Could someone please outline the reasons why XCP is required for dividend payment?
when we are talking about an asset which mines bitcoin, it just seems counter-intuitive to be expected to convert the earnings into XCP in order to pay shareholders, I can think of many problems this process will create along the way, but none which it solve. Requiring XCP to issue sure, that makes sense but dividend payment I don't get why anyone would use
It seems like a perfect system for distributed issuance with a roadblock in front.
Please see the FAQ:
https://counterparty.co/faqs/why-must-dividends-bets-and-betting-fees-be-paid-in-xcp/Are you saying it is simply
not possible as per the protocol to be able to issue BTC payment for dividends in some way? I wasn't sure if this was unique to bets or divident payments. I don't get why you would be debiting btc, would it not be a standard btc payment credited to all shareholder? aren't you simply splitting btc amongst a list of addresses.
Before, I was thinking like this;
we have a Scenario: Hosted mining operation
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What we have now with centralised exchanges
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1) Let's assume 10,000 investors. mining a steady 10BTC per day.
2) Pool stats are public enabling any investor to see clearly how many BTC are gained.
3) Every Friday, 12:00PM UTC, BTC are transferred to exchange and divided amongst shareholders. process is very simple
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Proposed counterparty solution
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1) Let's assume 10,000 investors. mining a steady 10BTC per day.
2) Pool stats are public enabling any investor to see clearly how many BTC are gained.
3) Every Friday, 12:00PM UTC, asset issuer transfers BTC to either a centralised exchange or the DEX and places a buy order for the amount of btc required. In this case it will be 70 BTC.
4) he waits for order to be filled the transfer XCP to all shareholders
so we have a few problems. First of all, manipulation. sellers know well that asset issuer *needs* to buy XCP to pay shareholders and will have to resort to filling market order(s) to get it in 1 batch, rather than waiting for his to be filled. and anyone can interfere in the process. That creates problem of not knowing an accurate and stable XCP/BTC exchange rate. shareholders need this to be transparent to know that they are not getting ripped off. (asset issuer needs to demonstrate they spend total amount of dividend on XCP and not pocket some and defraud on exchange rates.
They cannot easily prove the trading records on a centralised exchange so DEX is preffered but you know this will be an unwieldy process.
& liquidity. small dividends, e.g 1btc or so is no problem. what about when things scale up, now we have maybe 100btc in buy order on every friday which shareholders need to receive.
once shareholder receive XCP, what are they do to with it? What if they do not care for XCP? immediately dump on market by many shareholders on same day every week, essentially the shareholder lose money on the trades btc > xcp then back to xcp > btc for what? and now buyers capitalise to stock up on bulks of cheap coin during this 'dump' to capitalise on the next 'pump which will come during the next dividend payment when asset issuers try to acquire XCP, a constant cycle
I was very excited about the project, still am of course but I just cannot see such a system working in thise use case. maybe I had missed something really obvious?
I just cannot see how paying BTC dividends would not be infinitely preferable in this case, aside from the fact it is simply not possible
