Likeways and I appreciate the gracious reply.

It's not a "theory" it's an account of capital flows.

It doesn't say anything about whether we go down or up, only about how competitive Dash can be at storing capital in the chain compared to those other coins you mention. That account predicts that we'll be less competitive than our fully mined counterparts in attracting capital and therefore lose ranking relative to them. (Unless there's some other demand driver such as monetary velocity. But there isn't - that's at rock bottom as well and my "theory" for that is that it's a result of our poor performance in store of value. So it all goes back to the original issue).

Our performance in this respect is nothing to do with "fashion". It's systemic.

Are you seriously that confused ? I never even implied that the electric company was the investor. The exchange buyer is the investor.

Sure. And like the Titanic's 8-piece orchestra you'll still be parroting that mantra when we slide out of the top 100.

Miners are paid by outside investors, not some notional "Dash corporation" that you're inventing. They are paid to "secure" that investor's capital in the chain, not to secure the network from hacking. That happens to be a bi-product of the investment mechanism.

Even if 99.99% of coins are out of circulation and there are only 100 left the trading price can still be zip if there's no demand because "store-of-value" doesn't work. All bitcoin's supply in cold wallets is also "out of circulation". All litecoin's is, Monero etc.

Wake up.

What complete hogwash.

Even at the current price, masternode operating costs would need to increase 800-1000% to justify the revenue they already receive. Those costs are fixed and don't increase with coin valuation like mining costs do so MN profits increase linearly with price. Meanwhile, difficulty reductions don't make mining more profitable (in the long run). The whole point of difficulty adjustments is to keep mining at a consistent and sustainable profit margin.

Also always remember this, in terms of the capital transmission mechanism:

1] mining "costs" represent investor capital being transmitted into the chain. They are not a "cost" in a literal sense

2] masternode costs AND profits represent investor capital being LOST from the chain for every reward coin realised

In the case of [2] the capital either goes into MN pockets or is lost to operating overheads. So Ryan had it exactly the wrong way around. The masternode reward is justified only insofar as it makes us more competitive (in terms of useability) over a fully mined coin and no more. Tanking the mining quota the way we have is like slapping a 50% handling fee on making a bank deposit. It is any wonder that investors choose more efficient options for storing their capital ?

That's about the only reason why we're now floundering at the bottom of the top 80. We can't even keep up with ETC. All these fully mined coins are surpassing Dash on ranking...on a permanent basis until we sort this out.

These kind of anecdotal observations are not very helpful because they don't characterise the whole system performance in terms of its transmission of capital from secondary market (exchange) investors into primary market valuation.

In a mined coin, the primary market valuation is defined by the price of extraction of the next coin from the blockchain.

To determine those dynamics IMO we need to ditch our various preconceptions of individual trader behaviour, which are diverse, and simply understand the business model of a mined coin. In that respect, the problem is with the word "mining". It's a metaphor, nothing more and an unfortunate one in Dash's case because it obscures the real function of mining which is a capital transport mechanism. This has lead to a huge banana skin that we've slipped up on, making us think it's dispensable.

We need to discard the metaphor and see it for what it is - getting investor capital into the chain.

The capital transport process works like this:

1. the secondary market buyer invests their fiat capital at the exchange (e.g. Kraken)
2. the exchange transfers the capital to the "miner"

At this stage we note that the word "miner" is simply a metaphor for a broker who provides a capital-migration interface between the exchange and the blockchain

4. the "miner" exchanges their fiat currency for "hashrate currency" provided by the electric company
5. the "miner" then trades this for the coin in the blockchain primary market, supporting the price in the process through competitive bidding
6. the coin then travels back up the food chain all the way back to the secondary market buyer

The secondary buyer's investment capital is now in the blockchain, collateralised by the marginal cost of coin extraction. Meanwhile the the blockchain's tokenisation of that value has ended up in the hands of the secondary market buyer. This is the basic Satoshi model of blockchain capitalisation which Dash inherits.

