Please stop trying to deflect statements that are academically self evident by trying to assert that they are "assumptions" or lack "empirical evidence".

The Dash protocol is documented as exposing a proportion of its new supply to competitive mining. The rest is effectively "mined" at zero difficulty.

It therefore follows that various options are available to miners who want to "game" these protocol properties. An quantified example is given here.

That is a slightly silly comment if I may say so.

That the protocol supports and favours hybrid mining at scale is academic. It doesn't require empirical observations as "evidence".

I have offered evidence for hybrid mining being the most optimal configuration and of it being economically encouraged by the Dash protocol.

It's not unprofitable if you run a couple of masternodes alongside your rigs to reduce your aggregate difficulty below the network level.

Masternodes can mine at zero difficulty.

The incentive to mine is therefore to accumulated more masternodes. Once you've paid of your rigs and with a hybrid mining configuration you're thenceforce trending towards hoovering up the supply for free.

Having the blockchain donate coins to existing holders for next to nothing as a "wealth preserver" is also a theory.

It's just it's just that one of those "theories" has a slightly more successful track record at it than the other.

My jaw is on the floor.   So you're now saying you'd support it in principle ?

I thought you just didn't accept the whole concept that mining was a wealth preserver.

I certainly wouldn't be against implementing it in the way you describe if that was the price of making everyone feel more comfortable about it. The problem I have more than anything with the current protocol change is that it's going in the wrong direction.

It isn't really. It's what entitles you to operate a node and receive a reward that makes the activity profitable but it's not part of the accounting equation. Mining reward is, masternode reward is, mining cost is and masternode hosting costs are but the collateral isn't.


None of that is a problem. Also you've missed the biggest gain - the single objective of the whole exercise which is that we'd have attracted a huge amount of mining back to the chain and secured (in a monetary sense) a far larger portion of the supply. The point of doing that is to raise the opening price of far more blocks in the so called "primary market". It isn't the masternode count that supports the marketcap it's the price of a coin mined at "source".

It's not a question of them existing or not, it's that they're fixed. That is the significant factor here. I don't think you've once addressed this so permit me to conclude that you've "ignored" it.


How does this affect anything exactly ? It's not a component of the operating cost which is what affects profitability.

Mining and masternode operating profitability was far closer to parity back then than it is today, let alone when we hit our heady highs.

You avoided the point of asymmetric profitability completely.

If one company A makes widgets at a manufacturing cost of $100 a pop and company B makes exactly the same specification widget at a cost of $1 a pop what do you think will happen ? They are 2 markets with distinct dynamics. Company B can afford to outbid company A and they end up with a price somewhere between $1 and $100.

How does this situation reconcile itself ? Company A buys shares in company B and then uses some of its dividends to subsidise its manufacturing process.

I think you are in denial of this basic concept.

That's only the reward "share" you're alluding to. The actual reward at an aggregate level is a constant and independent of the number of nodes. It's essentially the proportion of the chain mined at "zero difficulty". Thats the bottom line and you can slice it up any way you like within that overall constraint obviously. The actual number of nodes is not the problem, it's rather profitability dynamics between the two groups and their increasing asymmetry as price rises. It's simply an unstable model for all the reasons I outlined in previous posts.


I don't see how this follows. The collateral is arbitrary as it is. If running a masternode is more profitable than not running one then the network will get populated. As previously mentioned masternodes churn so lots of them have ALREADY been sold. It's in fact possible for the entire compliment of 5000 nodes to be sold and for the network to still be populated at a steady count of 5000 because they simply change hands at different times.

The problem is measuring returns in Dash. It looks profitable when in fact is isn't because the return needs to be measured in dollars taking into account the capital gain/loss of the entire holding. ROI in Dash would only be meaningful if we were a stablecoin.


Because mining is a business. It's income oriented whereas speculative trading is capital gain oriented. They compliment each other. Mining is a competitive thing so if nobody else is doing it there's enormous profit to be made for you. As more join in it reaches an equilibrium point of diminishing returns and that's your prevailing network hashrate level.

Your (and other's) claim is that by reducing the proportion of the supply that's mined we become more competitive and improve our store of value. I dispute this claim because I observe that the store of value is directly related to how much scarcity is baked into the blockchain. You can measure it because it's a simple cost calculation that's easily demonstrated using basic accounting. The price that the miner "pays" for the coin is different from the price that the masternode "pays" for their coin and therefore when the secondary sale occurs that price is baked into the accounting for that sale. If the miner sells below cost, they'll have discounted that price, part of which will still show up as a loss. The miner still paid the full price for the coin and it therefore represents the "opening price" for the block. On the other hand if a masternode sells, even at zero price they'll have broken even.

