Where are those Bitshares' Shills?

[brekyrself]

http://bytemaster.bitshares.org/article/2015/01/13/Decentralization-of-Nxt-vs-BitShares/

-Can you refute any of the article above?

-I don't follow you on the whole (TM) company comments.  Are the dev's not the same as any other project in that they call the shots with community feedback?  The meger, from my reading, made complete sense for the whole ecosystem.

-You also state the peg's will fail, can you please explain how?  Run through an example please.

[DecentralizeEconomics]

http://bytemaster.bitshares.org/article/2015/01/13/Decentralization-of-Nxt-vs-BitShares/

-Can you refute any of the article above?

Yes and I've done so before.  Decentralization should be based on number of participants in the system not the percentage of blocks one user produces.  The number of allowed forgers in a system should be regulated by market forces and not capped at some arbitrary amount.  "Decentralization" means everyone should be allowed to participate without the consent of an authority.  I believe this is a better system and less prone to abuse.  By adding voting (delegation) to PoS, you are adding a "social contruct" which allows a hierarchical system to develop.  As the users of NXT increase so will the decentralization of the network.  Bitshares will always be artificially restricted to a certain number of block producers.  Dan argues one must restrict forgers because it is too expensive to run a node.  That's a preposterous argument.

Read https://bitcointalk.org/index.php?topic=916696.msg10107710#msg10107710, https://bitcointalk.org/index.php?topic=916696.msg10076698#msg10076698 and https://bitcointalk.org/index.php?topic=916696.msg10108654#msg10108654.

-I don't follow you on the whole (TM) company comments.  Are the dev's not the same as any other project in that they call the shots with community feedback?  The meger, from my reading, made complete sense for the whole ecosystem.

Of course.  BitShares is a company!

Remember, BitShares is a company, not a currency.

The trademark symbol is not an indication that you are a company, it protects a brand to avoid consumer confusion.  One of our biggest independent supporters thought it would be good to protect the name for that reason and paid  for the trademark application.  He is an independent agent and can do what he pleases.  We appreciated his efforts.  

You can put ™ on anything; it simply means that you consider it to be a trademark for your product or service. The registered trademark bug ® is used to indicate that your trademark is registered with the government, which gives you a wider range of statutory remedies in case of infringement. You only use the registered bug if you've actually registered the trademark formally, but you can use ™ freely.

...

I recommend they continue to use TM for the above reasons.

-You also state the peg's will fail, can you please explain how?  Run through an example please.

1 - People realize that "bitAssets" do not have full convertibility and therefore, should not be valued at the same price as the physical asset.
2 - Upon internalizing this fact, they realize Bitshares is based upon the "greater fool theory".
3 - Once the market confidence erodes past a certain point, there will be a catastrophic failure causing a run to the underlying asset (BTS).

Here is an example of a peg failing.  If the Bank of England is unsuccessful in enforcing a peg, what makes you think random actors can enforce one?  All it takes is one dedicated individual with enough money or a systematic breakdown in confidence across the board.

[HCLivess]

bitshares was scam of the century together with the whole gaw miners

[HalFinneysBrain]

Here is an example of a peg failing.  If the Bank of England is unsuccessful in enforcing a peg, what makes you think random actors can enforce one?  All it takes is one dedicated individual with enough money or a systematic breakdown in confidence across the board.

The problem there was that the British pound was a British pound, and its value could fall in terms of other currencies it was supposed to peg to.

But a bitUSD isnt a federal reserve note dollar.  
A bitUSD is "This is $1 worth of Bitshares, and the blockchain promises it".  

If you want to make a bitUSD, you need to put up $3 worth of bitshares as collateral.  

Then, the blockchain constantly checks the value of your bitshares collateral.  If it gets down to $2, because BTS went down, the blockchain says: "You are getting a little bit close to not being able to fulfill your promise to give him $1 worth of Bitshares.  We cannot allow you to get into a position where you might not be able to give him his $1 worth of Bitshares.  I am now issuing you a margin call, you are now forced to give him $1 worth of Bitshares for his bitUSD".  


