at some point.  Your task is to pick the winner(s).

We all know the drawbacks to mining-based approaches. But consider the drawbacks to front-loading 101 spigots at the scale of what I think you're envisioning. Just imagine the costly rent-seeking activities. influence costs, the wasteful campaigns that 100s delegates would run. Millions of dollars wasted by hundreds of people on campaigning and rent-seeking. Imagine the scams and frauds that a few bad apples would try to perpetrate, the disagreements and fights about broken promises, the lawsuits about privacy, libel, and such. Imagine all of that drama that DAC developers and the community would have to experience. Now multiply that by 10, 20, 30 DACs. Do you see the problem with this governance scheme? It would likely be a nightmare that would give Bitshares a black eye or two. Why endorse this type of system upfront?

Maybe in the future there would be a specialized DAC that really needs this type of funding model to raise 100s of millions of dollars for development or marketing by wasting 10s of millions on campaign spending. But that should be really up to the DAC developer. Why hardwire this problematic governance into the prototype DAC upfront?

When did Bitshares become inflationary again?  I haven't been paying that close attention apparently, thank god we're re-inventing the wheel this is working great.

It (bitshares X) didn't, these guys just suck at PR. Working on it
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Offline AdamBLevine

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You want to put the BTS completely fragmented?!
Quote
For this reason we have decided to recommend that all future chains based upon the concept behind BitShares X be initialized with a snapshot (100%) of the state of BitShares XT around the time of their launch.

Key word here is initialized with snapshot. All chains BM plans to make will still do this. Some will print new shares because he thinks that will make that chain more likely to be worth more overall. Some will not to appease investors. In either case, you have a stake in them all.

I'll make a few chains too, some initialized with some shares to the altcoins that'll be traded on them, some airdropped on real-world organizations (partnerships with traditional businesses). Whatever.

You have stake in them all.
What I would really like to see is this:

1) A single chain that upgrades over time and adds new features supported via the dilution method once this chain gains traction then clones can pop up on their own to compete.

The challenges with this approach is:

1) Not everyone supports the dilution approach
2) How do you handle different snapshot dates



You guys will no doubt find the best, or one of the best, ways to proceed. I don't want to ruffle feathers needlessly or waste anyone's time here. But I still don't understand the current line of thinking.

"A single chain that upgrades over time and adds new features supported via the dilution method..."
My question is, would new features really be that costly to implement? Isn't there another way to support development other than by diluting shareowners?

To your point 2), "Not everyone supports the dilution approach".. I'd say that is a bit too mild. More accurate to say, "very few support the dilution approach, and many are vehemently against it."

If you're going to consider dilution (which is not advisable), then at least consider how it's done in the finance world. In the case of stocks, dilution is a byproduct of capital raising. Selling shares to fund a project lets the market be the final arbiter. If the market doesn't like the proposed use of funds, then the share price will drop, voila, instant feedback mechanism.

Here, giving delegates or developers carte Blanche by diluting so much in advance is very, very different. It's just plain arbitrary and asking for trouble.

Which is better?

1.  Use mining to gradually release the last 80% of shares along some front-loaded curve that burns all the money people are willing to pay for those shares.

2.  Have a developer keep the last 80% of shares to be spent along some front-loaded curve as the developer thinks is best to achieve success..

3.  Have the last 80% put in 101 spigots that dispense along some front-loaded curve as 101 elected delegates campaign and shareholders vote to get control of one of the spigots.

4.  Release all the shares up front leaving no operating budget and hope that someone will donate to maintain and grow the assets.

You don't have to choose.  All four are likely to be tried at some point.  Your task is to pick the winner(s).

We all know the drawbacks to mining-based approaches. But consider the drawbacks to front-loading 101 spigots at the scale of what I think you're envisioning. Just imagine the costly rent-seeking activities. influence costs, the wasteful campaigns that 100s delegates would run. Millions of dollars wasted by hundreds of people on campaigning and rent-seeking. Imagine the scams and frauds that a few bad apples would try to perpetrate, the disagreements and fights about broken promises, the lawsuits about privacy, libel, and such. Imagine all of that drama that DAC developers and the community would have to experience. Now multiply that by 10, 20, 30 DACs. Do you see the problem with this governance scheme? It would likely be a nightmare that would give Bitshares a black eye or two. Why endorse this type of system upfront?