This is the asymmetry that's cancerous to marketcap growth IMO. You dismiss it by making recourse to anecdotal arguments such as "but masternodes don't sell". It doesn't matter. These anecdotal hypotheses are irrelevant to the valuation of the capital flows within the protocol because they're there and they don't change based on how they're denominated. Whether masternodes "sell" or not is irrelevant to the argument, what is relevant is how much of the blockchain new supply capital is wasted and how much is invested back into the chain.

How does that justify a revenue straight out of the blockchain other than on a basis that's commercially competitive ? As price rises that profit simply keeps rising and rising without limit. Simply having the 1000 Dash balance there doesn't generate any revenue (unless you count mitigating sybil attacks as a 'revenue generation') activity.

Other coins have their supply locked up in wallets just the same as Dash. How is it that you think that having 5 BTC worth in a cold wallet on the Dash network entitles you to mine all day long at zero difficulty without consequences for the marketcap whereas having 5 BTC in a cold wallet on the bitcoin network doesn't ? There are over 10,000 wallets on the bitcoin network with over 150 BTC "locked up" in them. That's 30,000 Dash each.

Do you imagine how BTC's price would crash if it suddenly gave away half the coin supply for nothing to everyone with 5 BTC or more in a cold wallet instead of spending it on upwards difficulty adjustments ?

Institutional investors will abandon Dash if they don't get capital gain.

There are two types of mined coins from an investor perspective:

 • ones that deploy the capital they draw from order books in upwards difficulty adjustments
 • ones that deploy the capital they draw from order books in masternode holiday cruises

Guess which one new institutional investors prefer to place their capital with ?

There is indeed a community (of investors). It just doesn't quite understand what it owns or what parts of it make it valuable in a formal enough way to not through the baby out with the bathwater.

We're drifting once more against BTC. This should not be happening.

Dash is a very powerful coin and it's getting destroyed by lack of thinking. The community must not congregate around a vote decision. It must think, review and continue to evolve around the decision. It must not allow itself to be gagged by a vote but rather use it as a platform to evolve and compete against other coins. Otherwise we'll just drown ourselves in our own governance mechanism. It was supposed to liberate thinking and make the coin more versatile, not castrate community thinking.



Dash has amazing prowess but underpowered due to its mining capacity being completely neutered by the protocol IMO. A bit like the most advanced Boeing that couldn't get off the ground because its engines were underpowered.

When are we going to get our mining power restored so we can all get behind this coin again ?

Why should Dash holders put up with strangulation of mining competitively just so that masternodes can earn holiday cruises ? Why can we not be aggressive, competitive and use our advantages to gain rankings against other mined coins ? Why do we have to put up with this silly narrative that "managing traffic to order books" is all Dash can do to save itself ? Other coins are happy to have high volume trading (and can afford it because being 100% mined, the fiat they draw does not get dumped in holiday cruises, instead it gets invested straight into upwards difficulty adjustments across their ENTIRE blockchain which is the definition of store of value in crypto. That's why they enjoy investor preference over us).

We have a budget that is the blockchain supply. New supply is being created every day. To me that supply should be directed optimally and aggressively at the three targets that can grow Dash:

 1. wealth preservation (mining)
 2. forward investment (treasury)
 3. service protocol (masternodes) The cheapest but most competitive of the lot. Spend least, gain most.

We are wasting HALF of our entire supply on the 3rd target when investors are interested in the 1st target.

You mean it's only descending at a 20 degree angle rather than a 70 degree one ?

So masternodes are leeching so much capital out of the chain that we can't even perform as an adequate proxy for BTC in terms of store of value ? Heading for 2 BTC per node once bitcoin revalues ?

Then make the coin worth something and stop allowing the protocol to give away half the supply for nothing.

We want the coin to be traded, not held.

Store of value performance comes from the effective deployment of capital, not from seeing how much of the supply you can chase back into wallets.

Lock nearly the entire supply up if you like. Then trade 1 remaining Dash for $20 and you've just crashed the marketcap by 80%.

The taxman is only interested in operating profits and the Dash protocol imposes a huge asymmetry on operating profits between miners and masternodes. Right now for example almost ALL of masternode reward is exposed to taxation whereas in most cases NONE of mining reward is according to prevailing mining conditions.

That's half the coin supply on an ongoing basis. 100% mined coins do not have this type of problem because they are generated with a pre-existing cost base (which also represents the 'opening price' b.t.w.), not with a zero cost base as pure profit for the "miner".

@dafdaf I think you mis-understood the chart. These are operating profits, not reward share. The protocol cannot "decrease the miner's red part", it's set by the free market = mining competition.

Tax pressure is as illustrated. Massively asymmetric.