Notice that all the way along, each party only takes a small profit margin for transporting the capital. The money paid to the electric company isn't an overhead, rather it's a currency exchange. Notice also that in Dash's implementation masternode rewards are revenues which if realised, have to be tapped out of the investor capital flow which therefore never reaches the chain. The consequent blockchain capital deficit is represented by masternode profits on their reward realisations which (unlike miners who are simply conduits) have a near-zero cost base.

At this point there will probably be conflicting and diverse views about this perspective. So it's helpful to introduce 2 distinct analytical models to resolve these:

 • a widget production model (where you're trying to minimise the resource cost and maximise selling price)
 • a capital transmission model (where you're trying to maximise the amount of capital that gets from stage 1 to stage 5)

In terms of the widget production model, then it's true that "cost does not drive price". The manufacturer is trying to minimise costs and maximise price and if market demand is there then profit is inversely proportional to cost. But in a capital transmission model the OPPOSITE applies. This is where the masternode community have got it wrong IMO and ended up configuring our protocol parameters at a way sub-optimal level for capital appreciation. For example when you transfer money to your bank account, you don't regard the value of the capital you're moving as a cost. The units in your account are not widgets with a production cost, they're a store of value so you want as much as possible of the capital from stage 1 to end up at stage 5 using the example above as an analogue.

So in the model for store-of-value digital assets with distinct primary and secondary markets (BTC, Dash, LTC, Monero, Doge etc), mining represents the transmission mechanism and it has to operate with high fidelity. If half the capital from stage 1 ends up in masternode operator pockets on the way to stage 5, this asset will bleed marketcap and external investors will simply dry up. That in turn will lead to loss of non-investor user adoption which will manifest in depleted blockchain traffic statistics. Sure the masternode operators will make money for a while but ultimately the low fidelity capital transmission will deplete the store of value performance to the point that even masternodes don't make money due to the chronic devaluation of their collateral by external asset markets.

The way to fix this IMO is:

1. for Dash governance to become conscious of the distinctive and conflicting priorities between these two analytical models (widget production model & capital transfer model) and the perilous banana skins generated by conflating the two  

2. to appreciate how our psychology is pre-primed with priorities of the former and that we tend to project these on the latter unconsciously

3. as a consequence of 1 & 2, to realise that Dash can then be way more competitive as a capital transfer model than it is at the moment. ( = store of value performance)

4. only then can we add back in Dash's usability features into consideration. It is unique in the aspect of being capable of supporting nearly as much capital transfer performance as BTC and LTC but way out-competes them on usability. We can't do that however unless we address the issues with our crippled mining quota

Luckily, all that it takes in technical terms is a re-appraisal and resetting of the reward ratio. Nada.

In governance terms however it might take a bit of a leap of consciousness, maturity & sophistication. That is the next obstacle to be scaled IMO.

I agree. And mining is "generating demand". It's a market.

If you short-circuit that market and "donate" the coins directly to a privileged few then the net effect is to tank the price in that "market". You're not generating any demand, just supply because so much of the coin (~50%) emerges with a zero cost base.

How can you not get this ? How void of dispassionate, intuitive logical reasoning does one have to be not to see that allowing such a high proportion of coins to emerge with a zero cost base in this type of asset is going to chronically eat the markcatcap away (relative to equivalent assets that don't do it) ? If you can't see it intuitively I've even given you the sums so you can demonstrate it to yourself using pure accounting:

 • the masternode reward doesn't have a buy side
 • the mining reward does

So part of the reward is a net sell and part is neutral. Clearly the more of the reward you push into the "net sell" sector, the more it's going to drag the marketcap down until it simply sinks it due to eventually erroding even investor confidence in its ability to store value. The only reason proof of stake coins get away with this is because they have on-chain sinks that offset the sell-pressure from staking rewards. Store-of-value assets that synthesise precious metals don't have that, scarcity is what is invested in. Sure it's ok to have SOME masternode reward. I'm not advocating for none. I'm saying that beyond a certain point the reward doesn't offset the capital loss it causes in the masternode collateral which sets off a slow death spiral that's impossible to escape. We went way past that optimal reward-split point.

