Topic: Proposal for Standardizing the Distribution Rate of Dev MSC via the MSC Protocol - page 2. (Read 5740 times)

Hmm...to better help folks understand how this may look, would it be possible for you to plot a few graphs of this formula for 3 of so different scenarios over the next 12-24 months, e.g.:
* Linear MSC price rise, Bounty amount in USD stays about the same
* Exponential MSC price rise, Bounty amount in USD increases linearly
* Whatever else may make sense?

I know there are a number of variables expressed here...if you don't think it would be useful due to this, that's fine.

I like the idea of having the remaining asset partly in msc. But I would rather aim a msc ratio of 50% instead of 80%.
Also, if the foundation buys msc over the next months and then abruptly stops, the msc value will then suddenly drop, because of a sudden drop in demand. That's why I propose a 'smooth' way to get msc into the foundation wallet - to reach the desired ratio asymptotically over a long time. I worked out a formula that could be used for that purpose:

http://imageshack.com/a/img543/7554/xry2.png

m_buy(t): number of mastercoins to be bought on that day from the distributed exchange, by selling bitcoins.
m(t): number of owned mastercoins on that day
b(t): number of owned bitcoins on that day
x(t): price of one mastercoin in bitcoins on that day
c(t): average number of mastercoins spent per day (bounties, etc.)
T: Time in days, when the desired ratio should be reached (1/e)
r: Desired mastercoin ratio of the total value.

I this way, the desired ratio will be reached exponentially.

To get a feeling of how many msc would have to be bought per day: If we choose m(today) = 0, b(today) = 5000, x(today) = 0.15, c(today) = 50, T = 365 days, r = 0.5,

m_buy(today) = 95.7

So, the foundation would have to buy back about 96 mastercoins from the distributed exchange today. Of course this number will change, as soon as the msc asset goes up, or if the prices change significantly. Everything would be transparent, and bounties etc. could be paid in mastercoins.

What do you think?

If I may ask, regarding wealth generation, what's your personal goal.... i.e., pay your bills, and then beyond that, stock up on an asset that is risky, but has a huge upside, or, pay your basic bills, and save a much more moderate amount in something that's much more of a "sure thing"? If the latter...what interested you in Bitcoin??

If you were given enough in fiat every month to pay your bills, and then MSC/BTC beyond that at a good level...would that help?

Personally, I'm used to spending my time on risky things, after putting up with insane risk for years...i.e. losing 6 figures in a blown up business, scraping by by a few K in the bank with a company that burns 70K/month and having to have my parents buy my groceries for a few months because I couldn't afford it, etc .... but I am a weird duck I guess...in my case it paid off, but, yes, those hard times lasted years and it took me awhile to adjust to that. Doesn't mean I like that much risk....just saying that because compared to crap like that, to me, this seems pretty safe, hahaha! 

If I didn't have this business that was growing so quick and taking 90% of my time, I'd be here coding for you guys in a heartbeat.

Wow, there are a lot of varying opinions here (as far as the foundation buying up MSC, how to pay devs, JR working full-time, etc). I think any unilateral action on something this big by the mastercoin foundation could risk alienating the community.

For any big issue that requires voting, how about we do this:

* Open a voting period of 1-2 weeks. A thread is started where 3 or 4 voting options are given (along with a 2 paragraph "best justification" for each).
* Each voting option has a corresponding bitcoin address
* To vote, the top 50 or 100 Mastercoin holders will send some small fraction of a mastercoin or bitcoin from their MSC holding address to one of the voting addresses. Some one then tallies up the votes, after removing any duplicate votes, verifying MSC balance, etc.

This way, voting is semi-anonymous, and one can easily verify voter eligibility (as well as perform recounts, if desired, for verification). It also gives the community a voice in this matter.

I think its better to pay developers in MSC and to have the foundation hold MSC. It's a lot easier to trust a foundation or company which uses it's own product than the foundation or company which uses some other product internally.

Ideally you want developers who really believe in what Mastercoin can become rather than speculators who just want a quick buck. I think it should be MSC or fiat for developers but not BTC, not LTC, or PTS.  Imagine how awkward it is if the Bitcoin foundation paid people in Litecoins.

