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RE: Incentive trees and what we can learn from Bitconnect
yes i have been around a long time and to use full premine is a good point because isnt a coin with economic fundamentals or the strength of security like bitcoin or others so to liken it to others isnt an argument for is trying to draw similarities between different things
saying bitconnect gained in price is irrelevant of course it would they take payments in bitcoin so can push the price for free
you say at the end you are not defending yet say how amazing it is and the gains its made, it is scam of course it pays a lot when they exit they will take a lot.
Once again, not defending anyone or any crypto, but lets evaluate the mechanics.....
The strength of any cryptocurrency is the blockchain and code powering it....In Steem we have Delegated Proof of Stake, it is our leverage relative to BTC or USD or any pair that the market providers give...In Steem we are leverage mainly against BTC and USD an thus we derive value, that value give power to the participant base on his Stake, what makes Steem blockchain unique, we participants mine the Steem and the overall value of Steem is base on the participant that choose to first buy the Steem on the exchange...one controversial aspect of the Steem ecosystem is the SBD, how does it obtain value, it can obtain value if its pegged to Steem or another asset that has value(in SBD case its the USD)...what one must understand here, something must offer a bridge to obtain value or a consensus must be reach where all participants agree that X is indeed worth that amount...If we should compare cryptocurrency to government back notes, the varying world currencies are backed by the respective governments making them legal tenders and thus giving them some market value....In cryptocurrency we are relying on the code and exchange, that says, given the demand and what available participants are agreeing that 1 BTC is worth this amount and from this other cryptocurrency/token obtain their value....There isn't any government backing so theoretically no one has any legal jurisdiction and no law is really broken...
With regard to bitconnect, the mechanics behind it are Proof of Stake and Proof of Work, two concepts you should be familiar with so I wont get into any detail..the max supply is 28 million and current supply is around 8million, now base on the supply and the demand BCC has seen its value risen from 3 dollars all the way to 280 where it is trading currently...impressive growth but we are missing the point of how it get there, it gave an incentive, an probably the incentive program fired up people who were energized to go out an recruit....what makes this unique, you can trace the transaction on the blockchain like we do with Steemd and the blockchain base on the market rate and supply give it a USD value of over 2 billion USD....there is much more to say especially with regard to Proof of Stake, an how the company has taken advantage of it to lock up tokens used in loans to further drive its price...so we have to zoom out now, we have three asset class BTC, BCC and USD, both BTC and BCC are appreciating relative to USD, the contract obligation of BCC is to pay the lender the equivalent of USD BCC value of their loan duration...at the beginning of January 2017 a 10K loan would have cost over 3000BCC tokens which has contract obligation of 120, if we did the calculation now a 10K only cost Bitconnect 49 tokens with an astounding USD return...if we look at the value left on the blockchain, Bitconnect made an absolute kill... now we haven't even mention the controversial bot but trading bots has been around with us since 2002, its primarily Bots moving in tune of over 4 trillion USD dollars for banks like Citigroup and look at the volatility in crypto, so we should really move from see this as far fetch and try to articulate weaknesses and strengths of the model
your making an example between different things yes bitconnect use pos also pow is much different than steem dpos
stating that they use POS is irrelevant to their legitimacy and isnt a innovation they created
also to say usd a a trading pair isnt correct majority of trades are done with btc on a platform they control only a small fraction not even 1% is traded in usd
artificial growth from a constant pump isnt a great achievement they accept btc in exchange for usd take fees from trading and in between etc is easily achieved
trading bots are in every market
humans cant make trades as fast as they happen 90% of trading is automated by bots
recently this year bitconnect relocated to Indonesia from the U.K leaving millions in unpaid taxes and within 60 days U.K will be seeking assets to claim this scam wont last much longer
You haven't read what I said, I never said POS was an innovation they created, I am saying they taken advantage of the concept to further their business model....
If you are referring to Bitconnect using BTC as payment then you lack the mechanics of how it works, it pays the USD BCC value, the only obligation of BTC in the contract is as an entry as with any cryptocurrency.....
