Chains like ETH, XTZ et al are a world away from Dash in terms of market sector. They are designed from the ground up as services. They are not stores of value primarily. This is why archetypes are everything because crypto-assets are synthetic assets. You can't start off being gold, then decide to be a bit of a gold coin then say, "hey..those equities over there are getting a bit of love, we need some 'a that luv as well", then, "hey..we need to be a currency also !".

That is destructive and will end up creating a carbuncle out of what was originally a very promising archetype that Dash was following. This is why I said:


Dash has not a hope of competing with the non-mined chains on their own territory. Their token issuance is arbitrary for a start (as opposed to competitively mined). They can run rings round us on services - create entire stable coin platforms, host national GDP sized bond offerings, on and off-chain apps, you name it. Those chains are having utility priced in. They're valuable while they're useful and valueless when they become obsolete. As an archetype, more like a corporation than a precious metal. They are well suited for paying dividends because they're more like equity investments in that they can pay a return based on activity growth.

Dash is nothing like this. It inherits bitcoin's monetary model which is a digital commodity that's invested in for capital growth. You would not normally expect to receive a revenue from such an investment (because there's no service provision and no service cost for the holder). If you ain't got capital growth you got "nottin". The idea of the masternode revenue was to incentivise a high performance node network and make the capital asset more competitive (as a capital asset, not a service). Nor is currency an appropriate archetype for Dash other than in a barter sense because it's not a stable coin (if it was it wouldn't be worth investing in other than as a hedge).

For all these reasons, sacrificing mining reward for masternode reward amounts to cannibalising the capital. Like when a person starves and the body starts consuming its own organs to stay alive. Sounds a bit melo-dramatic but that's how I see it.


How very myopic if I may say so.

Were you here for the last 4 years ? Dash out-marketed everybody. What "marketing" does Litecoin do ? What does XMR do ? What do the bitcoin forks do ? None of them even had a marketing budget never mind a fully funded core group or army of decentralised marketing recruits while we have had budgets in the millions. Ben Swan alone was paid in 7-figure dollar sums. Merchants were plastered in Dash stickers and given POS terminals all across Venezuala for years. Amanda B. Johnson drew audiences from everywhere. We had Dashforce, eduction arms in Germany and we got listings on all major exchanges including Coinbase.

What those other coins DO have that we don't, however, is an efficient monetary protocol that rewards the stakeholders who bear the the network costs instead of the ones that don't.

Why look at indirect effects on competitiveness when you have a direct one staring you in the face ? Answer: cognitive dissonance and a blind tribal belief in the asset because that's what we're invested in. I've seen it in every single community from Blackcoin onwards. Even Cinnicoin was like this. Completely incapable of re-appraising what they were invested in any dispassionate way.

Unfortunately, the only meaningful appraisal in these matters can come from un-invested parties and I'm afraid those are even scarcer than a 100% mined crypto in this debate.


Is it ? What I see is that it's showing every sign of a dead cat bounce. Buoyancy is about as robust as a lead balloon. We hit rock bottom, bounced a bit, and are now trundling along at a bitcoin ratio from early 2014 days. As far as investment performance is concerned, it's against bitcoin that matters. If bitcoin hits $200,000 one day do you think a masternode will be worth $1.4 million ? That's $9 million a WEEK in masternode revenues. Half a BILLION per year. How will you justify to markets maintaining a valuation that supports such a gargantuan revenue stream doing effectively nothing ?

Even if a masternode were to be worth $200,000 at that point (which will be nearly 3 x from here), that puts Dash price at only 0.001 BTC. A loss of over 80% from here. That is why competitiveness and ranking matter, because without them you'd be better off buying BTC unless you're using Dash to buy chicken nuggets.

IMO, Dash has no option but to stick hard with its original archetype which is to inherit as much of bitcoin's monetary model as possible while making it versatile and easy to use, otherwise it'll fall into the crack between stores of value and services and disappear out of the top 100.

