BitShares and Mastercoin - a comparison

[monsterer]

Trusted, not necessarily centralized. Having to trust the price feed is an issue, but having to trust the market which can be manipulated is the issue Bitshares will have.

I don't really see an easy answer. I don't have complete faith in the market or in its participants.

It will always be some blend of a set of centralised feeds, though. It could suffer from a similar problem that banks inflict on bitcoin exchanges who use their services - if all the feed providers somehow decide to stop serving data to mastercoin, there is a big problem.

Cheers, Paul.

[ripper234]

Trusted, not necessarily centralized. Having to trust the price feed is an issue, but having to trust the market which can be manipulated is the issue Bitshares will have.

I don't really see an easy answer. I don't have complete faith in the market or in its participants.

It will always be some blend of a set of centralised feeds, though. It could suffer from a similar problem that banks inflict on bitcoin exchanges who use their services - if all the feed providers somehow decide to stop serving data to mastercoin, there is a big problem.

Cheers, Paul.

If by "It" you mean Mastercoin then you are very wrong.

Mastercoin is an open platform. We are developing features blazingly fast.
If we think some form of another of completely trustless asset mechanism is feasible, we will implement it (remember, this was the original motivation for the project!)

Please don't make the mistake of thinking that Mastercoin is one particular feature or another. Mastercoin is a platform.
Whatever good things that our competitors do, we'll shameless copy for the betterment of the world and our users.

[hathmill]

Trusted, not necessarily centralized. Having to trust the price feed is an issue, but having to trust the market which can be manipulated is the issue Bitshares will have.

I don't really see an easy answer. I don't have complete faith in the market or in its participants.

It will always be some blend of a set of centralised feeds, though. It could suffer from a similar problem that banks inflict on bitcoin exchanges who use their services - if all the feed providers somehow decide to stop serving data to mastercoin, there is a big problem.

Cheers, Paul.

If by "It" you mean Mastercoin then you are very wrong.

Mastercoin is an open platform. We are developing features blazingly fast.
If we think some form of another of completely trustless asset mechanism is feasible, we will implement it (remember, this was the original motivation for the project!)

Please don't make the mistake of thinking that Mastercoin is one particular feature or another. Mastercoin is a platform.
Whatever good things that our competitors do, we'll shameless copy for the betterment of the world and our users.

Ripper, I appreciate your fair comparison of the two contenders. Ive no stake in neither of them, but I am reading about them trying to figure things out. I have a question about Mastercoin: can the value of a single Mastercoin be so high that somebody that do not own any Mastercoins can not afford to buy assets tied to the Mastercoin?

[ripper234]

Ripper, I appreciate your fair comparison of the two contenders. Ive no stake in neither of them, but I am reading about them trying to figure things out. I have a question about Mastercoin: can the value of a single Mastercoin be so high that somebody that do not own any Mastercoins can not afford to buy assets tied to the Mastercoin?

We are all building a layered system.

Bitcoin value is increasing.
Mastercoin and Protoshares value are "tied to Bitcoin value" in some broad sense.
Mastercoin maybe more so because it relies on it technically and increased Mastercoin value directly benefits Bitcoin.
However I think every cryptocurrency at this point benefits Bitcoin.

Both these projects are building systems that require MSC and PTS to operate.
You will need MSC (or something as valuable as MSC) to work with some of our features.
MSC can be very high, but it's very divisible, so you'll also be able to buy "MSC backed USD" even if 1 MSC = 100 BTC = 100,000,000 USD one day.

[Luckybit]

Trusted, not necessarily centralized. Having to trust the price feed is an issue, but having to trust the market which can be manipulated is the issue Bitshares will have.

I don't really see an easy answer. I don't have complete faith in the market or in its participants.

It will always be some blend of a set of centralised feeds, though. It could suffer from a similar problem that banks inflict on bitcoin exchanges who use their services - if all the feed providers somehow decide to stop serving data to mastercoin, there is a big problem.

Cheers, Paul.

What if the feed is a DAC or AI of some sort? It doesn't have to be human or centralized.

[hathmill]

Ripper, I appreciate your fair comparison of the two contenders. Ive no stake in neither of them, but I am reading about them trying to figure things out. I have a question about Mastercoin: can the value of a single Mastercoin be so high that somebody that do not own any Mastercoins can not afford to buy assets tied to the Mastercoin?

We are all building a layered system.

