[B&C] Paying reputed signers

B&C Exchange
#9

It’s contained in the block, so I’m 99% sure it’s BKS.

We aren’t paying people who do work or don’t do work, we’re paying whoever gets the most votes. That signer is most likely the one doing their job the best.

Why do you think reputed signers would sell their BKS? Out of everyone I can think of, a reputed signer has the best chance to hold the BKS. They are reputed, so they’ve been with B&C for a long time and have shown that they have BKS holders interests at heart. They are the ideal BKS holder and the least likely to sell out of all provable categories of people.

Aside from protocol challenges, if we pay them in NBT and they buy BKS with it, we are handing money over to traders. If >50% of rewarded signers would rather be paid in BKS than NBT then we should pay them in BKS.

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Use case: Minter and shareholder section has a ton of typos derived from copy and pasting this from the NSR white paper.

1 Like
#10

BKS’s dividend address is bitcoin? I think BKS/BKC/BTC all can be handled by B&C blockchain just like Nu blockchain deals with NBT/NSR and PPC.

For signer reward:

  1. BTC is the best/convenient choice since all B&C exchange revenue is BTC from BKC sale. This revenue can be split into share dividend, signer reward and software development/marketing.

  2. BKC is also a good choice.

  3. BKS is the worst choice, reason is simple: centralization. Signer get more and more BKS and BKS distribution is worse, and there will be some holders selling a portion of BKS reward and depress BKS price. DON’T FORGET NEARLY ALL B&C INVESTORS ARE COMING FOR MORE FIAT.

In the end, a tragedy of bitshares comes up again, look at the bitshare additional issue, do you like BKS to become another BTS?

The reason I invest B&C is that when B&C business revenue is Zero. all expenditure can be zero including signers rewards, B&C has no liability to feed a bunch of signers who contribute none to company’s profit. Keeping a computer for 24X7 hours on line is quite cheap, they can hold for years when revenue is low.

B&C’s revenue should be always greater than its expenditure.

#11

BKC is the absolute worst. Are we expecting the signers to be making so many transactions that they can burn them up? Otherwise, where are they going to sell them?

BTC is OK, except that distributing btc every minute via multisig in reference to a block chain vote would be very complicated and, in my opinion, costly. We’d have to pay the btc transaction fee 10x per block. Not to mention our whole exchange would collapse if btc got 51%ed.

BKS is the best because it improves distribution and most directly gives the signers the reward they want the most. If, say, 20% sell then we can buy those shares back with a quarter of the btc we saved by not paying signers in btc. Only if 50% sell will the share price be diluted by BKS rewards.

I fundamentally disagree that paying BKS to proven valuable community members via a shareholder vote is centralization.

1 Like
#12

I don’t think so. They can trade BKC for whatever they want to. Once more it doesn’t matter whether they receive BKC (which they can trade for BTC, BKS, PPC, etc), BKS (which they can trade for…) or…
BKC can be sold for up to 1 USD or NBT, respectively.
While BKS might fluctuate. BKC can be expected to be close to 1 USD.
That provides the signers with a more reliable level of payment (in USD value; compared to BKS and BTC) as long as they do their job well and keep their reputation high.
If they’d be paid with BKS and wouldn’t want to keep them to get rid of fluctuating BKS prices, they had to trade them persistently to e.g. NBT.

BKC can be sold for close to 1 USD. Not always and not in times of oversupply, but in the long run BKC are expected to be close to 1 USD - that is one of the assumptions BCE’s business model is banked on. Except for BCE nobody can create BKC. So if BCE is used for trading, that assumption stays valid.
The only drawback is that speculating on rising BKC price level is barely possible - they won’t ever be above 1 USD.

Nope :smile:
The BTC that would be distributed needed to be held available by BCE. BCE would receive BTC for selling BKC (or trade received NBT, PPC, etc. to BTC), because BTC are meant to be distributed to BKS holders.
If they don’t get distributed on a regular basis, but kept to pay the signers, BCE relies on Bitcoin to pay for one of the most important ongoing functions: signing transactions.
I wouldn’t chose that dependency if I had other options.

I think that BTC would be the worst payment option for paying signers - especially considering this:

So no, BTC is not ok, it’s horrible.

Maybe not the best, but still better than BTC. I prefer BKC like I explained above.

While I basically see some danger, I tend to agree with you.
Especially when looking at the amount of BKS that will be distributed to them this way.
And the reputed signers are not necessarily the same people all the time.
The ones with the best reputation will earn the money.

ninjaedit: 3 different people, 3 completely different opinions, lol.

