Isn't it slightly early ?

We're currently tracking December 2016. Previous ATH should be reached on Jan 2nd. We're front-running it due to global collapse.

The "greenest" staking service in crypto is here.

A good example of how "wasteful mining" was abandoned to the benefit of early adopters and paid for by late adopters.

P.S. Can you offer any examples from the real world where interest or dividends are paid without being earned ? I haven't found any.

Not saying we're not due for a pump but the pump without the dump would be nice.

I should employ you as my personal policy and finance manager. You spend more time on it than me !

It sounds neat.

But the main problem is, nodes simply aren't a significant economic hub in crypto networks in the first place. They're not money-making commercial enterprises but rather a very cheap to maintain component of the network. So the issue of whether they're shared or not is irrelevant IMO compared with the viability of the reward they receive in the first place.

The use they have in Dash's case isn't as a revenue-earning business (at least not primarily) but to boost the capital value of the mined currency by decoupling its mining from the services layer and make it more attractive for payments use without any significant loss in mined value. A bit like how a steering wheel is an extremely cheap component of a motor car - maybe only $100 in a $20,000 vehicle - but without it the car's value would be nothing. You wouldn't be able to drive it.

All the same, pretending that the steering wheel should be valued at $20,000 as well would put the car's value at $40,000. So out of whack with any competitors that you wouldn't get any customers.

So it is with masternodes. They are an extremely cheap component that requires us to compromise very little in comparison to bitcoin to gain a huge advantage. If we pretend however that they are so expensive to run that it requires half the entire coin supply to support, then we'll lose all our customers. (As we have done). Whether they're shared or not is an irrelevance.

The problem with coins with "features" is that they are so exposed to obsolescence.

The more "innovative features" you have, the less store of value. The less features, the more store of value.

Store of value is also a "feature" but it's a monetary feature, not a technical one.

Like UNO par example.

Ancient. 100% mined. No cake-slicing funny business. Rising bottoms against BTC.

But how do you deal with staggered arrivals ? (like lets say you have 20 contributors to a node. They won't all turn up at the same time - you need some kind of opening and closing gate that ensures that the collateral is fully populated during a continuous period).


Hex token was launched this year and is currently headed straight to zero. "Features" can't keep a monetary token afloat - they need to actually catalyse some economic activity that's of value to the society.

This is where I depart from many crypto-nerds. They seem to believe that simply by owning a holding in something that should entitle you to a dividend. I think this is because they have legacy banking in their heads where you earn an interest on your holding (or dividend on shares). But this is moronic thinking. They don't take it further to consider where that banking interest or dividend originates. It's only available because it was earned from some additional economic work. The equity you invested in Amazon for example was spent on something which generated growth that came from selling books & PCs to customers. If it did nothing there would be no dividend. If the bank just kept our deposit in reserve instead of using it to monetise construction projects, big tech and big pharma, there would be no interest.

The crypto "staking" idea on the other hand is just a numerical mimicking of this. It takes an existing slice of cake and turns it into two slices, then 4 then 8 etc. But you've still got the same amount of cake. That's what staking is and masternode rewards are simply a version of this as long as they are not deployed in service provision that's demanded by the market. (It's not enough for us to just provide it, the market has to demand and use it).

The only place it works is the Ethereum or Tezos type situation where the tokens themselves are consumed by the blockchain as payment for computing services which generates real commercial demand, even if it's some mad "cryptokitties" thing. Or the tokens can actually backed with some kind of bond by way of a smart contract which turns them into a security.

Cake-slicing dividends = worthless because coin value = fixed marketcap/supply = ever decreasing. Mining on the other hand grows the marketcap simply by increasing competition for the primary supply. Hashrate mediates that competition, it isn't about "securing the network" technologically as much as securing it monetarily. It's the basics and it works.

I'm not really a fan of trustless shared nodes. It basically means that any amount of Dash can be staked plus you're going to have collateral fragments coming and going all the time, so getting the node to stay up needs some kind of time lock on funds which means they're no longer instantly liquid like they are now. A nightmare for the protocol to manage plus it has to work out where the rewards go etc.

Trusted is better. I think this kind of pooled investment should be pushed into the financial services commercial sector where it belongs and can be properly administered according to the requirements of the local market and regulators, not in the protocol.

I think all that was proven was something about turkeys & christmas along these lines of advanced logic:

 • "It's been proven that moving more reward towards me increases the value of Dash".
 • wasteful miners just use Dash to draw fiat from markets and increase the mining difficulty of the new supply
 • I will put the reward to good use by sticking it in my pocket and keeping it away from exchanges (until I need the cash myself)

We're now below where we were when that announcement was made on the:

  • Dash/BTC ratio (100% mined coin, no masternodes)
  • Dash/LTC ratio (100% mined coin, no masternodes)
  • Dash/ETH ratio (100% mined coin, no masternodes)

...I stopped counting there.

That is a good question and one that I thought about quite a lot.

Lets say price was at $3000. I doubt masternode operating costs would be significantly higher than now since it doesn't require any more hardware performance to accommodate a $2 million transaction than a $2 one. (It's miners that do all the expensive work in that department anyway).