They all got pumped....and your point is ?  

...that Dash will soon get pumped and everything will be alright.

No, just responding to relevant commentary. I do try to put some constructive thought into each post.

Saying that "masternodes have been put through the ringer" isn't a justification for an unsustainable protocol that has been demonstrated to haemorrhage marketcap to other coins IMO.

Nor is saying Dash did much better than other ALTS in the 2017 bull run and now we have fallen back and we will do good in the next one. The market conditions now and then have no comparison. Dash was a market leader at that time and served as one of the main hedges against bitcoin's impending "doom" of a contentious hardfork. We've not only fallen back from there against bitcoin but gone beyond it and lost half the value that the 2017 pump launched off.

IMO it's important that this proposal does not go unchallenged because it represents an endorsement of the prevailing strategy which has not been successful or worked as intended. The principle of the split reward system is that it improves competitiveness, not erodes it.

Pay masternodes enough to justify their added value and it will work as intended, make Dash more competitive and gain it marketcap.

Use MN rewards as bottomless well of bribery payments in exchange for hodling, and it'll do the exact opposite.

The existing problem is we have a split reward system which pays masternodes a lot for doing nothing and investors very little for doing everything. (since they cover the cost of mining of the primary supply).

The existing problem is we have proven to be less competitive instead of more. Our 100% mining reward contemporaries have become way more valuable than we have over the same period of time.

Do yourself a little calculation. Take the masternode count, multiply it by the weekly MN reward, then multiply that by the Dash/USD exchange rate. Then multiply that by 52 (to get the annual amount). Then multiply that by 5 (to project a nominal 500% gain to a Dash price of, say $350).

As masternode holders, if we intend to pay ourselves that amount of annual revenue drawn from the blockchain each year without incurring ANY cost (i.e. near 100% pure margin) then I'd say we have some due diligence to do in terms of identifying who is on the other side of that revenue stream. (i.e. who incurs the cost, even though it may be nominal). You cannot have revenue without cost, doesn't matter whether the rewards get liquidated or not.

In our case, this is the value of Dash being withheld from investors. It's the value that would otherwise have been delivered into the hands of those paying for the primary supply and therefore represents a nominal cost to them. When investing in our 100% mining-reward competitors, investors do not incur such a cost which is why we're sharing the bottom of this list with a joke coin while they are not.

You can look at it the other way if you want: That the mining supply is fully delivered to those who pay for it and the masternode supply is independent, created by way of nominal growth instead of through competitive mining and that this purely numerical inflation is "gifted" to masternodes. But then the market is at liberty to value that portion of the supply at zero (which is its opening price to the masternode recipient). It amounts to the same result - a cratering of our marketcap relative to our fully mined contemporaries.

Reducing the mining reward in the name of improving store-of-value has it exactly the wrong way around. It needs o be increased otherwise the adverse competitive is just going to continue and worsen.

Some people are impatient to get off the bus. Many are deep underwater.

A quick (though brief, because it will only last until the next MN ceiling gets hit) 1000 MN exit pump may seem more appealing than long term stability and growth. The risk is we might end up with neither if the "wider market" doesn't buy it.

Then you misinterpreted my remarks. I said that the non-mining reward should more adequately reflect the value that's invested into the network by masternode operators, albeit that there may be a profit component to it. Right now they don't invest anything. Their running costs are zero.

Nobody's arguing against that.

Demise as a competitive crypto asset when compared with its 100% mined contemporaries.

One of the liberating things about crypto is that it allows their creators and investors the independence to test their new ideas to destruction.

It is a matter of concern that in this case it isn't a "new idea" that's being tested but a very old one that's about as innovative as Bernie Maddof, i.e. dangling excessive margins over cost as a carrot to investors.