When the Bank of England had the problem that the British Pound was falling, they hadn't set aside a bunch of Deutchmarks or whatever as collateral, and no blockchain was forcing them to remove some of the pounds from circulation and give everyone the pegged value of marks or whatever in return.

[DecentralizeEconomics]

If you want to make a bitUSD, you need to put up $3 worth of bitshares as collateral.

This begs the question why would anyone want to pay three real US dollars for one fake US dollar.

Here is an example of a peg failing.  If the Bank of England is unsuccessful in enforcing a peg, what makes you think random actors can enforce one?  All it takes is one dedicated individual with enough money or a systematic breakdown in confidence across the board.

The problem there was that the British pound was a British pound, and its value could fall in terms of other currencies it was supposed to peg to.

But a bitUSD isnt a federal reserve note dollar.  
A bitUSD is "This is $1 worth of Bitshares, and the blockchain promises it".

Then, the blockchain constantly checks the value of your bitshares collateral.  If it gets down to $2, because BTS went down, the blockchain says: "You are getting a little bit close to not being able to fulfill your promise to give him $1 worth of Bitshares.  We cannot allow you to get into a position where you might not be able to give him his $1 worth of Bitshares.  I am now issuing you a margin call, you are now forced to give him $1 worth of Bitshares for his bitUSD".  


When the Bank of England had the problem that the British Pound was falling, they hadn't set aside a bunch of Deutchmarks or whatever as collateral, and no blockchain was forcing them to remove some of the pounds from circulation and give everyone the pegged value of marks or whatever in return.

Because the underlying asset of "bitAsset" derivatives is BTS, the volatility is going to cause unnecessary losses for "bitAsset" derivatives holders.  What happens during sharp declines of BTS?

[monsterer]

Here is an example of a peg failing.  If the Bank of England is unsuccessful in enforcing a peg, what makes you think random actors can enforce one?  All it takes is one dedicated individual with enough money or a systematic breakdown in confidence across the board.

It's a good job everyone got out of GBP and it was exposed for the scam it was.

[Daedelus]

Here is an example of a peg failing.  If the Bank of England is unsuccessful in enforcing a peg, what makes you think random actors can enforce one?  All it takes is one dedicated individual with enough money or a systematic breakdown in confidence across the board.

It's a good job everyone got out of GBP and it was exposed for the scam it was.

Are you saying BTS has a centralized authority that can enforce the continued use of BTS after a major crisis and loss of confidence, until it recovers? That seems to be the only reason people are still 'in' GBP.

[monsterer]

Are you saying BTS has a centralized authority that can enforce the continued use of BTS after a major crisis and loss of confidence, until it recovers? That seems to be the only reason people are still 'in' GBP.

No, but in exactly the same way, value doesn't disappear into nothing even in the face of a crisis. If the bank of england had decided to adopt the EUR and drop GBP at that time, that would have forced everyone out. As it was, GBP still had significant value and remains one of the worlds strongest currencies today.

[Daedelus]

So GBP has the centralised government of one of the worlds richest economies, with the ability to borrow billions on a whim backstopping it and BTS has..2-3 times collateral denominated in a currency that will be at the centre of any crisis/loss of confidence?

Value does disappear: Enron, WorldCom, Lehman Brothers, pets.com... etc

[StanLarimer]

The bitAsset value continues to hold, enforced by an impartial block chain, all the way down from 3x collateral to, say, 2x or 1x collateral at which point a margin call is executed and you get handed the underlying collateral asset which you can immediately sell to get your full money back.

Thus, the bitAsset provides highly improved stability (within a percent or so and therefore not perfect) over a wide range of values (33% to 67% volatility, depending on the asset's parameters, and therefore not infinite).

But that is still very useful, and far better than holding assets like first generation crypto currencies that provide no such protection at all.

Most insurance policies have a max payout and some form of deductible that limits the range of what they will cover.  But that does not stop them from being useful products that people are eager to buy - because it covers a huge (but not infinite) range of risk for them.