1 Like
#13

What’s more, voters can stop voting for someone if they think that person is being rewarded all the time.

You’re right that btc (or any other non-B&C crypto) is the worst for like 100 reasons.

I see your point that BKC is ~$1, but it still tastes bad in my mouth to use them to pay off debt. Maybe I’ll come up with some better arguments after I think about it some. We should start a new thread anyway, this one’s used and abused at this point.

#14

We could ask a moderator to split the posts after BKC/NBT Peg (looks like I started with derailing the thread :frowning: ) to a new thread titled “paying reputed signers” or anything else.
@coingame, would you do that?

There might already be a draft for the implementation of the reputed signer reward, but I think a discussion might help to better understand or even improve the design.

Trying to look unbiased and non-technical at it, BTC might be a good choice. But as I expect the first reputed signers to be from the Nu/BCE ecosystem, they might see that differently and might prefer BKC and BKS over BTC.
From a BCE point of view BKS and BKC are better as well, because a reputed signer reward paid in BKS or BKC allows payment with units that are under complete control of BCE; no dependencies to external development/issues/problems.

Using BKC to pay signers would allow continuous distribution of BKC. For BCE it’s no economical difference between paying signers with BKC, BKS or BTC.
Paying with BKC is just very convenient, provides a constant flow of BKC to the market.

But looking at the design, end of page 13 in chapter “Pairing of BlockCredit and BlockShare addresses” it looks like the reputed signer reward is designed to be paid in BKS:

[quote]
There is a need for reputed addresses to be BlockShare addresses so they can receive block rewards of shares.[/quote]

If they do a better job than those who receive no votes, it’s earned and fair to do it.

The whole reputation system will be… fascinating; lending Spock’s words.

#15

Signers with KBS reward will definitely sell at least a portion of their rewards, and BKS price may depressed to 1$, good luck BKS holders. Bitshare is waiting for you.

#16

Reputated signer don’t have to be from Nu or B&C community technically as the strongest requirement for them are, in the order of importance, 1) don’t take the money and run 2) maintain the signing bot 3) good enough network connections. After the initial period 2) and 3) will be easy to have – could be as simple as clicking a few buttons on a web interface in most situations. So the dominant factor is 1), which anyone who has a reputation stake could qualify – ones on bitcointalk, reddit, public figure of many kind.
Paying signers of a wide variety of origin with NSR, BKS, BKC would not be as appropriate as NBT and BTC.

#17

We use BTC as a means of paying out dividends to shareholders, I don’t understand why we wouldn’t use a percentage of that to pay our reputated signers. Wouldn’t it be logical to pay them for their service in the same way we pay our shareholders? BTC makes sense because we already use it to pay dividends. On top of that BTC still is and will probably remain for a very long time the most liquid crypto with the most widely accepted uses. Aka BTC is a very practical coin to have and I can’t imagine reputed signers not being happy with being paid out in BTC.

Also I’m very much against diluting BKS shares by printing new ones to use as a payment for reputed signers, unless there is an acute emergency which requires funds quickly we shouldnt print new BKS. Like @Sabreiib I’m against diluting shares for various reasons which have been stated before in different topics. Paying reputed signers in BKC also seems illogical. Paying them in BKC would mean they would be dependent on buy side support on the market to convert their BKC (which they won’t have any use for unless they are huge traders themselves) to a commodity like BTC which they can convert to cash or use a means of payment for whatever.

2 Likes
#18

assume we pay dividend and signer rewards monthly.

2016 July: 10000$ revenue
2016 Aug: 0 $
2016 Sep: 5000$

So how do we pay the signers? Still pay them in August while the company owners(shareholders) get none?

#19

As long as the BKC are sold in small chunks, there’s ongoing revenue as long as the blockchain is used by customers, because according to the design document:

But more importantly:
if the signers are paid in BKS (like the design document suggests - or like I read it) or in BKC there’s no problem to pay the signers as the BKC and BKS can be created by protocol when creating the block.

That’s another advantage (aside from the technical advantages) over using BTC, NBT or anything not native to BCE: no need to keep funds to pay the reputed signers; the payment can be created on the way.

#20

A reputed signer must have BKS address, and how we dispatch dividend is just how we pay them reward.

Regard signers as special shareholder, this is the most simple and comvennient way.

#21

Let’s talk this practically.

