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should people with multiple masternodes receive an economical incentive to always only vote once?

Discussion in 'Pre + Budget Proposal Discussions' started by Pietro Speroni, Jul 25, 2017.

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should people with multiple masternodes receive an economical incentive to always only vote once?

  1. no

  2. yes, and the incentive should be 0.005 dash per payment per masternode

  3. yes, and the incentive should be 0.01 dash per payment per masterernode

  4. yes, and the incentive should be 0.0215 dash per payment per masterernode

  5. yes, and the incentive should be 0.0464 dash per payment per masterernode

  6. yes, and the incentive should be 0.1 dash per payment per masterernode

  7. yes, and the incentive should be 0.2154 dash per payment per masterernode

  8. yes, and the incentive should be 0.4642 dash per payment per masterernode

  9. yes, and the incentive should be 1 dash per payment per masterernode

  10. other (I will explain in a post)

Results are only viewable after voting.
  1. Pietro Speroni

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    Right now each masternode owner has one vote. And it was claimed that this is to use the "wisdom of the crowd".

    Now the "wisdom of the crowd" is a technical term that refers to some really interesting phenomenon. In several situations when you ask a crowd to evaluate a situation. Especially a situation that involves evaluation a number in a one dimensional range (like the money to allocate for a budget, for example) it has been shown that asking this question to several people (the more the better) who has
    • all the same weight;
    • no incentive to lie;
    • and an incentive to bet on the optimal value
    then the median of all the votes will approximate the optimal value. This has been shown by asking people to evaluate sports results, as well as asking people to evaluate the weight of a dead ox; or the number of beans in a jar.
    (It is actually a really cool party game, take a transparent jar, fill it with beans, and then ask everybody to write down in secret the number of beans in the jar. And when all has done it read all the numbers, calculate the median, and then predict that the result will be very close to the median. Then count the bean. I did it in a bar with sugar cubes, and they were so impressed they did not even ask me to pay for all the sugar :-D ).

    Some people, usually experts, will be very very close to the actual result. Maybe even close than the median. But (and this is a key element) you cannot predict who the experts that come so close will be. Do the same experiment twice or thrice, and each time the best expert will always be a different person. While the median will always be either on the spot or nearly on the sport. Every. Single. Time.

    This is the magic of the "wisdom of the crowd". This is why doing it makes sense.

    But notice something, for the "wisdom of the crowd" to work each person should have one vote. Deciding who are the experts, or who are the person who are more invested and giving them more vote does not increase the probability that the median reaches the results. If it does something it biases the result in favour of the people more invested making the median slide further away from the optimal result.

    Similarly letting people see how other people voted tend to bias the result making the wisdom of the crowd oracle less precise.

    I am a masternode owner, and I am about to turn on a second masternode. This will give me the possibility to vote twice.

    So here is my suggestion. I think people who own multiple masternode should vote only once. Unfortunately letting people who have multiple masternodes vote only one time is a non trivial problem. One idea could be to ask a proof of individuality from each masternode. But this has privacy problems, as well as security problems (what if someone decides to abduct the masternode owners? Or a government decides to arrest them?).

    So I would like to suggest a different solution. People who own multiple masternodes should have an economical incentive to declare it. And then they will only be allowed to vote once for all the masternodes, but in exchange for this they will earn a bit more for each masternode they own. Right now a masternode will give you about 1.8. Maybe when a person has multiple masternodes set up together it could give 0.1 dash more.
    0.1 is just a work in progress example; Of course the actual value of how much should be evaluated with a vote among the masternodes; Great example of a situation where the possibility to vote a number and then taking the median, suggested by demo would turn out really useful.

    So here is my suggestion: should people with multiple masternodes receive an economical incentive to always only vote once?
     
  2. TroyDASH

    TroyDASH Well-known Member
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    I'm not sure if I agree with the premise that there is a problem. Shareholders in companies don't get one vote per person, they get the number of votes that is proportional to their stake, and I think for good reason. We can't guarantee that every person with more at stake will make better decisions that affect the value of their investment, than every person with less at stake does, but when you aggregate the effect it seems to me like a proportional voting weight is a solid way to move forward.
     
