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Running lots of nodes is not an effective attack vector if you are looking to disrupt the workings of the network.
Running a significant portion of nodes could be used, however, to unmask the identity of someone behind a transaction. If a malicious entity is connected to every node it is easy to figure out who is who. The first node to propagate a transaction is presumably one of the parties involved in the transaction... thus you now know the origin IP of the transaction.
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Well, I don't think its consider legal in the US. If so please explain the close down of https://btct.co/ and mtgox getting their bank frozen. Mtgox didn't follow regulatory guidance put in place by FinCEN. That is why they had their accounts frozen. BTCT is an entirely differnt conversation, as they were concerned with regulatory pressure from the SEC. Nothing to do with Bitcoin directly per se. It was the issuance and distribution of unregulated securities. That is why they shut down. |
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Guys, I'm just telling you like it is. Not about elitism, etc... Of course you CAN lie on the form, but should you? That depends on whether the benefits are worth the potential civil penalties to you. If you lie and get caught, there are consequences for you and potentially SecondMarket. Why risk it? All they would be doing is buying coins for you. If you are on this forum surely you can buy them yourself.
You can read the securities act of 1933 and similar, the rules are there. You just have to ask yourself whether or not you want to follow them.Don't make this about me.
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It is fraudulent to claim you are an accredited investor when you aren't, but companies don't have incentive to actively breech users' privacy to attempt denying service, and government doesn't have much incentive to try enforcing these rules on an individual level when there's no indication of illegal activity. The only exception is when there's potential for "terrorism," which is probably the reason for SM's background check. (it's probably not a full financial audit determining whether or not the potential member is an accredited investor - but since they don't say exactly what the check is or what it's for, it's hard to say for sure)
Where are you getting this crap? Of course it is in their benefit to check out the details of their investors. Whether or not they do, well that is their problem. If someone reports them to the SEC and they do any kind of an investigation, SecondMarket is fucked. There are no documents to forge. There are boxes to enter in your income, investments, and net worth, similar to how "liar loans" worked. Sorry, but lying on the form == forging. You aren't gonna convince anyone in here that is a good idea. |
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Trying to forge your way into this fund seems like a silly thing to do. You are putting yourself and the fund at jeopardy. If you have the skills to forge the documents you have the skills to invest 25K in Bitcoin without having to have SecondMarket hold your hand.
This is a stupid conversation to be having on a public forum, anyway. Please think people.
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If we take a step back and just look at the arguments on the table, ex-trader's concerns aren't entirely unfounded nor were the answers cryptocyprus provided entirely clarifying. Deprived says: How are you planning to hedge against a heavy fall in the BTC/EUR rate? I'm not aware of any cheap high-volume means to do so (other than converting into fiat which would be rather pointless).
Your plan pretty much relies on BTC rising vs EUR. Whilst I'd tend to agree that long-term that seems likely it's also likely that any such rise won't be a steady one but will have the occasional large bubble + collapse.
If BTC happens to be at the top of a bubble when you launch it could be rather a problem for you. Whilst you may hope your own purchases could extend the bubble you can't really base a whole business plan on hoping BTC doesn't have a collapse shortly after you start taking deposits (if it happens later then it isn't such a big problem - after a while only a total collapse of BTC would be a major issue for you).
It's certainly an interesting business model - borrow money denominated in EUR then bet it all on BTC rising. And rather than paying interest for the loans to speculate with, charge them fees for the privilege. cryptocyprus responds: We shall be operating our own local index based on several determining factors to prevent bubbles having a detrimental effect on our operations, these bubbles will also provide us with the opportunity to strengthen our own position.
....
We also have products planned that will provide part of an gains back to the customer.
....
Our local index will determine the price the Bitcoins flowing between our customers when depositing and withdrawing, this will be determined on long averages, our purchase price, how efficiently we can liquidate our own positions to ensure sufficient cash flow to cover larger withdrawals, customer behavioral trends.