Bitcoin value is increasing.
Mastercoin and Protoshares value are "tied to Bitcoin value" in some broad sense.
Mastercoin maybe more so because it relies on it technically and increased Mastercoin value directly benefits Bitcoin.
However I think every cryptocurrency at this point benefits Bitcoin.

Both these projects are building systems that require MSC and PTS to operate.
You will need MSC (or something as valuable as MSC) to work with some of our features.
MSC can be very high, but it's very divisible, so you'll also be able to buy "MSC backed USD" even if 1 MSC = 100 BTC = 100,000,000 USD one day.

Thanks, I guess the bold part of my text answers it all. I will be interesting to see Mastercoin take shape.

Personally I would never trust a trusted third parties price feed. Ive been an avid forex trader, so I know for sure that price is at best a subjective measurement of value that changes between brokers. LIBOR etc tells us that price feeds are used for manipulation and so forth and so on. Simply put, my opinion is that third party trusted feeds is a broken concept. The closest thing I think we got to a decentralized exchange is localbitcoins, litecoinlocal etc, and as many ATMs and online exchanges as possible. I want not one but several systems, before I think its decentralized.

BitShares idea of incorporating prediction markets is very interesting. I have not thought it through to Ive not decided whether I believe in it fully or not, but if it works then I would prefer it over trusted price feeds. As Ripper234 sayd, anything can be implemented on Mastercoin so well... if prediction markets is a good thing I would love to see it on Mastercoin.

 

[ripper234]

See also

https://trello.com/c/6ZXtVWKz/21-spec-for-prediction-market-event-betting

[Winslow Strong]

BitShares idea of incorporating prediction markets is very interesting. I have not thought it through to Ive not decided whether I believe in it fully or not, but if it works then I would prefer it over trusted price feeds.

I've been trying to understand the bitshares idea myself, and have a discussion going with bytemaster over here http://bitsharestalk.org/index.php?topic=13.0

I started trying to summarize our conversation, but the explanation given to me so far of the version of bitassets (e.g. bitUSD, which it's hoped would track the USD/BTS exchange rate) that are only able to refer to their own price rather than an embedded price feed of USD/BTS is so incoherent, that I can't even give a hypothetical explanation of how it should be believed to work.  There really isn't much similarity with prediction markets, because prediction markets have terminal payouts for who is right and who is wrong.  In bitUSD's case:
(a) Such information would need to be derived from an embedded USD/BTS
(b) There is no terminal horizon for bitUSD
(c) There are no lump-sum paymets from holding bitUSD which scale linearly with respect to USD/BTS.

bytemaster seems to be willing to consider a version with an embedded USD/BTS feed.  However, in that case, merely dividend payments are proposed to scale with deviations from USD/BTS.  Compare this with CFDs where the value that changes hands exactly compensates for changes in the price of the underlying - e.g. of USD/BTS.

If they were going to embed price feeds, they would be better off using CFDs, or futures, i.e. established financial products, where cash flows compensate directly and linearly for price changes. The proposal without embedded price feeds makes no sense.  How could an asset track the price of another when none of the attributes that give it value are even able to reference that price?  It's not like there are arbitrage possibilities between bitUSD and USD/BTS, like there are with e.g. ETFs, because you can't redeem bitUSD for USD, nor for anything tied to the value of USD, because nothing in the blockchain even knows about the price of USD unless it were to be embedded.

[Luckybit]

BitShares idea of incorporating prediction markets is very interesting. I have not thought it through to Ive not decided whether I believe in it fully or not, but if it works then I would prefer it over trusted price feeds.

I've been trying to understand the bitshares idea myself, and have a discussion going with bytemaster over here http://bitsharestalk.org/index.php?topic=13.0

I started trying to summarize our conversation, but the explanation given to me so far of the version of bitassets (e.g. bitUSD, which it's hoped would track the USD/BTS exchange rate) that are only able to refer to their own price rather than an embedded price feed of USD/BTS is so incoherent, that I can't even give a hypothetical explanation of how it should be believed to work.  There really isn't much similarity with prediction markets, because prediction markets have terminal payouts for who is right and who is wrong.  In bitUSD's case:
(a) Such information would need to be derived from an embedded USD/BTS
(b) There is no terminal horizon for bitUSD
(c) There are no lump-sum paymets from holding bitUSD which scale linearly with respect to USD/BTS.

bytemaster seems to be willing to consider a version with an embedded USD/BTS feed.  However, in that case, merely dividend payments are proposed to scale with deviations from USD/BTS.  Compare this with CFDs where the value that changes hands exactly compensates for changes in the price of the underlying - e.g. of USD/BTS.