Even though masternodes may not recognise this as a failed strategy, markets have plenty experience in doing so and in our case they have recourse to a remedy beyond the reach of the Dash protocol to rectify the situation = eat those margins for breakfast by devaluing the coin and then diversify into assets that do compete more effectively than us against the best cryptocurrency stores of value.

Hopefully they won't use it, but equally as hopefully I can sell my bitcointalk posts for $10k a pop  

Ask yourself, what is an investor doing when they choose to purchase a mined coin from an exchange ? They're paying a miner to mine it for them so they don't have to buy a gazillion pound rig to do it for themselves. If you give then cheap, "unmined" coins in return that are cast-offs from large holders, what do you think they're going to do ?

Exactly what they have been doing for the last 3 years.

Sometimes I don't think Dash investors realise what they bought or how to protect it. If you wanted to invest in utility (rather than a mobile, versatile commodity) you should have bought Mastercard shares, or some other type of blockchain security who's protocol is designed to host entire nation's worth of debt securities.

Meanwhile, many people do not want to invest in that stuff. They want "sound money" that works. But be aware, it's the "sound money" part that they invest in. The "that works" part only makes its utility competitive against other offerings. It doesn't increase the value. (Like gold coins don't over gold nuggets other than a tiny premium).

So if you want to short-change digital commodity investors on hashrate and choose to inflate the blockchain supply on a purely numerical basis instead, don't be surprised to discover that they have more capacity to short-change you than you do them.



The competitiveness is the part on the left. The value is the part on the right. They are not interchangeable. To think that they are would be a very big mistake...

The perspective applies whether masternode dump their rewards or none at all.

It's simply a formal approach to verifying the anecdotal claim that sliding the reward scale away from mining is effective in drawing less net liquidity from markets. From the responses I've received on here I don't think anybody actually bothered to understand the analysis and let it sink in. They generally make an intuitive interpretation instead in which case they always end up re-enforcing their original assumptions.


No, but it can't be created out of "thin air" either. You need a handy cosmic explosion which ostensibly occurs once per universal creation event around these parts. So when scarcity is synthesised by electronic assets, cost of production cannot be ignored. I put it to you the other way around: if the cost of mining bitcoin was zero and holding it was the only way to generate more supply, would that represent a store of value on its own ? Obviously not because the archetype is faulty and doesn't implement certain essential properties in the synthetic asset. It's simply a numerical redenomination exercise.

Redenomination of the base supply on its own is ok if you're adding value in some other way. But it's a fiat archetype where the store of value function only works if the supply growth represents a growth in underlying value of the economy. It doesn't work the other way around (growing the money supply to grow value) which is why I contend that Dash loses competitiveness against its archetypal peers.

I don't necessarily agree that we're going to see the 2017 type spike where we "out-FOMO" the market on a reversal. That happened because of pricing in a speculative rotation to Dash out of bitcoin and hedging due to prospective bitcoin forks. We now have several well established decentralised "payment rails" on the market - instant, private, stable coin and otherwise which makes it even more crucial for Dash to stick to its original archetypal space: a versatile version of bitcoin with as high as possible mined element unless its needed to pay for the "versatility".


Ok I stand corrected on that range. You're right that Monero was above us in marketcap for longer than I had remembered. I think I just spent too much time jousting with Monero trolls for years before that during which it remained at 1/5th to 1/3rd of out cap. However, it still overtook us on supply growth, not by limiting it. All these coins - BTC, LTC, BCH, XMR, whatever - ALL have protocols which deliver the entire supply into the hands of miners, yet they manage to capture more of the total cryptocurrency marketcap than we do.

This doesn't support the theory that throttling mining supply makes you more competitive as a store of value.

It isn't beyond me.

During this discussion over the last few weeks, 2 ways of "looking at" the non-mined element of the reward have emerged. I initially presented the perspective of the mining cost also accounting for the "cost of production" of the masternode reward, in which case the mining cost of the entire supply is effectively born by the investors who pay the mining cost. ("Investors" in that case being either miners who mine to hold or the segment of the market that gets the mining supply dumped on them).

