FOMOing straight back to 9k over the next few days.

Market knows it.

The asset we really need to decouple from is the CME bitcoin futures which has BTC in a vice.

Recovery in progress.

It doesn't work.

What happens in practice is that the entirety of the new supply ends up going straight to market because "staking" allows holders to have their cake and eat it. They get "free income" without losing any of their capital and that "income" simply end up eroding the value of the asset like a slow cancer over time. It also attracts other sell pressures such has taxation. Most goverments tax crypto-staking income at the value it had when received so it forces the holder to sell in realtime in order to avoid accumulating a rising tax liability.

Only 2 things work when it comes to supporting the price:

 • scarcity alone (achieved through highly competitive and expensive mining)
 • some on-chain service provision in high demand where the chain itself re-absorbs the staking rewards in exchange for those services (such as Ethereum, Tezos, and other POS smart-contract chains)

Providing holder with "rewards" for doing nothing but holding is a really no more than a ponzi and it's been demonstrated as useless when it comes to supporting the price because all that's happening is the existing capital base is being re-denominated in ever smaller slices. The Proof if Stake chain isn't actually creating any new value by creating new "coins". They don't come with their own scarcity attached as POW ones do. It's like taking a pile of sugar measured in Kilograms, then re-denominating in Pounds and saying you've now got 2.2 times the amount of sugar.

See what the market thinks of the idea...

That only works if you take the view that people are in the market to invest in "cheaply secured networks".

But from looking at the last 8 years of history that would appear not to be the case.

Rather they seem to want to invest in the coins with most scarcity and the market's definition of "scarcity" in that context is coins that have required the largest amounts of energy to mine.

If you need actual "in the field evidence" of how reducing the mining reward doesn't lead to a higher valuation then try looking at Dash. We've had 50% less mining reward than our competitors for several years now and we've lost market share to all of them. ergo: based on that, reduce it further and we'll lose even more market share.





Quizzie. You spend a lot of time in here. Please go back and read my previous post. We are not shifting reward back to miners, we're shifting it back to the primary market that pays for the mining cost so that we can supply it a competitive amount of coin, not compared with masternodes but compared with other competing blockchains.

The point, therefore is to stem the loss of market share to them. The mechanics by which we lose that market share are various, but an example is having to find market liquidity for BOTH the mining cost AND the sale price of the masternode reward. i.e. charging the market for 3 coins and only supplying it with 2.

We need to change our mindset from thinking about the reward split in terms of "mining/masternodes" and think of it in terms of "mining dash/mining XMR" or "mining Dash/mining LTC" etc.

Here's what our "cheaply secured network" did for us so far in terms of market share (% share of leading monetary altcoin marketcap):



Notice I left out bitcoin. If we include bitcoin then Dash is so comprehensively trounced in terms of market share that it barely registers. If we diminish the mining reward any further (or even leave it where it is) we'll have an ultra-cheaply secured network and correspondingly ultra cheaply valued coin that's so cheaply valued it doesn't even make it onto page 1 of cmc.com IMO.

Data: (source: waybackmachine, archive.org coinmarketcap.com month of March)

I'd put a lot more value in Ryan's arguments than mine as well if he had managed to explain in what sense hashrate is a cost to the Dash community/holder.

The "cost" of securing the network as I see it, isn't borne by Dash holders. It's passed on to the market which pays for the hashrate. Nor are miners "contractors of the network" IMO as he asserts. That's merely a metaphorical/philosophical perspective. A cryptocurrency network doesn't need hashrate for security, since as RT himself has noted that can be done in cheaper ways. Rather the market needs hashrate to discover increasingly scarce coins.

Commercially therefore miners are (by definition) in the role of contractors to the primary market which is outside of the network, buying in. (Bear in mind that there is an enormous, sustained and increasing worldwide demand for hashrate and Dash is now proposing to limit even further its exposure to this demand). That market receives a portion of the new coin supply in return for financing the mining cost. As such, it already receives 50% less from Dash than it does with other POW coins and this competitive handicap will become even more acute by persuing Ryan's solution, losing us even more market share IMO.

So since you were so convinced by Ryan's presentation qwizzie, perhaps you could explain here the mechanics by which that "cost saving" ends up as a more buoyant coin value for the Dash hodler  

Here is the basic problem I imagine as seen by the non Dash-holding market when presented with the option of investing in Dash (ignoring any mining profit/losses which are negligible compared to non-mining margins who's costs also need to be covered):



Finally, under the latest proposals...

