Quote from: cunicula on September 20, 2013, 07:31:26 PM

Quote from: bytemaster on September 20, 2013, 07:25:58 PM

The impossible trinity is true if the only means of controlling the price is 'printing money' or 'destroying' money, but that is not what we have. Furthermore, the analogy breaks down when you factor in 'Sovereign monetary policy'. We are not attempting to Peg BitShares to USD via monetary policy. BitUSD is the result of two sides of a prediction market that neither creates nor destroys value, it merely transfers it from those who bet wrong on future price movement to those who bet right. This can be maintained forever, especially because of automatic margin calls that 'settle the trade' before the long position can lose money.

Absolute, complete, bullshit.

You are paying interest on BTC deposits. The interest rate is determined by the mining algorithm.
This is the monetary policy you are adopting for bitBTC. Bitcoin also has monetary policy. It is different from yours.
You don't magically not have a money supply just because you are not a sovereign. It just becomes a criminal offense now.

You are maintaining a peg. (or well you are using the claim of a peg to attract marks).

You are using free markets. (the better to access your marks).

Review the webpage again:
http://en.wikipedia.org/wiki/Impossible_trinity

Done?

Open your wallet
Put in this address: 1HxNKmUd1YgR9Metop4mHZdGNGEhUfEvcP
Type in as large a number as possible.
Click Send.

Now thank me for saving you from jail time.

The interest rate on BitBTC is not based upon the mining algorithm and it is not paid in BTC. No BitBTC is ever created unless two people agree on a price and take opposite sides of the bet on the movement of the price. Furthermore, they must both put in equal value in terms of BitShares.

If there is no price movement, the short pays the long via the opportunity cost of lost dividends.
If the price goes up, bitshare-value is transferred from short to long.
If the price goes down, bitshare-value is transferred from long to short.

This is a 0-sum game, not a ponzi, not a peg enforced by monetary policy. This is a prediction market of voluntary actors speculating on future price movements and making money proportional to their investing skills.

The return on real BTC is a growing supply of BitShares... which if they have a non-0 value can be sold for additional BTC. I am not promising any particular rate of return and my peg is not a 'hard peg' but fluctuates over time within a narrow range. This is why we adopted an axiomatic approach to designing our system:

1) no price fixing
2) all voluntary transactions
3) no creating value from nothing
4) 0 sum, value is only transferred never created nor destroyed.

Unfortunately, your system violates these core axioms despite your fancy math.

One last caveat... we are not pre-mining and have accepted no investor money from non-sophisticated investors... the money I received early on (May) was refunded + 50% and we continue to turn down funds from people who want to invest in the idea because of SEC laws. These are not the actions that would be taken by a scammer.

Furthermore, we are spending significant time and money to build revolutionary market-based systems far beyond just BitShares with the goal of securing life, liberty and property for all without the need for government. We want to make the world a better place.

I spent significant time and effort to teach and educate people in the Mastercoin thread. As a result of my efforts Mastercoin has been forced to redesign their market pegging system. So while I disagree with the approach of Mastercoin, I have developed the utmost respect for dracoinmister as being well intentioned and thinking outside the box.