Topic: DNotes 2.0 - Staking, CRISP Interest, DNotes Pay - page 272. (Read 148866 times)

Yes! This is exactly what I'm driving at. I don't want this Board to misunderstand me. In the case of DNotes, I certainly hold with Zuckerberg "I'm here to build something for the long-term. Anything else is secondary." The long-term is the core of Bezos' RMF I mentioned above. Alan has the capability to see around the corner. And it's great to see such a solid team driving towards a long-term strategic vision. That's rare in Crypto, as we all know.

But here is my deep point about focusing on price at levels other that the 10-year, 30,000 foot view. It's not an exact analogy, but I think there are a some really fantastic similarities to  the way DNotes and DNotes Global has been structured, and how Berkshire Hathaway kickstarted its otherworldly success in the 60s. It all has to do with a concept called float.

Here is a description of float from a book called the Warren Buffett way:

"In addition to department stores, Diversified Retailing owned a company called Blue Chip Stamps, which provided supermarkets and gasoline stations with trading stamps to give to their customers. Stamps were collected into books and in turn exchanged for merchandise. To purchase the merchandise, the supermarkets and gasoline created a pool of money, or float, which Blue Chip Stamps managed. In the late 1960s Blue Chip Stamps had a float of more than $60 million in unredeemed stamps. This float ultimately allowed Buffett to purchase other businesses including a candy company, a newspaper, and a savings and loan."

Basically, Buffett was able to produce amazing Returns on Capital by leveraging compounding through what is called the Homeostatic Business Model. Here is how Alice Schroeder, the author of Snowball (the only authorized biography of Buffett), put it:

"But in the bigger picture, what Berkshire, Diversified, and Blue Chip [the latter two were eventually merged into Berkshire] really possessed were two things. The first was the homeostatic business model--the idea of grafting float onto a holding company so that it could respond internally to the changing environment. The second was the power of compounding, as float and investments doubled and redoubled over time. The novelty and strength of Berkshire's model cannot be overstated. Nothing like it existed, or would for years to come. 'That was the golden period of textbook capital allocation,' Buffet says".

I see DNotes 2.0 as a kind of float. Which can then be used to further invest in the ecosystem. In Buffett's case when starting up his models with Berkshire, he bought See's Candies. For DNotes, it might be investment in CryptoMoms to take that to the next level. Or whatever it is.

But if NOTE continues to decline in the near-term, there is a lot less float with which to supercharge NOTE 2.0 environmental element. And as you say, nobody knows the machinations of the markets. They will do what they do. So does NOTE pop on 2.0 release? Likely, but also maybe not. Which again then means less float for development. So, near-term price does matter. And I'm glad you see that.


Tactically, this is where my critique of the eye-popping numbers fits in. It psychologically primes NOTE newcomers to confusion, because of the disconnect between right-now price downturns and starry-eyed 10 year out projections. Most folks can't readily cognize that kind of vision.

Idk, that make any sense?

That last point about cryptocurrencies other than Bitcoin is exactly what I thought when I read that. We all know that Bitcoin may not be the best option for small transactions. It could serve as a longer term store of value, but there is clearly opportunity for another cryptocurrency (or several) to become mainstream for everyday transactions and micro transactions.

The price is important, it impacts the growth rate and scaling of DNotes in a significant way. Stabilizing the growth trajectory is an important factor in our upcoming upgrades. If DNotes was, for instance, consistently a dollar, it would give us the fuel and we could more rapidly deploy the DNotes strategy and continue to the growth from there. However, as you said it's much more important over the longer term, rather than over the short term. The price of DNotes is 300+% higher than it was a year ago, that could go down, that could go up, only the open market can determine that.