All this is on the BitAsset side of the trade, where you buy the stabilized currency as a way to stay in crypto without exiting to the dangers of the fiat world every time you need stability.  You can switch between risk-on and risk-off as often as you like, for about a penny.  That's a huge advantage for savers and even bigger for speculators who want to lock/unlock on the peak to peak swings.

On the short side of the trade, you are happy to put up 3x collateral to gain leverage.  If the trade goes in your favor, you have more of the underlying asset appreciating for you.  The amount of collateral required is set to cover most of the volatility range expected for the underlying asset and this is a tradeoff that can vary.  For example, in currency markets where volatility is typically very low, you may only need a few percent collateral to cover that amount of risk. 

As BitShares market depth continues to grow, it will be possible to adjust these parameters to their optimum risk/reward points.

The setting of these parameters defines the financial product you are buying and different products are possible to meet different market needs.

[monsterer]

The amount of collateral required is set to cover most of the volatility range expected for the underlying asset and this is a tradeoff that can vary.  For example, in currency markets where volatility is typically very low, you may only need a few percent collateral to cover that amount of risk.  

That's actually an interesting point I'd wondered about which explains how are forex brokers are able to offer 20x leverage - the volatility is low enough in those markets to make it feasible.

[Daedelus]

So 'safer than a swiss bank' (and implicitly the swiss government) was a bit of an overstatement? Or do you still maintain that BTS has a lower systemic risk than a swiss bank/the swiss government?

I've only seen BTS comments relating to counterparty risk. Systemic risk not being mentioned, only allusions to BTS being equal to an insurance company or Fortune 500 company or other organisation that has significantly less risk of collapsing around you. And, presumably, hoping the reader equates the risk between the two as equal by association.

[StanLarimer]

So 'safer than a swiss bank' (and implicitly the swiss government) was a bit of an overstatement? Or do you still maintain that BTS has a lower systemic risk than a swiss bank/the swiss government?

I've only seen BTS comments relating to counterparty risk. Systemic risk not being mentioned, only allusions to BTS being equal to an insurance company or Fortune 500 company or other organisation that has significantly less risk of collapsing around you. And, presumably, hoping the reader equates the risk between the two as equal by association.

I'm not worried about banks collapsing, I'm worried about them brazenly stealing from people with government blessings.  Ask the Cyprus bank customers who got a 40% haircut, or more.

There are actually many places where we talk about systemic risk.  For BitShares, this risk is equivalent to where any new crypto product would be expected to be in its second year of development.  Over time, as the system matures, that risk tends to settle out to a level where more and more people feel comfortable.

The "safer than a Swiss bank" tag line is intended to emphasize that, while banks and cryptos each have their own unique array of systemic risks, blockchain-based systems can be designed to be less vulnerable to the risks of arbitrary actions from unscrupulous governments.  In particular, Swiss banks used to be famous for their privacy and safety from outside government interference.  This has been completely lost in recent years.  So in that sense, BitShares is much safer that what used to be the safest place to keep your assets - a Swiss Bank!  

Given the new Cyprus-style "bail-in" banking laws now sweeping the globe that permit banks to confiscate customer money to cover their own risky investments (e.g. MF Global), it is not hard to make the case that a mature crypto currency has much, much less systemic risk than the modern banking system.

[Daedelus]

So 'safer than a swiss bank' (and implicitly the swiss government) was a bit of an overstatement? Or do you still maintain that BTS has a lower systemic risk than a swiss bank/the swiss government?

I've only seen BTS comments relating to counterparty risk. Systemic risk not being mentioned, only allusions to BTS being equal to an insurance company or Fortune 500 company or other organisation that has significantly less risk of collapsing around you. And, presumably, hoping the reader equates the risk between the two as equal by association.

I'm not worried about banks collapsing, I'm worried about them brazenly stealing from people with government blessings.  Ask the Cyprus bank customers who got a 40% haircut, or more.

There are actually many places where we talk about systemic risk.  For BitShares, this risk is equivalent to where any new crypto product would be expected to be in its second year of development.  Over time, as the system matures, that risk tends to settle out to a level where more and more people feel comfortable.

