Ascending smoothly into the top 70.

Descending smoothly into the top 90.

So there's that.

Meanwhile, lets see what's happening to our compatriot "hybrid proof-of-stake" asset that also thinks it "doesn't need all this hashrate":



But then we already know where this ends up for coins that  use "marketcap milking" to excess in order to bribe existing holders rather than direct their protocol to prioritise store-of-value. (Or at least we would have if we'd done any decent due diligence before signalling priorities to the market by making long term protocol adjustments).

But OBV indicates accumulation.

So #pumpIsComing.

 

Dash "coregroup" does not control Dash. The masternode operators do. Maybe they don't realise that. Dash coregroup does whatever the masternodes command (including sending our marketcap to oblivion if that is the masternode's instruction).

Despite all the sophisticated, nuanced, diverse and creative propositions that were put in their lap, masternodes adopted the one that did the most destruction to the coin - "put more of the marketcapitalisation into the pockets of masternode owners". It is a gross failure of the governance system - one that turned potential leaders into leaches.

The only way this can be turned around is to rescue the genuine value proposition that Dash had in the first place. Masternode peeps need to understand that mining is a "capital absorption" process. It is the means by which capital is absorbed into the the blockchain. If you deny this and instead claim a right to "income" based on a capital holding that is doing no work (while miners do), we're done.

We are a mined coin. Don't try to be Ethereum, Tezos, Fiat, Visa or any other target. Be Dash. The only coin that can absorb capital at at the rate of bitcoin but at the same time deliver services.

It has to work for outsiders.

FIFY.

They are required for 1 thing over everything else: To facilitate a high mining quota while supporting services (by decoupling the service layer from the mining layer on-chain). The high mining quota is needed to store value, just as bitcoin does, using the capital transfer business model of POW.

The question then presents itself: "Why then torpedo your ability to absorb capital, having successfully liberated it from the service-layer priorities ?". Why not play the card you created for yourself ?

There are plenty of competitors that can do what Dash does if ALL we are going to do is be a functional service layer. There are NO competitors that can do both. So that's where the facepalm-factor lies in what we've done.

To some people, power is more valuable than wealth. Certain hard-core, mass holders will not want to let go of their right to make wrong decisions on behalf of the community.

That would normally be ok because the competitive value of their collateral just depletes accordingly, so free market in play. The problem here is that it pulls the value of everybody else's investment down as well.

That was maybe an area where the decentralised governance needed a bit more evolution.

(Ah, now there's a word )

So what is happening then ?

What is Dash doing about its ranking collapse ?

Where is the community debate that Dash's governance model should have heralded ?

Where is this discussion ? That is the question. Where are the promoters now ? How do they suggest that Dash recapture its market competitively ?

There is only 1 way IMO:

 • maximise mining
 • maximise services
 
There is no other crypto that can offer this in combination. Meanwhile, here's  what we are doing at the moment and why we are experiencing ranking collapse:

 • minimise mining
 • maximise servies

Why would anyone want to do that ? Where's the "hashrate dividend". Looks like it's negative to me.

Any de-fi token can do that. No capital transfer is made into the blockchain. This is what Dash has to its advantage. Bitcoin can't do it, Monero can't do it, Litecoin can't do it. So why don't we do it ? Because masternodes are so short sighted ?

 • maximise mining
 • maximise services

Go back and have a look at this post. Halfway down it I cite two distinct analytical models (perspectives) on the business model of mining. If you're seeing miners as passing a "cost" onto investors then you've got the wrong one of those two models in your head. You're thinking of things from the perspective of the "widget production model" which is why you'll keep making misplaced valuations and judgement calls about what's good for the asset.

We're not trying to produce coins as cheaply as possibly, avoiding passing "costs" onto the customer as you would do if you were making and selling gearboxes or something. Rather we're trying to store as much value in a coin as possible. If you look at this with a "widget production model" economics head on, it will look like the coins are 'too expensive' and we need to make them 'cheaper'.

That's the defective analysis that informed the "we don't need all this hashrate" insanity. Also, we're not trying to "sell less coins". Since when did low volume become a priority ? If mined coins "hit the market" it's because it was viable to mine. If it was viable to mine it's because there was demand for it in the secondary market. We WANT those coins to be supplied and get into circulation, and it doesn't hurt the price AS LONG as there is a primary market buy side to balance the secondary market sell side.

 • this IS the case with a mined coin
 • it ISN'T the case with a masternode coin

If you want to look at it from a double-entry bookkeeping perspective, then a distinction there is made between A: a cost and B: an investment. The difference, in accounting terms, is that:

A: reduces profits on sales
B: moves value around the balance sheet

So you have to be very sure which model you're dealing with because of you're not utterly clear about it and get it wrong you'll have the OPPOSITE effect to the desired outcome on every performance metric. For example, when a Dash investor at the exchange spends $1000 dollars on Dash, they want to know that the Dash COST their counterparty as near as dammit what they're paying for it. Otherwise their "investment" is simply going towards the profit being made by the trader.