Bitcoin a Safe Haven in Zimbabwe

This recent article by CNN talks about how bitcoin is becoming a safe haven in Zimbabwe. It puts the rush to purchase bitcoin down to a lack of confidence in their local fiat currency. But what I found most fascinating is how the exchange rate for https://golix.io/, their local exchange, is so much higher than the standard rates.

http://edition.cnn.com/2017/10/31/africa/zimbabwe-bitcoin-surge/index.html

Over the last month this exchange has traded a relatively low volume of 115BTC. But their exchange rate sits between US$9,900 and US$10,900 per BTC which is significantly higher than US$6,447 shown by CoinMarketCap. I don't understand how this could be. My only guess is that using their existing financial system makes it extremely difficult to send money overseas.

Another interesting takeaway from the article is this quote from Saxo Bank analyst Kay Van-Petersen. "It's only a matter of time before an emerging or frontier market government decides to adopt a cryptocurrency as a foundation for credibility, transparency, accountability, and attraction of foreign capital."

This might seem like an outlandish statement in any normal context, but Zimbabwe is no normal context. In 2008 the Zimbabwean Dollar was replaced by the US Dollar as a solution to rampant inflation. While successful, it has now resulted in a shortage of US Dollar hard currency, so banks are limiting how much is handed out. Then recently the government began issuing "Bond Notes" which are best understood as a new fiat currency that is pegged to the US Dollar. But black market trading has broken it from its US Dollar foundation and its value is also plummeting.

In such a situation, the cheapest option with the most stability is to embrace bitcoin as a national currency option. This has the added benefit of facilitating foreign trade which is so critical when an economy faces instability. Then, there is also to reasonable probability that the increasing value of bitcoin internationally will result in an increased net worth of the Zimbabwe economy.

Bitcoin is already being used by local traders, but from the article it seems like it is only for large purchases like vehicles. But adopting bitcoin opens the door to exchanging with other cryptocurrencies. If locals became familiar with a cryptocurrency running on a mobile device that had minimal or no fees, that cryptocurrency would quickly become the basis of daily transactions, while bitcoin would be the top-up vehicle, and safe haven for larger funds.

Ron Paul Concerned About Government Oversight of Cryptocurrencies

https://dcebrief.com/ron-paul-concerned-about-government-oversight-of-cryptocurrencies/

I agree, price is important. Too high of a price too early in the development process could be catastrophic for currencies with long term goals of alleviating poverty and offering a monetary alternative to the worlds underbanked masses. While it is easy to get impatient, wanting this to pay off immediately, there is merit in waiting until all DNotes services are deployed, and capable of serving the worlds financial needs, before pushing for massive value appreciation. If we push too soon, before the everyday person is involved, we will simply perpetuate, perhaps even compound wealth inequality.

I gotcha. Just saying that illustrations like that can confuse people, and that is exactly what happened with some folks.

And sure, this space is rife with rampant speculation, pump and dumps, and the like. There are a lot of awesome blockchains out there which have experienced appreciation, but it's folly to suggest nothing backs that. Syscoin was 1 cent in early March. And now it's 23 cents. Nothing backs that? Really? Same with Monero, NEM, NEO, and quite a few others.

Really hope the "scammy investor pitch" line wasn't directed at me.

Lastly, appreciate all the work and DNotes community leadership that you do, and I really enjoy all your DCEBrief stuff. I am a big believer in long-term thinking (Bezos' Regret Minimization Framework is a personal totem for me). But let's not pretend that price is completely irrelevant.

You are correct, Tim. Conserving precious resources (electricity) is one of the reasons we are switching from Proof of Work (POW) to Proof of Stake (POS).

Micro-payment has been on our radar since the beginning. This has huge potential. It is seemingly easy but instead, it comes with many challenges. With the launching of DNotes 2.0 we are just one step closer.

Another Reason to like DNotes2.0 Moving to Proof Of Stake

Creating content has been a growing industry for decades now, from movies, through television, to websites and online videos. And the majority of this content isn't paid for directly. Instead it is supported by advertising. But as the public gets more wary of the ever increasing psychological techniques used in advertising, and become sick of advertising taking over screen real estate, we're adopting tools to circumvent or block advertising.