    • Agree Agree x 9
  3. Pietro Speroni

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    Hi @TroyDASH , thanks for answering.

    What you are saying is absolutely correct, companies do NOT use this system. And instead use a system where the weight of the vote is proportional to the number of shares someone has. This is not the wisdom of the crowds and if Dash preferred to use this system it should not claim it is using the Wisdom of the Crowd. Now, the question is, do companies when they make their decision make better decisions than the wisdom of the crowd would provide.

    Look at the example of the beans in the jar. And make two experiments, in one case you give to everybody the same vote, and in the second you use weighted votes, and you distribute the weight of the votes following some power law distribution (which is a common way in which goods end up distributed when there is at the base a "to who has shell be given" process, which is common in capitalism). And now you see if the median still provides a good prediction for the quantity you are trying to measure. Which in your example will be beans in a jar, but in reality might be things much more important like the right balance between investing in two different projects.

    And then you will see that the bias that comes from the power law distribution will simply skew the result making it go off on a tangent.

    And the fact that the people who own more, will have more vote, and will risk losing more will not change this in any way. Why? Because they don't know what the correct result is. Even if they were the emperor of the dashuniverse, they could not make the correct prediction. They just would drive themselves mad in trying to make a prediction that no single human being can do.

    And if this system, the way corporations run, was so good, then corporations should have a really good track record, right.

    You judge. For me I agree with Richard Wolff in being critical of how decisions are taken when few people hold all the power.

    He makes an ethical point (this system is not democratic). I make a pragmatic point (this system does not produce the best result. Provable).

    In any case if you still disagree with my position, can we at least agree that Dash should then stop pretending it is using the Wisdom of the Crowds. Dash will essentially be just a decentralised corporation. Sure it can be profitable. But no where as interesting as what I would like it to become.
     
    • Agree Agree x 2
    • Disagree Disagree x 1
  4. Dashmaximalist

    Dashmaximalist Active Member

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    the worst run companies are far better than best run governments , reason too much power given to many imbeciles

    The best way to run anything is to give the decision power to people who have stake in it

    thats what dash is all about
     
    • Agree Agree x 4
  5. Pietro Speroni

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    Indeed it is better to have 20 people who are invested in a company to decide than 20 people who are not invested in a company (government officials).

    But this is not what I was suggesting.

    What I was suggesting is to have thousands of people voting. Each invested enough. It's called the Wisdom of the Crowd and it works better than companies which work better than government officials.
     
  6. tungfa

    tungfa Administrator
    Dash Core Team Foundation Member Masternode Owner/Operator Moderator

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    reg "wisdom of the crowd" ...
    the crowd in dash is the biggest stake holders / investors
    the system is build around them being the smartest investors as they have the 'most to lose' and will make the best decisions (vote) for the network
    why would we not allow them to vote with each node each time ? wouldn't we then disencourage investors to invest more as suddenly we do not "trust " them anymore (to make smart decisions )

    sorry but this does not make any sense to me
     
  7. TroyDASH

    TroyDASH Well-known Member
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    The point where the beans in a jar example breaks down though is the assumption that nobody knows what the correct answer is, or that no one is more likely to be closer to the correct answer than anyone else. The reason it works for the beans is that there is no relationship between someone's level of financial interest and their knowledge of geometry and bean sizes. But in the aggregate, someone's amount of money they can invest *does* have a general relationship to their ability to make business decisions and manage wealth. Suppose if a 100 million dollar company used the wisdom of the crowd approach and said one vote per person with at least one share. Would it be better to trust the business decisions to a hundred thousand people 1 vote each who have an average investment of $1000? Or better to have 5 people that combine for 50% of the voting power with $10 million invested each, and the rest of the voting shares spread out to others proportionally to their stake? I would argue for companies, the latter is the better approach. Others in Dash may disagree with me here, I can only speak for myself.

