I think that's a "64" actually according to my "trainspotting" log.

If you read between the lines here, "X" (Twitter) is basically saying the account WAS'NT hacked. It was legitimately authenticated from Twitter's point of view using the correct phone number. So @SECgov must'v simply lobbied X to announce it was "compromised" based on @SECgov's word that someone had access to G Gensler's phone that shouldn't have had it.

It's still all hand waving.

This has already occurred - propelled on in no small measure by the reward ratio adjustment of 3 years ago in favour of masternodes. Yield must be measured in $USD, not Dash because the yield is on the invested capital (which is $USD). This means capital loss on the masternode collateral has far more to say about "yield" than masternode rewards do while they are denominated in Dash. In the current circumstances therefore, the yield is negative and if we increase masternode rewards at the expense of providing value for money to primary market buyers - it will go even more negative IMO.

("Obliteration" in most market observers eyes is being wiped off Page 1 of coinmarketcap.com which is now happening to us).

What we must do IMO is restore the Dash blockchain's capacity to absorb capital which has been throttled by the the need to fund unearned masternode profits and treasury budgets at all costs. Conversely, those budgets will be restored with the stabilisation - and the growth - of the capital value of the coin.

What's wrong with simply acknowledging that mining is a decentralised market ? Does something that fundamental really have to be explained on a podcast ?

It's why "mining" was created - to distribute the coin to "buyers" without recourse to a trusted entity such as Binance. It's also why it's called the "primary" market because it's where coins are "purchased" for the first time. The buyer purchases electricity, the electric company supplies it, the buyer then feeds that to the network as a bid and receives coin according to the level of their bid.

"Dash" is not paying the electric company anything, the market buyer is because that is the currency of the primary, trustless market. If you feed coin into that market at zero difficulty (i.e. masternodes receive it) you simply circumvent that market, thereby tanking the price.

What exactly is so difficult to understand about this for certain Dash people when EVERY OTHER POW coin understands it ? Even POS people understand it because they realise that if they don't have mining they need an on-chain business model.

 

This is hilarious. The last re-allocation worked so well that lets do more of it.

Let me just address this point first of all:

1. It doesn't matter that the "coins above us aren't proof of work coins". What matters is that the CONTROLS for measuring Dash's experiment in diminishing the POW quota ARE above us.

2. Efficiency can be measured 2 ways:

A: efficiency in storing value
B: efficiency in producing the actual coin

IF you use method "B" criteria (which is what is being done in that video) then all you're doing is judging the network as you would a production process. i.e. if you make the cost of production ever cheaper, the coin will simply change hands for ever cheaper amounts. This is NOT the case with the "non-POW" coins because they are proof of stake from inception and have a completely different business model from Dash. They have on-chain sinks.

The whole point of POW is to make the production cost approximate to the exchange value until such time as transaction fees take over. You can't just turn Dash into a POS simply because it "looks like everyone else is POS".

This is the most insane proposal I've seen and it will be the end of Dash due to people utterly misunderstanding the economic nature of a cryptocurrency, especially a POW one. The mining process is a MARKET. Miners are simply primary purchasers of the new supply and bid for that coin in a trustless market. If the chain simply gifts that supply instead, it will tank the marketcap back into the dark ages.

I have been right so far over the last 2 years. Surely people cannot be so stupid as to double down on an already failed strategy.

Finally: lets define "efficiency". In a widget production process of some kind (e.g. cars, computers) it's defined by [sale price]/[cost of production].
In a POW cryptocurrency it's defined by [return on investment] - a completely different concept. That's what "gives the most value for the money investors are paying". They DO NOT WANT a coin that is cheap to produce (unlike in the widget case). They want a coin that is EXPENSIVE TO PRODUCE (because they don't want to pay $1000 for a coin that only cost $1 to mine and since a masternode is simply a zero-difficulty miner in this respect, that's what they will increasingly get if this proposal has its way).

==========================================

Here are some specific misconceptions:

1: Amanda asks here (understandably) "how much electricity is too much" ? The very fact that she's asking that question is an indication that the whole premise of mining is mis-understood because there's no categorical answer. If you don't value mining then you should just get rid of it all and convert to POS, solving the security problem another way like POS coins do. But there IS a point to mining and this brings me point 2:

2: In this clip, @riongull asserts that "the whole reason that we have mining is to prevent attacks". This is simply WRONG. Mining has an economic dimension which is a DECENTRALISED MARKET. It's how market participants bid for and purchase the new supply without recourse to either centralised exchanges or Public Coin Offerings.

