Ok, now I get it: The dividends flow along the dividend pathways, but in the opposite direction as the initial transactions. And if you create a dividend pathway by making a transaction which includes transaction taxes you won’t get any part of those taxes back, but the taxes will be shared equally (unless the “tax return” for one person exceeds his dividend pathway) among the nodes of the web of consumption of the person you give the money, except for yourself.
Also, the dividends paid out reduce your dividend pathway by the amount that is paid out, so you cannot ever get more money back than you have spent, but you can in fact get back 100% if enough dividends accumulate. This system might be called a “transaction tax return system”, but you can get back all of what you have paid to one node, and not just the tax you have paid on that transaction!
Now I want to understand the incentive layer of the Resilience protocol.
How is the liquidity of a dividend pathway defined? Is every dividend pathway actually a pair (x BTC, y) of a volume x reduced over time by dividend returns and a tax rate y (which can change depending on the dividend pathways you create in the future)? Or does the system work differently?
yeah pairs. this is an example from the proof of concept NodeJS/MongoDB app on http://graph_dev.basicincome.co and http://connect.basicincome.co
a dividend pathway won’t change, it’s limited to the ‘liquidity’ it was created for. But you can create new pathways that provide higher liquidity, and if you have multiple pathways in multiple ‘dividend rates’ to another node, then the system will always favor the one that gives you the most money.
Ok, so the dividend rate of a dividend pathway always gets the rate that the pathway target (the one whom I transfer my money to) currently has? And my rate becomes the rate of the pathway target instantaneously? Or is the change of the rate modulated somehow? Is this where the incentive layer comes into play?
Oh, and how can I increase my own rate if there is nobody in the network with a higher rate from which I could buy something? How do I do that?
Yup. If you send 100BTC to a target node who has a 0% dividendRate, you replicate that rate, and your node is limited to 0% for the next 100BTC it receives. This is the incentive layer. I’ve called it ‘the first law of Resilience’ too, it’s an important part of my system.
You produce more than you consume. The nodes from who most other nodes consume will be the most influential nodes. The consumers are influential in that they can choose value producers that provide them with basic income, and the producers are influential in that a consumer-node that has been selected by producers will be very influential and shape the taxation behavior of its swarm.
Would the same also be true for very low dividend rates like 0.01%? And what about high dividend rates like 50%? Do these get locked in place for a while, too?
So, are producers free to define the transaction tax of each product they sell? How would that interact with their current dividend rate?
Assume that producer P currently has a dividend rate of 10%, but wants to sell a product with a 20% transaction tax. How would that work out, if nobody in the network currently has a dividend rate of 20%? As far as I have understood the system a consumer C would copy the dividend rate of 10% from P and not the 20% transaction tax that P would like the transaction to have. Are nodes free to change their dividend rate at any time as they please, as long as those are not locked due to the incentive layer?
A node can change their transaction tax at any time. The rate they have at a given consumption transaction is the rate that creates the consumers dividend pathway.
Nodes are free to change them at any time. If Node P sets the rate to 20%, it might still be limited by incentive-layer penalties, and it might never reach a 20% transaction tax rate. Node P could change its own consumption patterns, and select nodes that also use dividendRates around 20%, which would decrease node Ps incentive layer penalties.
“This application is revolutionary in its aim to provide a globally shared income, similar to Bitcoin transactions in that it provides an incentive layer by rewarding miners/nodes in exchange for hosting and securing the network. This digitally produced incentive is what Johan has placed at the heart of the Basicincome.co application, a replication of what he describes as a swarm of nodes very similar to our ecological and human conditions.”
-BitNation – Decentralized, Borderless Government to Provide Universal Basic Income