I can even understand people like Ryan thinking that ditching hashrate will make us somehow more "efficient". He's a classically trained economist and economics is all about optimal use of resources. But he mis-characterised the business model of mined assets. We're not a "widget production" model, we're a capital transport model. The priorities reverse. If you think of hashrate as a production resource then of course it's excess to requirements when you have something like chainlocks. But this isn't a coin production factory, it's a capital transport system. It transports capital from a market investor into the blockchain. It uses a TRUSTLESS MARKET where hashrate is the CURRENCY used to transport that capital into the "bank". The value doesn't end up in electricity companies it ends up in the blockchain. They only peel off a tiny piece of profit but they supply the "currency". The capital invested ends up in the coin. The more of that "currency" you can attract to your chain (on top of whatever else demand you can create) the more demand your emerging coins will have at the primary source. Conversely, the less you attract, the less bidding there is and the more the value is undermined. What's going into masternode pockets isn't profit from blockchain activity, it's investor capital that should be going into the chain.


Not if we get the basics wrong. If we get the basic protocol so misaligned with the capital transport model which mining implements that it actually weighs down the store-of-value performance so heavily that you don't even get adoption, then you're never going to get monetary velocity. The store-of-value has to work first, then velocity can come. But it doesn't work the other way around. Why do you think we've been trounced by even Litecoin et al and left in the dust at 10k transactions per day. Zip improvement in velocity (daily transaction count) in 5 YEARS ! That's despite gazillions spent on marketing, all kinds of zany adoption projects, features, masternodes, instant send, on-chain mixing, Venezuela, you name it.

What's missing ? Store of value performance that only mining can deliver.

Lets stop dreaming and start thinking.

That's a pump, not a store of value. By now you should know the difference surely. All of that is coming from bitcoin's coattails. To "store value"we need to make progress or at least to be reasonably buoyant against bitcoin. Instead it's hammering off support trying to breakthrough to some new depth that looks like ending up at 1 BTC per node.

To be buoyant in SofV you need to use every spare ounce of fuel and not p*ss it away out of the network on unsustainable rewards for nodes. But of course that's not going to happen because the governance system has been a disaster in conflict of interest as its most effective achievement to date is to allow the governors to stuff their pockets full of ever more of the emerging coin supply at no cost, then dump it on markets for a profit at any price until the marketcap in BTC terms simply haemorrhages to a shadow of its former self.

Let us review the "mineables" and see how our "we don't need all this hashrate" anthem is making us more competitive...



Nice !

We've been overtaken by a "Helium" coin which I'm sure deserves its place above us because of #reasons not to do with us tanking our mining quota to favour governors. Rather it's to do with Dash being unknown and people not realising how great Dash is.

At least helium is light. It fills kids balloons so understandable.

The fact that our governors have decided that stuffing our own pockets full of ever more of the emerging coin supply is the clever way to make Dash more investible for outsiders than ADA, XMR, LTC and BSV, who expose theirs to the free market, is bound to bear fruit eventually  :-)

Keep chanting and we should be ok. In particular see: Dash Expected to Exceed Litecoin Transaction Count Following Agreement with Halifax Storm Damage Distribution Agency

There is no bigger "manipulator" of price than the protocol itself.

If you have the protocol force one half of the market to engage in competitive bidding while feeding the rest of the supply out to existing holders at zero price, what do you expect to happen exactly other than a continuous draining of market cap ?

It's got nothing to do with nonsense like "perception & hype". Dash has had more that its share of that compared with any other coin. It's simple accounting for capital flows.

---

Notice how the hybrid proof of stake coins are chronically trailing all the fully mined ones. It's not rocket science: "Mining" is only a metaphor. What it actually is is a market.:



Mining Is A Market

From an analytical perspective, by definition Dash's primary market includes BOTH miners and masternodes.

If you feed coins into that market at zero price you end up with an asset who's value is constantly undermined. In that respect, (at nodecount equilibrium) masternodes are simply zero-difficulty miners. It's ok while the masternode count is changing from a lower value to a higher value. But the long term valuation of this asset is going to be determined by its performance at nodecount equilibrium. The only scenario where donating coins to holders beyond their own contribution to the network is viable is this one:



But Dash is a bitcoin clone. A monetary synthesis of precious metals. The whole point of such an asset is that coins are preserved, not burned.