    The question of whether Dash is a decentralized company/organization, or a decentralized government/democracy is a very important one and I like that you are bringing it up.
     
    #7 TroyDASH, Jul 25, 2017
    Last edited: Jul 25, 2017
    • Useful Useful x 1
  8. Pietro Speroni

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    Sure, let me try to explain this better then.

    The way in which people are able to predict an information is not proportional to how much money they have at stake. Either they have enough at stake to give their best bet, or they do not have enough at stake, and their prediction is random (or worse). The fact that I now will have twice the money at stake opening up the second masternode, does not suddenly give me twice the predictive ability I had before. Yes, I am risking twice, but I am always the same Pietro. I will always vote in the same way. Sure, if my stake at Dash went so low that I did not care about Dash at all, and in fact I wanted it to fail I would start voting differently. But once we trust people to make a vote because they own a masternode (which is the value of a small apartment in many cities by now) their predictive ability are not dependent upon how many masternode they own.

    Does this makes more sense now?
     
    • Agree Agree x 2
  9. Dashmaximalist

    Dashmaximalist Active Member

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    You have made a fundamentally wrong assumption
    "The way in which people are able to predict an information is not proportional to how much money they have at stake"

    History of world's most successful companies proves that they can , unless you dont have a stake in something , your predictions are useless frankly

    you dont make great fortunes unless you are really good ( imagine warren buffet etc )
     
    • Agree Agree x 1
  10. TroyDASH

    TroyDASH Well-known Member
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    The issue I have here is the use of the term "predict" being applied to business decisions. Business decisions are not like predicting the outcome of a coin flip, or guessing how many fingers I am holding behind my back. There is a level of skill involved, and when there is a level of skill involved, markets have a great way of bringing the best decisions to the top. Take for example the Augur project - decentralized, competitive prediction markets. The whole thing depends on the markets, if it was everyone can only buy one share (or only move the market by the same amount regardless of how many shares they buy), of each prediction market it would never work and the current price of a market would not be as accurate.
     
    #10 TroyDASH, Jul 25, 2017
    Last edited: Jul 25, 2017
    • Agree Agree x 3
  11. Pietro Speroni

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    Hi @TroyDASH, thanks for the very useful example.

    Let's break it down because you make a lot of really interesting points.

    Hmm, sort of. The first time this was observed was in 1897 (if I recall correctly) and Farmers were to bet the weight of a dead Ox. And you absolutely had experts among them. But no one knew the correct answer.


    Yes, and no. Adding financial incentive makes sure people try their best. Might make some more calculations. But at the end the result is not so much a better prediction than the aggregate prediction of many people that are "enough" incentivised. I am not speaking about random people making random decisions, but many people invested. At the end to optimise the probability for the system to make a good prediction you need to increase two things:
    • more people
    • people with more money.
    And the two things are mutually exclusive, so you need to find a good compromise. If you let anyone who has 1 dash or more has 1 vote you would probably get too much noise. But also if you let people have one vote for each dash (thus following a power law of vote weights). Because in a power law you have a tiny group of people who control most of the masternodes. And so the actual votes that counts are so few that the median has also too much noise.

    At the end the median is wrong both if people vote randomly (because they don't care), or if to few people vote (or have their vote count).


    You guys are taking an ideological position, but this is really not an ideological question. This is a very practical question: which formula is more predictive?
    • The median of the votes for each person that holds at least 1000 Dash
    • The weighted average of the votes, weighted by amount of time they hold 1000 Dash.
    I think this question is not a matter of discussion and it is instead a matter of experimentation. And I claim that once you make such an experiment the result will be the first formula. As such it is not a matter of speaking for me or for you, but of making the correct experimentation, and showing how the two formula compare.

    I am even willing to make the python code (open source so you can check it) myself. If enough people are willing to put their ideologies aside and look at this as an experiment.

    It is and I am very surprised to be the only one that seems to support the idea of a decentralised government. But if this is what you guys believe in, why did @amanda_b_johnson kept advertising Dash as a coin guided by a form of decentralised government?
     
