Because the problem manifests itself primarily in market share (relative marketcap) rather than absolute marketcap. It's seen in ranking.

To illustrate, the "theory" is that the market acts to push mining margins and masternode margins towards equilibrium. (Competition theory that strips "flab" from excess margins in uncompetitive offerings). In this case we're talking about the competiveness of the primary supply of Dash vs the primary supply of competitors. i.e. how much "coin" does an investor get for their buck when buying from a Dash miner vs a Litecoin or bitcoin miner.

To analyse this illustratively, lets fix a few variables across 3 coins (BTC, LTC & Dash) so we can observe only the ones who's behaviour we're assessing. We observe what happens to a week's mining supply.

Lets assume: (Example 1)

 • all circulating supplies are equal and start off at 1000 coins
 • all 3 coin prices/market caps are equal
 • all block rewards are equal
 • all chains generate a primary (mined) supply of 1000 coins over a week
 • all mined supply goes to market
 • coin price is $1 for all
 • mining is at break-even for all
 • market demand liquidity is $3000 per week invested evenly across all 3 coins

Now, with all this stuff fixed, we vary ONLY the protocol split reward between miners and masternodes. We keep BTC and LTC the same and vary Dash as follows:

BTC 100%
LTC 100%
Dash 50% / 50% (Miners/Masternodes)

So lets tot up what the market got for its "buck" after this week's supply is sold and all 3 circulating supplies consist of 2000 coins each.

1. It got all 1000 new Bitcoins (=50% of the closing supply)
2. It got all 1000 new Litecoin (=50% of the closing supply)
3. It only got 500 new Dash (=25% of the closing supply)

So Dash was less competitive in the market - it could only deliver half the supply that its competitors did for the same investment. The reason is that Dash requires to cover a very expensive overhead that the other two do not (MN revenues). ERGO: competition theory suggests that Dash loses market share to the other two. (Or suffers a devaluation to half their price).

Now, this is all other things being equal which of course they are not. But this is how analytics works anyway - you fix some stuff to weed out adverse harmonics in the mechanics of other stuff. But even when you "unfreeze" everything else, that harmonic is still there eating away at the market share.

If you drive your car with the brakes on it will slow down, all other things being equal. You can stick a bigger engine in it and it will go faster, even with the brakes on, but the braking effect is still there. It would be better not to have it. That's what we have with this low mining reward in Dash IMO - a braking effect with regard to market share. All of the technological innovations, community actions and first mover advantages are having to swim against the tide of covering the massive cost of generating coins which arrive pre-loaded with a profit margin (zero cost base) for a select few holders. Our competitors don't have this overhead to deal with and so are now ranked way above us despite being almost void of innovation or practical use cases.

I'm not saying the "pre-primed-with-profit" coins are bad. They are an important part of the Dash model and incentivise the high performance network. But what I am saying is that they form WAY too high a proportion of the primary supply. We need to mitigate that overhead, get competitive again in terms of primary supply delivery and then, having levelled that particular playing field, add the service layer to multiply the value beyond competing offerings. IMO that will restore whatever was lost to MN revenue in dollar terms and allow the network to resume long term marketcap growth.

Unfortunately you're taxed as if you dumped them whether you do for real or not. That's another adverse aspect of increasing MN reward - it exposes far more of the new supply to sell pressure from statutory compliance sources, whereas restoring mining reward would do the reverse.

Well it proves you're a Dash fan more than a Dash business at least. Congratulations

I think I invested in an economic model, not a confidence trick or kids tea party

Lets ditch the anecdotal commentaries & sociological guesswork for a moment and revisit the phrase..."we don't need all this hashrate" as I think that's probably what I have most problem with.

First of all, IMO, it is not for us to decide if "we" need it or not. "We" (whoever that is) did not create the high hashrate to secure the network. It can be done with lines of code (and has been). High hashrates exist because of competition for the new supply. The market decides what level of hashrate is commensurate with the scarcity of the supply according to how highly it values the coin.

There's no economic redundancy to it in that respect anymore that there is to mining diamonds. So while that hashrate may be excess to requirements in terms of securing the network from hacking, it's not available for trimming in an economic sense without consequences for the price because you're taking diamonds that were below ground and difficult to access, moving them above ground and giving them away from free, thereby undermining the price of the genuine ones being carried up by the miner.

Now, you may say...ah, but the above ground diamonds are difficult to access as well because you need to buy a masternode to get them.

True, but missing one crucial point: Dash is non-fungible as far as masternode hodlers are concerned. They do not value the coins in their revenue stream the same way as they value those in their threshold capital base (the 1000 Dash). The latter are probably held onto for dear life while the former are dumped on the market without a second thought cos......there's another couple arriving next week that don't cost me anything.



The net effect is that the "above ground" free coins gradually grind down the level of the "access bar" to masternode ownership till it's neglegable in dollar terms and this is totally consistent with the economic theory of perfect competition where market acts to eliminate so called "supernormal profits". The market does this by "de-ranking" Dash and bleeding its market share to other assets.

