While I’m in favour of BKC, I understand that using BKS makes sense at the start.
Thank you for chiming in!
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This is a misunderstanding let me use an example to clarify. We’ll use a few constants, first lets say every week there is a demand for 10000 BKC, we want to pay our signers 20% of our earnings. If we use BTC to pay singers it goes like this:
First week we sell 10000 BKC for 50 BTC, we pay singers 20% so 10 BTC go’s to signers and 40 go’s to shareholders as dividend.
Second week we sell another 10000 BKC for 50 BTC, we again pay signers 20% so 10 BTC and 40 to shareholders.
Third week it’s the same we sell another 10000 BKC for 50 BTC, again signers get 20% so 10 BTC and 40 to shareholders.
That means that after 3 weeks we made 150 BTC in revenue payed 30 BTC as payment to signers and we distributed 120 BTC as dividends.
Seems simple and your assumption is that same is true for paying in BKC since money is money right?
Alright first week we sell 10000 BKC for 50 BTC, we pay singers 20% so they get 2000 BKC and we distribute 50 BTC to shareholders as dividend.
Second week we only sell 8000 BKC for 40 BTC, since 2000 BKC is sold to customers by signers for 80% of the regular price so they get 8 BTC. This week we distribute 40 BTC to shareholders and 1600 BKC to signers.
Third week we sell 8400 for 42 BTC, since 1600 BKC is sold to customers by signers for 80% of the regular price so they get 8 BTC, we pay signers 1680 BKC
That means after 3 weeks we made 132 in revenue payed out to shareholders and we paid signers 5280 BKC that netted them 21,12 BTC.
Now this looks good right? Seems its even more profitable to pay in BKC then in BTC. However what we are forgetting is that essentially we netted an extra 20% revenue the first week by printing extra BKC. So lets forget the first week and look at the 2nd and 3rd week.
Second week we sold 8000 BKC for 40 BTC and signers got 2000 BKC netting them 8 BTC. So in total we made 48 BTC in the second week compared to 50 if we distribute in BTC.
The third week we sold 8400 BKC for 42 BTC and signers got 1600 BKC that netted them 6,4 BTC. So in total we made 48,4 BTC
Now let’s see what happens the 4th week. This week we sell 8320 BKC for 41,60 BTC the signers get 1680 BKC that nets them 6,72 BTC so in total we made 48,32
Now in the 4th week we reached our equilibrium since in the 5th week it would be the same. We will sell 8320 BKC for 41,60 BTC the signers get 1680 BKC that nets them 6,72 BTC so in total we made 48,32 again. This would keep going on and on and on.
Now let’s look back to distribution in BTC which means we would sell 10000 BKC for 50 BTC every week. This means we’re losing 1,68 BTC per week due to distribution in BKC. Money =/= money, by distributing in BKC we are undercutting our own revenue stream no matter how you cut it. Of course the amount to which we’re undercutting depends on the price signers sell but no matter how small this effect persists. Hence my case for paying signers in BTC.
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Problem is here, why you distribute 100% revenue to shareholders and issue extra BKC to signers?
I agree 100% on this. The only reason I do not think we will use BTC is that practically using BTC is difficult and I’d need to see a plan for implementation. Short of finding a reasonable implementation, I prefer BKS to pay signers.
It depends on the willingness of signers, not ours!
Assume we talk a lot and get a conclusion, but most signers say"I wanna BTC", or “I wanna BKC”, does our talking make sense?
I don’t think signers will make themselves heard like that. I think the rewards will be what we set them and we’ll either get a bunch of signers or we won’t depending on how much we pay them. We can speculate that one currency or another will draw more or less signers, but a controlled experiment for that is neigh impossible.
This logic seems a little bit flawed.
If there’s constant demand for 10000 BKC by the market, why should signers (need to) sell for 80% of the price?
If you adjust it to 100% you’ll see that money is money is money 
Due to technical (and not economical) reasons it’ll be either BKC or BKS instead of BTC.
And due to design reasons it seems to start with BKS.
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B&C can wait for customer, signers may not be willing to. If you look at peercoin price charts a lot, you’ll notice that when someone is in a hurry to sell they can drop the price by several percent just trying to cash out, then the price spikes back up shortly after. B&C is not panic selling, but signers may be.
But then it’s no constant demand which was the basis for the scenario.