    • Agree Agree x 2
    • Informative Informative x 1
  12. TroyDASH

    TroyDASH Well-known Member
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    More predictive of what though? If we are predicting how many beans are in a jar (this is actually a measurement or observation, not a prediction), then perhaps the median one vote per invested person is superior. But if we are "predicting" which of two options will provide a higher ROI (a business decision), I would go with the weighted/proportional votes.
     
  13. Pietro Speroni

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    Surely there are people who are really good at predicting. And then they amass good fortunes.
    But the opposite is not true, there are people who made good fortunes (maybe through inheritance, or sheer luck), but this does not make them any good in predicting.

    I agree with you that people need to be invested enough to care. But once that threashold is over we risk to give the keys of the car to a small minority of people who might end up making their own personal interest. Which is what happens in corporations, by the way.

    For now the situation is not very bad because masternodes seem to be still decentralised enough. There seem to be no single person who is able to significantly shift the decision too much. But imagine if we had the 20% of masternode owners which controlled 80% of masternodes (the classical Pareto ratio). Or worse the 1% having 95% of the masternodes. Basically those few business genius (according to you) will now have the control of Dash. And they could start passing laws that rises the level needed for someone to have a masternode (from 1000 to 5000). This would make perfect business sense from their point of view. Something like CEO of modern corporations that pay themselves those incredible premium. In fact they could phone each other (because now they are few, and they would know each other like Bitcoin miners), and start pay themselves bonuses by putting in budget payment for them. I scratch your back, you scratch my back. Perfectly good business decision, for them.

    Now it is the time when we can set up a system that does not permit this later on. After you cannot. Please, please, please think about it. Maybe sleep on it.
     
    • Agree Agree x 1
    • Useful Useful x 1
  14. Pietro Speroni

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    Agreed is not the same; I speak about prediction because the wisdom of the crowd is the base of prediction markets which are used to predict sport results.

    But am I suddenly twice as good in evaluating ROI because I doubled my investment in Dash?
     
    • Like Like x 1
  15. TroyDASH

    TroyDASH Well-known Member
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    On an individual basis, no, but in the aggregate that is the effect that happens, because fewer people who are bad at evaluating ROI are able to invest as much as people who are good at evaluating ROI.

    Sports betting is another interesting case because free market prediction markets are also possible (ex. Augur, or DirectBet)
     
  16. GrandMasterDash

    GrandMasterDash Well-known Member
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    I've previously suggested something very similar. In my case, I think declared clusters of MNs should get more dash but less voting power. If they want more voting power then they simply don't declare clusters.
     
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  17. Pietro Speroni

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    Agreed that it would work like this. I am just not convinced the predictive abilities would be linearly correlated with the investment. Especially when you go to the extreme of having very few masternode owners basically deciding everything. In a sense when you go from the Wisdom of the Crowd to the Agreement of the Elite. Especially because the Elite, can easily corrupt itself giving itself bonuses.

    This is different. In betting you can bet more or less, but you bet more or less depending how you feel on the individual race. So it is neither a situation where all the votes are the same, nor a case where richer people bet always more. Each person bets an amount proportional to how much they are are sure of their decision (multiplied by their wealth, but not just their wealth).
     
    • Agree Agree x 1
  18. UdjinM6

    UdjinM6 Official Dash Dev
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    Not sure if she ever did such a claim but I'll let her correct me :)

    For me personally, Dash is decentralized organization/governance and definitely not a democracy/government. At least curently :) I honestly don't see any issues with people putting money where their mouth is and having more voting power for putting more on stake. Yes, this can lead to a corruption in legacy systems but imo the reason for this outcome is not the money and the power itself, the reason is that legacy systems are closed ones and hard to escape - they don't have direct feedback loop on the decisions that are being made and often there is no choice really, you have to leave with whatever was decided by those in power. In digital/crypto it's all open, you can "abandon the ship" in minutes and that will have the most direct impact on those who has the largest stake. The have to think twice (and then think once again) before doing smth stupid or harmful.
     