If the price drops considerably quickly it will take time to filter through the averages until it reaches the front line, this additional time will enable us to take advantage of trading conditions to strengthen our position. Deprived responds: I see a lot of words there but no real meaning.
When someone withdraws their euros there's no "flowing between customers" - you have to sell Bitcoins to recover their euros.
You can pretend on paper that you still have enough BTC to cover euro-denominated deposits (by using an internal exchange-rate that isn't in track with the market) but you can't actually sell your BTC onto the open market at that internal index price.
The scenario I'm looking at is the typical bubble one - think of what happened earlier this year. BTC rose up to $250+ vs USD then collapsed down to $100 very rapidly and stayed there for months (dipping even lower on occasions). If you had 5 million euros on deposit with you and 1 million euros float and BTC halved vs the euro then at best you'd only have 3.5 million euros worth of realisable fiat. i.e. you'd be insolvent.
Pretending BTC was still worth $250 doesn't solve that. And as soon as customers notice and start withdrawing the deficit grows as every withdrawal has to be covered by selling BTC at the real price not some pretend index.
And what does "this additional time will enable us to take advantage of trading conditions to strengthen our position" mean? You claim you'd be unable to even move the BTC around without customers signing transactions - so how can you trade with them? cyrptocyprus responds: We shall operate our own reserves for trading both EUR & BTC and not deposits, our strategy will be constantly monitored and adjusted. Not every BTC and Euro will be derived from the public markets and we also have several options on futures. Our strategies will be kept private because we do not want to buy off the back of our own hype, this will be partly unavoidable but we will be doing everything we can to mitigate that risk.
If someone withdraws €5m and other withdrawals that day alone make the total €7m, we will also take deposits that day at the same price point, even if the deposits that day total €5m we will already be in a strong position because we would have the trading benefits of adding that €7m to the market prior to the decrease, increasing the strength of our own reserves. Another answer somewhere else: 1. We will implement a hedging strategy utilizing our own reserves, this strategy will be constantly changing, we will also be setting the price locally to ensure that sudden falls in price are not realized on the front line immediately. This gives us an opportunity to increase trading activities to strengthen our positions. A good trader(s) will make gains under volatile conditions, irrespective of the direction of the movement. Sorry I cannot provide the exact strategies for different scenarios but doing so would be like playing poker with see through cards. Another answer More than 100% of total liabilities in our own reserves wouldn't happen because during any falls we would continue our trading to ensure that we had sufficient Bitcoin to cover the adjustments required. The depth of the market is also a very important factor, its all well and good having a BTC/EUR rate of €1000 if it would only take 10BTC to drop it down to €500. And his answers to ex-trader: A "run" on withdrawals would serve only to reduce our liabilities unlike a traditional bank.
We will have both options and futures trading available to us prior to launch (with substantial volume)
We will also be basing our business model on the additional services we shall be offering, ie insurance, international remittance (there are more but I will provide more detail when we have more solid progress).
Yes substantial losses in the value over a long period of time would not be of benefit to anyone neither ourselves or anyone that holds Bitcoin as a store of value, however if we fail our customers can still obtain their own Bitcoin. For these recurring losses to happen it would also pretty much mean an end for Bitcoin too (if they were to happen at this point in time), something I don't foresee happening anytime soon. For everyone who likes doomsday scenarios, if you think your going to wake up tomorrow with Bitcoin valued at 0, it just isn't going to happen because of the fact that if two people agree on a value then it will always be worth something.
There is definitely some gray area, as we are not privvy to all the methods used (competitive edge, as claimed). Whether you believe in them or not, that is up to you. |
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Mate, it's over now. Give it a rest. All your arguments could be made against Bitcoin (as has been said two times now). There is risk, but that risk != ponzi. If you do in fact report this to the SEC, shame on you. What a filthy thing to do. Paints a grim picture of your character.
