Topic: [ANN][DASH] Dash (dash.org) | First Self-Funding Self-Governing Crypto Currency - page 15. (Read 9723768 times)

The word "mining" in cryptocurrency is just a metaphor for a trustless market. That's all mining is. A market.

Its commercial purpose isn't to secure the network but to enable investors to purchase shares in the blockchain directly as they emerge according to the emission schedule, without recourse to a trusted intermediary.

Clearly national currency can't be used to mediate such an exchange so hashrate is used instead. Hashrate is the "currency" with which coins are purchased and the market is legitimately termed the "primary market" being that those who purchase their coins there (as opposed to on a commercial exchange) are the "primary holders" on issuance.

All we're doing with masternode rewards therefore is issuing half the supply at a zero price to an arbitrarily defined section of the primary market. I use the word 'arbitrarily' in a strict sense because the network isn't actually receiving anything in return for the rewards it pays to masternodes, at least nothing that remotely reflects the value of the reward. That this is true is endorsed numerically by the profitability of the node which in most cases is close to 100% of turnover as they have next to no costs.

So masternode rewards must therefore come out of marketcap. There is no other funding source on the other side of the income stream (unlike De-Fi, where the chain itself fuels monetary velocity by drawing fees for on-chain computing services that can only be paid in the native blockchain token. That in turn pulls external capital into the chain).

One might say "but masternodes paid for 1000 Dash, so they deserve their rewards". No. They deserve 1000 Dash and they received 1000 Dash, just as someone paying for 1000 Bitcoin would receive 1000 Bitcoin. They wouldn't keep receiving more bitcoin.

There is another problem at the aggregate level: While the masternode reward concept can incentivise investment in Dash for a while it only boosts the price WHILE THE NODECOUNT IS GROWING. Once the nodecount stabilises at equilibrium then we get a whiplash effect and everything is thrown into reverse as we experience coins flooding onto the market (from MN free airdrops to the tune of half the entire supply) instead of being taken out. Even the "circulating supply" thing is nonsense. Masternode collateral circulates just as non-MN collateral does, in fact in a bear market MN's are under more pressure to sell than most because they've got more to lose. You might have 2 masternodes up for sale while 20 cold wallets with 100 Dash each in them are not up for sale in which case the MN collateral is circulating and the non-MN supply isn't in that particular case.

Remember, mined coins "flooding onto the market" are not a problem because there is a buy side to that transaction to balance the sell. So no net sell pressure from miners. Masternode rewards however ARE a problem because there's no buy side in the primary market so it's all net sells in the secondary.

SOLUTION

As that commentary I screenshotted above points out, Dash is potentially an incredibly powerful variant on bitcoin due to its decoupling of a service layer from the blockchain mining protocol. Services therefore don't have to work in blocktime, they can work in realtime (instant send being the first example of that) without impacting on mining capacity. But this great advantage is thrown down the toilet if you don't maximise demand in the primary market at the same time - in metaphorical terms, maximising "mining". Masternodes can still receive rewards and be incentivised but far more of their investment growth needs to come from capital gain on their collateral rather than airdropped income. This would also get rid of the statutory sell pressure from taxation. We have all these headwinds that fully mined coins don't. We need to turn them to our advantage not their's.

The way to fix this and get competitive again as an attractive investment asset is - as suggested above - to get mining back to something like 80% at least IMO.

Being part of a consensus has nothing to do with being right. The herd mind is not elevated it is the lowest common denominator

Consensus belief once held that the earth was the centre of the universe with the sun and other planets orbiting in perfect circles. people were persecuted for challenging this belief.

In the case of masternodes there is a mistaken belief that the miners are expensive and have to be paid for by 'the network'. The consequence of this belief is that the reward allocation is always skewed the wrong way. The market punishes masternode coins for airdropping too generous a portion of the supply for free.   The idea is so deeply entrenched that when things aren't going well the proposed solution is to give even less to miners. It doesn't work. Dash has proven this in a real world experiment.

As for your points 1 and 2 i think toknormal has addressed that already. However i might add no one ever said the mining metaphor was a perfect analogy between crypto currency and metal. yes difficulty adjusts for practical reasons, so that block rates stay roughly constant over time. but no matter work is still being done to buy the coins with energy cost.