Its value is in scarcity (not nnumerical scarcity but the cost of acquisition from the primary supply), and the equivalent in that sector to a coin burn is mining. We MUST get our mining quota restored or we're f*kd. We'll head into the top 80, then the top 90 and off the front page like Peercoin did. This would be a disaster because Dash is potentially a very powerful competitor to bitcoin if only its governors could understand its own strength which is to accommodate nearly as high a mining quota as bitcoin WHILE supporting a service layer on-chain which bitcoin can't and none of the other competitors in that list above can.

But if we throw that advantage away we're lost. We are a mined coin - accept it. Swallow it. Live with it and use the fact that it takes only a tiny compromise in mining quota for Dash to gain a huge advantage against bitcoin for investors. Do not try to be Ethereum. Managing "circulating supply" is meaningless without taking demand into account as well and demand dies if it doesn't perform as a store of value compared to fully mined competitors. We can have very low circulating supply and still have what's left traded for a very low price. Bitcoin has lots of its supply "locked up in wallets" as well. It doesn't need masternodes.

Why ?

Because bitcoin, litecoin, monero, BCH, BSV et al target "capital gain" instead of income as an investible asset property. That was what Dash was supposed to do and could still do if it recovered its mining quota and learned how to intelligently avoid the fate of Peercoin. Masternodes would recover their reward and non-masternode holders would start to benefit as well. Investing in Dash wouldn't be all about whether you had a masternode or not.

---

Take a look at this. This is Dash's performance against bitcoin....in the biggest BULL market since 2009. Dwindling price, dwindling volume, dwindling blockchain activity, dwindling masternode count, dwindling everything.



All of our $USD gains are from hanging on to bitcoin's coat tails. You already know that because earlier in this thread this question was asked...


Yet nobody could even be bothered answering it which is kind of disappointing considering we:

 • have an investment to protect
 • in a governance coin with a budget which at least should be able to promote some kind of reasoned argument that's competitive against other mined coins
 • have a mega ton of capital queing up looking for a place to park itself
 
Let us wake up & smell the coffee because we know what this means: if this is all we can do in a crypto bull market then when it turns bear we're gonna be slammed so hard into the back pages of rankings that it will unlikely be recoverable.

If we think that "intelligent governance" means voting to put ever more of the coin supply into governors own pockets and that that makes an asset more attractive for outside investors then we only have further ranking collapses awaiting us.

This elephant in the room needs to be addressed imo.


[moderator's note: consecutive posts merged]

When you're talking about climate and attempting to make claims that a gas which forms less than half of 1 percent of our atmosphere is so "special" that it possesses some kind of magical thermodynamic asymmetry that no other gas posseses, to the extent that a barely detectable amount can bring us to global extinction, (contrary to all known thermodynamic laws) then the only way it can be done is through lies, distortions, statistical manipulation and scientific fraud.

For example, take a look at the Y-axis in your graph. It is calibrated in parts per million (PPM). Now convert that to percent and re-calibrate the axis to show the other atmospheric constituents such as nitrogen and oxygen. You will now find that your "skyrocketing" Co2 level is actually nothing of the sort. It'll barely even be detectable with the naked eye and may even be caused by the oceans releasing Co2 absorbed during the medieval warm period. Not the comparably miniscule amount emitted by man.

Now take a look at the x-axis. It's not even calibrated in millions of years which would be the appropriate scale when looking at the long term evolution of atmospheric constituents. This is what it should look like even without comparison with the other constituents:



Not that any of this chronological Co2 p*ssng contest matters anyway.

The first and final nail in the coffin of this hoax is has always been the first law of thermodynamics itself. If you want to raise temperature you need more energy, end of. As this document, written by a gas turbine engineer who spent a lifetime on thermodynamic modelling, describes, there is no "trapping" of energy by any gas beyond its heat capacity. Even if properties such as emissivity (Co2's apparent magical "trapping" property) may vary, they only affect the rate at which it absorbs energy, not the equilibrium temperature they reach. (See Page 14)

https://gvigurs.wordpress.com/2019/04/28/the-emperors-new-climate/

I've got no idea. But it wasn't because of Co2 causing some mystical "radiative asymmetry". As I explained above, temperature is not heat. You can have high temperatures with low heat flux and low temperatures with high flux depending on various things. For example the albedo might have been different back then.