Regarding (2): JR's solution is the following: "Use the remainder of our BTC to purchase MSC over the next few months on the distributed exchange". This is too vague to determine whether it will be successful. Unless it is specified at what prices the board is buying MSC, we're not even sure how many MSC we will have to pay developers! At least with Bitcoin, we know how many we can have and what we can offer. It is true that there ought to be a more cohesive list of future bounties, that way we can intelligently partition our Bitcoins, but if we convert BTC to MSC over the course of months we won't even be able to determine the number and size of the bounties.

Regarding (3): Not everything is about projecting an image. It's possible that MSC will hit a technical wall and the demand for it will go down, and we'll need to hire developers . It will be difficult to pay developers in a currency which is of little value at the time they receive it.

1) the most important thing IMO is that JR commits 100% of his time to MSC, he is the founder, brain and soul of this project. Half measures are counterproductive.

2) Devs should be offer only MSC, and maybe fiat. No worries about the liquidity of MSC, the foundation would be providing that in the solution proposed by JR.

3) "reducing the exposure to MSC" is not an option. It would look like that the board wants to sit on  a pile of BTC "in case MSC fails". That's bad because create many negative incentives.

They should at least be *offered* fiat (or bitcoins).

The problem is that you're assuming MSC is more liquid than it is. If you want to sell your MSC, you need to find a buyer, which isn't always easy, and even if you do find a buyer, he may not want as many Mastercoins as you are selling, in which case you may have to lower your ask price.

Reversing your remark would be better: If a dev wants to increase his exposure to mastercoin he can sell his fiat for MSC. This is surely much easier than selling MSC for fiat.

I don't know how many times it needs to be proven that we're going "all in". If the goal is to attract good developers, irrespective of whether *they* are "all in" or not, they should be paid in fiat, or at least BTC.

I don't understand the discussion about the devs being worried about being exposed to the volatility of crypto.

First, this is what it is - it has enormous potential but also risks. No great fortune/opportunity comes without a risk.

Secondly, if a dev wants to reduce his exposure to crypto he can immediately sell his MSC for fiat, in the very moment he got paid. What's the problem?

Thirdly, the more I think it the more I'm with dacoinmeister. This is an "all-in" kind of project. Did Satoshi paid devs with fiat? Why is the board pushing to keep BTC and do not purchase MSC? It would look like they are very comfortable sitting on a pile of BTC and do not believe that much in MSC.

For me it's a no brainer, let's go 100‰ MSC, alluding to "instability of cryptos" to justify holding BTC against MSC is ludicrous.

This, right here. I wouldn't even feel comfortable getting paid in BTC let alone a currency that's just a few months old.

I have a feeling that we sometimes forget how fragile MSC still is. There are so many things that will or could happen that will have a great influence on the perceived value of the coin itself. It would be seriously irresponsible to use most of the Bitcoins from Exodus to buy more Mastercoin.

J.R., if you want to leave your job, do you really need to sell Mastercoins to do this? I'm sure a part of the 3000 BTC currently sitting in Exodus could be exchanged for non-internet money so your family has the security that for the foreseeable future they don't have to worry about anything while you work on Mastercoin. Having you on board as a developer would solve a lot of problems and speed up the process. I'm currently often waiting on votes on the way how the spec should be interpreted before continuing on. Having you in the trenches would surely speed this up.   

My concerns are echoed in #2 as a good reason to consider the implications, but I'm not sure it's really material. Increasing exposure to MSCs may seem noble and aspirational, but it's not prudent financial risk management which may require increased flexibility in times of extreme volatility. However, if the securities are highly correlated (BTC with MSC), this point is pretty much moot and any issues related to MSC exposure will also be reflected in the value of your BTC holdings as well.