    • Agree Agree x 2
    • Like Like x 1
    • Useful Useful x 1
  19. demo

    demo Well-known Member

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    Why would we prevent big stake holders to vote? Because stupids and spies infiltrated Dash, and they are now probably the biggest stake holders around . Thats why a proof of individuality is needed. In order to spot them, and diminuish their voting rights in case they are undoubtedly spies or stupids.

    It is not a wise choice to encourage whatever investors, because some investors may are rivals and may want to destroy you. Some investors may are big stake holders here, but bigger stake holders in another place, and maybe it is in their interest to destroy you in order for their other place to survive or to boost.

    I voted "other" in this poll, due to this.

    <vote history> <-- why vote history is usefull?
    should people with multiple masternodes receive an economical incentive to always only vote once?
    no 5 vote(s) 71.4%
    yes, and the incentive should be 0.005 dash per payment per masternode 0 vote(s) 0.0%
    yes, and the incentive should be 0.01 dash per payment per masterernode 0 vote(s) 0.0%
    yes, and the incentive should be 0.0215 dash per payment per masterernode 0 vote(s) 0.0%
    yes, and the incentive should be 0.0464 dash per payment per masterernode 0 vote(s) 0.0%
    yes, and the incentive should be 0.1 dash per payment per masterernode 1 vote(s) 14.3%
    yes, and the incentive should be 0.2154 dash per payment per masterernode 0 vote(s) 0.0%
    yes, and the incentive should be 0.4642 dash per payment per masterernode 0 vote(s) 0.0%
    yes, and the incentive should be 1 dash per payment per masterernode 0 vote(s) 0.0%
    *other (I will explain in a post) 1 vote(s) 14.3%
    </vote history>
     
    #19 demo, Jul 25, 2017
    Last edited: Jul 26, 2017
    • Disagree Disagree x 1
  20. MizzyMax

    MizzyMax Member

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    No because it creates higher centralization. If you have more masternodes than others, you can gobble up more Dash quicker than the others. Unfair, if that became the case, masternodes would create a masternode group shares to increase profits. which wouldn't make sense.

    Personally I think that nodes should be just like miners. Free to run, and incentivized. from the knowledge Iv learned, nodes will automatically be required to run better equipment, if the equipment isn't qualified than you are off the network. So I don't think collateralizing is the incentive structure we need, just need a good payout based upon actual work nodes will do for us. Right now it's a very low amount of work for a very large reward. we pay $6.3 million to masternodes monthly to provide a $45,000 service.
    The math: 4500 nodes
    payout a month 7 Dash = about $1400
    $1400 x 4500 = $6.3 million
    Server cost a month = $10
    $10 x 4500 = $45,000

    Honestly, why not take 70% funding from nodes for now to increase treasury funds? About $4 million more a month for funding? Masternodes do not need the money to run their services.

    I guess some can say the extra money left over that masternodes collect is labor fees for voting lol, idk. I look at it from a business perspective, I see we are over paying. In the beginning masternodes barely made profit, I think they made around $20 a month. it's gone sky high now with no increase in productivity from nodes. Unless we create a forever changing rate of rewards to costs I can see it being acceptable. A system that automatically changes the difficulty level requirement based on price movements. I think that would be needed for collateralized nodes to make sense.

    Just my personal thoughts on the subject.
     
    • Disagree Disagree x 2
  21. UdjinM6

    UdjinM6 Official Dash Dev
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    https://www.dash.org/forum/threads/economics-how-should-dash-stay-competitive.15438/
     
  22. djcrypto

    djcrypto Member

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    I don't think "guessing number of beans" is anyway relevant to voting yes or no on proposals.

    IMO if you're smart enough to have lots of masternodes, you're smart enough to vote in a representative fashion.

    Rewarding whales more than minnows will incentivize centralization and a take-over - we don't want that.

    If there becomes a problem with voting blocks rejecting reasonable proposals, something will have to done.