The "safer than a Swiss bank" tag line is intended to emphasize that, while banks and cryptos each have their own unique array of systemic risks, blockchain-based systems can be designed to be less vulnerable to the risks of arbitrary actions from unscrupulous governments.  In particular, Swiss banks used to be famous for their privacy and safety from outside government interference.  This has been completely lost in recent years.  So in that sense, BitShares is much safer that what used to be the safest place to keep your assets - a Swiss Bank!  

Given the new Cyprus-style "bail-in" banking laws now sweeping the globe that permit banks to confiscate customer money to cover their own risky investments (e.g. MF Global), it is not hard to make the case that a mature crypto currency has much, much less systemic risk than the modern banking system.

I'm not worried about banks collapsing, I'm worried about them brazenly stealing from people with government blessings.  Ask the Cyprus bank customers who got a 40% haircut, or more.

Good dodge and misdirection (and I thought you had changed). I was talking about the systemic risk of BTS collapsing, I didn't ask if you were worried about banks. What you won't acknowledge and continue to draw attention from is that BTS isn't as secure as a bank from a systemic "collapse of market" failure as they have governments stood behind banks, ready to bail them out. If BTS goes down, there is no one there to pick them up again. It works, until it doesn't.


All cryptos have blockchains, so you must think that all cryptos are safer than a swiss bank account? So why say that at all, if this is what you truly meant at the time. Would you market a car using features that were commonplace across all cars?

"BitsharesCar has eye-level translucent windows, symmetrically positioned circular wheels and ergonomic posterior envelopment systems (seats)"     ...No? Maybe you would..  

[svk31]

So 'safer than a swiss bank' (and implicitly the swiss government) was a bit of an overstatement? Or do you still maintain that BTS has a lower systemic risk than a swiss bank/the swiss government?

I've only seen BTS comments relating to counterparty risk. Systemic risk not being mentioned, only allusions to BTS being equal to an insurance company or Fortune 500 company or other organisation that has significantly less risk of collapsing around you. And, presumably, hoping the reader equates the risk between the two as equal by association.

You're mixing apples and oranges here imo, that statement was made up by the Bitshares "marketing department" and does indeed refer to the safety of your funds compared to in a traditional bank, which is subject to government confiscations, bankruptcy, Cyprus style haircuts and other kinds of risk. Like you said in another post this is equally true for any blockchain based currency, although they of course do not offer the market pegged assets with interest payment that makes Bitshares more similar to a traditional bank.

[Daedelus]

So 'safer than a swiss bank' (and implicitly the swiss government) was a bit of an overstatement? Or do you still maintain that BTS has a lower systemic risk than a swiss bank/the swiss government?

I've only seen BTS comments relating to counterparty risk. Systemic risk not being mentioned, only allusions to BTS being equal to an insurance company or Fortune 500 company or other organisation that has significantly less risk of collapsing around you. And, presumably, hoping the reader equates the risk between the two as equal by association.

You're mixing apples and oranges here imo, that statement was made up by the Bitshares "marketing department" and does indeed refer to the safety of your funds compared to in a traditional bank, which is subject to government confiscations, bankruptcy, Cyprus style haircuts and other kinds of risk. Like you said in another post this is equally true for any blockchain based currency, although they of course do not offer the market pegged assets with interest payment that makes Bitshares more similar to a traditional bank.

Ah, so BTS marketers were just trying to catch noobs who didn't understand that what they were investing in was available everywhere within crypto, rather than being a unique USP to BTS?

But you still appear to support that $100 in BTS is safer than $100 of CHF in a traditional swiss bank. Maybe you should have said "Safer than a Cypriot bank", but I guess that would have grabbed fewer people..

[testz]

So 'safer than a swiss bank' (and implicitly the swiss government) was a bit of an overstatement? Or do you still maintain that BTS has a lower systemic risk than a swiss bank/the swiss government?

I've only seen BTS comments relating to counterparty risk. Systemic risk not being mentioned, only allusions to BTS being equal to an insurance company or Fortune 500 company or other organisation that has significantly less risk of collapsing around you. And, presumably, hoping the reader equates the risk between the two as equal by association.