When Dash platform comes along, a more expensive hosting configuration might be required, but the costs are still miniscule compared with mining. They are still fixed so masternodes will always be at a profit above operating costs. This is distinct from miners who need to keep their investment catching up with coin price since competition will increase as soon as there's a disparity between primary ("price" to the miner) and secondary (price to an exchange buyer) markets.

So lets say you set mining reward back at 80%. That would attract back a huge amount of competition for Dash's primary supply (since we would be twice as competitive as we are at the moment compared with other coins at the current Dash price). At the same time masternodes would still receive around $150 or more per month which is 7 times average hosting cost. That profit would only increase then with coin value but it wouldn't eat into the mining competitively nearly as much as it does now, we'd still have a DAO budget and we'd still have all out features.

The thing is, masternodes would probably look at a $150/month revenue and say it's too paultry to be incentivised from. But the point of it is it's far more scaleable than what we have at the moment. (Why ? Because it leaves the majority of the chain mined. Their cost is variable so far more of the chain gets invested in as price rises than does at the moment). We might then have a genuine chance of reaching high valuations at which nodes may become a viable business.

One of the reasons for the antagonism with my perspective on here is that when I use the work "invest" I'm referring to how much effort is invested into the chain to raise the opening price of new blocks. But other people tend to think of "invest" as meaning the secondary market - i.e. exchanges - and controlling price on there. That is too late. It's too far upstream to make a difference because the chain has already issued the coins by that time and the "accounting" for price has started, i.e. half the chain is "issued" at zero price.

It's not pathetic and principle isn't dependent on any particular mining profitability. Once again you're groping around in the dark for random aspersions to cast on a very solid principle - the fact that the reward is split between fixed cost operators and variable cost operators.

The mining calculator is irrelevant other than for illustrative purposes. Anyone who receives a masternode reward (yourself in particular) will know it's nearly all profit in the late 90's percentage. There's no speculation about that.


True, they don't mine blocks because they don't need to. But in economic terms they CAN be considered zero-difficulty miners because the reward is not being used for anything else. So they can be modelled as such on an equivalent basis.

The role of masternodes as "zero difficulty miners" isn't baseless, it's fact. (Here it is quantified).

That this portion of the reward is used to fund a pure profit margin isn't an assumption, it's fact (again, see above).

That that the mining model uses hashrate to mediate competition for the primary supply and thereby put a price on it isn't an assumption, it's fact. (Even tax authorities see it that way).

The only "assumption" is that is made is that this level of reward ratio is sub-optimal and adversely affects Dash's competitivity. But this assumption isn't baseless. It's exactly what's predicted by the idea that the market simply reprices the uneconomic profit of masternodes. It also explains why our feature superiority has worked in reverse, putting us at such an enormous marketcap deficit compared to competitors which have none of these features. It also completely conflicts with what's argued here about hashrate "not being needed".

So keep posting that these are "not facts" or "baseless" but it would seem to me that that's just chaff because you don't really have any plausable counter arguments.

I think you're actually the troll around here. The amount of sheer obfuscating nonsense you post designed to thwart and hamper open discussion is off the charts.

You know I was referring to the block reward itself, not exchanges order books.

You have got this picture wrong.

I know it sounds plausible but it's wrong.

For a start, masternodes are not buying. They receive coins straight from the chain and don't have to "pay" for them. Requiring hashrate as payment for coins effectively puts a price on their issue to the first holder and it's not a small amount, it's HALF the entire supply we're talking about. When the protocol allows this to happen it has an effect on price. I realise that individual investors may not care whether the coin was hashed out of the chain or not, but it has an aggregate effect which can be measured if you're forced to account for it (as I was when I started accounting for everything on tax returns). That's when I realised how corrosive this practice was to the marketcap over a long period of time.

Sure we'll get pulled along by the tide for a while, but that isn't the same thing as having a competitive advantage in store-of-value performance.

Really ?

Please explain. How does giving them away for free make them more valuable than if they were very expensively mined ?

The blockchain has a budget which is the block reward.

The de-facto use of that budget is to make coins as expensive to mine as they are to buy, thereby implementing a synthetic store-of-value.

If, instead of doing that, the protocol gifts those coins away then only one result can be expected long term.

It doesn't mean the coin still can't be useful, provide great service, utility, good for payments etc. It just will be a sh* store of value by comparison with one that optimises its budget and spends it in keeping scarcity high.

******* Solution ********

Dash gives half its "scarcity" budget away to masternodes when it doesn't have to. It's getting next-to-nothing back for this since the masternode network is extremely cheap to run compared with what it gets paid out of the blockchain. The software to run a node is free of charge. The node is automated. It doesn't require a salaried operator maintaining it for 8 hours a day. Even the collateral stays in the hands of the original owner and is no less accessible than an equivalent balance in a bitcoin cold wallet.

I am advocating for putting that reward to good use in a way that benefits directly the store-of-value performance of the chain. Then the network will actually get something for its money. That is BULLISH and OPTIMISTIC.

