Origin of BitShares - Part 12 - with lessons learned for Steem
Spring 2015 was the best of times, and the worst of times..
Dan and Nathan had just invented core concepts that would become Graphene. Everyone had a quarter-time job with BitShares - working for the very unmanned software company they had created. We also had our year-end bonuses denominated in BitShares to supplement our income for a while. So, when BitShares pulled out of the Great Bitcoin Recession everybody would be all set!
It was just a matter of free-falling through a few more tiny plunge-braking paychecks and then pulling out of the dive just before impact...
Meanwhile, Graphene was looking great! The world's first real time blockchain with transaction times reduced to seconds and volumes in the hundreds of thousands of transactions per second! It would have a built-in referral program and insanely great tools for managing accounts and transactions.
But the BitShares price remained stuck in the doldrums. We realized we had a serious supply and demand problem.
To live off our savings (in BitShares) and our meager incomes (in BitShares) we had to sell them relentlessly. This was putting selling pressure on the market and suppressing the price forcing us to sell even more to feed our families.
Simultaneously, all our energies were going into Graphene which we couldn't announce yet because investors just don't like to hear you plan to throw out your old code and start over again. Innovation is a dish best served cold. This left a vacuum of good news which led to sluggish demand -- also suppressing price.
That would be letting the markets see you sweat.
The curse of liquidity
Most companies work from investment capital that is immobile. Your investors agree to leave it locked up in the company for a long time before expecting to get it back. So you can work away without worrying about keeping short term speculators happy. Not so with crypto. Cryptocurrency holders are free to surf the rising edges of many currencies and they hop out of your currency any time you are working on something new.
So while we were sweating out the birth of Graphene, many speculators were using the lull in the action to go surfing elsewhere. This didn't exactly help demand.
This would happen again in the summer of 2015. After the announcement of Graphene, the surfers came by to grab our new wave and prices surged. But as soon as we deployed the world's most powerful industrial strength real time block chain (with a gratifying price spike) the surfers were off looking for new thrills and the price began to sag again. After all, what had we done for them lately?
And now you know why Steemit is designed to lock up its investment capital!
The difference is dramatic in getting to the top of the charts and staying there!
Coming up Next: Cryptonomex Rears its Head
Cheers!
Stan Larimer, President
Cryptonomex
The origin of BitShares and Steemit
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Greatest Hits
Bitcoin and the Three Laws of Robotics
Engineering Trust with Charles Hoskinson
The Origin of BitShares
Why I will never give up Christianity