If they were going to embed price feeds, they would be better off using CFDs, or futures, i.e. established financial products, where cash flows compensate directly and linearly for price changes. The proposal without embedded price feeds makes no sense.  How could an asset track the price of another when none of the attributes that give it value are even able to reference that price?  It's not like there are arbitrage possibilities between bitUSD and USD/BTS, like there are with e.g. ETFs, because you can't redeem bitUSD for USD, nor for anything tied to the value of USD, because nothing in the blockchain even knows about the price of USD unless it were to be embedded.

Bitshares and Mastercoin are similar but Bitshares is more decentralized and pays dividends. Also Bitshares inherits its price discovery mechanism from market fundamentals while Mastercoin gets its price from goods and services. At the moment both are relying on speculation and have massive momentum.

Protoshares unlike Mastercoin will pay dividends.

[nanobit]

Bitshares and Mastercoin are similar but Bitshares is more decentralized and pays dividends.

What makes you say Bitshares is more decentralized? What I've seen and read, I can't find anything that would back this up. The amount of PTS that was mined in a week surprised everyone and what I've learned it was/is mostly done by big players. There was only a few days when regular folks could find blocks by themselves.

I'm happy to be proven wrong, but so far I haven't seen anything that would back up the claim that PTS mining would have been better model for the little people who can't invest a lot up front versus Mastercoin's "Exodus August" model, where even small players had an equal possibility to invest.

[codyave]

bytemaster think it's a success. curious how the market reacts when bitshares is released next year.

[bytemaster]

Bitshares and Mastercoin are similar but Bitshares is more decentralized and pays dividends.

What makes you say Bitshares is more decentralized? What I've seen and read, I can't find anything that would back this up. The amount of PTS that was mined in a week surprised everyone and what I've learned it was/is mostly done by big players. There was only a few days when regular folks could find blocks by themselves.

I'm happy to be proven wrong, but so far I haven't seen anything that would back up the claim that PTS mining would have been better model for the little people who can't invest a lot up front versus Mastercoin's "Exodus August" model, where even small players had an equal possibility to invest.

Small players can BUY PTS today just like they could buy Mastercoin.   Furthermore, there are 1000's of small players who have received PTS and anyone mining within the first 48 hours generated at least one block.    How many people currently own Mastercoin?

[klee]

Bitshares and Mastercoin are similar but Bitshares is more decentralized and pays dividends.

What makes you say Bitshares is more decentralized? What I've seen and read, I can't find anything that would back this up. The amount of PTS that was mined in a week surprised everyone and what I've learned it was/is mostly done by big players. There was only a few days when regular folks could find blocks by themselves.

I'm happy to be proven wrong, but so far I haven't seen anything that would back up the claim that PTS mining would have been better model for the little people who can't invest a lot up front versus Mastercoin's "Exodus August" model, where even small players had an equal possibility to invest.

Small players can BUY PTS today just like they could buy Mastercoin.   Furthermore, there are 1000's of small players who have received PTS and anyone mining within the first 48 hours generated at least one block.    How many people currently own Mastercoin?

From a speculator's point of view, obtain 2-3 hundred coins from both projects and wait...Sure win!

[kdrop22]

Yes, agreed. I am betting on it as well, albeit at a much smaller scale.

[BitThink]

Bitshares and Mastercoin are similar but Bitshares is more decentralized and pays dividends.

What makes you say Bitshares is more decentralized? What I've seen and read, I can't find anything that would back this up. The amount of PTS that was mined in a week surprised everyone and what I've learned it was/is mostly done by big players. There was only a few days when regular folks could find blocks by themselves.

I'm happy to be proven wrong, but so far I haven't seen anything that would back up the claim that PTS mining would have been better model for the little people who can't invest a lot up front versus Mastercoin's "Exodus August" model, where even small players had an equal possibility to invest.

Small players can BUY PTS today just like they could buy Mastercoin.   Furthermore, there are 1000's of small players who have received PTS and anyone mining within the first 48 hours generated at least one block.    How many people currently own Mastercoin?

From a speculator's point of view, obtain 2-3 hundred coins from both projects and wait...Sure win!

200 PTS ( < 2BTC) is fine, but 200 MSC ( > 20 BTC) seems really a lot to invest.

[klee]

Bitshares and Mastercoin are similar but Bitshares is more decentralized and pays dividends.