Misrepresenting a highly risky investment as extremely low risk or risk free is illegal. e.g. recall the coindesk article One bitUSD will always be worth about one USD, say the founders, just as one BitBTC will always be worth around 1 bitcoin.
Recall the CEO's statement Let me be clear, we believe firmly that the floor will always be at or above 1 btc. We have always claimed that and will always believe it.
These have now been acknowledged to be false statements. If anyone happens to lose money all they have to do is dredge up these quotes. US courts will hold these guys liable. This is not an absolute. Everyone should believe in their product, that doesn't mean they are implying that it will cure cancer. They could have worded the Coindesk article with a bit more grace, but you are overreaching. More likley the author misunderstood what they were trying to say (he got some facts wrong to begin with). Considering the product hasn't even been released (the final draft of the white paper isn't even done yet!!!) there is ample time to mold the message. |
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1) It is theoretically possible for your scenario to occur, and in such a scenario everyone who was Short BitBTC would be entirely wiped out and everyone who was long BitBTC would end up with twice as many BitShares as they started with (assuming they sold). It is even possible for the result of this catastrophic loss of value in BitShares to result in BitBTC being on the books without any corresponding short positions backing it up. Such an event would be terrible for those long BitShares, even worse for those Short BitBTC... but those who are impacted the least would be those who are Long BitBTC... they doubled their BitShare holdings.
Let's put this in simple terms, so that everyone understands. I purchase 1 BTC worth of bitBTC today. I plan to convert this back into BTC exactly one month from today. As long as the next month's price of bitshares in terms of BTC is at least 50% of the current price, I will get my 1 BTC back. However, if next month's price is less than 50% of the current price, I will not be able to recover my initial investment in full. (i.e. I will get back less than 1 BTC) Correct? (please don't tell me that some magic speculator is going to come in and bail me out) Mate, it's over now. Give it a rest. All your arguments could be made against Bitcoin (as has been said two times now). There is risk, but that risk != ponzi. If you do in fact report this to the SEC, shame on you. What a filthy thing to do. Paints a grim picture of your character. |
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Still a little bit confused. Does that mean Americans cannot privately invest on a company as a shareholder without approval from SEC?
As it stands, if you want to provide equity-based investments in the U.S. you can have no more than 35 unaccredited investors. An accreddited investor must have >$1m net worth and/or makes >$200K/year. The company must also comply with the entirety of the Securities Act of 1933. So really the only crowd sourced equity you can do in the US (as of yesterday) is to accredited investors (see: https://wefunder.com/ or https://angel.co/public). With Regulation S you can be a US-based company and just turn down US investors (as I linked earlier) and avoid all the hassle of the SEC. Thanks a lot for your detailed explanation. Then how about pass through? So that means to the company, there's only less than 35 investors. The investors then pass through the dividend to others, which has no relation with the company. The pass through manager (non-American) then put these PT shares on an exchange, and theoretically this is just the investor's personal behavior, which has nothing to do with the company. Is this legal (at least the company wise)? I don't want to derail this thread any further, as we already know btquick is breaking the law. But to answer your question, unfortunately no. The SEC will basically try and buy your shares. If they can--through any means--you are in trouble. If you want to discuss the SEC and American investors further, start a thread it'd be my pleasure to join in. I can tell you now anything to do with US unaccredited investors is gonna be a no, there are no major loopholes unfortunately (at least that I am aware of). I've been doing quite a bit of research would be happy to answer any questions. |
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Still a little bit confused. Does that mean Americans cannot privately invest on a company as a shareholder without approval from SEC?
As it stands, if you want to provide equity-based investments in the U.S. you can have no more than 35 unaccredited investors. An accreddited investor must have >$1m net worth and/or makes >$200K/year. The company must also comply with the entirety of the Securities Act of 1933. So really the only crowd sourced equity you can do in the US (as of yesterday) is to accredited investors (see: https://wefunder.com/ or https://angel.co/public). With Regulation S you can be a US-based company and just turn down US investors (as I linked earlier) and avoid all the hassle of the SEC. |
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also in light of recent events, do you still believe that you are operating entirely within the appropriate laws?