So new avenues for paying for content are being explored. One is micro-payments which are now becoming possible due to cryptocurrency reducing individual transaction fees. Another one is renting out computing power for mining coins while enjoying the content being provided. This is the service being provided by Coinhive. They provide code to website managers, which is then run on visiting computers. It is Coinhive's intention or preference that the websites get user permission before doing this, or at least inform visitors to sites running their code that it is running. But they have shown little interest in enforcing this courtesy.

Not so surprisingly, people have found a way to exploit this service and hack into other people's websites to inject the code, for their own profit. As the ars Technica article states, "Ad blocker AdGuard recently reported that 220 sites on the Alexa top 100,000 list serve crypto mining scripts to more than 500 million people."

But even if this system is used ethically and only with user's acknowledgement, it is still likely to be a fail. This is because running the code on a CPU without high-level optimisation, is very likely to earn less in mined coins than it will cost users in electricity. In the comments. Evan_s put it really well. "Add on the overhead of JavaScript implementations running in a browser instead of decently optimized native code and you are even less efficient at mining. This means you are probably spending a fair bit more on electricity than the site is getting for their cut of the value of the bit coins." And then goes on to point out that it will never work because as soon as a basic home setup running java-script through the CPU is profitable, more people will set up much more efficient rigs.

And this is just another example of how the heavy computing load, and its subsequent waste of resources, will eventually make Proof of Work a relic in cryptocurrency's history. If instead POW was creating something of real value, like rendering CGI frames, or analysing data for SETI, I could get behind that coin. But as it stands, the only coins that interest me are the ones using POS.

https://arstechnica.com/information-technology/2017/10/a-surge-of-sites-and-apps-are-exhausting-your-cpu-to-mine-cryptocurrency/

Hi MiningHabit,

These aren't my "growth numbers" or projections of any kind, and certainly isn't some scammy investor pitch. You may have missed TimMarsh's post (above), which was the whole reason for the chart:

Tim: "But it is just as likely that DNotes is being used for daily transactions and a single DNote could be worth $4,000."

If DNotes is going to be successful as global digital currency for all, an investment vehicle, next-gen venture capital, used in global trade & commerce, etc, what do you think the marketcap would have to be in 10 years to encompass all those functions? I wanted to answer the math side of the question, but the conservative side of me would only go up to $1,000. 

"Note: I used monthly compounding in the calculations for staking rewards - It may be off a bit, but it will be close. The $1,000 potential price for DNotes in the chart is my conservative example for Tim M's $4,000 price."

This is what I was aiming for in presenting the chart this way:

Tim: "Thanks Chase, for doing the math and presenting it so clearly. I really like it how you broke it down into the increasing number of DNotes due to holding onto the investment, and the increase in value of the total amount of DNotes owned with different projections. Very clear. I often hear how Alan and the DNotes team believe it is important to start saving early, but seeing the numbers, and the impact of compound interest makes that so much more clear."

At the end of 10 years, it shows how many DNotes you have, and you decide what you think the price will be at that time. The 'illustrative' intention of $10, $100, or $1,000, was to make it easy for anyone to calculate a projected potential unit price based on what THEY thought it might be. ie. - if I think DNotes will be $200 each, I only need to double the calculation at $100.

MiningHabit: "Within that context, sl-avik's confusion is understandable. Citing numbers that require 125%-200% compound annual growth rates for illustration purposes....is not terribly illustrative."

Almost every other cryptocurrency has already experienced their massive price appreciation with nothing to back it. DNotes has purposely stayed low key and now has significant value available at a very low price - this is a fact, and nothing more. It is very shortsighted to look at DNotes current price as any indication of where it will be in 10 years.