This is an interesting idea, and I applaud J.R. for his transparency and for sharing his ideas with all interested parties. I do, however, have some concerns:

1.) If it is perceived that the Mastercoin Foundation is artificially inflating the value of MSC it may discourage people from investing and thus have the opposite effect. This is the danger of unintended consequences: i.e., that people will perceive the price of MSCs as artificial and not reliable.  I think it would depend on how the MSCs were purchase by the Mastercoin Foundation - a small amount over a long period may mitigate this perception. (Keep in mind also: companies buy back stock in limited quantities when they perceive that it is undervalued.)

Similarly, people are attracted to MSC because of its development funds -- it is well funded in an established currency, BTC. If you take that away, MSC may be a less attractive investment for some.   

2) The Mastercoin Foundation already has (or will have) a massive amount of MSCs vesting over the next few years. Selling the majority of BTCs for MSCs makes absolutely no sense from a risk management standpoint. The Mastercoin Foundation has massive exposure to MSCs already.

3) If anything, the Mastercoin Foundation should be taking measures to control for the volatility of BTCs by, for example, proposing bounties such as BTCs or MSCs worth at least $50,000 USD. Or by announcing hybrid bounties: part USD/BTC/MSCs. Or by some other means. Whatever it is it should mitigate the risk of over or underpayment to the developers for work done.

I do like the "eating your own dogfood" type ethos of this idea, but I share some of Kyune's well-stated concerns as well. This may make sense IF devs are willing to work for MSC (which I doubt, at least at this point, since it's so new and unstable, even compared to BTC).

On the up side, this action would definitely put the price of MSC way up...how much, depends on your buying strategy (e.g. constant, over X months, or managed/strategic where you buy on the dips to act sort of like a market maker of sorts and smooth out volatility, as well as get the best prices for the coins). Depending on the predictability of your acquisition strategy, the other risk is that other traders will front-run you (like exchange traders front run the fed QE/twist operations)...although I'm not sure of the impact in this case, as this is much more of a limited market than the stock market. (Maybe a more knowledgeable trader could comment.)

I think we've established that it's rising prices that attract press (at least with Bitcoin), not the other way around. In that event, it may very well kick off a virtuous cycle in Mastercoin's favor. However, we have to remember that most people are risk adverse, non-strategic momentum-chasers that will get in on a trend near its peak and cash out at the smallest sense of danger...mainstream media caters to that mania because it appeals to, well, the mainstream. This means that any raise may be short lived, similar to the earlier cycles bitcoin went though... Mastercoin will very well have a similar path of peaks and crashes along the way.

The other risk is that Mastercoin could be canned for manipulating their own market by some. Also, if the foundation favored MSC too much to BTC and the value of MSC plummeted in one of these fear-induced reactive sell-offs  (as JR said, it could randomly go down 90% on its way up, like bitcoin has), then the foundation would find itself in that "impotent startup" pickle that Kyune raised.

approved +1000

+1
Great Idea!

I believe the key to community support lies on explaning how this change would "motivate highly-skilled devs to commit more time for developing Mastercoin" and thereby speeding up the build of Mastercoin applications.

I've been trying to get the board to agree to do this for awhile now. Now I'm trying to leverage a bit of community pressure

Ah . . . wut? BTC is appreciating faster? I think you are extrapolating on way too short of a timeframe. MSC is WAY up against BTC since it launched.

What an interesting suggestion! One general question raised to mind regarding governance: Did the Board discuss this suggestion among themselves beforehand, or was J.R.'s post the first time members of the Board heard about this?

Regarding the proposal itself, I might support it, if the facts show that the change would motivate highly-skilled devs to commit more time for developing Mastercoin. Hopefully the board will gather feedback from the lead developers before making any decisions?
The fact that this would enable dacoinminster work with MSC fulltime is a huge upside from my point of view.

Regarding voting, this should either be asked from people who verifiably own considerable amount of MSC, or decide it within the Board after collecting feedback. What I wouldn't like to see is that random +1 comments affect the decision. Naturally good comments and viewpoints need to be gathered from everyone.
Listing e.g. top 50-100 wallets (as the status is today, when the suggestion was published), and gathering votes to a public thread wouldn't be too difficult technically.

I'm very interested to see what group of people the Board decides should be part of making the decision.