They never have been. Profit sharing is a pretty name for an equity-based security. They should be registered with the SEC or be turning down US investors (which they have no way of doing on BitFunder). I'm honestly surprised they did this, especially because they claim Marco Santori is their lawyer; I doubt he would sign off on this. How about convert all shares to direct shares so that the investors become private shareholders? They would still have to audit the investors and make sure they are not US citizens, among other things (see: regulation s - category 3). see that Ascension, some of us don't mind sharing our competitive edges. it's all about the love  |
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also in light of recent events, do you still believe that you are operating entirely within the appropriate laws?
They never have been. Profit sharing is a pretty name for an equity-based security. They should be registered with the SEC or be turning down US investors (which they have no way of doing on BitFunder). I'm honestly surprised they did this, especially because they claim Marco Santori is their lawyer; I doubt he would sign off on this. |
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Let's go through another concrete example describing exactly what will happen to bitshares in the future. The example shows that 1) bitshares is a simple ponzi 2) bitshares is nothing at all like bitcoin
1) Suppose that bitshares experiences a bubble just like bitcoin's first bubble. At the peak of the bubble, the market cap of bitshars reaches 1 million in terms of bitcoins. (Recall that the market cap is just the bitcoin denominated price of a bitshare × the total quantity of bitshares in existence)
2) Suppose also that bitshares has issued 100,000 bitBTC at the peak of the bubble. At the peak of the bubble, this is fine. Bithshare's market cap is sufficient to back these 10 times over.
3) Recall that bitBTC cannot be involuntarily confiscated once they are issued. So if the price of bitshares drops the BTC denominated debt (100,000 bitBTC) do not just disappear. Instead bitshares just falls deeper in debt.
4) Suppose that bitshares market cap drops to 1/15 of its bubble peak (as in the 1st btc bubble). This leaves a bitshares market cap of 66 thousand BTC. But wait a minute, bitshares has 100, 000 units of bitBTC outstanding. Liabilities exceed assets. The system is bankrupt.
Let's ask some questions:
1) The bitshares creators tell us that a bitBTC will never fall below 1 BTC. Apperently some kind of price "floor" exists at this level. But ask yourself, would you pay face value for a bitBTC when the bithsares backing them trade for at most worth 0.66 BTC (and in all probability an order of magnitude less)
2) What about bithsares themselves? How much would you pay for a bitshare in this context? Bitshares are effectively equity. If the creditors holding bitBTC are to be repaid, bitshares will have to appreciate by 50% before the equity holders go into the black again. We do not normally see shares in bankrupt companies trading above 0 unless a gov't bailout is expected.
3) Assuming the gov't doesn't bailout bitshares, how is it that the market cap of bitshares could still be as high as 66 thousand BTC? What does this tell us? The value of a bitshare will keep dropping. Sending the system further and further underwater. It will not stop until it hits 0.
Thank you for the pleasant reply. BitUSD is a BitShares-derived BitAsset that must be created against a valid bid and post collateral in BitShares equal to the value of bid. If the bid is accepted, the collateral and purchase price are held by the network until the BitUSD is redeemed by repurchasing it. The block chain will then redirect the dividends of the collateral to all BitUSD holders. BitUSD is entirely fungible and all dividends from all BitShares backing all BitUSD are pooled to determine the dividends (in BitShares) paid to the holders of BitUSD.
The BitShares backing the BitUSD may be spent in two ways:
by providing BitUSD as input to the transaction and redeeming it.
by a miner who enforces a margin call when the value of the backing falls to less than 150% of the value of the BitUSD.