There is nothing artificial about it, if Ethereum should incorporate Proof of Stake and lock up their coins in contract it would spark their price as well, if you aren't familiar this is basically the same concept behind Masternodes, its one of the features Dash has benefited from, in essence you can even think of Steem Power in the same light, the more power up the less Steem available and if the demand is great, Steem price would absolutely pump, so it isn't artificial... that how the market works, its the beauty of these varying cryptocurency project the code governing it and the economic model behind it....low supply coins are sensitive to price hikes providing that there is demand... Remember these concepts are ways of securing the blockchain...with regard to the article, the question we can ask, could Steem create an incentive, it used to be offering interest on SBD and the inflation that existed with Steem but participant had to deal with their Steem being lock up for over 2 years... its very lucrative to have a Dash masternodes but if the participant wish to sell then he/ she must forgo the agreement, remember the payment is in DASH at the market rate, so if Dash price continues to drive up, what matter place to be... what these coins are trying to do is give the coins more utility, for example Dash want to the crypto of commerce(used as payment option, that why getting merchants on board is important) when you do that you have another stream of income from transaction fees and the trading volume markets the crypto, so when Bitconnect makes moves to get debit card it shows that these people are making moves....I am trying to be objective as possible... I hope no one flags me but hopefully we better understand with regard to the 60 days we have to see how this plays out, quite frankly cryptocurrency does not really have any legal jurisdiction, what government can do is dictate what is a legal tender of commerce/ trade or not apart from that, there isn't much....base on the government classification whether they consider it currency or security, then we have to think of capital gains and the laws that exist with regard to taxation in that given country where the gains are realized apart from that, there isn't much written in law
Steemit used to have "vesting" which paid interest on Steem Power, Steem Dollars, etc, just for holding. I think of Steem Power as the "vesting wallet". I think of Bitconnect where they figured something out, like for Bitconnect loaning is the equivalent to mining conceptually. In Bitconnect there is the "lending wallet".
If you loan you might get rewarded some variable interest for the day. On Steemit you might get rewarded if you blog or hold Steem Power. On Bitcoin you might get rewarded if you buy an expensive mining rig and you mine.
All of these are the same at the core. Essentially in every case you mine with your dollars. You put money into some smart contract or equipment in the hope that you will take out more than you put in after some fixed period of time. In Steemit or DPOS they called this "vesting". In Bitcoin it's adjusted by the difficulty algorithm and it's Proof of Work.
So in theory I do think it is possible to achieve the goal of a sustainable affiliate marketing protocol on top of Steem SMTs, and I think it is well worth it to implement this after looking not just at the success of Bitconnect but the fact that some of the top bloggers on Steem who brought thousands of people to the site are now doing it for Bitconnect. To get people like that back on the side of Steem requires Steem actually do something to allow the marketers to actually be rewarded for promoting Steem at least at a level good enough to be seen as the safer alternative.
Imagine what good it could do for Steem if people were on Youtube telling people to buy Steem and power up, and if these people earned a commission it could still be worth it.
Excellent point, recently I wrote an article about how Steem and EOS could benefit from the continual mulit-sig Ethereum wallet problems....In it I wrote essentially about the SMT and how it can help push their agenda further....Thinking about it now, Steem itself can launch its own SMT for marketers, where marketers are rewarded base on the amount of volume that they bring in, What do you think....I also think moving forward, once Steem establishes itself and the price of Steem moves above 2.50, they can pegged it against Steem instead of USD as to help restrict the amount SBD in circulation as less would have to be produced because we all agree that crypto prices would continue to trend higher.... The challenges Steem faces is creating an incentive, everyone won't be bloggers, how now can we create an environment that encourages participants, one may say curation rewards but I believe that isn't enough as we can see happening....I am also very concern about the potential effects flagging could have on the SMT if participants for whatever reasons start flagging projects, so lets see how it plays out
These are only your personal opinions, but my post was not an opinion piece. I offered the facts based on academic literature which I cited. There are people who don't touch crypto by the same arguments you use about ponzi, and people who wont use Steem by the very same arguments. Steem has bots too, whales, and an internal exchange with a "Steem Dollar". Steemit+Steem is a legit innovation in the space and deserves to be discussed, but so is Bitconnect.
you keep referencing steem and other technology bitconnect doesn't use and are irrelevant
comparing two different things with little similarities is false logic and a week argument for
if you check this link you will see how bitconnect has committed criminal tax evasion from the U.K and will have a case put against after 60 days
So loaning is another form of mining? Plus they have an exchange. Their exchange takes 0.25% on every trade, which is the same 0.25% they give in interest max on loans. The interest or any other promises are regulated in the sense that they are variable rates and they can suspend accounts.
Also Bitconnect is not convicted of tax evasion, those are FUD rumors which have no documented evidence. The evidence does reveal a company with shareholders and you can find the names of the shareholders. Bitconnect based on all evidence is not going to shutdown in 60 days and even if somehow hackers shut the site down it is just like Steemit and can come up again in another jurisdiction because they have their own blockchain.
Anyway the post was not about whether you should invest in Bitconnect. We know you don't plan to invest in it and that is fine as no one asked you to.