The profits of BCE would be lower in those times with less demand for BKC.
Those times are all the time. What if a major BKC buy happens every 2 hours and a signer wants to sell BKC but only has 1 hour to do it? They’ll dump on whatever orders are up. This same phenomenon will occur with BKS, don’t get me wrong. However, I would rather have a depressed BKS price than a depressed BKC price because BKC would cut into our dividends which would in turn dump the BKS price anyway.
I have a hard time thinking of a scenario in which a BKC sell couldn’t wait another hour. Signers aren’t expected to be in a position where selling BKC one hour later should play a role.
If they are so short of money they might not be the right people to act as reputed signer… They should stop doing it and get their security deposit back.
How fortunate that @sigmike was going to implement the signer reward in BKS:
And even better - it’s already done:
I still like the idea of the signer reward in BKC, but BCE will start with BKS and I think it’s good this way
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Because they have to compete with us selling infinite BKC for 1 dollar or rather 1 Nubit each, aka they will have to offer lower prices if they want to see their sell orders filled. Now how much lower will depend on the traders but the point is we will always lose money in the way I demonstrated by paying singers in BKC. Not only that but we will burden them with the task of selling their BKC on the open market, while we could just give them BTC instead everyone wins.
However if we are dead set on not paying them in BTC (which honestly is the best way to pay them) we could also pay them in BKC and then give them the opportunity to sell back the BKC to us for 1 Nubit each or the equivalent in BTC. That way we don’t undercut our revenue and we give the signers and easier option of trading in their BKC for something useful.
At that point we may as well pay with nbt. You still have the issue of paying signers with a foreign block chain. I’m all for paying signers with btc if you can think of a reasonable implementation. I can’t figure out an efficient method.
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If the sell walls of the BKC custodians are filled with orders at 1 NBT, selling the BKC at 0.999 NBT will suffice.
0.001 NBT per BKC. Reasoning see above.
Interesting idea. The easiest way to achieve that would be to offer a buy wall at close to 1 NBT.
But that’s a business BCE might not be interested in.
That’s why I got stuck with BKC - it’s close to NBT, but a BCE internal unit.
The longer I think about the signer reward being a part of the coinstake transaction, the better I like that.
After all it’s not only the economical aspects that need to be taken into consideration, but the technical as well.
Signer reward as BKS seems to be the most simple, maintainable, reliable, tested way to issue a reward.
[quote=“masterOfDisaster,
post:54, topic:2550, full:true”]
If the sell walls of the BKC custodians are filled with orders at 1 NBT, selling the BKC at 0.999 NBT will suffice.[/quote]
Your forgetting 2 things, one there is other people selling BKC people who have overbought and want to get rid of them and 2 if there is an infinite sell wall at 1 NBT price very few people will put out buy orders and just buy when they need them which means our signers will have to wait until there 0.999 NBT sell orders get filled or try to dump at lower prices to increase the speed at which they can unload their BKC.
When people start to realize a constant flow of BKC gets dumped by the signers they might even hold off with buying BKC until they can scoop some up cheaper. That’s just smart business, so doing this might even hurt the demand for BKC.
It might be far more see reason above.
[quote]Interesting idea. The easiest way to achieve that would be to offer a buy wall at close to 1 NBT.
But that’s a business BCE might not be interested in.[/quote]
Obviously we are not putting out a public buy wall for BKC, we’re not buying back BKC. However we could privately buy back the BKC we give to our signers. For example they could send their received BKC to our BKC custodial who then sends them back the equivalent in BTC or other crypto of their choosing. Doing it this way give the signers and easy and fair price for their BKC and we prevent BKC getting dumped on the market undercutting our revenue.
It would however dilute BKS shares, something which a lot of shareholders are unhappy with. I would encourage signers to become shareholders only I rather have them use their payment to buy BKS on the market. More buy side support on the market is obviously good for the value of BKS.
All these people compete with BCE’s sell walls. If reputed signers sell BKC slightly below the BCE sell walls, they get their BKC sold.
You are creating a scenario, but don’t follow your own rules.
To get back to your original calculation:
if BCE can sell 10,000 BKC per month and 2,000 BKC get distributed to signers, then signers can sell 2,000 at 0.999 NBT each - otherwise BCE wouldn’t be able to sell 10,000 BKS. Full stop.
Shareholders should be even more unhappy with a reputed signer payment method that didn’t work properly