Margin calls are enforced by the miners when they put together a block. When a miner enforces a margin call, he uses the backing BitShares to repurchase the BitUSD and thereby redeeming it. After BitUSD is redeemed it no longer exists. Any leftover collateral is sent to an address owned by the short position (not kept by the miner). Am I on the right track here? |
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Yep, the analogy breaks down if you take it too far though. mcxnow (which, btw, is probably a long con - run by a scammer) shares fee profits with holders of mcxFEE. What on earth does mcxNOW have to do with this? Scammers are more rational than academics because they function in the Real World. If you have revenue of $50,000/year in an exploding niche... And a Market Cap of $7,000,000 = very high Price to Revenue of roughly 135... And only 5% of your Market Cap has been monetized... What is your next move? It's definitely not something that would hurt your business. What? Someone asked, I just added my opinion of the motives of rs. Not sure what that post was all about. |
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Actually carefully reading the white paper you will notice we never used the word 'interest' once and always refer to everything as dividends. That said, there is no perfect analogy to these financial assets in the current market. When you are talking to the common man they consider any return on their savings 'interest', when you think of equities you think dividends. It is a 'variable interest' rate paid to the longs by the 'shorts' which must 'borrow' the asset from the network 'society' and the cost of borrowing from 'the network' in order to 'short' is the dividends paid on the collateral. These are all just analogies so don't get to caught up on what it is called and instead just look at who is transferring value to whom and why. Haha, you're right. The word gets thrown around in here so much I think I implanted the memory. If you choose to speculate on the behavior of the chain, you might be able to make money. It is an experiment with a solid foundation in economics being peer reviewed well known economists in reputable positions who are working to rewrite our white paper. We are working with professionals from across the Bitcoin space and you will quickly learn that calling us a scam is tantamount to calling all of Bitcoin a scam. Great, that is much needed. You should consider having tiered white papers with varying levels of complexity. Right now all you have is the coindesk article for the less econ-inclined. |
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In case you are missing the point here ....
this system i just looked at is "wrapped up" in a "useful human purpose"
and that I believe was suggested at , "to be used as a decentralized payment system"
unfortunately i will suggest that , in a digital system , (as opposed to say as i explained Commodities )
these "useful human purposes" can be overcome easily without "risk" and thus the equation again simplifies .
so you see what we are talking about is "Human work", , "useful purpose" and "risk"
Humans do like to take risk, but usually when related to benefit, but as that equation equalizes this aspect, the aspect that you people here are talking about will be in a sense "equaled out"
become zero. it won't be needed , there will be no useful human function for it .
but i could be wrong...
I am having trouble following you entirely. Are you implying that the the messaging and ID system should not be included? And how does this follow from your equation? What do you think is the appropriate definition of a bond? And how does BitShares (if that is what you are talking about, I am not sure) violate that definition? And can the current implemetnation be changed to accommodate the "real" bond? The whole point of this open source thing is to collaborate and share ideas, not make absolute statements then walk away. |
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Again, you are not going to cloak your ponzi scheme in a (distributed asset corporation), blah blah blah. You are going to the press and saying: “If you own BitBTC you can earn dividends on your bitcoins,” said Larimer. “If you have a thousand bitcoins and you convert them to BitBTC, and then you hold it for six months, then you convert the BitBTC plus the dividends you received back to bitcoins, you’ll end up with more bitcoins than you started with.”