Maybe in the future there would be a specialized DAC that really needs this type of funding model to raise 100s of millions of dollars for development or marketing by wasting 10s of millions on campaign spending. But that should be really up to the DAC developer. Why hardwire this problematic governance into the prototype DAC upfront?

When did Bitshares become inflationary again?  I haven't been paying that close attention apparently, thank god we're re-inventing the wheel this is working great.
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Offline hadrian

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So there will be two chains?  BTS1   AGS holders 50%   PTS holders 50%   
another one BTS2   AGS holders 10%  PTS holders 10%    delegate 80%

or maybe more? BTS 3\4\5\6………………………………

I feel quite doubtful about the whole thing, and I cannot see any promising future about the whole thing

First of all, with so many chains, if there is someone who wants to buy BTS, which one should he buy? he will be confused and he will be not sure which one to buy and will not want to buy because he will be not sure which one will be the final version.

second, before, all the people thought AGS\PTS would get 50%\50%, so they made the investment, but now they were told they might only get 10% or 10%?  plus, if you said you would let the market decide, the fact woule be that, if PTS AGS holders only get 10% instead of 50%,  the other people could get the rest 80%, of course people would like this plan. it is just like if the people who originally have a lot of money now have to spare their money to the poor people. of course this plan would be more welcome by the people, because poor people are much more.

sorry for my words, i am just very very XX right now.

The key point you are missing is that we do not control what variants others will make.  Neither does Bitcoin.
What is different here, is you get ownership in all the honorable variations.  You win if any one of them wins.  Maybe more than one will be successful.

For anyone who bought in before the snapshot, having a share in each of many variants might not seem too bad.

BUT tianshi asked, "...with so many chains, if there is someone who wants to buy BTS, which one should he buy?".

Imagine you had been following Bitcoin for a while, but had not been following BitShares. You then start to hear a lot of talk about this bank & exchange which has been launched so you decide to look into it. If you discovered several variants, all competing with one another, would you not be deterred from using one out of fear of picking the wrong one?

I think this scenario could majorly hinder adoption by anyone not already invested into BitShares, at a time when an influx of new money is needed.
Ideally BitShares would launch a product good enough that it picks up a strong network effect so quickly that any competing chains would fall by the wayside. This would give people enough confidence to pour money in, seeing it as the REAL and ORIGINAL chain, like Bitcoin compared with flaky altcoins, (even if competitors come along with slight advantages).

How can this product be produced, though, when new ideas suggest that changes should be made, but historical agreements forbid these changes?

How much money would be needed in order to successfully invest in growth for Bitshares XT? Any ideas?
Could enough money be raised by alternative means (outside of the DAC fees), so that no dilution is necessary? (I don't suppose the AGS fund could/should cover this?)

Can BitShares raise money specifically to invest into the growth of their flagship DAC?
Sell merchandise?
Sell memberships to "BitShares Members Club", with some kind of perks?
Sell subscriptions to "BitShares Magazine"?
Create InvestCoin? - bought by the public by sending BTC to a purchase address. The BTC is used to actively invest in various crypto stuff (even including Bitshares XT?), and a percentage of any profits is periodically sent back to the senders bitcoin address. This would be the lazy way for people to speculate in the crypto world - they'd love to check the charts to see if their gamble is paying off etc.

I have to go to bed now, so sorry if this is garbled rubbish. It's all a bit half baked... :P
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Offline luckybit

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another one BTS2   AGS holders 10%  PTS holders 10%    delegate 80%

First of all... AGS/PTS holders start out with 100% and can nominate delegates that destroy 100% of their surplus pay and thus is potentially no different than the 50/50 approach.

Second... the 10/10/80 is more like 30/30/40 for the first year *IF* the delegates that are elected decide to spend (invest in growth or keep)

So what we are suggesting is that there could be no dilution if the shareholders don't want dilution.  Assuming it is guaranteed when the current shareholders are in control of who they vote for is just wrong.