All correct except it isn't so much the miners that carry the cost of masternode margins, its Dash's primary market. That's to say the market that buys the mining supply. Difficulty adjustments can keep miners at a profit but the net result is that the external market (not Dash holders) is ultimately having to carry the cost of the masternode/proposal margins and getting nothing in return, while in other coins they get a part of the coin supply (Proof of Work) in return. This is losing Dash market share on a chronic basis.

Note: There is always a primary buyer.

 • If the miner holds, then the miner is the primary buyer (they paid the cost of the mined coins, both the ones they themselves received and also the cost of the ones that masternode holders receive)

 • if the miner is simply running a business (rather than "investing in Dash") and sells as they mine, then the market trading partner is the buyer

MINING AT A PROFIT/LOSS
It also doesn't matter (when you do a bookkeeping audit of the process) whether the miner mines at a loss or a profit. If they mine at a profit then the mining/masternode reward cost is paid for by the primary market. (As stated previously, the miner themselves may adopt a dual role as miner + buyer in this regard or they may not)

If they mine at a loss then the miner/masternode reward cost is borne by a combination of the primary market (trading partner to which the miner sells) and the miner. i.e. the reward costs are made up from external market revenue and mining losses

Either way it represents bad value to the external market compared with other mined crypto where much more of the supply is returned to the primary market in exchange for covering the mining costs. This loses us market share.

Think of it this way. Bitcoin charges transaction fees, but at least that's all they charge. Dash charges half the new coin supply to the external market and gives it nothing in return. It's like charging 100 times the transaction fee of bitcoin, yet we appear to congratulate ourselves on being a "low fee" currency ? Something is slightly twisted here.

Analysing things on the basis of trying to guess which demographic is more or less prone to send coins to order books is kind of hopeless.

Hashrate always gets paid for. Work from there. The coins that result as a reward from mining therefore always have a buyer (the primary buyer).

 • if the miner holds then the miner is the buyer
 • if the miner sells as they mine then the trade partner is the buyer

So the whole concept of whether miners "dump" or not is moot. What's far more significant is how the hashrate cost is rewarded. Dash is unique amongst POW coins in that the "buyers" of the new supply only receive half the supply. The other half is given away (to masternode holders) who receive the coin at zero cost. There is therefore potentially a wholly distinct price-discovery mechanism at work there since masternodes are at a profit al the way to zero. (Less hosting costs which amount to a paltry amount).

So who bears the cost of those masternode margins ? That is one question. The other question is can that party reduce those costs to itself ?

The answer to the first question is that the primary market bears the cost (the market that pays the mining cost of all rewards). The answer to the second question is that the market can mitigate its overhead (the cost of mining the masternode coins) by devaluing Dash in dollars.

This happens most acutely when marginal demand for masternodes reaches its minimum I imagine (MN count tops off) because then the selling pressure is immense from 2 sources:

 • the primary market migrating to other coins where it gets 90%-100% coin for its hashrate and does not have to cover the cost of expensive "holder" margins

 • masternodes dumping their "free money" and never being at a loss no matter what the price of Dash

The way to resolve this IMO is to MDGA ("Make Dash...") by returning it to its original mission: Bitcoin with Masternodes. That means restoring the mining reward to as high a possible level, say 80%-90% and bring Dash back to competitiveness. Although MN margins will be less in terms of Dash, the business model will be viable again and the project can grow. MN dollar-denominated rewards will then turn around IMO and start to grow as well.

We do not want to go down the route of trying to become a utility token, POS "bribery" token or any kind of cooked up hybrid IMO. Bitcoin with masternodes is a very strong proposition and we should make it work.

Stop giving away free coins to be dumped at any price and charging the value of those coins to the market that pays for the mining hashrate.

Then the trend may have a chance to reverse.

Otherwise, I'd have to agree with this:

Not really. It's based on a theory of how hard/more persistent assets and soft/more utilitarian monetary assets are structured. Profit-takes leak capital into layers lower down the pyramid following successive market cycles of the upper layers. The lower layers become less volatile but more persistent and therefore serve as a market reserve while most of the profit from growth is made in the upper layers.

You can see this occurring with bitcoin on any long term chart including the log chart of price and the market dominance chart.