"Where we are now matters far less than where we are going from here." -Alan Yong

While I won't make predictions of the future price of DNotes, we are constantly growing and moving DNotes into a better position on multiple fronts and I believe that should be reflected in the value of DNotes. The comparison of company growth may not exactly be a good measure to compare to cryptocurrency, they are both speculative in different ways, also a company doesn't typically generate new shares on a constant basis like a cryptocurrency. Growth and prediction factors will be wildly different at this stage. Chase is merely putting forth a personal opinion, with some figures with a range of prices, rather than an official growth projection from DNotes Global Inc. Ultimately giving people an informed way to make their own judgement.

One of the factors at play today is block reward. The blockchain today releases upwards of 30,000 DNotes per day or almost 1,000,000 DNotes per month to miners, the majority of which have significant reasons to immediately liquidate those DNotes. Such as electricity and hardware costs. So let's say buy support has to continue at somewhere in the range of $50,000 currently per month just to compensate for the mining reward, creating constant negative pressure on the market. Additional buy support appears to come in waves, and I'm sure much of that is speculators, buying with the intent of selling at a higher price as soon as possible. The lasting effect from buy support can only be short lived in this environment with stronger sell pressure the more buy support there is.

Now imagine if the negative pressure is reversed. Instead of releasing coins to miners with significant reasons to sell, what if they were released to holders of DNotes with no electricity or hardware costs with significant reasons to hold their DNotes while maintaining if not growing DNotes support and perceived value?

If the price remains the same or goes down, it may appear there is no support, but in fact there a significant amount of support just to maintain the price.

A couple of cents to add to this thread....Chase, whilst I appreciate your chart, I'm not sure it quite lands as intended. sl-avik brings up some important points as to why.

Personally, I have a very outsized part of my Crypto portfolio in DNotes. Have held and not sold literally since the first block. Though I did sell some to bet on the last world cup in bitcoin :-)  And I won't lie, it does hurt whenever I update my holdings to see litecoin or bitcoin crushing it, and DNotes going from Top 75 to 100...200...and now 300.

Within that context, sl-avik's confusion is understandable. Citing numbers that require 125%-200% compound annual growth rates for illustration purposes....is not terribly illustrative.

To couch this in the IRL realm....

I feel exactly the same way looking back on some investor pitches and Board decks we've created for my company in the past. Some of the growth numbers we used were wild. And in present day looking back, wildly off. They were possible at the time, but I think we ended up doing a disservice to ourselves by setting the context in such a way.

I feel similar to some projections that we've sent out recently. In fact this was my exact critique to my CEO on Friday when reviewing something we were sending over a possible partner.

TeeGee, you are 100% correct. DNotes has a different vision and commitment since it was founded 3 1/2 years ago. Instead of going for "fast $$$" we have been investing heavily in ecosystem and foundation building. We are now well positioned. Our next phase will reflect the beginning of an aggressive expansion starting in 2018. Take a close look at our roadmap. Don't miss the train that is almost ready to leave the station.

Tim, here is my quick response since I am still on the road. A good leader must be prompt and decisive. Great decisions are often guided by established principles and mindset which are part of the established culture in which the company operates. I always promote a strong unified culture as a major contributor to business success. When everyone shares many common goals and beliefs they tend to arrive at the same conclusions and likely to make similar decisions. Once we learned the best decision making process and  consistently make the right decision - decision making, especially on smaller issues, become instinctive. This is a hugely important subject and one that I am very comfortable with. I could include a dedicated video on this subject one day. I still have a long way to go before I am done with the first 70. I am committed to have them done by this Christmas.

It's a great quote -- all good projects are built on solid foundations and fundamentals. DNotes have spent years making sure they get the right foundation in place before planning to rapidly scale and adjust the system to need beginning next year, as Alan has pointed out. People often do not recognise the importance of proper fundamentals at the start because they are usually attracted to what is right before them, and visible. DNotes success centres on its plans in its roadmap. Right now in this space people can see new ICO projects that offer some interesting features, and some projects that are cryptocurrencies and others that are development platforms that also do cool things. There are also decentralized exchanges and fiat gateways we like to use, and payment processors, and then there is traditional banking etc. Each of these groups have their own market segment that they generally stick to and compete in. DNotes plans to do all of these things and bring them under one roof to make spending money even easier than it is for us today, without anywhere near the costs! Once people can spend money fast, cheap, and easily, they'll have something before them that is both visible and useful that is not offered by others -- and they will want to buy it. At that stage, the price could go to anything. What is the market value of something that is better than traditional banking, can do what VISA does, and offers all of the necessities we need in the cryptospace in a tightly integrated fashion?