3: In the context of [3] therefore, "Dash" is not paying electricity companies. Dash is not even a company or an entity. Market participants are paying electricity companies so they can convert their dollars into the trading currency of that primary, decentralised market which is hashrate.

So all the electric companies are doing is acting as currency exchange brokers. The capital flow is thus:

Primary coin buyer: --> $USD --> Electric Co --> Hashrate --> Dash Network (Increasing marginal bid price)

You can see form that capital flow therefore that electric companies are putting value INTO the Dash network, funded by primary coin buyers. So the answer to Amanda's question is NO amount is too much to pay to electric companies because the Dash network is not paying it, the primary coin buyers are. (That's also why she's having a problem with the arbitrarily set mining reward ratio). The fact that they then sell the coin on exchanges is moot because they have ALREADY invested in the primary market at the marginal price and the coin is simply changing hands from then on with no net sell pressure.

You've got this all wrong. It is not thought out properly.

First of all, nobody's earning any "yield" because the collateral does not hold its value. Nobody's interested in earning more Dash on a shrivelling capital base, they want the investment they already have to first perform against competing assets. In particular against other fully mined ones given that our protocol was modified on the basis that we didn't need that mining and that ditching it would make us more competitive (need I remind you it hasn't, it's made us LESS competitive).

Secondly, when you take the market as a whole (Secondary exchange markets AND the primary mining market), it turns out that the CAUSE of the negative yielding in Dash is grossly over-donating to existing holders instead of selling to the highest bidder. We don't control the MN dollar reward - the external market does and so when it sees a node with $10 a month running costs being gifted half of all the new supply is simply devalues the entire asset to reflect the true value being contributed by masternodes. In fully mined coins you don't get this - the entire supply has to be bid for which restricts it to ONLY those investors who are paying for it. This serves to support the marketcap.

Thirdly, no coins are "locked" in masternodes. The situation's exactly the same as in bitcoin = you might as well say coins as "locked" in bitcoin wallets because Dash MN collateral is just as liquid - it can be sent to an exchange at any time and there's not timelock on those coins. MNs get bought & sold just as non-collateral supply. In fact there's more incentive to hold bitcoin or any other fully mined, Page 1 altcoin, than to hold Dash masternode collateral simply because of the improved capital performance. (They "yield" more from capital gain alone than Dash does with Cap gain + MN reward).

Fourthly, you have miss-characterised the role of mining. It's not only to secure the network, that's just a technical bi-product. Its economic role is to support a decentralised market for the new supply where hashrate serves as the "currency" of purchase so that a centralised broker (such as an exchange) is not required. Chainlocks is not a substitute for this role which is why the market has valued it accordingly and we never saw any upwards revaluation when that feature was incorporated. The only thing the wider market will ever significantly revalue is if the masternode rewards are wound in. Then we might have a chance of stabilising the catastrophic and chronic capital loss on collateral and see a much more optimal balance of growth between income and capital gain.

So your justification doesn't hold water and nor has it ever. Our protocol has prioritised masternode income at the expense of capital gain and it's toxifying the entire investability of the asset.

The price is now $26 and we are the BOTTOM ranked mined coin in the top 100. That is exactly as I predicted when we dismissed mining as non-essential 3 years ago.

That remark seems consistent with most Dash insider commentary I've seen during the last 2 years - that "worse is actually better".

Try winding in the reward ratio for a change.

If you really want to promote this asset, try answering this question:

What is it exactly about the reward ratio that makes Dash appealing to outsiders more than insiders ? (Because that's what results in more buys than sells).

Now at $26 in fact.

Ranking Nº 99.

As anticipated, capital loss on masternode collateral nicely continuing to outperform dollar income from masternode rewards.

(By design, on a "we don't need all this hashrate" basis).

Prepare for Page 2 status and all that goes with it including the end of a fully funded, buoyant development effort:

https://imgur.com/lZkNzR4

***********************************
How to prevent this and arrest the descent:
***********************************

Wind in the reward ratio with immediate effect.