See, for example this article from a couple of years back:

I opened this discussion talking about bitcoin dominance which is a bitcoin topic. As a 6-year holder I tend to find it relevant and generally post such views freely in this thread. Have done for years.

You just got so triggered by the subject that you started bouncing off the walls in a fit of monopolistic zealotry to the extent that you couldn't see the wood for the trees in the point I was making which is actually not very challenging to bitcoin if you care to re-examine it.

All the same you sure can produce some entertaining troll bait so it's not all wasted

Not really. I'm under the assumption that we are myopic in our sense of time. If you imagine yourself zooming forward 100 years and you're in 2120 looking back at the "dawn of crypto" you wouldn't see so distinctly "one" get born and then "the others". You'd just see a cloud which represented the explosion of the first ever electronic monetary assets. Doesn't mean bitcoin can't still be more of a "reserve asset" than its successors but it also means that it's less volatile. It's just a question of degree - like Exter's pyramid - you have a base layer of reserve assets into which profit is taken in times of recession, then a graduating utility layer which expands faster than the base layer in times of growth.

That's just how any market sector of monetary commodites gets structured organically - which is why I call alts "the lungs of bitcoin".


"Adoption" can have a variety of meanings when it comes to monetary assets. For monetary commodities "adoption" simply means holding it as a savings vehicle. So measures like the number of active wallets, blockchain transaction use etc ,apply. On the other hand if it's used as a unit of account then it can scale outwith its own technical domain (i.e. holders may not hold bitcoin but may hold some other asset or debt securities that are denominated in bitcoin).

By either measure, the observations are the same - that the wider crypto market serves as the "lungs of bitcoin".

Jeezz..grow tf up.

You're as bad as the gold bugs.

Lookup the phrase "natural monopoly". The only scenario that fits that definition is when crypto is used as a universal unit of account. As a monetary commodity/asset it's no more a natural monopoly than sand is.

Also, the "economy" has a slightly wider scope than this particular thread and it might be wise to spend less time in here if you've ended up with such drastically distorted ideas about how markets develop. Without alts there'd be no bitcoin and vica-versa and pretending they're some kind of "contaminant" is just short-sighted lunacy. It's like your head denying it's got a body.

Sorry to apparently challenge your zealotry on that but it's simple observational fact and I'd be careful about what you wish for if you think otherwise :-)

Are you folks seriously still under the delusion that bitcoin is a natural monopoly ?  Because if you are then I'd consider investing in yellow socks since they're about as likely to establish one.

What do you think's has been happening over the last 10 years ? The so called "altcoin" market is about as utterly hammered into profit-take oblivion as any modern asset's ever seen and bitcoin's still only 16% away from having a minority market share. Wake up and smell the coffee.

Alts are the lungs of BTC and they're about to initiate a sharp intake of breath after an epic exhale

Well you never really did understand the difference between electronic "money" and electronic assets, so I can appreciate that that delusion might persist in your view of things.

Dream on.

Silver has a bit of a problem travelling through wires. You can't hold it unless its "under your bed". Same with gold. So that puts a glass ceiling on PM valuations from now on because Bitcoin you *can* hold and it can travel through wires.

No contest.

Read it again. It's sensical.

Why do you think Bitcoin didn't fall to the worst predicted lows this time around ? Because the alt market had grown large enough for their to be considerable volume in cross-crypto trading and capital flowed from alts to BTC which mitigated the capital flow from BTC to $USD.

Conversely, alts will rally to more significant gains than bitcoin in the bull market.

So they trade against it and have a dampening effect on it that cushions its volatility against the $USD.

They are the "lungs" of bitcoin.

realr0ach wishes bitcoin "went away". Others on here wish it had a monopoly. Both characterisations seem a bit like wishing for the grass not be green.

The $238 Bn crypto marketcap is diverse and active. Live with it. Bitcoin trades against alts because it needs something to trade against that's in its class. At times it will dominate and at other times it won't. We've just passed the point of apparent BTC maximum dominance where the cycle reverses.

That's just how diverse market cycles work and if they didn't exist they'd be created. (By "markets" )

Profit has been wrung dry out of most alts. Specially against BTC.

Also BTC requires a healthy alt market to grow more. Dominance will continue to reduce now while alt market "buttresses" start growing and most upside will be in alts during the next bull market (at least in relative gain terms).

BTC dominance resuming its slide. Alt season about to taxi onto the runway.

Dominance heading for the 20-30% range.