Whether the miner sells coin at a loss or not is irrelevant because they had to buy it first. The masternode didn't.

So if miners sell at a loss the net investment in the network is still positive. If a masternode sells at a profit (which is always case for MN rewards), the net investment in the network is negative.

That's what matters - the sums.

The more you move the reward towards masternodes therefore, the less external capital gets into the network and the more reward has to be paid out of existing marketcap rather than outside investment. This is the reason we sank to the bottom of the mined sector and are now left mired in a league of sh*coins without pedigree such as Mina, OKB and loopring instead of in a competitive ranking where we belong.

Yeah, I thought you might which is why I posted it, I am still very much for the reallocation and I do think that in time Bitcoin too will break some rules, my prediction is that it will move to a POS consensus and it will abandon the 21 million coin limit and have a trailing inflation rate of for example 1% similar to other shitcoins like `HEX` and Ethereum.  One thing that does seem to be more true is the perception above all else matters the most (to price), not how the coin is emitted or even how quickly it is emitted.  Firo will do well if as a community they are all able to agree on an approach forward, I wish them well and I hope they do good by themselves and the environment.




Yeah, i've faced this issue in my life too, at some point when people keep telling you the same thing over and over again, you have to admit that you are probably wrong and they are right.  You think that just because a coin is mined it is 'hard' and has wrought physical value, but this wrong on a couple of points.

• 1. The miner may sell that coin at a loss.
• 2. As the price comes down and miners drop off the network, the difficulty in creating new supply also decreases.

In particular I want to draw your attention to point 2 which does not apply in the mining of physical gold for example, where when the price drops too low for gold, miners simply stop mining and the new supply is quenched.  In Bitcoin and Dash for that matter, when the price drops, the algo just makes it easier to mine, this completely blows your argument of the water that mining gives a coin intrinsic value, it does not.

I'm getting deja vu with this. ok what have we got ? Firo project. Improve tokenomics by spending less on mining. FFS
I'll tell you how it ends. You don't make any waves, you plumment down the rankings. You start irrelevant and thats how it is/

remember Meraki ? (it took me ages to find it)
https://bitcointalksearch.org/topic/m.53517798


Sounds similar no? where did that end up? It doesn't even have a ranking, https://coinmarketcap.com/currencies/meraki/

I'm sorry to be unenthusiastic but we need a masternode coin that goes the other way. with mining something like 80% as ballpark. A precious dash. A scarce dash. Not more cheaply airdropped worthless shit.

Why does dash and every single other proof of work masternode coin not see it? what is the point of having proof of work and then trying to eliminate the work? You need to understand bitcoin before you start getting rid of mining

A project doesn't "spend" anything on mining.

Mining is the cost of acquisition of the coin for outside investors when they purchase it in the primary market. (It's known as "on chain demand" as opposed to "exchange (secondary market) demand").

A project doesn't have "more available" to it for spending on value added by puncturing its scarcity and feeding half its supply into the ecosystem with a price tag of zero.

The only people that don't understand this appear to be Dash Kamikaze insiders who don't realise that this theory of giving away coins instead of exposing them to on-chain bidding has already been tested to destruction being that we've done it for 8 years and are at the bottom of the mined league in marketcap. I'm not saying don't do it. I'm saying don't do it beyond the point of diminishing returns and we're way past that.

On a more general note, I'm slightly bemused at what's going on at the moment. The other day I came across this post which, while I probably wouldn't be as conspiratorial, nor include certain players like @taoOfSatoshi (or even @markMason nor @coinGun & @tanteStefania) in the mix, is at least somewhat reflective of my own view of recent history. What put it on my radar way back was the splitting of the Discord which I saw as an unnecessary act of wanton vandalism by a few who were unable to tolerate contrary views. That's their right. It's a free decentralised investor community. But things have gone downhill ever since with retarded economic theories such as the one posted above prevailing and now the dismantling of DCG.

What are the people advocating this putting in its place ? Do they have clear and structured personell plans ? Do they have an advanced understanding of our economics ? (see exhibit A above) ? Do they have access to world class development teams ? Are they some kind of project management experts ? Are they busy lining up a bunch of ground breaking DAO contractors ? From where I'm standing the answer is a clear "no" to all of these.