This is what happens with masternode coins. The investor IS having a cost passed onto them but it's the cost of the masternode's profit margin, not the cost of extracting the coin from the chain. It's the latter that collateralises the investor's capital remember. Therefore masternode margins beyond the measurable added value (cost of running a node) do not benefit the investor AT ALL in book-value terms. Whereas with a mined coin, that cost is collateralised by a financially quantifiable increase in scarcity.

============================
P.S. Just remember this in case the message still isn't getting through.

Masternode rewards are NOTHING unless the marketcap increases. They're paid out of coin supply growth, not external revenue, so if the marketcap doesn't increase then all you're doing is slicing up a carrot and telling the holder they've got "more carrots now" just because you sliced it into smaller peices. Note that this is not the case with a mined coin because the miner adds value to the coin by being forced to bid for it. That value DOES come from an external source and that's the role of hashrate - to mediate that value FROM the external source INTO the blockchain.

That's not selling, it's "brokering". Miners acquire their coin at a cost.

But you never did seem to get that distinction (and neither did many of your co-voters) which is why we're now in this position, having hobbled our most competitive protocol feature of all.

A wise sage once said:

"There is no greater cancer to the marketcap of a digital asset than the asymmetric profitability of its first coin holders"

In the same way that an efficient microchip manufacturer can collapse prices by being more profitable at a lower price, so the masternodes can tank the market by being more profitable than miners at a lower coin price. Then difficulty adjustments make that change permanent and the cycle starts again, leading to a long term ranking collapse such as the one we've seen go on for a couple of years now.

This helps no-one because in the long term, masternodes are simply digging their own grave by devaluing their collateral. It doesn't encourage investment in masternodes either because outside investors look at this and are at least as concerned with capital gain on their collateral as they are with potential rewards. If the reward level is beyond optimal such that it results in a capital loss rather than a gain (when compared against competing, fully mined options) then we will see no net reduction in "circulating supply", even in the limited context of the flawed economic definition currently governing Dash's protocol.

The solution is to target a balanced profitability strategy that sustains a high coin price rather than a high stream of zero-value coins that simply get dumped on markets with no compensating investment in the primary supply (as is required of the pure mining business model).

Sure. If the ranking plunge isn't going fast enough for you then be my guest.

It's only fair that masternodes should be gifted ever more of the new supply to compensate for their devaluing collateral "network contributions".

Descending smoothly.

It'll only take 2 years of masternode rewards to get back to an ROI of zero if you invested $USD 24 hours ago

No worries - just measure your ROI in Dash and you'll get 6% always !

Some of this happens to be true and some of it is just clinging to any port in a storm instead of (what you could be doing) advocating for Dash's powerful governance mechanism to be deployed to adapt the protocol for maximum competitiveness.

Dash is capable of attacking competitors to an extent that few if any "coins" are. But it can't do that while its hands are tied behind its back by a masternode community who's priority is to leech as much of the marketcap into their own pockets as they possibly can.

The irony of the masternodes' flawed priority is that they ignore the opportunity cost of growth in purchasing power of their collateral which is required to be pledged in order to receive mining rewards that would otherwise be directed to raising the price in the primary (mining) market. That price advantage alone can move the value of their collateral far more than the incremental coin-count of their Dash holdings can. We've seen that already.

Let us look at the OBV (On Balance Volume) in the longer term charts of Dash vs Bitcoin. We can see that there is some accumulation going on. OBV is lazily moving contrary to the price trace on the longest range charts. But it's barely detectable and this is in the middle of one of the greatest bull markets ever for crypto. So we'd expect that. But the problem is, this is also happening with fully mined coins and it isn't reflected in rankings.

(It might be for a brief few weeks when the "pumpers" get hold of us but that will only serve as an exit door for shills rather than people who actually want to stay in Dash and believe in it on the basis of fundamentals).



The reason for that (and the difference from the last time) is one and one only: we are at masternode equilibrium

Dash's marketcap growth dynamics are completely different at masternode equilibrium from what they are when we are moving from 400 masternodes to 4000. That's because it doesn't really matter how much of the supply is in or out of circulation, it's the rate at which it's taken out or put in to circulation that matters. At masternode equilibrium, the collateralising supply no longer has any effect on that rate. The dynamics shift so that the masternode rewards now become the dominant factor and those are all on the sell side only. (Miners have to buy the supply that they subsequently sell).

This explains why Dash is now at the bottom of the marketcap rankings for all mined coins in the top 80 digital assets. If it was true that we "didn't need all this hashrate", we'd be at the top because only half of our supply has to be competed for with hashrate whereas all of their's does. We are twice as competitive as them in terms of "not needing hashrate" yet we're at the bottom of the heap. The masternodes got something wrong there.