Not only that, as a masternode operator it's a self-preservation and self-interest perspective because I don't want my collateral to lose value and the capital loss on collateral blows any masternode reward to kingdom come with only small revaluations never mind the huge ones we've had over the last 3 years.

Contributors like yourself and bigrcanda should be ashamed of yourselves in my view because you're in no position to be throwing chaff in the faces of people who are attempting to genuinely analyse this problem in good faith. Despite that you continue to do so with your nonsense obfuscating arguments like "down from ATH" and "where's the evidence" while all the evidence anyone needs is staring you in the face as you know fine well.

You're simply trying to paint a pretty face on a monster, shrug your shoulders and blame our poor performance on being washed around by the tide. xkcdd's excuses are equally bad. Dash has had plenty fair shakes at institutional acceptance - we were one of the earliest on BTCe back in the days, one of only a handful traded on Bitfinex, had investment funds taking masternodes, got promoted worldwide by Keiser for months and accepted on Coinbase.

The three of you are pathetic in the arguments/excuses you offer forward IMO, and if we get anywhere it will be in spite of them, not because of them. Empty spin doctoring is just going to get us more of the same and I do not agree with your stance of sitting on hands, declaring blind allegiance to a non-performing strategy and waiting for wind to blow us into some gain.

IMO my approach is therefore bullish, not bearish since I see huge opportunity in our wasted budget and am advocating for it to be put to good use.

LoL. I see irony isn't one of your strong points

Defending masternodes against the destruction of their capital.

Well you occasionally pop your head up to do that. But more in a sense of faux outrage than technical debate. (Not to mention the fact that you're highly conflicted anyway).

This isn't my "premise" and it isn't dismissible. It belongs to the Dash community. We're not in 2014 anymore where a bitcointalk fan-narrative is enough to sustain a coin. We're now in an era of genuine institutional investment where every last aspect of a coin's store-of-value mechanics will be scrutinised.

If and when Dash gets to $1000, half the blockchain supply will be issued to network operators who at that point will be receiving a reward of $5460 per month for a service which costs them $20 to provide. Questions will therefore be asked as to why fixed-cost network operators need to have a 99.7% profit margin supported when the other half of reward recipients operates at a commercially competitive margin. Questions will also be asked as to how that excessive margin benefits new investors and protects their capital.

Satisfactory answers to those questions will not be forthcoming because there aren't any.

Mining protects the capital value of new blocks because most of the mining reward attracts fiat revenue which contributes to increased network difficulty. That is the mechanics by which fiat gets transmuted into cryptocurrency mined value. Masternodes on the other hand drain it in a reverse process because most of that block reward has to support pure profit that contributes to masternode holiday cruises. Those margins are therefore a toxic timebomb the bigger they get. (And the higher the price goes, the bigger they get).

Dash has a huge advantage - owing to its innovative decoupled protocol - in that it only takes a tiny amount of the blockchain reward to make us unassailably competitive in service features. But we're not availing ourselves of that advantage. We're paying masternodes a massive margin anyway straight out of the blockchain reward that should be allocated to mining. That's why the markets are crucifying us.

b.t.w. regarding this point:


Anecdotal opinion polls are not a substitute for a viable economic model. Your polled investors don't need to be "aware of masternodes" for them to lose their shirts on an investment. Miner's and masternode's interests are miss-aligned by the protocol. They need to be aligned for the coin to be successful. Masternodes can drive down the price at a profit in terms of their rewards. Miners can only drive down the price at a loss.

When you have half the coin-holding community sitting at a permanent profit-taking position while the rest are all at speculative margins, the outcome is inevitable. It's what we've seen during the last 3 years and why we're the only one of the top 10 mineables now below support in satoshi price. In fact we've given up all satoshi gains since 2 months after the birth of this coin despite being the most feature-rich.

A fundamental rethink is required for us to become aggressively competitive again. The answer is staring us in the face. We have the dry powder available and the protocol control to direct it where it matters - making the primary supply more expensive and thereby attracting mining competition away from our competitors. We won't even lose any of our "feature" advantages in doing so.  It just needs a few turkeys to vote for an "alternative" christmas that will benefit them far more sustainably then the current one

margins insane
are not capital gain
you think the explain
means even more pain

but margins well spent
are capital kent
internals may vent
but investors relent

There are plenty of holders of $83k worth of bitcoin who do so without requiring an "uneconomic profit" to be paid to them out of the blockchain. Nor would they want to if it came at the cost of devaluation of their capital. Dash has no advantage there from simply having coins held in wallets. Its advantage is in being as good a store of value as bitcoin but with an on-chain service layer.

But that service layer should be valued appropriately. If it isn't then the advantage is lost and we simply use the blockchain to pretend that "something is happening" which warrants payment to masternodes.

You are the one who is mis-representing Dash by pretending that capital costs alone represent a basis for masternode revenues and absolve them from generating any economic benefit for the chain. I can understand how masternodes themselves can be deluded by this logic (turkeys/christmas) but outside investors are not.