Another name for hashrate is "primary demand" (by definition). i.e. demand in the primary market. As far as new supply is concerned, Masternodes are market participants the same as everyone else. If primary demand for that supply is dismissed in favour of excessive gifting to that market sector, then chronic tanking of the marketcap relative to fully mined competitors is inevitable.

Exactly what we are seeing.

It is still a very good coin with massive potential.

In my view that potential is being heavily throttled by one small aspect of its governance which is its Achilles heel - namely that masternode owners perceived benefit is in conflict with their actual benefit.

Their perceived benefit = how much Dash per week they receive for free from the blockchain
Their actual benefit  = how much the wider market (non Dash holders) values that benefit

Masternode holders are getting pain from the wider market because their rewards never matched their contribution to the network (the cost of hosting a node) and so the wider market tanked the value of their rewards in dollar value accordingly, realising that it was an unsustainable model compared to bitcoin where nodes are hosted at no cost to the network. (To any investor, cost of running the network is in inverse proportion to return on investment).

From a marketcap perspective, the problem with Dash protocol is that you are required to hold 1000 Dash to obtain those rewards so the wider market is unable to revalue Dash rewards without tanking the entire marketcap of Dash. Masternode holders are required to bear this pain in a higher proportion to most so their dollar value of capital loss wipes out the dollar value of any rewards they receive.

The way to address this issue, keep Dash alive, investable as a store of value and still offer healthy profit for masternodes IMO is to (for example):

1. Decouple the reward basis from the collateral and make it dynamic so that the reward could be valued independently (by the non Dash-holding market) thereby protecting the price from the dumping of "free Dash" that was never bought in the primary market (i.e. "mined") and returning its store-of-value properties to a performance equivalent to bitcoin while outperforming bitcoin on network services and convenience

or

2. Reduce the reward (in Dash terms) to a level commensurate with the cost of operating a masternode, thereby restricting the flow of Dash to exchanges propelled by near 100% profit taking. (Miners cannot gain anywhere near that level of reward from selling. Masternodes can).

This would arrest our marketcap depreciation by restricting supply to only:

A: miners who have to "purchase" it in the primary market straight from the blockchain
B: masternodes who have to "purchase" it in the primary market by providing network services commensurate with their reward, albeit at a profit level around parity with miners
C: secondary market buyers who can only "purchase" it from either of the primary buyers above

That is a tight model that outsiders (non Dash holders) might be interested in investing in.

However until that fact is acknowledged by Dash insiders we are headed for Page 2 and from there destination Peercoin. Rapidly plummeting to oblivion with everyone trying to get out.

========================================================

People who, in the past challenged my view pointed to proof of stake models in the context of "they do it so why can't we ?"

There is a very simple answer to why we can't do it which requires recourse to ancient monetary models. Most (surviving) POS chains have on chain sinks. i.e. the the blockchain token is valued on the basis of the volume or projected volume of ON-CHAIN services that chain will provide. (Because it's the on-chain services that consum the tokens, not off chain secondary markets where one buyer values the token higher than an existing holder. While that type of valuation is going on at the moment, it's speculative based on the future demand for ON-CHAIN services). So POS is basically the blockchain equivalent of buying a stock in a business thats here today, gone tomorrow.

Bitcoin on the other hand does not provide on chain services. It's digital gold and its value works the OPPOSITE way around from POS. i.s. it's a digital rock that is rare, sits in a vault and does nothing. Dash follows from that by turning gold nuggets into gold coins that are easier to trade but hold their value as well as bitcoin. It even inherits bitcoin protocol.

Dash therefore is not, was never and will never be a Proof of Stake coin because its original design was optimised around conserving the store of value properties of bitcoin while making it more nimble to transact. Only it can do this, in particular, because it has heritage, is original in its field and was born in the 5-year altcoin "nebula" that makes it rare.

But we throw this advantage away by trying to turn it into a POS chain. The protocol right now is like tying a lead weight to an eagle in terms of store of value. It will tank to oblivion no matter how many services are offered because if potential investors are only interested in services (rather than investing) there are a myriad of here today, gone tomorrow chains they can use.

Therefore, to survive, Dash has to have recourse to one of the approaches cited in the paragraph above to reflate its marketcap.

Not correct. Decred is following the same trajectory as Dash, not "any other alt".