Sure you can create whatever type of intellectual property you want. Freedom of speech and all. You cannot misrepresent what you are doing to naive investors in order to attract investment. That is fraud. Distributed / not distributed does not make a damn bit of difference. Lets simplify this for you... I am Mt. Gox and am running a P2P exchange. You deposit your BTC with me I pay you interest from the fees I charge facilitating the exchange. You can withdraw more BTC in 6 months than you started with because the business earned a profit providing a service. The only thing I have done is decentralize Mt. Gox and allocate the profits to the shareholders. Isn't this exactly what MCXNow is doing with fee shares? I don't see why both your ideas can't co-exist and compete in the market place without getting the SEC involved. That could be bad for the community. And what about Mastercoin? Yep, the analogy breaks down if you take it too far though. mcxnow (which, btw, is probably a long con - run by a scammer) shares fee profits with holders of mcxFEE. BitAssets pay dividends in a similar manner, but mcxFEE doesn't have a predictions market or even a fraction of the features BitShares has. Mastercoin is also in a different boat because it is leveraging the blockchain and is limited by the constraints of the Bitcoin network. This is not to say that Mastercoin basket currencies couldn't be supported in the BitShares network. Oddly, the method by which JR went about presenting and collecting funds for the project are right in line with some kind of scam; he either didn't care or just simply didn't know any better. Even OT/Praesto are different beasts altogether. C's argument, to some extent has merit, however he(or she,idk) seems to abstract the problem in such a manner that it fatigues his capacity to judge without bias. The fact that he has conceded that some BitAssets are not a ponzi is evidence of that. Take for example this quote: What I'm more concerned about is how I can own the whole world and my neighbour can own the whole world at the same time? This matter might cause some confusion. Do you have some theoretical physics story to go along with the prediction market? That might help to smooth things over. Here is is making a valid point, but in the wrong context. Nowhere does BitShares imply (explicitly or otherwise) that it can break the laws of physics. Note what bytemaster says: Party A decides to post that interesting bearing asset as collateral for a short position in BitBTC.
Party B decides to buy the long position in BitBTC with an equal amount of this interesting bearing asset.
A & B must agree on the exchange ratio.
There are now 2x the value of BTC held in the form of an interest bearing asset as collateral. The interest from the collateral is paid to the holder of BitBTC.
If the market moves against A, the miner will cover giving B the opportunity to sell their BitBTC for BitShares at the new higher price and thus B ends up with more BitShares + Interest and the market value of these BitShares + Interest is greater than the BTC. Assuming the prediction market dynamics work.There [is] 2x the value of BTC held in the form of an interest bearing asset as collateral. The interest from the collateral is paid to the holder of BitBTC. There is no more value there then there is in the real world. You must give to take. It's not a one way street. Think of it this way: just like you can't get Bitcoins for free, you can't acquire BitAssets for free either. If people choose not to participate in the predictions market then the system will not maintain its viability. Like I said earlier, there is risk that investors will think the system is flawed or not up to snuff; in this case your BitBTC goes to 0. Or perhaps the tech is flawed and it breaks. Again, 0. If people do invest, money is not created, it is redistributed following trade activity. That is all. He also makes claims like this: 2) The investor is depositing x bitBTC worth of capital in your prediction market. Somehow this is generating returns, right? Normally you pay 100% of these returns to the investor, but now the investors is generously offering to give 95% of his returns to you, keeping only 5% for himself. Ironically, many of the arguments c makes are reminiscent of the early-days of Bitcoin when people claimed it was a ponzi, creating value out of thin air. Those claims usually came from economists who didn't take the time to think through the proposition value of the system and the mechanics of how it works. Satoshi certainly could have premined Bitcoin, but then what? No one would use it. Likewise, if BitShares did not offer some return to participants why would anyone bother to use it. It's not about generosity, it's about practicality. With quotes like this (and, as others have mentioned) I am beginning to think there are issues with semantics. A bitBTC is not in fact generating a return, the network is being fed money via fees generated from the prediction market, which are divided and distributed amongst participants in the network holding bitBTC. Why the word "somehow" needs to be used is beyond me. He also likes the word interest, and with good reason (Daniel uses it, the coindesk article uses it, etc...): The interest parity condition implies that bitBTC will steadily depreciate against BTC. BitAssets do not provide interest in the traditional sense, so I think it is best the word is removed from the white paper. Perhaps finding a word that has better parity (yea, i used it) with the concept