Temperature is not heat. That's another piece of hand-waving lunacy that's used to keep this nonsense alive. Mars atmosphere is 95% Co2. (Reflect on that for a moment - earth is 0.04% and Mars is 95% Co2). Yet its surface can lose 100 degrees of temperature overnight without a sweat. That's because its atmosphere is thin and so has little heat capacity compared to a thick one.

Temperature is a measure of a particular mass's thermal response to heating. It's not a direct measure of heat. The idea that you can measure the "temperature" of a planet by averaging out the values of a bunch of thermometers (that are not the same thermometers that were there 100 years ago) is bonkers. You'd be hard pushed to get a meaningful measurement from a big pot of boiling water to within a half a degree, never mind a planet.

See here for how the climate works. Tip: to understand the "greenhouse effect" it helps to understand how a greenhouse works. The heat is trapped by the roof preventing the air from floating away, not some voodoo "radiative asymmetry". On a planet, gravity provides that service, not Co2.

https://gvigurs.wordpress.com/2019/04/28/the-emperors-new-climate/

Note, in particular Page 14 of that document. That's the reason why a trace gas that doesn't even form half of one percent of the atmosphere doesn't constitute some kind of fairy tale "thermal non-return valve" where heat can go in one direction and not the other, defying all known laws of thermodynamics.

If it did we would have cooked to a cinder eons ago.

Ok, I'll contribute something.

What is the only altcoin explicitly mentioned during this tirade (at around 2 minutes into it) ?

You've got your accounting logic all screwed up I'm afraid, as has xkcdd above.

In terms of ROI your "risk" is measured in dollars (or other currency) not dash, because that's what you invested. So you need to measure the return in dollars, not Dash. If the level of masternode rewards results in a NEGATIVE return in dollars, EVEN if you are earning 72 Dash per year then that is because the marketcap has been bled and revalued downwards.

So the problem reverts to supporting the price in markets and there we  return to the idea of ALL markets, not just exchanges. Here's how that works:

 • miners support the price in primary markets
 • investors support the price in secondary markets
 • at nodecount equilibrium, masternodes deplete the price anywhere (because they don't have a purchase side to their net transaction & there's no on-chain sink to absorb it like in De-Fi)

That's all anyone needs to know.

Just because the primary market is termed "mining" doesn't change the fact that it's still a market and if you feed out half of your coin supply around it at a zero price instead of exposing it to competitive bidding then you'll tank the price in secondary markets since you're pump-priming so many of its players with so much unrealised gain.

So what are they going to do ? Realise it of course.

Only masternodes themselves seem to be blinded by this glaring conflict of interest. That's because they think they "deserve" a return for having invested 1000 Dash. But nobody "deserves" anything from markets unless the market gets something in return which means that Dash has to function well as a store of value at least and not have its capital value drained to pay out free coins to a select few holders. This doesn't happen in bitcoin even though it has more "hodlers" than Dash. It doesn't happen in Litecoin, it doesn't happen in Monero, BCH, BSV etc.

The wider market seems to understand it without a problem which is why we're trounced by coins that don't do any development but DO expose all of their supply to competitive bidding.


I don't affirm that masternodes should not receive rewards at all.

I'm saying that the reward ratio should reflect the investment that contributors make to the network in terms of cost and that more of masternodes reward should be experienced as capital gain rather than income. In that regard, the "cost" of the masternode's contribution is not the 1000 Dash. They still have their 1000 Dash just as a Litecoin investor that bought 1000 LTC still has their litecoin. LTC hodlers hold it even though they don't get any free blockchain coins for holding don't they ? The masternode's cost of network contribution is their hosting fee + labour. A couple of hours per month in maintenance maybe.