"Mineables" that didn't do what Dash & Decred did have retained their place in the Top 10 and other "Mineables" that weren't even in our league such as Doge, Ether Classic and others have taken our places.

The reason for this is that mining is a market. If you want to market analyse Dash the you have to look at the WHOLE market, whatever currency is used to acquire Dash, not just exchange markets. With that in mind, the word "mining" is only a metaphor - a metaphor for a decentralised market that uses hashrate as currency instead of US Dollars. It's still a market though and if you feed supply into that market to ANY participant at zero price then you simply undermine the market capitalisation (pun intended).

It's fine that masternodes are rewarded.

It isn't fine that they are rewarded at multiples of the numerical monthly value they contribute to the network. Then the "free market" (that isn't invested in masternodes) just compensates by devaluing that contribution relative to other assets, and along with it our collateral and the entire marketcap.

Anybody that doesn't understand that has no business investing in Dash, never mind governing it.

You're comparing apples with oranges. Ethereum has an on-chain sink, Dash does not.

It's a completely different economic model because the tokens are consumable and used by the chain itself to pay fund on-chain services, so it's a business services archetype, not a monetary metal archetype like Dash which inherits bitcoin's model.

You can't just mine coins and give them away for zero price straight of the chain and expect that to support marketcap. Profit will be continuously taken by new holders at the expense of marketcap, it's just numbers. The reward needs to be adjusted for optimal marketcap, not optimal masternode greed.

It had a fatal flaw which was that governance was executed according to the priorities of insiders rather than outsiders.

The governance contracts therefore had to constantly appeal to insiders - people who already had Dash - in order to get votes, rather than those who didn't have it and would have had to buy it.

Ironically it was the outsiders that were needed to support the marketcap which is why it tanked. Even more ironically, the "insiders" haven't been retained by this policy and a significant number have disinvested. So not only did we have an increase in supply (from mining) but an increase in so called "circulating supply" from masternode disinvestment. That was because the masternode reward didn't sufficiently offset the capital loss on collateral which was (ironically) caused by the excessive masternode reward being far beyond the costs being incurred by masternode operators to maintain the network.

Dash thinks that Dash protocol controls the masternode reward. But anyone who's tried to live off a masternode reward knows that that's not true. Whatever the protocol sets, the free market values it accordingly. So if Dash sets the reward high and the market values it down, then it means that we got the setting wrong. It was suboptimal and we need to change it til the market sees it as optimal. This was not done.

Which all demonstrates that the policy had - and still has - its priorities reversed in terms of what is needed to attract new investors. Dash is not the "money of the people". Doge is the "money of the people" or even bitcoin as it does not throw away half its supply at zero price as we do.

New investors want native blockchain mining supply to be restricted to those that pay for it rather than have it gifted away beyond the level that is needed to retain core network resources. Until that issue is addressed, Dash will continue to flounder.

Lets analyse Dash holistically.

How much more powerful could its marketcap be if the Masternode reward was directed economically instead of arbitrarily ?

Looks like we are now at the end of the road for bitcoin appreciation. Now fully capitalised and valuations will probably hover between 20k and 60k from here on in.

The price has now dipped well below the last market peak from the 4 year cycle instead of staying above it as in previous cycles and the logarithmic long term trend has now levelled off, so stock-to-flow worked for a while but we've even departed form that = projections on the future based on hopium of the past 

This analogy doesn't describe blockchain mining. You're thinking of earth mining which isn't the same in economic terms and gold mining can't be used as an accurate archetype. In earth mining, the cost of production does not depend on the number of miners. The cost of extraction is fixed and depends on things like how deep in the ground the target mineral is, how sparse or dense it manifests etc.

Blockchain "mining" is different. It's a decentralised market pure and simple and therefore DOES depend on the number of market participants (which are unfortunately referred to a "miners"). So the price in that (primary) market responds to demand for the next block. Much of that demand originates in secondary markets (exchanges) and finds its way into the primary market via the brokering function of the miner. So the capital flow looks like this:

Exchange Buyer --> $1000 --> Miner --> $1000 --> Increase in difficulty (and therefore primary price)

But for masternodes, the capital that enters the exchange never reaches the blockchain and is not available for raising the price. Instead it goes onto the masternode's balance sheet and is lost to the Dash ecosystem completely:

Exchange Buyer --> $1000 --> Masternode --> $1000 --> Growth in MN balance sheet. (No difficulty increase and therefore no primary price increase)

Even if the masternode does not sell, as you propose, there is still a deficit in primary demand caused by the masternode receiving the coin without having to compete/bid for it (at nodecount equilibrium).

