Disbursement Definition?

1. What is a disbursement?

Disbursement is the release of funds from a trust fund for payment to contractors and other parties.   The term can also be used in reference to loans made by a trust fund.

2. Purpose of disbursement?

Disbursement ensures that the project remains viable and keeps funds flowing through the system. It also prevents any one person from gaining too much power over the system, by ensuring they cannot “solo-mine” their way to 51% of all coins.

Disbursement is usually done either monthly or every time a certain amount of blocks have been mined (for example, every 50th block).

3. Disbursements vs dispersal of assets?

There is often confusion between disbursement and dispersal of assets. Disbursement refers to the distribution of funds collected for a project, whereas dispersal refers to the distribution of any other type of asset collected for the project (such as physical goods or intangible items).

4. Types of Disbursement?

There are two types of disbursement: proportional disbursement (or per-block disbursal) and uniform disbursement.

1. Proportional disbursement refers to the disbursement of funds based solely on the number of coins each member holds. This is useful for projects with few members, or where some members hold very large numbers of coins.

2. Uniform disbursement refers to disbursement using a fixed formula, which can be adjusted to account for more factors than just the total number of coins in the project. This is useful for larger projects, where a proportional formula may end up giving too much weight to a single member.

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5. Advantages of Disbursement?

There are many advantages that make disbursement preferable to other forms of asset distribution. The main advantages are listed here:

It ensures an equitable distribution of project funds among all members, preventing any one member from gaining too much power over the system.

It prevents loss of coins by ensuring that no members end up holding more than they should.

It ensures an orderly distribution of coins, which enables members to plan their activities more effectively.

6. Disadvantages of Disbursement?

The main disadvantage is that disbursement can be slow and require a lot of effort from project members. It is generally not recommended for larger projects with many members, as the effort can be more than the project members are willing to put in.

7. What is an example of disbursement?

Disbursement with a 50-coin minimum threshold and 0.1 coins per transaction would be simple, requiring each member to do nothing but wait for their coins to come in. This is easy enough even for a small project, with 10 members.

Disbursement with a 200-coin minimum threshold and 0.1 coins per transaction would be more complex. This would require each member to make up to 200 transactions in order to get their coins. This is harder than it sounds because doing lots of transactions is not free; the extra effort may push members to try to sign up under multiple identities, which can cause problems.