So it seems like if 60% of AGS/PTS holders want the dilution approach then that is the approach that should be used.  The other 40% are free to "sell" and start their own chain. 

So in all reality it is probably best to let the shareholders vote rather than have us decide unilaterally.
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Offline bytemaster

One thing all of this *discussion* has exposed is that politics and voting is a fundamental violation of property rights. 

1) Running a company by committee is a bad idea.
2) 99% of voters have no clue as to what is actually in their best interest.
3) It becomes a prisoners dilemma... if everyone cooperates it could work well, but individuals can profit more by defecting.

Conclusion:
 
   It is entirely too risky to consider such a significant shift in premise.   The free-market way to achieve the desired goal is to for someone to launch a new chain, pre-allocating enough to themselves to justify the investment and then growing to compete in the market place.
I have absolutely no idea how you can conclude 1)2)3) from this discussion. Maybe it's just that I'm not a good master of byte as you.

I suppose I concluded it based upon this discussion in combination with offline discussions sparked as a result of this discussion.  Specifically:

1) vote buying is an example of prisoners dilemma
2) if voters knew what was best for them they could escape the prisoners dilemma... but they don't and will likely fall for the bribe.
3) if voters don't know what is best for them, then allocating the budget according to their whims is like design by committee. 

So I took some leaps based upon first principles that got lost in the mix of discussion.   
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Offline batemastur

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One thing all of this *discussion* has exposed is that politics and voting is a fundamental violation of property rights. 

1) Running a company by committee is a bad idea.
2) 99% of voters have no clue as to what is actually in their best interest.
3) It becomes a prisoners dilemma... if everyone cooperates it could work well, but individuals can profit more by defecting.

Conclusion:
 
   It is entirely too risky to consider such a significant shift in premise.   The free-market way to achieve the desired goal is to for someone to launch a new chain, pre-allocating enough to themselves to justify the investment and then growing to compete in the market place.
I have absolutely no idea how you can conclude 1)2)3) from this discussion. Maybe it's just that I'm not a good master of byte as you.

Offline bytemaster

One thing all of this *discussion* has exposed is that politics and voting is a fundamental violation of property rights. 

1) Running a company by committee is a bad idea.
2) 99% of voters have no clue as to what is actually in their best interest.
3) It becomes a prisoners dilemma... if everyone cooperates it could work well, but individuals can profit more by defecting.

Conclusion:
 
   It is entirely too risky to consider such a significant shift in premise.   The free-market way to achieve the desired goal is to for someone to launch a new chain, pre-allocating enough to themselves to justify the investment and then growing to compete in the market place.   

For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline BTSdac

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but I haven't  got it, why give 80% to delegate is better than now.

This probably deserves its own thread and is often discussed in the Mumble Hangouts (please show up and join the discussion).

The goal is not to give it to the delegates for simply producing blocks.  The goal is to make it the DAC flexible enough at the protocol level to adjust its resource allocation strategy dynamically and fairly according to shareholder wishes.  Shareholders select delegates.  Delegates are highly paid and thus there is competition for this role.

As delegates compete they make campaign promises such as:

1) I will fund development of a web wallet with Developers X, Y and Z
2) I will fund a faucet
3) I will return money to the shareholders
4) I will pay to lobby the government
5) I will buy a superbowl ad.

The shareholders can then decide what mix of delegates / resource allocation they desire.   

So the alternative of hardcoding minimal rewards (a fraction of TRX fees) for delegates is effectively making the decision to rely upon voluntary investment in infrastructure.  View this like a company and ask how much would a normal company spend to grow to be worth 100 Billion?    How much has this community put into the DAC to boot strap it?  Several million dollars.   To think that several million dollars is enough to take it to 100 Billion is very wishful thinking. 

In any case, the shareholders get what they want and the success of the DAC is entirely on their shoulders.
I worry about if delegate campaign  with returning money to the shareholders  ,it will decrease the stability and robustness of network of DAC , if shareholders voting delegate just because this can supply better network service ( include produce block chain, less network timeout and honesty  ) ,then the delegate supply better service have high voting .
opposite if one delegate return money to the shareholders,  many shareholders would vote him for money even this delegate supply bad network service .  worse he is a attacker
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Offline batemastur

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