So sure - go ahead and try to create a nice, "lean hashrate", instant payment system with labelled addresses. All you'll have made is a copy of every electronic payment network since AMEX. Who cares about the coin value if all people want is fast, cheap payments with a label attached ?



If, however, we also want Dash to serve as a scarce, investible store of value, then way to stop and then reverse the "rot" IMO is to:

1. restore mining reward to a healthy level which will reduce the proportion of new coins being held at excessively high margins over cost

2. as the coin value recovers, masternode revenue will recover in dollar terms so there will be no net-loss of revenue for MN's in the medium term

3. as Dash platform grows in service provision capacity, more resource can be demanded of masternodes which will add value to the network and further offset the asymmetry in margin between miners and masternodes, thereby relieving the pressure gradient that's driving coins to the market

This analogy is flawed:


You don't reduce mining costs (or even hashrate) by reducing miner reward IMO, you increase them because the miner still has to bear the cost of mining all of the supply.

All. Of. It.

Secondly, if they want to sell for a high price, the miner has to control as much of the supply as possible. In that context they're in competition with two distinct groups:

 • other miners in competitive mining (fine !)
 • existing hodlers operating to different economic constraints since they may have a distinct cost base that makes them more competitive ( <-can afford to sell into markets at a profit when the miner can't) (not fine !)

To illustrate the second of those two points, consider why bear markets happen: Profit taking ! (Or conversely, loss minimisation). The profit taking continues until margins above cost-base are exhausted to the extent that an equilibrium is reached between demand and supply. If anyone has trouble understanding that principle, the clue's in the name

This can occur at the end of a micro 2-minute rally, a mini 4-hour one or a macro 4 year one. It goes on constantly whenever there's been a sharp price increase.

So what's gonna happen if you design your coin economics so that 60% of your hodlers are at 100% margin over cost all day long, regardless of price ?

....continuous profit taking. You're basically building the economics of a long term bear market right into the dynamics of the coin production and distribution.

A phenomenon that ends up looking something like this in terms of performance against coins with a high (100% ) mining reward ratio...



The effect is so powerful, it can't even be mitigated by first mover advantage...



My view therefore is, if we're going to have a review of protocol economics in the name of improving "store of value", how about edging it towards one with a successful track record rather than a disastrous one ?

If so, qwizzie, why hasn't the case for the current proposal been presented in terms of that long term vision, re-stating what the ultimate economic basis for the coin value is instead of analysing everything in reactionary terms of "limiting supply to markets". Why does it quietly ignore the fact that fiddling with the reward ratio does nothing to throttle the net fiat value of supply to markets as defined by the needs of the emission curve ?

By comparison, bitcoin's long term economics is unambigious: miners get "lottery" rewards in exchange for hashpower that slowly give way to rewards from payment fees. But in both cases the entire reward goes to miners in return for service provision. There is no "3rd party" parasite holder income to support.

The basis for Evan's original reward ratio rebalancing was that there would be massive adoption which would justify the masternode rewards based on value added in the form of service provision. He was planning for blockchain traffic in the 6 or 7-figure transactions per day range. That never materialised. Dash ended up being bought up as an investment instead. Not for use as a payment medium. This changes the priorities at present and makes a high POW level far more valuable in relative terms IMO - at least for a much longer period of time than Evan envisaged and maybe forever.


That's only true if you see hashrate as a form of technical security, not monetary security. That philosophy isn't "DASHy" it's "POSy" and a cursory glance at coinrankings shows that it's folly.

POW coins are invested in because they are scarce. Their scarcity comes from being competitively mined, not from being limited in supply. You can make anything in limited supply in 10 seconds.

This is how I see it as well. I just don't get it.

Here's the real problem and why messing around with masternode block reward in the manner proposed IMO is going to make zip difference other than steadily deplete Dash's quality as an investable asset (though it may still remain a technically interesting payment medium)....

You can increase the masternode reward ratio. You can decrease it. You can do whatever the hell you want with it, but 2 aspects of Dash "economics" remain unchanged:

1. the emission schedule
2. who pays for it

The cost of the maintaining the emission schedule is still 100% borne by miners, regardless of what reward they receive. That should have formed the starting point for any "economic analysis" because it's the only quantitively known factor in Dash's economics. If it costs them $100k to mine X days of Dash's emission curve, they still have to dump $100k of Dash on markets to pay for it. (Before MN's even sell 1 single Duff).

Similarly, it doesn't matter whether difficulty goes up, down or sideways or whether coin prices lead or follow mining cost. The relationship between reward ratio and supply to markets (in fiat value terms) is clear:

1. the generation cost of the ENTIRE supply is still borne by miners and that therefore determines the potential liquidity they supply to markets
2. that potential supply is only ADDED TO by increasing the masternode reward ratio

Sociological guesswork about stakeholder demographics and "who is most likely to sell" may or may not be useful, but it's no substitute for basic accounting which is unambiguous in pointing out where the price has to go to support the spraying of free money at a gated sector of the coin holding community which has to make supernormal profits at the ultimate expense of new investors.