You're mixing apples and oranges here imo, that statement was made up by the Bitshares "marketing department" and does indeed refer to the safety of your funds compared to in a traditional bank, which is subject to government confiscations, bankruptcy, Cyprus style haircuts and other kinds of risk. Like you said in another post this is equally true for any blockchain based currency, although they of course do not offer the market pegged assets with interest payment that makes Bitshares more similar to a traditional bank.

Ah, so BTS marketers were just trying to catch noobs who didn't understand that what they were investing in was available everywhere within crypto, rather than being a unique USP to BTS?

But you still appear to support that $100 in BTS is safer than $100 of CHF in a traditional swiss bank. Maybe you should have said "Safer than a Cypriot bank", but I guess that would have grabbed fewer people..

No, marketers mean what 100 BitUSD equal 100$ USD in Swiss bank but "safer than a Swiss bank" because can't be seized, etc.

[svk31]

So 'safer than a swiss bank' (and implicitly the swiss government) was a bit of an overstatement? Or do you still maintain that BTS has a lower systemic risk than a swiss bank/the swiss government?

I've only seen BTS comments relating to counterparty risk. Systemic risk not being mentioned, only allusions to BTS being equal to an insurance company or Fortune 500 company or other organisation that has significantly less risk of collapsing around you. And, presumably, hoping the reader equates the risk between the two as equal by association.

You're mixing apples and oranges here imo, that statement was made up by the Bitshares "marketing department" and does indeed refer to the safety of your funds compared to in a traditional bank, which is subject to government confiscations, bankruptcy, Cyprus style haircuts and other kinds of risk. Like you said in another post this is equally true for any blockchain based currency, although they of course do not offer the market pegged assets with interest payment that makes Bitshares more similar to a traditional bank.

Ah, so BTS marketers were just trying to catch noobs who didn't understand that what they were investing in was available everywhere within crypto, rather than being a unique USP to BTS?

But you still appear to support that $100 in BTS is safer than $100 of CHF in a traditional swiss bank. Maybe you should have said "Safer than a Cypriot bank", but I guess that would have grabbed fewer people..

Trying to market something is not the same as trying to catch noobs, you are intentionally assigning malicious intent because of your biased opinions. While the safety may be available from most blockchains, the usefulness is not, but guessed you missed the part about pegged assets.

Swiss banks are no longer what they were either, just see Swiss-leaks. And before you try to twist my words again, no I'm not saying tax evasion is great nor that Bitshares should be used for it, but scandals like that one are eroding the confidence in Swiss banks and their ability to keep their client's money safe from outside influences.

[brekyrself]

So 'safer than a swiss bank' (and implicitly the swiss government) was a bit of an overstatement? Or do you still maintain that BTS has a lower systemic risk than a swiss bank/the swiss government?

I've only seen BTS comments relating to counterparty risk. Systemic risk not being mentioned, only allusions to BTS being equal to an insurance company or Fortune 500 company or other organisation that has significantly less risk of collapsing around you. And, presumably, hoping the reader equates the risk between the two as equal by association.

Swiss banks are not what they used to be.  See: http://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act

[StanLarimer]

But you still appear to support that $100 in BTS is safer than $100 of CHF in a traditional swiss bank. Maybe you should have said "Safer than a Cypriot bank", but I guess that would have grabbed fewer people..

Sadly, its not just Cypriot banks any more.  Cyprus was just a test case.  Meanwhile banking laws in Europe and the US have been quietly changed to allow the same thing to happen there.

So bail outs are history.  Bail ins are the new government-sanctioned plan.  Coming to a bank near you.

This means that legitimate crypto assets can be much, much safer than the new, unbelievably corrupt banking system.

As always, pick your own risk mix.  As I said,

while banks and cryptos each have their own unique array of systemic risks, blockchain-based systems can be designed to be less vulnerable to the risks of arbitrary actions from unscrupulous governments.

And yes, many (well designed) cryptos share this characteristic - but we are marketing to the users of the vilely corrupt and unbelievably dangerous fiat banking system.  Hence, it's important to mention that BitShares, being a very well designed crypto, is "safer than a Swiss bank".