You take the revenue of the masternode reward and subtract the cost of running the node. (The capital cost of the node does not qualify, nor do notional costs such as "risk" and "opportunity cost").


Indeed. Then you'd pretty quick see how sustainable the current MN margin was cos with the current rewards we'd be astronomically expensive compared to bitcoin.


Broken clocks are only right once per day whereas the haemorrhaging of capital from our increasingly "numerically inflated" coin to other fully competitively-mined ones is continuous and chronic.

It's numerically inflated vs competitively mined. Market picks the latter for store of value unless you can justify the cost of the reduced mining proportion (which we can't at the moment).

Lets get Dash back to an inspiring ideal rather than "how much free money can I get from my masternode", meanwhile the market is at liberty to simply trash that "free money" back to the dark ages in Satoshi or $USD value as it sees fit. (And the capital value of all Dash holdings along with it).  

We need protocol priorities where the market isn't able to do that and where the utility premium ENHANCES the capital value, not eats it.

Guvs starting to outlaw crypto as a means of payment. Store of value allowed: https://news.bitcoin.com/putin-signs-law-cryptocurrency-legal-russia/

That is very disingenuous of you qwizzie. The "horse" is not lack of growth, it's lack of competitiveness and relative loss of capital to other assets. So it is very much alive, not dead. I think you've got the blinkers on.

...all while losing yet another ranking place against a 100% mined competitor that doesn't have Dash's "unique" advantage of only sending 40% of its supply to market via miners

Nice !

If this is what the pricing in of our new "store of value" protocol looks like I won't hold my breath for the real thing. Perhaps people might start pulling their heads out of their hopium filled a*sses once we drop off page 1 of CMC and realise what the cost of 5000 nodes worth of 100% margins is because the market already does.

...and I'm calling it ultra radar & xcsd sh*ing their pants at getting overtaken by Zcash

...if the pump-group trying trying to defend us against the loss of yet another strategic ranking position has deep enough pockets.

That is nonsense. Have a look at these: https://cryptoslate.com/cryptos/masternode/

They all have well populated networks in terms of masternodes. Does that mean the networks are "valued" ? The top of that list after Dash is just over an eighth of our marketcap. The rest aren't even in the top hundred. Dash itself has gone from a marketcap of $8 Billion to only $700 million while we've been at this level of nodecount the whole time.

Dash has never in its entire lifetime been able to sustain any coin value over $100 while the nodecount is high. Coin value growth has only ever followed nodecount growth and the reason is fairly clear: supporting 6500 coins per week as "gift" money that doesn't add anything to the value of the investment has not been seen as attractive as buying into the fully mined competitors.

The difference this time is that we have a fully populated masternode network. Dash's "bear" market started instantaneously once we hit saturation at around 4800 nodes because you've then got a tsunami of "free money" being poured into wallets. (Also I imagine we hit a fragmentation phenomenon where the smallest marginal investment required to attain a node is too large. i.e. everybody who was within affordable distance of 1000 Dash now has one and everyone else is hundreds of Dash away from it).

MN rewards at this level amount to around 6500 coins per week which at present value is $500,000. Doesn't matter if the bulk of these get held or not because ANY of it hitting the market extinguishes bullishness since we still have the mining cost to collect from the market which is barely impacted by the reward disparity.

If, at 100% mining reward we would have dumped lets say $500,000 worth of Dash on the market per week before to cover mining costs, at 40% mining reward we STILL have to dump $500,000 (coz hashrate barely changes - if anything it keeps going up) but ADDITIONALLY another $100,000 to $500,000 of masternode rewards.

The huge dampening effect is there for anyone to see. The split reward theory ("sending less mining supply to markets") says we should be the more buoyant of the two in pumps. But we're not - we're the less buoyant. Why is that ? It's because we're not collecting less mining cost from markets - we're collecting the same (in terms of dollar cost of mining). Possibly even the same as we would have with a 100% mining reward. But ADDITIONALLY we're continually dumping a pile of masternode supply which Litecoin isn't.

Are you hoping it doesn't ? In vain it would seem 

What the market values right now, what it doesn't...and why.

Interestingly, the DCG proposal that's just passed claims to do just that.

Congratulations to those who supported the DCG proposal for block reward re-allocation and to Ryan for getting his policy endorsed with such a wide margin.

I hope it delivers the objectives you anticipate.

Perhaps they just buy the ones that are most valuable and sell the ones that are least valuable.

If, given 2 identical chains:

 • the entire supply of the first is subjected to competitive mining while
 • the supply of the other is inflated arbitrarily on a purely numerical basis

...then the market may favour the first as the more valuable.

No need to look further for philosophical answers.

^^^
There you have it in a nutshell.



And here in a nutshell is the totally flawed reasoning behind the problem...
vvv



...promptly demolished by andyfreer2020 in the very next remark.

Projecting a corporate model onto a blockchain in this way using loose metaphorical characterisations of miners as "contractor overhead" that can be beneficially "cost cut" is about as rational as clearing a maternity hospital of pregnant mothers to cut down on staff costs.

Dash people do not pay miners. The market (external to Dash) pays them to mine coin and deliver it to them. They are therefore the market's contractors, not ours and if we mistakenly think that the mined coin should accrue to us instead of to the investors that paid for it, those investors will promptly slope off to other chains where they aren't similarly short-changed, cratering the capital value of our holdings in the process.

No problem, no apology required.


It's an idea, though I think it would probably see about as much support as the technical arguments I've advanced on here have.