Then others remarked that they didn't see it that way. They saw 2 distinct segments of the supply. The "mined" part is what miners receive and pay to mine, the balance basically pops out for "free" and is donated to masternodes.

If you take the latter view, there's no distinction with a proof of stake model. It's a straight redenomination of coin supply - a numerical exercise like money printing. You can't have it both ways. In the former perspective, we overdraw mining cost and undersupply mining reward from available market liquidity compared with 100% mined competitors. In the latter we simply inflate the coin supply numerically instead of subjecting it to competitive mining.

Both are toxic & corrosive to marketcap while the masternode reward is simply drawn down for "holiday cruises" instead of being used to add value to the network.


I didn't expect it to drop out of the top 20 rankings while Litecoin stayed in the top 10 and XMR in the top 15. If you check back to postings around that period you'll see that most others didn't either. You were very selective about the comparison with Monero from late December. That was a spike that echoed Dash's from 8 months previously. It didn't remotely reflect the long term position over several years which was consistently a 3x to 5x multiple for Dash.

What happened was that Monero had a very high emission rate during those years but it didn't cause their price to tank to the same extent as ours did with a much lower emission rate. So although for a given wallet holding they may not have been higher performing as a savings vehicle, they ended up the more valuable chain.

All of this completely contradicts the logic behind the split reward system beyond what's warranted by measurable added value from the masternode network. (i.e. the margins are not justified, get passed to markets to support who in turn simply devalue the coin relative to competitors to compensate).

I don't see "stock buybacks" as a viable business model in corporations and while I do recognise that reducing "circulating supply" in a monetary asset like Dash can be useful for supporting the price, I don't see reward ratio as a way of changing it. The supply is "out there" however it's generated and even entire masternodes are part of the "circulating supply". I dumped half a masternode over a year ago for example. There was no "magic gate" to go through. I simply opened my wallet, sent the appropriate balance to an exchange and sold it. The coins were not "locked up" in my node any more than the rest of my balance was as the wallet balance is a continuum.

Masternode revenues give people an incentive to hold as long as the capital value is rising. But they give an incentive to sell if it's falling because the exposure is far larger. So it's a zero-sum game.

What would make it NOT a zero sum game is if all the coin supply was "doing work" for the network. i.e. if the proportion of the supply that wasn't competitively mined was being invested in some kind of network service. If it isn't it should be subjected to competitive mining to maintain maximum scarcity of the primary supply. This is where we disagree. I see mining as extremely valuable because it acheives scarcity in a way that limiting the numerical supply never can. That's just a denomination. We could re-denominate the entire supply as 5000 coins or 50 million instead of 9 million and it wouldn't change a thing. Wouldn't make the supply any more or less valuable. That's all non-mined "coin" inflation is - a purely numerical exercise just like printing fiat. (See my post above about it).

Bitcoin has 100% mining reward ratio + no node collateral requirement. By the logic of the current proposal it should be losing value at a faster rate than Dash because of so much "circulating supply". But it isn't. It has blown us away on marketcap (how valuable the entire supply is) over the years.

Litecoin has 100% mining reward ratio + no node collateral requirement. It has blown us away successively on marketcap.
Monero has 100% mining reward ratio + no node collateral requirement. It has blown us away on marketcap, going from 1/5th of ours to double.

The theory that moving the reward ratio slider one way or another reduces "circulating supply" in a favourable way only works if you cherry pick your definition of "circulating supply" to make that theory behave the way you want it. Unfortunately the market doesn't do this as the examples above demonstrate.

No. It doesn't.

Opportunity cost is neither accounted for nor "chargeable" in this way. Nor are any of the other "costs" that you mention.

Stock buyback economics.

Let the masternodes "suck" the Dash off the market.