The difference is that none of those have 3000-4000 node holders leaching the investment in new supply straight into their own pockets instead of allowing it to pass into the chain in the form of raising the marginal cost of a block.

Remember:

Marginal coin price = marginal cost of block /  block reward.

So you can't BOTH be a top 40 capital gain coin AND pay 4000 masternodes rewards that are 98% in excess of their operating costs. Pick one.

It doesn't ignore that point at all. What exactly would be the point of "forking" it ? To demonstrate that governance doesn't work ?

Governance is working fine, it's just sending the price in the wrong direction that's all, and the reasons are adequately explained above.

If you're on a freeway and discover you're accidentally going south when you meant to go North, you don't need to shrug your shoulders and continue clueless into the distance hoping you'll find a future as good as the one you planned. You look for the nearest exit, get across the opposite carriageway and continue back on track. The kinds of protocol changes we made a couple of years back address fundamental market trends that can take a couple of years to manifest unambiguously. We are now at "freeway" that point.

If you feel you have some "modern concept" of value that somehow defies the appraisals I made above, be my guest.

Hand waving philosophical vagaries, bald assertions and speaking in generalities has never and will never impress any potential investors. They understand basic things like how hashrate affects scarcity, how masternode rewards far outweigh operating costs (so "overpaid") and long term ranking performance as an arbitrator on the governance priorities we make.

This coin has some core properties that are very good and it's survived nearly 7 years so far with reasonable visibility. That is about to end because the market is turning around and it isn't taking us with it this time so some soul searching is in order. The kind of arguments you've offered up so far in response to my criticisms that the reward ratio is set wrong, are 2014 type stuff. We can't get away with that anymore - we need things nailed down and a granular understanding of the economics of the coin which REFLECTS what we see in the market, not that contradicts it.

There needs to be monetary tightening. If you really need a "for dummies" rule of thumb, a good indicator of "loose ship" economics is bloated parasitical profits being made by any type of stakeholder, be it miners, masternodes, contractors, traders, whatever. In that respect the masternode reward sticks out like a sore thumb. It's a no-brainer.

Put it this way, if you were earning $500 per week from masternode rewards, would you rather that came in the form of 2 Dash or 0.2 Dash ? Reflect on that for a moment because in the latter case your collateral would be worth 10 times more than in the former.

The DAO also needs some reform. The contracts on there are paltry. They are a pale shadow of the activity a few years back when there was a lot more contention in the community but a lot more action and broader participation as well. That all got shut down and needs to be invigorated but part of that process is acknowledging that this is not a "club", it's an industry and that requires critical self appraisals, not the kind of "everything's alright and everything will be alright" that seems to have characterised your responses so far.

All in all what I'm saying is that there is no way forward other than to make ourselves highly competitive again in the store of value asset market. That will mean some bullet biting decisions IMHO.

Then you just don't understand accounting convention. Unfortunately investors do and this matters to them because there is no other "convention" to measure value by. Even speculative value ends up on the books eventually either by mark to market conventions or, in the case of POW blockchains, through difficulty adjustments.

If you buy a tractor for $60,000, it goes onto your balance sheet at that value as a capital asset and then gets depreciated from there.

You're basically dismissing the value of "mining difficulty" on some nebulous philosophical basis it doesn't add "intrinsic value" to the coin. That's irrelevant because it adds a material value to the scarcity and therefore adds to the book value once it's mined. So you'd need to come up with some pretty categorical reason why a coin like Dash - where only 40% of the exchange revenues from mining sales go towards difficulty adjustments upwards while 100% of our competitor revenues do - should be more valuable and expensive.

You don't have one and that's what I'm saying the problem is (as far as new investors are concerned). All of Dash's "feature advantages" are worth nothing if half of the primary supply investment capital goes towards populating masternode balance sheets instead of backing the marketcap with higher marginal mining costs. We inherit the bitcoin protocol which is a store-of-value protocol. If we just want to create a feature-rich blockchain then you're better off with some modern token system like Tezos or something that's at least dedicated for that purpose.