However Dash could turn this around and use its powerfull governance mechanism to its advantage. It's a simple step process:

1. understand the "mining" business model and its role in transferring fiat capital into a blockchain token

2. recognise that the reason we've lost so much competitivity corresponds to our lack of performance in store of value

3. masternodes need to appreciate growth in the value of their collateral (capital gain) at least as much as the Dash denominated rewards they received (because, having so much at stake, it can also manifest as a capital loss which will simply wipe out those Dash denominated rewards in an instant)

4. anyone who gets past points 1-3 will immediately realise how cheap service performance can be for Dash alone (exclusive, not available to Bitcoin, Litecoin, Monero et al) and how much masternode rewards can be increased by shifting a component towards capital gain and away from a Dash-denominated income level that results in overall capital loss

The key to this is understanding the difference between a risk asset and a stable coin. In a stable coin we wouldn't have this problem. Masternode income would be masternode income, end of story. You would not have to calculate your aggregate reward by offsetting that income against the capital loss of your collateral. But Dash is not a stable coin. So you do have to calculate your reward by taking capital loss (or gain) of collateral into account and IMO masternodes should therefore be interested in Dash's protocol features which can maximise their capital gain, not just their Dash-denominated rewards.

The technical reason for that is that Dash inherits bitcoin's innate monetary properties but also (at a technology level) managed to decouple the mining protocol to liberate a new service layer protocol. But this advantage is lost if the project is co-opted by people (masternode operators) who simply don't even value the mining protocol. We end up with the worst of all worlds - not a de-fi token and not a highly mined scarcity token either.

One final point. When I say "capital loss" I'm talking mainly about opportunity cost. The cost of remaining invested in Dash while Bitcoin, Litecoin, Monero et al hammer us on ranking. Ranking means marketcap loss and marketcap loss means opportunity cost and opportunity cost ultimately means "staying in fiat". Ok you didn't lose any fiat-vauled Dash but you sure lost out by not being invested in Bitcoin.

Dash has and has always had an immensely powerful offering which was as good in store-of-value terms as it was in usability "what a nice wallet" terms. But we will not be able to deploy this advantage without being thinking, competitive and addressing elephants in the room.

Otherwise page 2 awaits us.

Dash isn't some kind of product like toothpaste where marketing makes the difference in terms of competitive performance.

If it works as a store of value it attracts capital from investment markets. If it doesn't work as a store of value it bleeds capital to other assets that work better.

Marketing isn't going to change a damn thing except keep a few existing investors happy. A comfort blanket. We are great at marketing to ourselves but seem uninterested in anyone else. Anyone outside of the Dash ecosystem.

The best marketing you can get is to slide up the rankings on CMC. To do that you need an efficient mechanism to transfer capital into the chain, not to bleed it out of the chain as un-earned masternode rewards do.

That's all it there is to it.

LoL !! Are you serious ? There only are 14 "mineables" in the entire top-80 digital assets and we're...wait for it..number 14 amongst them !  

If you count staying more valuable than Ravencoin as a success then why not invest in litecoin instead ? It's even more valuable than Dash.

That is why mining is "so f#$#ing important", especially if you're a "mineable" because you don't have any on-chain sink to generate demand from hosted applications. It's all in the scarcity value which uses mining as the transmission mechanism to get capital "into the chain" as described here.

Except it just keeps delivering "results".

Funny that.

Now that we're in the top-80 marketcap rankings with transaction count on the deck (due to a gazilion competing decentralised payment methods on offer) and store-of-value performance on the deck (due to a torpedoed mining quota), maybe your own mantras might start to have some effect.

Never mind that none of the scarcity-based mined offerings support SIMULTANEOUSLY a very high mining quota that can compete with bitcoin's store-of-value performance AND a service network that can compete with the best de-fi has to offer. But we would not want to avail ourselves of that unique market vacancy would we ? That would be stupid and a "waste of hashrate".

The only question now therefore is:

"how low"
"does the bar have to go ?"

Even if there is it doesn't matter because miners have a transaction on the "buy side" to compensate for their sale. So at worst they're brokers, not sellers. An exchange investor is the ultimate net buyer.

Masternodes however have no such compensating activity on the "buy side". They are net sellers when rewards are realised. The investor who buys their coin ? Their investment capital does not reach the blockchain, it gets diverted into MN pocket never to be seen again by the Dash ecosystem.

This is what eats the marketcap on a chronic basis relative to fully-mined competitors.

So what ?

They'll just be bought again and the masternode count will re-stabilise at some arbitrary point, except this time not haemorrhaging all the investor capital out of the chain that it did before.

The protocol doesn't control the value of the masternode reward, the market does and the market has already "reduced that payment" and coins have been getting "sold off" for the last 4 years.

In fact in my view that fact that Dash is finally addressing its own "elephant in the room" and making itself more appealing to outside investors instead of just existing ones would be seen as bullish by the market and create a run on Dash.

Maybe paying people like you to write tosh like this is the way forward. You could make it up as you went along which is what you're good at and if you were verbose enough we might even manage one of those blip sized pimples on this chart  

(Or as an extension of the idea. Why not use Dash's fabled GETC as a basis to pay both you and the masternodes !)