What happens when when we hit the next masternode "saturation level" ? Then we'll have, say 6000 nodes, all generating 1.3 coins per week = 7800 free coins being thrown at people per week at a zero cost base, ready for profit taking all the way down to zero.

We need to time our exit to perfection ?

The more concerning point is, the wider market does share my view. (That the value is in the scarcity and that difficulty isn't irrelevant to scarcity as you seem to be alluding to).

The main purpose of "hashrate" is not to secure the network. Never was and if we see that as its primary role we'll end up developing an efficiently secured network that's worthless as a monetary asset.

Why does "difficulty" as a mining property even exist ?

It exists because it's the only way to implement scarcity in a synthesised monetary asset. The more people attempt to acquire the next block the more scarce the protocol makes it, requiring more effort to mine it. The coins then pop out of the block with a pre-determined "price" attached to them which reflects the demand that prevailed at the point of mining. The "price" then goes on to characterise the evolution of the market price since every subsequent trade will incur either a gain or a loss on the previous price.

By reducing the proportion of the coin supply that's subject to this "real" form of scarcity, all you're doing is making the blockchain dysfunctional as a monetary asset.

Take the masternode reward for example. A moment's accounting shows this to be a "scarcity-free" zone in terms of cost of acquisition:

Date                  Narrative                       Amount               Balance (Dash)
*********************************************************
March 2020.       Purchase Node              +1000 Dash          1000 Dash
April   2020.       Reward                         +5 Dash               1005 Dash
May    2020.       Reward                         +5 Dash               1010 Dash
June   2020.       Reward                         +5 Dash               1015 Dash
July.   2020.       Sell Node                      -1000 Dash               15 Dash

I now have 15 Dash that were acquired at effectively zero cost and therefore no value added to the chain. Any price above zero is pure profit which is why the market (which includes holders of those rewards on the sell side) is at liberty to continually value the supply downwards as long as there are people willing to pay hard dollars for something that cost zero dollars to produce.

Scarcity does not mean "low in number". I can create a chain tomorrow that only has 10 coins in it and grows by 1 coin per year and the market can value it at zero. Scarcity - properly synthesised - means "difficult to attain" as in costly to attain. Giving coins away for nothing is simply inviting the market to value them accordingly.

Problem is that if you issue half your supply for free, like it popped out of a cornflakes packet instead of subjecting it to competitive mining then the market will just value that element at zero and average it over the rest of the supply.

1000 coins competitively mined where the mining consensus set the price at $100.
1000 coins delivered to holders at a price of $0.

 = total supply value of 2000 x $50.

Wake up people.

Start thinking rather than following.

That isn't a reason to increase the masternode block reward.

More Dash does not equate to more value, it just equals the same value redenominated into smaller units. For it to mean "more value" the marketcap needs to increase which it hasn't done for 2-3 straight years.

All this during a period where we've had a split reward when other mined coins haven't, a more ambitious "utility roadmap" when other mined coins haven't and arguably far more promotion that other's haven't.

The exchange rate against the "reference standard" store of value in crypto has been in a continual downtrend since the very first revaluation in April 2014 if you exclude the "pump & dump" in the middle which gave up all of its value & more and now looks as if it's at least as likely to break down out of the channel as up. I'm afraid tribal "Blackcoin" style blind allegiance isn't going to be enough to keep this afloat which is why if things continue on the current course, the best that can be hoped for IMO is a brief "exit pump".

There is no known mechanism by which exposing ever less of the primary coin supply to competitive mining leads to a higher coin value. There is plenty of evidence to the contrary including the fact that every single one of our mined long term competitors that have prevailed in the ranking war does.

We are currently trapped in a state of tribal comfort-zone denial about this. Getting out of denial would be bullish IMHO.

But Dash does not make a "profit".

It's a synthetic monetary commodity, not a business. (Even if it was a business, the "profit" would accrue to the business, not to investors. Investors might get paid dividends occasionally but hopefully not to the extent that it cost them a capital loss many times the amount of the dividend).