Successful projects like the one described above must begin with sound foundations and fundamentals. The quote from Alan's book encapsulates it nicely.

"Where we are now matters far less than where we are going from here", is a direct quote from my book. Once again, you are right, Chase. I forgot my own saying, and did not look at DNotes' roadmap when I said that $10 potential for DNotes was "too rich." DNotes is positioned for rapid growth and it will begin next year. 

This is the first time I've heard someone talk about the importance of making your decisions promptly. It would seem to be an obvious thing to do, but in many workplaces I've seen work stalled for a long time while waiting on a decision. And I've experienced what Alan mentioned where staff need to get the job done, so they make a decision themselves. Sometimes this has been okay, and sometimes the staff have lacked all of the important information and re-work was required.

I'm also really glad to hear Alan saying that it is important to follow your instinct and learn to trust your gut. What I'm hearing from management principles lately is that you need to be able to justify your decisions with logic, that you can't make them on a whim. But I'm on Alan's side with this one. Logic has it's place and no go leader will make a decision lightly when they know it is illogical. But successful managers might well make decisions that seem illogical by following their instinct, and then turn out to be right.

Life is not a closed system, the information that we're given is rarely more than a snap shot of an approximation made a some point in the past, and the rules we apply to our logic can often turn out to be old and faulty wisdom. Some of this old-wisdom persists in some cultures when it has been completely disproven in other cultures. For example, in Australia, the current wisdom is still, "When opening a shop, put it where there is nobody selling your product so that you capture that market." In Southeast Asia, the best place to put a shop is clearly right next to where there are lots of others selling the same thing. But if you look at results, even in Australia, the most successful shops are the ones that are clustered by product. If there are four Italian restaurants in one suburb, and just one Italian restaurant in a suburb closer to you, customers are more likely to drive further to the cluster of Italian restaurants than to go to the closer shop.

But the worst thing about following logic is that it discards the powerful and complex abilities of your brain to draw on thousands of seemingly unrelated data points and correctly predict the best course of action. This ability runs much deeper than our conscious thoughts that we're aware of. And because the magic is done behind a closed curtain, many people find it much harder to trust, than the conscious little steps that we can take with logic. It takes courage to follow intuition over logic. But experience of success in doing it, and as Alan said, "honing your skills", makes doing this become more natural over time.

BOK Governor: Future Bitcoin Regulation to Treat Crypto as Commodity, Not Currency

https://dcebrief.com/bok-governor-future-bitcoin-regulation-to-treat-crypto-as-commodity-not-currency/

Hi sl-avik,

The chart is merely showing how the DNotes 2.0 CRISP interest, staking reward, and the 365 day deposit will add to your balance. The second part of the chart shows how an increase in the price of DNotes over the next 10 years would affect your long-term investment.

"The chart below gives you an idea of the potential growth of DNotes 2.0 if you take advantage of the various rewards opportunities. Nothing is guaranteed in cryptocurrency, the markets are volatile, and you should never invest more than what you are comfortable putting into a high-risk investment."  

As far as the price going down, DNotes is not alone - it is the nature of the industry. The majority of people in crypto right now are attracted to the latest hyped up ICO, and may not understand the significance of DNotes doing things differently. Many of the coins with inflated marketcaps have nothing to support their value, and could see a lot of selling pressure in the near future.

If you want to know why I believe DNotes has the potential to grow to $10 - $100 in 10 years, you may want to check out the roadmap here - https://bitcointalksearch.org/topic/dnotes-20-staking-crisp-interest-dnotes-pay-1924858