I'm not saying reform isn't needed and I'd be happy whittling down DCG to a programming team and little more. Cyrpto sells itself if it gets high enough up the marketcap ranking. But IMO the original "Discord vandals" have held sway of many Dash narratives for quite a while now and produced nothing. (Except "Masternode-Zeus" which is good and I've already given credit to).

So this view is relevant IMO and worthy of consideration. What I like about this view is that the guy actually likes Dash, understands it and isn't trying to destroy it, mutate it out of its comfort zone or otherwise undermine the authenticity or sovereignty of its monetary characteristics.

The Firo project is looking to follow in Dash's footsteps and improve their tokenomics by spending less on mining and more on value add.

https://forum.firo.org/t/tokenomics-and-funding-division-of-block-reward-discussion-and-community-matching-fund/2061

https://forum.firo.org/t/poll-on-firo-block-reward-division/2150

If they can get this through, the impact on price is potentially bullish as the network's electricity costs would be dramatically decreased and become more environmentally friendly too.  Firo is able to afford this change because similar to Dash they employ ChainLocks which reduces the reliance on Miners for their network security.

For me, that a person involved in a project valued at more than 1,000 million dollars, has to worry about skirts, accusations of children from behind a computer screen, or crying in forums and asking for help, is an example that Dash needs a radical change of people.

A professional has goals, and to achieve those goals, has a plan. Sometimes it is necessary to recompose the plan, and other times it is necessary to change it.

I think it's time for MNs to vote smart and look for professional people. Perhaps you even have to look for professionals far from cryptography, and far from the people of the Dash environment. If we only get stuck with the people who know Dash, we will barely get an average candidate profile, far from excellence. In the years that I have been following dash, I have never seen a profile of a person who stands out from the rest, and is able to lead the team to make Dash prosper.

You have made me laugh, and you have my support, and you have it simply because you are a person who asks uncomfortable questions, and you do not spend your time sleeping on your cotton cloud waiting for everyone to applaud you and tell you how great you are , which is what I've been seeing for years at DCG.

All the best

If I was a Dash Trust Protector, the first thing I'd do is set up a due-diligence exercise to establish what the economics of Dash are and exactly how it justifies (in hard accounting terms) deviating from its cloned inheritance. Nobody in this community can even do double entry bookkeeping, let alone apply it to such apparently exotic concepts as proof of work, proof of stake, reward flows and investment capital flows. They don't even understand the economics of bitcoin (otherwise they'd have anticipated its success as opposed to its failure). Understanding the economics of bitcoin is the first step to understanding the advantages of Dash.

This would be ongoing and have two parallel aspects: analytics and debate. As far as analytics go, it's not that difficult for example to employ an experienced modeller to test out theories such as the one I promote continuously whereby our masternode rewards are super-optimal and undermine the capital gain element of growth. Then we'd at least have a control reference with which to test any theories and proposals coming out of DCG.

I'd require an economic model that was formally presented that investors could understand and measure progress by. This could challenged and refined on an ongoing basis.

Then I'd establish some kind of semi-formalised protocol for DAO contractors by which their progress and accountability could be better measured by investors, along the lines of what's described here and here.

Then I'd re-instate @taoOfSatoshi as moderator of some kind of forum where all views are tolerated, broad umbrella, aimed at non-holders at least as much as the tribalistic priorities of a few hardened insiders.

That for me would represent "protecting trust" in Dash. I wouldn't be concerning myself too much with personal behaviours, who said what about who's wife/girlfriend, people throwing their toys out of prams, rage quits and huffs. That stuff is the domain of golf club politics and tends to be a signal that the priorities I outlined above have been forgotten and neglected. Pretty sad stuff. New investors are not interested in that kind of b.s. no matter what side of the argument you're on.

Sorry, but due to technical reasons due to the abnormal operation of the pool with Dash Coin, I had to remove it from the list of supported ones for now!

https://powerminers.tech/
This coin supported in new low fee multi-coin pool!
We are waiting for you...

LoL ! Well I suppose there's always solace for some in being the least bad loser  

Dash is a bitcoin clone with the claim that donating new supply to existing holders at zero cost rather than exposing that supply to competitive bidding, represents a competitive advantage for investors. So there's nothing arbitrary about comparing its marketcap performance with other mined coins that didn't do that.