We dispatch dividend/reward periodically. That period maybe one day, one week or one month. Our revenue record of 2016:

Period I: 10,000$ revenue (around 40 BTC by selling BKC)
Period II: 0
Period III: 5,000$ revenue(around 20BTC)

Solution I, signers paid with BTC

Shareholders voted a ratio that they distribute revenue in this way: 60% BTC sent to shareholders as dividend, 20% sent to signers as reward, 20% sent to a fund multi-signatured held by 20 signers for future software development and marketing.

System just send 24BTC to shareholders proportionally according to their BKS quantities, then send 8 BTC to 20 signers as per their performance, and finally our fund added by 8 BTC.

This is simple and robust.

Solution II, signers paid with BKS.

So how much value of BKS should be paid to these 20 signers? Should more than 40BTC value? Should we pay them constant BKS reward regardless what level our our company’s revenue? Should we still pay them during period II when they confirm none transaction and other shareholders get zero income?

No?

What’s the ratio of our revenue sent to them? 20% value? Good, it’s about 8BTC, what’s the average BKS price during three periods? What’s our data feed of BKS price? B&C, BTC-E? CCEDK? OK. We have five big exchanges. The three period average price is calculated.

Period I: 4$ per BKS, so issue 500BKS & sent as reward
Period II: 3$ per BKS, so no reward.
Period II 5$ per BKS, so issue 200BKS & sent as reward

Now the liquidity of BKS market is relative low, so how many signers will sell what proportion of their reward BKS is important and hard to know.

Will their sell orders effectively depress the BKS price? How about that other ordinary BKS holders find they are diluted by 3% (BKS price drop) while only get 2% value of dividend? Will they become angry?

Will some big bad signers intentionally manipulate the BKS price so that the data feed get quite lower BKS average price and reward them more BKS?

*Will some signers find that their reward are losing value because other signers sell some BKS reward earlier than them?*Will reward selling become a competition that every signer tries to sell some BKS as quick as possible?

See, we’ve made the simple thing very complicated and dangerous.

Solution III, signers paid by BKC.

20% value of company income is decided by shareholders to sent to 20 signers.

Period I: use 8BTC to buy 2000BKC? Directly issue 2000 BKC and send to signers?
Period II: no reward
Period II: use 4 BTC to buy 1000BKC Or directly issue 1000 BKC to signer?

When signers get BKC, many of them may wanna sell BKC for BTC or FIAT, so they sell BKC at 0.999999$ and get BTC/FIAT.

This solution is OK, not so bad as solution II.

Conclusion: Obviously Bitcoin solution is the best and the BKC solution and then the BKS solution, last but not least, the worst solution is to reward signers on a preset basis such as 0.01BKS per day or per transaction and neglect what real revenue level of our B&C company is. If we do in this style, our destination is bankrupt.

#22

re "Solution I"
where do the BTC come from if not from sold BKC? Should BCE issue BKS to buy BTC? :wink:
If they come from sold BKC you can very well just pay them with BKC and let them sell the BKC for whatever they want.
Paying with BTC creates unnecessary dependencies on the Bitcoin network. If you want to pay the signer with something that has sufficiently liquid markets and a stable value, choose NBT :slight_smile:
…but I’d prefer not to have external dependencies when dealing with signer payment

re "Solution II"
If BCE is going to pay a fixed rate of BKS per block as a reward there’s no need to use data feeds. I don’t see a reason why signers should earn a percentage of BCE’s revenue. They deal with fixed rates for time and material. The BKS reward for signing activity needs to be high enough to compensate the efforts.
If we can learn something from the last week of the BKS sale: there’s some demand for BKS :wink:
If we were to assume dwindling BKS prices, we should better stop development and pay back the funders.

re "Solution III"
not 20% of company income, but a fixed rate per block is distributed to signers.
BKC can’t be sold for above $1, but close to it. So the signers have a reliable income stream (as long as their reputation is good enough) in $ per time.
An expected income in $/(block|hour|day|week|month) not easily possible with BTC or BKS and even if it were possible with NBT it would require the same handling of BCE external units and counterparty risk.

I don’t know with how many signers BCE will start.
I guess it won’t be 20 from the start. Let’s assume we have less than 10 at the beginning.
Renting a VPS capable of doing the job or running a machine at home (if internet speed is sufficient) costs a few USD per month.
The calculatory cost of the security deposit makes another few bucks (depending on the amount to be deposited it might be some more bucks :wink: )
And signers might want to be paid for their efforts as well.
Say a signer would require a monthly compensation of $100 to do the job.
With less than 10 signers that makes less than $1000 per month.