I'm also saying that we should stop thinking of miners as "miners" and recognise that they are simply buyers in a market. This market sets the opening price of each coin (by definition) which in turn influences the selling price on exchanges. In Dash, the reward ratio is skewed away from that market to a ridiculous extent due to a fundamentally flawed appraisal of how a mined coin's monetary model works. By sliding it back we recover marketcap, improve our store of value performance which will consequently bring back blockchain activity AND improve masternode reward in dollar terms.

That isn't the problem at all.

Has Monero "brought anything new to the scene ?"
Has Litecoin "brought anything new to the scene ?"
Has BCH "brought anything new to the scene ?"
Has ETC "brought anything new to the scene ?"
Has DOGE "brought anything new to the scene ?"

Dash is way more sophisticated and capable already technology wise than any of these. It doesn't need any "new to the  scene" shots in the arm to sustain it. What it needs is to stop bleeding its marketcap dry to pay masternode rewards that are unearned. Read those two posts I wrote above and recognise that there are TWO markets = primary and secondary. As long as we pretend that one doesn't exist and keep bludgeoning our price with free handouts of HALF the coin supply we're going to have this problem.

We are short circuiting our primary market where coins are bid for and instead sending them straight to exchanges in the hands of traders who's acquisition price is zero. Address that and we'll also throttle the haemorrhaging of our marketcap.

The crazy thing is that the solution isn't even a compromise for masternodes. A larger part of their reward simply manifests as capital gain instead of income which is far more beneficial as it's not even taxable. We need to start using the reward ratio intelligently instead of just p*ssing out free coins and hoping for the best. The monetary model is the basis of everything. If that doesn't work, nothing works, conversely a high performance store of value makes everything else work. The technology is then complimentary and helps everything along.

Wrong.

The miner has to acquire the coin first at a cost. The masternode acquires theirs at zero cost. What you're doing is looking at the secondary market only and pretending the primary doesn't exist. That would be like analysing a currency broker's books and only looking at the sell side and ignoring the buy side and saying "look ! they always have to sell to cover their costs". True, but that cost wasn't an overhead, it was the cost of acquisition so it's a fraudulent if not insane analysis.

Even if it was half right we'd still be reasonably competitive with Litecoin, Monero, Dogue et al because relieving that much sell pressure would make a massive difference to price. Instead we've cratered out of sight. So even the market is telling you it's wrong.

The analysis is precisely 180 degrees out of whack because you're only looking at the sell pressure in one selected market segment instead of the net sell pressure. The net sell pressure is calculated thus:

Sells minus Buys

Or another way of looking at it numerically is that the net sell pressure = profit made by the seller. For example if I acquire a Euro for $10 and sell it for $5 I've contributed $10 of "buy pressure" and $5 of "sell pressure", so $5 of net buy pressure across all markets (balanced by a negative profit of $5). From that you can see that a mined coin generates the least net sell pressure and a masternode the most.

That's why we've been on a continuous slide down the rankings compared with our competitively mined contemporaries. Unsustainable masternode profits, therefore they have to be paid out of capital which is why the marketcap is being drained.

The value isn't retained in the network. It's bled from the network and goes straight into masternode pockets.

In accounting terms, "retained profit" is profit that is not paid out in dividends or costs. In Dash, coins that are paid to masternodes are a COST to the network. Their value is not retained. You as a masternode operator are not "the network". You are a private entity and once the coin goes into your pocket at no cost to you, its value is most definitely not "retained by the network" but lost to it.

On the other hand the value of coins that are paid to miners IS retained by the network because their revenue is used by miners to bid up the price in a competitive race against other market players attempting to acquire coins from the primary supply. That costs them money which is why their blockchain reward is justified.

The electricity cost is therefore not an overhead, it's simply the bidding currency of a trustless market. Like you need to convert $USD to Euros to buy a coffee in France, you need to convert $USD to Kilowatt Hours to buy a coin from the primary supply.

The "cost" of those Kilowatt Hours eventually ends up in the price of the coins and consequently the marketcap of the asset. Conversely, the cost of the masternode rewards DRAINS the marketcap of the asset. That's why it should be used sparingly by the protocol, not like a 10kg sack of salt dumped on your lovely Wellington County Beef Tenderloin & Mashed Potato dish.