The fact is that most people are happier to let Dash slip continuously down the rankings than to challenge long held assumptions which incur an element of discomfort & risk. Those that are not just sell out and move on. We'll see what happens over the coming period as it looks like we're heading into a growth phase for crypto in general. If Dash does'nt perform as anticipated (or pumps & then stalls & burns at the next MN-high count like the last time), than at least the community will have an alternative explanation to consider which has had a decent airing.

@JollyGood There is no "negativity".

There is a challenge to the idea that for a mined coin, inflating the supply on a purely numerical basis rather than subjecting it to competitive mining, is healthy and may in fact cause capital to migrate to other assets if it's looking for a store of value. This theory seems to have been endorsed by observations.

Speaking for myself, I've promoted Dash for many years on the basis that it can do what bitcoin cannot. i.e. support the archetype of a highly valued, scarce digital commodity while making it super-useable.

However what gave Dash a competitive edge was inheriting bitcoin's monetary properties while decoupling a logical aspect of the protocol to provide services. Doing that effectively turned Dash from a gold "nugget" to a gold "coin". (But note that even in the archetype, the gold coin is still solid, not hollow).

The beauty of Dash in this respect is that it's capable of conserving the mining protocol, not at the expense of service provision. It solves many problems at once - for example payment confirmation can be delivered instantly while allowing the mining protocol as much time as it needs to create multiple confirmations. Other "coins" had to speed up the blocktime to to do this and ended up with orphaned blocks all over the place. Dash could also turn the masternode network into a coherent backend for client applications that require realtime consensus. The LLMQ aspect of the network is superbly thought through and orchestrates the service and mining protocols harmoniously to deliver realtime services instantaneously while, again allowing the mining protocol to operate on its own terms.

These are all great innovations. But they're all lost if the primary supply is no longer subjected to competitive mining in the first place. That's where the capital value lies with bitcoin, therefore that's where it lies with Dash. (Why else would you inherit the bitcoin mining protocol). We are not a service. We are a capital asset that's more versatile than bitcoin. It's the archetype.

A service is not unique, you can pick up "fast payments" anywhere, you can pick up "privacy" anywhere, you can pick up "ROI" anywhere, you can pick up "hope" anywhere, you can pick up "decentralisation" anywhere, you can pick up "limited supply" anywhere.

What you cannot pick up anywhere is these three things in combination:

 • a highly mined coin consistent with bitcoin's scarcity in terms of effort needed to access the supply
 • a highly versatile service-oriented network
 • a first mover born in the altcoin boom of 2014

Throw any one of those 3 away and you've got nothing. Reduce the mining element and you just dilute the value of the chain. The services are easily reproducible without the mining and at very low cost. It isn't a question of reward ratio, it's more importantly a question of what proportion of our supply is inflated through competitive effort and what proportion is inflated on a purely nominal basis (like the FED does). We have moved far too far towards the latter IMO.

If competitive mining is considered dispensable, then EVERYTHING is thrown into reverse. We no longer deliver scarcity to the market, we deliver utility. We are a technology (software) product who's utility will be considered as dispensible as we considered our own mining protocol dispensible. We're no longer even competing in the same market sector as our previous contemporaries but rather alongside the newer proof of stake networks who can simply blow us away when it comes to technical versatility since they don't inherit the bitcoin protocol but rather a pure utility oriented protocol designed from the ground up for service delivery.
 
In summary, the opinions I'm posting here are no different than those that I've expressed for the last 5 years. I don't need any lessons in how to be "positive about Dash". I still see Dash as having (potentially) a very optimistic future if people screw their heads back on the right way and don't lose sight of what made this project rare and investible in the first place. The only thing that's changed is background narrative.

Ah, "Faith backed coin".

Now there's an idea. Reduce flow of mining coin to markets by holding "faith-backed-coin" instead :-) Our competitors would never have thought of that.

I think I'm starting to understand why the portion of the coin supply that isn't competitively mined has value...it has faith. I hadn't considered this in my monetary theory deliberations. Might have to re-appraise some key concepts.

Now lets just hope the monkey-bridge holds up

It is used - just as a store of value rather than a means of exchange.

Even Dash's most ardent supporters in this thread did not buy Dash to spend it, they bought it to hoard it. Yet the features we promote to others are not the "store of value" features but the utility.

Just reflect on that for a moment.

So you're basically saying that a digital asset is as valuable as its holders want it to be. It's nothing to do with how scarce the blockchain protocol makes it but rather how scarce the "hodlers" make it. In that respect Dash's "store of value" integrity rests on identifying one hodling group over another and diverting most of the chain rewards to that one in the hope that they won't pass it on to the market. (Even though it's the minority group that paid for the mining cost).

If that is what you're arguing for I'd suggest crossing your fingers is at least as powerful a "store of value" principle. What you've described applies to matchsticks as easily as a blockchain asset.


The masternodes obtain the rewards at near 100% margin over cost. That usually means "free". Also by most definitions of "circulating supply" in this sector, that term refers to supply that's "out there" in someones wallet able to be spent. The fact that there's a variety of opinion over "who" is most likely to exchange their holdings for something else has no bearing on that definition which is why the claim that diverting rewards to masternodes reduces "circulating supply" is somewhat fraudulent IMO. There has been plenty of changing hands of masternodes over the years. There is also plenty of continual dumping of masternode rewards because the whole idea of investing in a node for many is to establish a revenue stream that's used for something.

The bottom line is...for an investor investing in Dash, they receive 1 Dash for every one that ends up in a masternode wallet. Either that or the coin supply is non-fungible and the masternode rewards are worthless. Take your pick of which perspective you prefer.

The wider market unfortunately has a 3rd option which is to invest in neither.