What makes you say Bitshares is more decentralized? What I've seen and read, I can't find anything that would back this up. The amount of PTS that was mined in a week surprised everyone and what I've learned it was/is mostly done by big players. There was only a few days when regular folks could find blocks by themselves.

I'm happy to be proven wrong, but so far I haven't seen anything that would back up the claim that PTS mining would have been better model for the little people who can't invest a lot up front versus Mastercoin's "Exodus August" model, where even small players had an equal possibility to invest.

Small players can BUY PTS today just like they could buy Mastercoin.   Furthermore, there are 1000's of small players who have received PTS and anyone mining within the first 48 hours generated at least one block.    How many people currently own Mastercoin?

From a speculator's point of view, obtain 2-3 hundred coins from both projects and wait...Sure win!

200 PTS ( < 2BTC) is fine, but 200 MSC ( > 20 BTC) seems really a lot to invest.

I mined PTS and was an early adopter in MSC @0.01BTC - just for clarification.
On the other hand at least one of Mastercoin, Bitshares and Next will achieve at least parity with BTC imho...

[rbdrbd]

Bitshares and Mastercoin are similar but Bitshares is more decentralized and pays dividends.

What makes you say Bitshares is more decentralized? What I've seen and read, I can't find anything that would back this up. The amount of PTS that was mined in a week surprised everyone and what I've learned it was/is mostly done by big players. There was only a few days when regular folks could find blocks by themselves.

I'm happy to be proven wrong, but so far I haven't seen anything that would back up the claim that PTS mining would have been better model for the little people who can't invest a lot up front versus Mastercoin's "Exodus August" model, where even small players had an equal possibility to invest.

Small players can BUY PTS today just like they could buy Mastercoin.   Furthermore, there are 1000's of small players who have received PTS and anyone mining within the first 48 hours generated at least one block.    How many people currently own Mastercoin?

From a speculator's point of view, obtain 2-3 hundred coins from both projects and wait...Sure win!

200 PTS ( < 2BTC) is fine, but 200 MSC ( > 20 BTC) seems really a lot to invest.

I mined PTS and was an early adopter in MSC @0.01BTC - just for clarification.
On the other hand at least one of Mastercoin, Bitshares and Next will achieve at least parity with BTC imho...

Colored coins is the potential dark horse in this race...in my mind at least...

[klee]

Bitshares and Mastercoin are similar but Bitshares is more decentralized and pays dividends.

What makes you say Bitshares is more decentralized? What I've seen and read, I can't find anything that would back this up. The amount of PTS that was mined in a week surprised everyone and what I've learned it was/is mostly done by big players. There was only a few days when regular folks could find blocks by themselves.

I'm happy to be proven wrong, but so far I haven't seen anything that would back up the claim that PTS mining would have been better model for the little people who can't invest a lot up front versus Mastercoin's "Exodus August" model, where even small players had an equal possibility to invest.

Small players can BUY PTS today just like they could buy Mastercoin.   Furthermore, there are 1000's of small players who have received PTS and anyone mining within the first 48 hours generated at least one block.    How many people currently own Mastercoin?

From a speculator's point of view, obtain 2-3 hundred coins from both projects and wait...Sure win!

200 PTS ( < 2BTC) is fine, but 200 MSC ( > 20 BTC) seems really a lot to invest.

I mined PTS and was an early adopter in MSC @0.01BTC - just for clarification.
On the other hand at least one of Mastercoin, Bitshares and Next will achieve at least parity with BTC imho...

Colored coins is the potential dark horse in this race...in my mind at least...

But you can't invest

[HeRetiK]

Colored coins is the potential dark horse in this race...in my mind at least...

But you can't invest

[Herp]

@Ron Gross


1. How would lots of stuff on top of bitcoin protocol, like social networking, work without clogging the blockchain which is already over few gigabytes in size?

2. Care to address the issue of dividends? Some make the claim Protoshares pays dividends while Mastercoin doesn't.

3. ProtoShares pay dividends by taking capital from say a "company" who does an IPO. That "company" will lose 20% in profits/IPO proceeds paid to Angels and Protoshare owners. A company starts with 80% of the raised capital and or will have to pay 20% of its profits. I assume companies trying to do an IPO using Mastercoin will get access to 100% of the capital and won't be forced to pay anything to Mastercoin owners. Is that correct?