    Cross that bridge if we get there, IMO.
     
  23. Pietro Speroni

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    Thanks for your answer @UdjinM6. Just please do not advertise it as Wisdom of the Crowd as it is not using this.

    For now :). Just wait until the winner crypto gets established, and the possibility to leave will be, de facto, irrelevant.

    In any case thanks to all for your input. I feel I understand this community a bit better. I still will open my second masternode :).
     
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  24. Pietro Speroni

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    Dear @GrandMasterDash , do you think you could find that suggestion? I would be interested in reading the discussion that came out.
     
  25. GrandMasterDash

    GrandMasterDash Well-known Member
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    I didn't find the post but I did find one comment I had made in Sep 2016:

    "Allow each MN to choose a reward-vote ratio (RVR). Imagine a sliding scale from 0 to 1. Each MN could request a maximum reward (1) but they would subsequently have zero voting power. At the other extreme, a MN could request maximum voting power (0) and receive no reward. And, of course, being a sliding-scale, any number inbetween.. say, 0.6 (thus receiving 0.6 reward and only 0.4 voting power)."

    https://www.dash.org/forum/threads/masternodes-and-volume.10807/#post-104710

    I also found this quote of mine from Aug 2016:

    "What if there was a system that gave higher payouts to people that proved they had control over more MNs, but equally gave them less weight in voting? That way people would have a clear decision of what was more important; more voting power vs more income"

    https://www.dash.org/forum/threads/...e-to-vote-with-number.9081/page-2#post-102473
     
  26. akhavr

    akhavr Active Member

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    Please, define "better decisions" formally in this context? Thanks
     
  27. Pietro Speroni

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    Great question, thanks.

    I would say a decision A is better than a decision B if the outcome is more in line with the vision and mission of the company, as well as it is more economically sound. As this is a complex evaluation with several elements sometimes it is not possible to clearly define a decision as clearly better than another (it might be better in some respect and worse in others, thus laying in the Pareto Front). But generally speaking we can simplify the problem by saying that whoever has more predictive power over what will happen using one policy or another will generally navigate the space of decisions better.

    Now the Wisdom of the Crowds has shown itself to be a tool able to make really good predictions (for example you should read how it was used to find a lost u-boat). There will always be experts that beat the WotC. But we cannot, unfortunately, know which expert will in a specific case reach a better result than the WotC.

    Again, thanks for the question that permitted me to clarify this important point
     
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  28. akhavr

    akhavr Active Member

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    The intractable problem is that, in the multiagent system, even given the agents have the same information and skills (predictive power), the reward function might be different. Then, add to the mix the difference in the information available, the capacity to process the information, the skills difference, etc..

    So far I don't know any management structure in history, that would solve that problem better, than a corporation. Shareholders pool their capital together towards a goal, elect board of directors to hire and oversee management. If the vision of shareholders (reward function) diverges, they either exit by selling out or branch out another corp. In crypto world, shareholders either sell tokens, or fork the project, or both.

    By adjusting the share in the company I may become more or less related to the collective corporate reward function and *this* is the way it is created. So, it *is* WotC, but in a different way than you've outlined in the initial post.

    Just my 2 duffs :)
     
  29. Pietro Speroni

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    It has, indeed, never been tried before.
     
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  30. demo

    demo Well-known Member

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    You are not a corporation. You are not a company. You are not a commodity. You are not collectible items, stamps, paintings or collective underwears of hot starlets. You are not....bla bla bla.

    YOU ARE MONEY!!!! Please always try to remember that. Money has not only economical aspects, but also political aspects and military aspects.

    Some people are trying to degredate the cryptocurrencies to ordinary commodities , to ordinary corporations or companies, to ordinary collectible items which depend on the state's currency and policy, while some other people are trying to ugrade the cryptocurrencies to real money.

    What is happening with cryptocurrencies has never happened in history before. By all means, please dont try to solve new problems with old recipes.
     
    #30 demo, Jul 27, 2017
    Last edited: Jul 27, 2017
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