Finally, by depleting the mining reward, we're making Dash:

 • less scarce (because, by definition, coins mined at high difficulty are more scarce than those mined at low difficulty - it's why competitive mining was invented)

 • less efficient in markets (because more fiat demand is needed to maintain the price for each coin mined)

 • less stable (because masternodes act against the natural correcting effect of difficulty adjustments by being able to continue to sell at a profit in bear markets)

What we need to do is increase the mining reward, not decrease it and whether Dash community people see it this way or not, it's how new investors will see it IMO. (Most of them can at least count).

Let me help you out there. The relevant points as far as "correlation" goes are these:









Now, a blockchain needs two core properties to address all these priorities at once:

1. a mining protocol that works like bitcoin's so that the coin is forced to endure a "right of passage" phase where it can survive long enough to eek out its supply and therefore accrue public endorsement as a durable monetary asset

2. a service protocol that works like Visa's where the public can easily access, buy, spend transfer and store value on a competitive performance basis with modern payment networks

The "correlation" with the article is that Dash is the only digital asset that supports both properties on chain rather than off chain.

That means it can address these issues directly where Bitcoin, Litecoin, Monero, Ethereum, Bitcoin Cash, Bitcoin SV and Cardano can only do so by "standing on one foot". They are all mono-layered financial protocols and therefore need to do it with off-chain facilities. (Otherwise known as "banks", even if they have a fancy title like "Lightning Network"). Doesn't mean those other networks aren't investible or might make people rich or get large market share. They're just useless at turning their gold nuggets into gold coins on their own blockchains.

Finally, one more aspect that's not even mentioned in this article is that coronavirus "central command" is trying to outlaw paper cash. (Of course because it might be infected with coronavirus !) What we gonna do then ? You need blockchain money that can:

 • move fast
 • not be defaulted on
 • inherits the most trusted monetary codebase on the planet
 • does not have to compromise its mining protocol to get performance

"Cash" to most people that value it does not mean paper fiat. It means barter. You need a blockchain that can turn gold nuggets into coins in an instant. In that respect there's only 1 blockchain with any history under its belt that is mined, inherits bitcoin's monetary properties and can function as fast as visa without speeding up its blocktime.

When we start calling perfectly healthy people "selfish miserable pricks" just for refusing to hide their faces, it's time to re-examine our priorities.

Lately, all fakeouts have commenced with a breakout and breakouts seem to be preceded by a fakeout - on short term charts at least. Accumulation been going on for months.

I'm sorry, science doesn't work like this. You take the statistics at face value to begin with and then if there's some extreme mitigating circumstance then maybe you can say that that's the rule rather than the exception. The statistics in this case are very clear - that the lockdowns countries are all top of the league when it comes to relative mortality (i.e. mortality corrected for population).

The studies on transmission are very clear. None of the things you cite feature significantly at an aggregate level. Transmission occurs predominantly indoors with sustained contact. (Which would explain why the "lockdown" countries are experiencing such high rates of transmission compared to the "non-lockdown" countries).

I don't quite understand your "disgust". The difference between Sweden and its neighbouring Nordic countries is almost insignificant in terms of mortality. Meanwhile the difference between Sweden and the big "lockdown" countries is very large - especially given that it's in the "wrong" direction if you hypothesise that the lockdowns are effective.

How do you explain this ?

For those of you arguing about CV19 "severity", take a look at Iceland. You now have a full set of statistics there in terms of recovery vs non-recovery since they've reached the end of their bell curve quicker than everywhere else.

Conclusion: 98.5% recovery and in fact looks like ending up over 99% once all cases are concluded.

Also this is only looking at actual infections, not the population as a whole. For population as a whole the death rate is 0.004 of one percent (0.004%) with a relaxed lockdown policy, stricter than Sweden's but not as strict as UK.

Also bear in mind that UK policy is largely based on Imperial college "model" which is currently being shredded as we speak by the online "nerd" community.

It's just an observable fact.

Bitcoin dominance is on a one-way ticket to depletion, but at the same time its marketcap has been rising - all in tandem with the growth of the alt sector which has pulled in way more capital on aggregate than would ever have turned up without it.

Bitcoin and the alt sector have a complimentary relationship. They are not in conflict, contrary to some of the deluded views expressed in here which remain stuck in a 2013 mindset.

We're now on the verge of another intake of breath where dominance will dip back down as a bull BTC market takes hold.

Get used to it

Alts are the "lungs" of bitcoin.

I'd say trading this market right now is lethal.

Anyone who didn't already make up their mind if they were in or out is just gonna lose more with every trade.

Barting back up the charts.

OBV on the 6-hour now shows only accumulation after that margin call asteroid hit. Will it get all the way back to 8k inside a weekly candle ? That is the question.

Notice that even when the price was still declining into the dip, the balance of the volume had already reversed and accumulation had begun.

Earwig. Low.

7k incoming.

Another breakout incoming.