If only 0.025 BKC were paid per block as signer’s reward this would distribute approximately 36 BKC per day or 1080 BKC per month, provide a reliable income for the signers, make signer payment comparably easy and in the end wouldn’t be different from paying them with BTC - economical wise.
Whether only BCE sells BKC for BTC and pays signers with a part of the BTC or BCE sells 1080 BKC less per month (and have signers distribute a part of the BKC) plays no role for BCE, but for the signers, because payment in BTC is less reliable in terms of $/month that can be earned by being a signer.
And it makes the payment process more complicated.

Maybe 0.05 BKC per block would be better as it did provide

  • enough compensation even with more than 10 signers
  • offer a bigger incentive to start as signer, because the less signers, the bigger the individual reward. Once more signers start competing for the compensation it will be less rewarding - just like the PoW arms race :wink:

Admittedly I don’t know how much compensation a signer would demand.
But depending on the value of the security deposit I can imagine joining the signer business for $100 per month if all I have to do is keep the signing environment safe and running and the private keys secure.

Tell me: how do you adjust the reputed signer payment to volatile BTC prices? Do you intend to have a price feed for BTC to adjust the reward accordingly? Or shall the reward stay at a fixed rate of x BTC per block?
What happens if BTC price plummets and signers don’t get enough compensation to continue signing operation?
Worst case:
no transactions will be signed, without CHECKLOCKTIMEVERIFY customer funds get permanently trapped in multi signature addresses, BKS price will follow BTC price, rather sooner than later it would be game over for BCE!
And all because of the dependency to an external unit.

For me the time of calculating in BTC is long over - it has been replaced by the option to calculate in USD, thanks to NBT!
…and that’s the reason why I prefer signer payment in BKC over payment in BKS - it’s close to 1 USD and an internal unit.

#23

We should not pay signers a portion of the profits, we should pay them continuously and dependably with a fixed number of shares of the company. Practically, paying with foreign block chains is not very feasible and exposes us to all sorts of exploits. That leaves us with bkc or BKS, and I don’t think we should ever be giving bkc to people that are going to sell rather than trade with it.

Selling BKS depresses price, sure, but so does not distributing dividends. Spending money is spending money is spending money, distributed in shares or nbt or whatever, spending money will end up depressing the share price no matter what form it’s in.

BTS has many problems with it, vastly more than just their basic reward system. I think we have plenty of room to succeed where they failed.

#24

+1!

I don’t understand that… The idea behind paying signers with BKC is that they are going to sell them for BTC, NBT, whatever they prefer and distribute the BKC to BCE customers.
Did you mean BKS while you wrote BKC?
I think we should avoid giving BKS to people that are going to trade with it rather than mint and vote with it.

#25

Sell to who? To prospective future B&C customers, right? Basically, instead of these customers buying from B&C, they will buy them from the signers who are selling them cheap (we’re talking <$0.5 here, the market will be highly illiquid and a 50% price cut is not unreasonable in the crypto world). Very few signers will actually want to use the bkc, a vast majority will sell. We would lose our source of revenue, dividends would dry up, and stock price will plummet.

If we pay in BKS, there will be no way for B&C customers to buy cheap BKC. That means that they will all pay full price and we can just keep on distributing dividends. That should generate more buy than sell pressure as everyone wants in on the profit stream. Selling BKS into that buy pressure is a very smart thing to do, from a trader’s perspective.

I am not of the philosophy that we should have no costs when no one trades. I am of the opinion that we should have operating costs and just be a successful company. If no one uses B&C it will slowly die, and I’m OK with that. If people do use B&C it will soar. I am quite confident it will be used, by Nu at the very least.

#26

The intention of paying signers in BKC is that they sell them - what else should they do with them?
If signers prefer selling BKC for $0.5 instead of $0.95 it’s their bad; they waste over 50% of their compensation by selling cheap.

For customer’s it doesn’t matter where they buy the BKC - the lowest BKC sell orders will be filled first by the buying customers.
If customers can get 1 BKC for less than 1 USD it will nevertheless be consumed by fees just like the BKC that are bought at 1 USD.
And even if BKC get sold cheap by signers - getting cheap BKC might incentivize customers using BCE and trading on it - a kind of advertisement. Sooner or later (as soon as BCE gets heavily used) the BKC can be sold at close to 1 USD - by the signers and the custodians.

I guess that most signers will not depend on converting the compensation immediately to money. The total effort for being a signer is not that big. The biggest cost is likely the calculatory cost of the security deposit and not the operation of the signing environment.