of being rewarded for participating in and supporting a network is needed ASAP. Someone said this I think. The only thing I can see that would support a claim that this is a pump and dump is the short mining period, which c hasn't even mentioned yet. The whitepaper argues: BitShares has chosen to adopt a 12 year period for issuing the available units instead of the 128 years built into Bitcoin because inflation is not necessary for the proper functioning of a currency and within 12 years competition for space in the blockchain (which is limited to meet the decentralization and scalability axioms) should drive transaction fees / volume to a level that keeps mining profitable and fees in line with the level of security demanded by the market. The network also has other means of generating fees/incentives for miners including: inactivity taxes, margin calls, and ‘dividend dust’. Bitcoin suffers from the pricing of mining rewards entirely out of proportion of with the needed / desired security. If c could break down these motives then I would be more inclined to believe him. However, he won't be able to. When you compare BitShares to Bitcoin which has a >100 year mining, you begin to see why a short mining period is not indicative of a ponzi. The dividends replace the long mining period. In this sense BitShares has greater longevity and absolute scalability when compared to Bitcoin. As of right now it *appears* that his claims are a peculiar mix of gaining a competitive edge and applying theories of economics to aspects of the system in a vacuum without having a complete picture of how the system works and why it will generate profit. Like he read the first few pages of the whitepaper then stopped; or perhaps his head was filled with too many thoughts to objectively critique the content. Or perhaps I am just too much of a 'tool' and am completely missing the point. Either way if things were kept civil in here it would make this discussion a whole lot easier. But wild behavior and personal attacks are usually indicative of someone trying to shift focus from the important points of the discussion - at least in my experience, the perpetual dicks on this forum are usually partially right but fail to see the big picture because they are blinded by emotional attachments. c, before you reply take a deep breath it will do you a world of good brother. like i said earlier, I could be totally wrong about these guys and you could be right. But I'm still not convinced! Please prove me wrong  |
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and develop intellectual property grounds What does this mean, exactly? ninjabanker It means it could be sought to protect against threats in the future purely defensive of course see the rationale here:https://bitcointalk.org/index.php?topic=299168.0 That we should combine efforts to build and fund coinsigner…I already have hundred of signups and positive comment confirming that the service is needed why not combine efforts? and develop intellectual property grounds What does this mean, exactly? Get a patent. ehhhhh jed dunnigan can you respond with a more intelligible answer being that we have actually met face to face... Ola, you know how I feel about software patents in the Bitcoin space. I'm not a fan. But this isn't the appropriate thread to discuss it is very off topic. |
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He earns a guaranteed risk-free return on his BTC.
Disclaimer: Not taking sides, just flushing out a question. I find this notion of risk free investment curious. There is inherent risk by holding assets in BitShares. There is the risk that the system won't be up to snuff and will fail, that is huge risk; or perhaps some other force will bring down the network. How can you not account for these when you critique the efficacy of the system? Or are you saying that doesn't matter when you build the model? edit: i was waiting for that personal jab. nice one! you just can't keep your hands to yourself, can you? regardless, you bring up a good point with the forever statement, that needs clarification. double edit: i have no money in this system. i am a voyeur, just curious of the possibilities. |
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Lets simplify this for you... I am Mt. Gox and am running a P2P exchange. You deposit your BTC with me I pay you interest from the fees I charge facilitating the exchange. You can withdraw more BTC in 6 months than you started with because the business earned a profit providing a service.
The only thing I have done is decentralize Mt. Gox and allocate the profits to the shareholders.
Hi bytemaster I'm glad you joined in , true , but that's not what I asked , i asked where does it come from , the "interest" the "work" . I'd just it to be said here in plain English , so as to not avoid the question : where does the extra BTC in the scenario quoted above derive from . ** just read the read of the page - but this is still relevant It has already been said by bytemaster: The DAC earns a profit by facilitating trade via transaction fees. Some of these fees are paid to miners for their services. The rest are paid as dividends. These dividends are not SOURCED from future investment and could be sustained forever. If there are no transactions there are no dividends. In other words, the system does not promise any particular rate of return beyond a share of the 'profit' the DAC earns selling space in the block chain for transactions. |
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