Surely you don't agree with paying people to do nothing.
When I deposit my savings at a bank, I expect an interest bearing rate, because I expect my bank to loan out the funds and make them productive. I don't expect to get paid for my capital sitting in the vault. We can't create capital out of nothing, it must be created from increased productivity.
When you debase BitShares and then distribute (a portion of) it proportionally to each BitShares unit, this is a facetious claim that you have given the BitShares owners something for doing nothing, because all you've done is debased the value of what they had, by (a multiple of) what you just handed them.
What do you expect to gain with such a lie? Let me try to enumerate some of what you what you may lose...
If you also distribute (a portion of) transaction fees to the BitShares owners, you are transferring wealth from the producers in the economy and paying people to do nothing. Remember M x V = nominal GDP, thus transaction volume is proportional to GDP and thus is proxy for production. Please don't tell me I can't use math to understand. I just did.
Your claim is that by buying BitShares, one is taking a proportional ownership position in a business which offers transaction services. And thus that (a portion of) transaction fees should be distributed to the owners of the business. I have several problems with this.
1. The wealthy transact a much lower percentage of their wealth than the lower class, yet they own 90% of the wealth. If BitShares is truly to become a means for decentralized stock markets as you envision with BitAssets, then you have just invented the most regressive tax ever known to mankind. Way, way, way above the Laffer limit, thus guaranteed economic implosion if BitShares became the dominant money and capital stock.
2. It is an oxymoron to conceive of a "investment" which is the entire economy (if BitShares becomes the dominant money and capital stock). Investment requires diversity, otherwise it is travesty of the concept of opportunity cost. Another way of putting this, is that when the dollar is your unit-of-account, you don't say your dollars are worth less when gold goes up in price. Thus you can't have an "investment" which is also your unit-of-account. It is nonsensical. Thus everyone who is investing (versus using for transactions) in BitShares is by definition in it for the capital gains, for as long as it is not their unit-of-account. And the aim is for it to become their unit-of-account, then the capital gains will be irrelevant (c.f. aforementioned gold example). So if you are growth mode, why do you want bleed your customers (the transactions) and starve your desperately needed PoW to secure against attack (while BitShares is still small and not a unit-of-account) who you need to grow, just to pay a silly dividend which isn't relevant to how the investment is being valued. And the dividend will be miniscule compared to the volatility in the BitShares -> USD exchange rate, so it is just noise, but yet costing you PoW resources when you need them most.
3. As you admitted, the ratio of split between the miners and the BitShare holders is not market determined. That is evidence to you that you've made an economics design error.
4. To the extent that your facetious gimick works to attract people to BitShares, these are dumb people who don't understand that the capital gains volatility made any dividends irrelevant. If you attract dumb early adopters, then you have dumber ecosystem built around it. Wrong trajectory.
5. Should I go on?
I do hope you do your dividends, because I want to see if any of my statements end up being true. Any way dividends are probably not a killer either way for your plans. My impression is a similar ideology infects also on the market maker issue (possibly also the domain name issue too). I am thinking I may be wiser to not try to too hard to change your design for I can gain knowledge by watching your results. Also I should not want to be responsible if I am wrong, since it is not my baby.
A few comments below interleaved...
AnonyMint,
You are clearly investing a lot of time into this thread and attempting to understand how things are expected to work and where we might have missed something.
You too. Thank you.
Recognizing that I have been wrong before and paid people to show me where I am wrong I can appreciate your efforts. I argued long and hard in the Master Coin thread about why their similar escrow system for creating 'GoldCoin' was fundamentally flawed and it took a long time to find the magic example / explanation that finally got him to see his flaws. We are in a similar situation here.
Yeah I can relate. But how confident are you about the accuracy of the tracking price of the BitAssets relative to the designated asset? I just couldn't go so rambunctiously into something with some more concrete basis.
I am betting the farm on my way of thinking and have been thinking through it for months. So you will have a very up hill battle and will need to find the magic insight that can undo all of my previous thinking. If you can do that it would be greatly appreciated because above all in life I seek knowledge and truth.
Thanks for the willingness to have a brief exchange of thoughts. I don't think I applied exceptional effort to change your mind. I don't believe in controlling others like puppets.
appeals to authorities I do not respect.
When you have some time, you should learn to respect Martin Armstrong. I haven't found a significant market turn that he has predicted wrongly since the 1970s. His predictions are made 10 and 20 years in advance and then accurate to usually within a day or two. The recent examples he called the gold price to decline from $1600 level and said it would go to slightly below $1200 by end of June. It was exactly correct both on price and timing. He is now calling for double in the DJIA by 2015.75 and he said we would see a correct to $14250 in Sept before resuming the rise.
The reason he can do this, is he spent $100 million to collect the history of the world and put it in an A.I. computer system.
He is way more advanced in understanding than any of the people you respect, including Mises, Rockwell, etc..
2) saving / hoarding is harmful in any situation
If you believe that Austrian economics says that an always going higher level of savings is positive for the economy, then you are egregiously misinformed. Note your use of word "any".
I am not against hoarding, when it is driven by market forces, then it can't become higher than optimum for longer than the irrational can remain solvent.
But if you view an economy only in the capital model of savings versus consumption, then you entirely miss the importance of fitness. This is where the math of simulated annealing comes in. I explained fitness in terms of knowledge creation and finance/saving:
http://unheresy.com/Information%20Is%20Alive.html#Knowledge_Annealshttp://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance,%20Rise%20of%20Knowledge.html#KnowledgeInvestingYou want to imagine that the simple act of delaying consumption is high-valued activity, but the fact is that the economy only functions between the diversity of knowledge is always finding matches of solutions to problems.
Fitness means that given a fractal coastline, you could select from a diversity of shapes to fit all the differently shaped indentations on it. In the real world, imagine the indentations as opportunities (or problems to be solved) and the fitting shapes to be human brains.
So saving versus consumption is really not where the economy derives. One of the proofs of this is the repeating 78 year cycle of technological unemployment that causes depressions and war, yet also brings all the prosperity we have today as compared to the Kings of countries of yore.
Armstrong understands this, because his computer identified these repeating cycles backtested to Mesopotamia.
3) dividends / pooling is 'socialistic' and inherently bad.
I can support this one with a some simple math explanation. But I am tired.
By your view, all forms of insurance are 'socialist' because people are pooling their money and then redistributing it disproportionally.
Actually because the capital is invested as usury and not at risk with knowledge applied, because each person is not investing their own capital. This is part of the math I would explain, but I grow weary. Been there, explained this so many times in past.
I am generally against insurance myself, but only because most conventional insurance is so regulated by the government that the risk/reward payoff for me doesn't line up in most instances.
It can't mathematically.
you are deciding for the market, thus reducing degrees-of-freedom, impinging upon knowledge creation, and thus destroying value.
I interpret this point as being logically equivalent to price fixing.
Astute. See point #3 above.
However, if you take a view that this system is not the 'entire market' and that it will be competing against LiteShares, FeatherShares,
See my point #2 above.
I have stated constantly that grandma does not get a 'no-risk' positive return. The BitUSD price will fluctuate +/- 5% and the effective dividend rate will also fluctuate with the result being that if she enters/leaves at the wrong time and doesn't hold long enough her expected ROI may be more or less than what she was expecting.
See points #2 and #4.
Now that I have debunked your 'no-risk', zero-knowledge, basis, I think the foundation of your argument against dividends is gone.
I don't see how you claimed to debunk it. But in any case, I grow weary now.