If the signer compensation were to be paid in BKS that would be fine as well - anything but foreign units are welcome!
I was just thinking that by paying with BKC you could get closer to $/month compensation.

And I agree that BCE will need to have operation costs. As far as I understand the signers’ rewards they are paid per block - no matter what the number of transactions in it is. So even if a BCE block doesn’t carry any transactions (and no BKC get destroyed as fee) the reward to signers will be paid.
It’s good this way, because the signers need to do their job continually. The whole exchange will be based on their reliability. It can’t be risked to have them drop off, because there’s no revenue of the exchange and nothing to be distributed.
This is one of the obvious reasons for using BKC of BKS as signer payment: BCE needs to sell BKC to get BTC, NBT or whatever. On the contrary, BKC and BKS can be created by protocol and are available even if no BKC get sold for some time.

#27

We can already do this by voting to lower the fee. If BKC is being sold for $0.5, we will end up voting for double the fee than we would if BKC is being sold for $1.

I have 2 things to say about this. The first is that I expect BKC markets to be less liquid than BKS markets, so the value of 1 BKC is less well known than the value of 1 BKS, not more. The second is that signers have no expectation to receive a certain $/month. With the same argument you present you could say that BKS minters should be rewarded in BKC. Signers make the system secure, albeit in an entirely different way than minters. Doesn’t it make sense to give them a portion of the thing they are securing as a reward?

When paying people, we want to pay them primarily with whatever they want to hold or use because otherwise we are effectively paying a fee to whoever is providing the market liquidity. Since our only options are BKC and BKS, we have to think which one are signers more likely to hold or use? Do we expect signers to mostly be traders, or to mostly be shareholders? I think they will mostly be shareholders, which is why I prefer paying signers in BKS.

#28

[quote]re "Solution I"
where do the BTC come from if not from sold BKC? Should BCE issue BKS to buy BTC?
If they come from sold BKC you can very well just pay them with BKC and let them sell the BKC for whatever they want.
Paying with BTC creates unnecessary dependencies on the Bitcoin network. If you want to pay the signer with something that has sufficiently liquid markets and a stable value, choose NBT
…but I’d prefer not to have external dependencies when dealing with signer payment[/quote]

Yes, those BTC comes from BKC sale. Only sold BKC is our true profit, otherwise we just issue trillions of BKC and get richer than Apple Inc Google Inc….:slight_smile:

If we directly give new issued BKC to reputed signers, what if they cannot sell them at 1$ for BTC/FIAT? Don’t forget that BKC pegging does not exist . On Free Market if BKC = 0.1$ at buy side, what would signers feel?

BTC liquidity is 100 times of NBT right now, and I guess most signers wanna FIAT when they are selling their reward. Bitcoin is relative stale if signers sell them in the first time and if they choose to hold BTC also OK, they are already players of crypto world.

I believe that you couldn’t be more wrong.

A fixed rate of BKS per block is stupid.

Assume you are a boss in real world, when your company income is very little and your employees salary is fixed & high and you know you cannot last for long time, bankrupt is ahead, what would you do? Fire them, yes, that’s your only option.
What’s the cost of a signer who keeps his/her computer online for one year? A average 50W PC consumes less than 440KWh which is around 44 USD? Internet fee? He has already paid for it.

So Why B&C company gives them high reward? They are not like Nu’s LPC who risk their own fund exposed to counterparts risk in volatile BTC price market. Totally unbelievable to pay them on a fixed basis!

Furthermore if they don’t share same profit condition with B&C company, they have less incentive to promote their service.

This is not like minting with PoS either, assume all BKS holders are minting and one year later, they all have 110% quantity of BKS, and SAME percentage equity of this company, for simplicity let’s assume that there is no speculate activity on BKS price and the capitalization remains same, every BKS holder has same value in his hands. Since all PoS miners don’t absorb money from outside(no revenue, just mint in internal network) , their money remains same, this is fair and logical.

But for B&C exchange business, our company is absorbing money(BTC) from outside, we are making profit which may fluctuate from 80,000$ to 3000$ per month, and you wanna give them fixed BKS rewards? Given that BKS price is also volatile so that sometimes signers are underpaid and sometimes overpaid. Isn’t this unfair and crazy?

All B&C investors and signers are “venture investors”, they clearly know about it, they may become millionaire or with empty handed. B&C is a business company not a social welfare institute. If we cannot make enough profit, just no money to pay ourselves. It is cruel and true.