If you put half the gold supply onto the market at zero price as it comes out of the ground - whether it goes to existing holders or new ones - I don't think there would be much debate over what effect that would have on the gold price.

That analogy applies directly, unambiguously and observably to Dash. I'm not saying don't do it. I'm just saying don't do it to such a ridiculous extent that we destroy the asset's performance as an investment compared to 100% mined peers.

We can all find an arbitiary way to rank the coins.   

Sure. But the count wasn't supposed to fall in the first place so that's like saying "the reason the Titanic is sinking is because it's got a hole in it". The question is why has it got a hole, not why is it sinking.

If you remember, the objective of firing even more free dash at masternodes was to reduce circulating supply which was the basis for addressing Dash's "store of value problems". Circulating supply (or at least Dash's definition of it) is inversely proportional to masternode count so my view is not simplistic it's just that the measure didn't work. It didn't even work on a competitive basis (see below) so your excuse that other coins experienced the same problem is moot.

The problem is that Dash cannot afford these masternode rewards with the paultry monetary velocity it has of 14k transactions per day. So they have to be paid out of marketcap and go-nowhere pumps that end up crashing below their liftoff point eventually.

All the same I'll add that one to your inventory explanations for your convenience  

Nº 271: All coins lost value
Nº 386: Hashrate's only a measure of carbon footprint
Nº 364: Dash was in a secular downtrend
Nº 210: we had some large elderly whales sell everything recently
Nº 142: Dash performs poorly leading into December
Nº 176: MNs aren't forced to sell, miners are
Nº 481: The instamine
Nº 482: Russia !!!
Nº 501: the count...must fall is to protect the income of the existing MNs

****** MINEABLES ******

While I do agree the BTC has been a disaster since 2017, I am not of the opinion that trend continues forever given that Bitcoin has hit market saturation and Dash is still a mostly unknown project with greater promise.  I would also like to remind you that other coins share the same chart as Dash in this regard, for example, Ethereum a coin that gets many accolades has never regained its 2017 high and IMO never will.

With the MN chart, you have spotted the trend, but your simplistic and fixated view on the reason has led you astray.  The reason the count has been falling and indeed must fall is to protect the income of the existing MNs left in the network, simply put the MNOs are pricing in the risk of holding Dash and currently that is 6.6%, since each year the reward is shaved by 7% we can expect to see some MNs leave the network to maintain a healthy ROI for the remaining nodes.

There's nothing to figure

There hasn't been one single pump in the Dash/Satoshi pair in the last 4 years that was sustained. The satoshi price always ended up lower than it started pre-pump.

The only silver lining is that the last two bottoms were fairly close to each other so at least the bottom seems to be flattening. The question is, what happens on the next BTC/$USD revaluation upwards ? Does Dash then lose it on the bitcoin pair and finally drop through the 2 BTC support for 1 masternode ? Or do we start to climb the rankings again ?

What's different this time ?

Anythin ?

P.S. Pure economics perspectives say the former (drop through 2 BTC support) because you have an income generating entity there that's doing absolutely no measurable economic work in comparison to the income generated. However the protocol fixes that reward in Dash terms independently of dollar valuation. So the market's only way to reconcile this is to revalue the MN collateral downwards which is what it's been doing.

This MN reward stuff isn't yet properly thought out and until it is it will continue to have a cancerous effect on growth. Look, even circulating supply (or Dash's own arbitrary made up definition of it) is disastrous. It's gone in the wrong direction. That was the whole basis on which that reward shift was made in the first place. You have to have recourse to the first derivative, as Ryan does, for any solace. ("The rate at which circulating supply is increasing has slowed"   )

You seem to have it all figured out, are you trading it then and making money? 

Dash pumps typically start off looking like this and end up looking like that because there's so much unearned profit to realise from excessive masternode rewards that it acts as a deadweight to any spontaneous growth. Is this going to be any different and represent any long term growth or is it just another exit pump ?

Even better!  I see we are almost back to 3 Bitcoins for a Masternode, the direction is right at least, number still more than 3x too low.

It's also manoeuvring on the raiche.