References
loaning is not a form of mining
because a token uses a form of mining isn't what gives a crypto value, distribution economic principles network security and how changes are decided by consensus algorithms or otherwise
bitconnect has a centralized exchange take btc give usd is easy to manipulate price with such control and taking a well performing asset and giving less
yes it is proven that bitconnect has committed tax evasion relocated from the U.K in July one week before tax was due here is link to gov site with filing
https://beta.companieshouse.gov.uk/company/10278342
https://s3-eu-west-1.amazonaws.com/document-api-images-prod/docs/wYGmnuGVgp6obZ3htZsVMhGcK8aZXTSlG2QBe9SXMjQ/application-pdf?AWSAccessKeyId=ASIAJXTG26VRKMJNPRHA&Expires=1510914492&Signature=tk0EqUaEM37UwWEA19Y6oMLNp%2BE%3D&x-amz-security-token=FQoDYXdzEIj%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaDLWuB4VFLMTadd%2BbwSK3A0S08FhwAaczQdHv0sQInDHaf0BE0%2F5sanbkxNDOsxIjZSknTlSRZgaFa0o%2BQ7YMZ3ozGBiM%2BChvyWQgt7BCXwvZV7LFYVEiokkbXxZ1hj%2FG8JAltX%2BVROeGmtAGVc1%2B5apBZEMqhIWlKs357embXpx6Avvhgy7YI1R1LzPluftDqNdfGGdSihDHF8H0avmDSEWO%2BBm38KbK%2FtAMAIRYkdeJLlV9xvOkjDB9y6Qrh4xY%2FONujAzVqZ6Ihn2TQHYPbvXl0QhMQ5ts7FCkptgMMYpMn89fTppfi7Yp1nEIg4Bu4lREppaUGzY5rxU851ATASmFc7MyVgsyUb2Kj5PO8C7NpZma3ejrACX3%2FUCLYqWe3Ebr7WesNSbZ%2F9uIFkl%2Bx8FITzLLdIpqWInZ7yLstCc2xfCMJtsE4GpxrWy%2B1YWvHzs58LVpW4EyhIQq8o78VqTiGmhaUBj%2FnQg0qDI89L8I2c6Hyy%2FwtRAsno4x6hRZqtpNiTNvO7i2zDEaswoB3s6H8J0KBOah4eWWLyRVnyvEwJTCFIWfXvr21000SsIliJhBDjHel9gGwkkyzQSmJAjN1MWXpTMo1Im60AU%3D
loaning is not a form of mining
because a token uses a form of mining isn't what gives a crypto value, distribution economic principles network security and how changes are decided by consensus algorithms or otherwise
Take some time to read up Proof of Stake, read up on how asynchronous smart contract works, read up on how demand and supply works....You keep saying artificial but you fail to understand the more tokens that are lock up in loans, the less that are available for the given demand, so that price would definitely spike....Dash currently has over 4000 Masternodes holders, all of which must have at least 1000 Dash to get a masternodes, if they should forgo the agreement, so we see the price fall because the market would be flooded with Dash but that isn't the case as it is probably one of the most lucrative masternodes around, Dash currently trading over 400 USD dollars, remember the Dash Masternodes pays out the USD value base in Dash on the contract, Dash is their currency, what Dash is doing now is trying to lift their trading volume so they are getting more merchants on board.....
The link to the paper and the UK, seriously you took that seriously???? So you saying now that every crypto has to now file the quarterly or name their directors and be up to date with the Queen request, trust me the Queen of England probably be more concern about buying up the dips on Bitcoin....if its the US, the US would be concern about capitalizing on the capital gains of its US citizens through taxation...
every crypto doenst have to file but bitconnect had there exchange and comp[any registered there so they do
the link to U.K site is accurate bitconnect operated in the U.K since the beginning and owes taxes for trading there
I am very familar with how POS works examples you give are from legitimate cryptocurrency with vastly different workings than an ICO token
again you make illogical statements trying to say there are similarities between strong well based cryptos and bitconnect when there are none
now with regards to taxes stating government would be after citizens gains through taxes bitconnnect is a a company and was registered in the U.K to trade and give legitimacy to
Well seems like you are determined to call it a scam and yes the UK government would shut it down in 60 days....why you so negative why call it an ICO token???
Man you points are well noted, this is my final points though... cryptocurrencies are still in its embryonic stages and what is legal to illegal isn't clear cut, the concepts and codes governing the blockchain aren't well understood and clearly it can be seen from our discussion... How do we legitimize one project from the other, how do we reach consensus as a community....these are some of the challenges that are ahead, I see a lot of baseline accusation and character assassination, the ecosystem is a very toxic place filled with jealousy, if Steem were to regain momentum an enter into the TOP10 again we would see attacks calling it a scam circulating again, probably we can thank the Dollar Vilgilante for taking on some of its biggest critics.... let discussion how the concepts work and how we can use the blockchain and the code that governs it as our guide rather than trying to run with the saltiness of others
evidence shows it is a scam
it is an ICO and isn't recognized by other reputable exchanges or users experienced with
how to tell a scam from a legitimate business is easy whether crypto or not
audit-able records, transparency, security, good practices reputable development team to name a few all of which bitconnect doesn't have
again you try and liken bitconnect and steem when there is no connection or similarity to compare except a form of POS which 100's if not 1000's of other coins tokens have