A falling DASH/XBT or DASH/USD is an indicator that anyone who is short Monero would be wise to pay attention to. Just look for example at what happened in August 2016. First Dash falls then Monero rises. Theoretically one can make a case that the Monero markets are un-correlated to the Dash markets; however there is still a significant amount of emotion on the subject in both the Monero and Dash communities for short term leveraged traders to ignore.

CON (XMR debt) was converted to equity in Crypto Kingdom (CK) in early September 2016. At that time Dash was trading below 1 XMR. Should a similar or more severe crash in DASH/XMR occur in the future Crypto Kingdom will not be adversely impacted at all since it is no longer short XMR.

Dash is currently trading below 3 XMR but still has a quite way to go down if is going to test the September 3, 2016, low of 0.671 XMR.

The main reason that Crypto Kingdom had to go off the XMR standard is that XMR is hard currency. By August of 2016 Crypto Kingdom had built a very large XMR denominated debt in the form of Consul Bonds (CON). This XMR denominated debt was the result of paying for among other things the development of the game. The equity, CK gold was, fixed effectively leaving only XMR denominated debt as the way to raise capital for development and improvement of the game. What had to occur and occurred was a conversion of the XMR denominated debt into equity since it was completely unsustainable. This was a accomplished by converting CON (XMR debt) into CK together with the voting / equity component of the old CK gold also into CK. The latest move is to use CK as the in game currency. The best analogy I could think of would be World of Warcraft or Second Life but where stock in Blizzard Entertainment, instead of WoW gold, or stock in Linden Labs, instead of Linden Dollars, was used as the in game currency.  This makes CK actually very unique since equity in the game itself is used as the in game currency.

My take is that the "CK pump" is to a large degree due to freeing Crypto - Kingdom from its XMR denominated debt albatross. In this way Crypto Kingdom would not be impacted by a crash in DASH/XMR which would likely wipe out a holder of XMR denominated debt.

Edit:  DASH/XMR https://poloniex.com/exchange#xmr_dash

Bytecoin (BCN) is fundamentally flawed because the Cryptonote adaptive blocksize limit without a minimum block reward (Monero has a minimum block reward of 0.6 XMR per block in perpetuity) leads to no incentive for the miners to secure the coin as the block reward falls. Eventually this will make Bytecoin vulnerable to a 51% attack. This is entirely separate from the above link which makes a solid argument that Bytecoin was an over 80% pre-mine as opposed to an over 80% ninja-mine.

Actually spam attacks by large miner groups is not the issue here. There is no incentive for miners to bloat the blocksize in this fashion in Monero since miners actually profit from the penalty. This kind of attack works against a fixed blocksize in order to drive fees up and it does not require a significant proportion of the hashrate if the blocks are already full with transactions. The real issue is long term insecurity, with miner rewards including fees falling to zero.

Unless one is prepared to violate the Bitcoin social covenant in a drastic manner such as for example:
1) Violating the 21,000,000 XBT limit by introducing a minimum block reward or
2) Introducing demurrage
Monero like blocksize scaling variants are a prescription for disaster over time in Bitcoin.

Edit: For the record I run Bitcoin core on my full Bitcoin node, and as a consequence I am well aware of the impact on bandwidth of spam attacks against the Bitcoin mempool.

As someone has has been working very closely on the Monero adaptive blocksize limit and fee structure, I must comment on this .

This is essentially the adaptive blocksize limit in Monero with two critical safety and security measures removed.
1) No penalty to increase the blocksize above the median. Monero imposes a quadratic penalty to a maximum of the base block reward for a block that is 2x the median.
2) No tail or minimum base block reward. Monero has a minimum 0.6 XMR per block base reward in perpetuity. This is approximately equivalent to 3 XBT per block in the case of Bitcoin.  Monero uses 2 min blocks vs 10 min blocks in Bitcoin.

To provide an idea of the ramifications here. In Monero the per byte fees are actually proportional to the (base reward) / (effective median blocksize). This is a direct result of the blocksize scaling penalty. This works in Monero because of the  minimum base block reward. In Bitcoin on the other hand the total fees per block will fall to zero along with the base reward creating little or no incentive for the proof of work.

Ethereum mentioned in the article also has at least the option in their social covenant to have a minimum base block reward. So this approach can also work in Ethereum.

There is a reason why many in the Bitcoin community are opposed to adaptive blocksize limits in Bitcoin. They are very concerned  with securing Bitcoin once the base block reward becomes minimal.

Edit: The above would also apply to other coins with a fixed number of coins such as Litecoin, Dash, ZCash, Ethereum Classic etc. On the other hand Dogecoin could go this route and even the venerable demurrage Freicoin could also go this route.

The Dash community has identified a legitimate flaw in Bitcoin, the blocksize scaling / lack of tail emission issue, and then used this in a marketing pump for Dash. The problem with this is that Dash has the very same flaw, as Bitcoin, only worse, since in Dash the falling block reward has not only to support the miners but also the masternodes and their project budget. All of this has nothing to do with the controversy over the Dash instamine.

Coins that do not have this issue because they have a tail emission include Ethereum, but not Ethereum Classic, Monero, Dogecoin and Aeon. DigitalNote has a tail emission but it may be way too small. Monero has an adaptive blocksize limit and the fee structure to go along with it. It would not be difficult to retrofit Dogecoin with a similar adaptive blocksize limit / fee structure, and in principle although more complex it should be possible to do this with Ethereum.

Monero like adaptive blocksize limits without a tail emission will lead to an insecure coin. Bytecoin, and many Cryptonote coins for example are living on borrowed time because of this. The way to understand this is how fees work in Monero, where fees are proportional to the (emission) / (Effective median blocksize). If the emission goes to zero then so do the fees and the coin becomes insecure. This by the way is the concern of many in Bitcoin Core who choose security over scaling for obvious reasons.

I have not seen a solution to the fee / scaling issue for Bitcoin and similar coins with a fixed total number of coins, other than having the blocksize set by a miner vote. (BIP100 type solutions) https://en.bitcoin.it/wiki/Scalability_FAQ. This may work in a competitive environment where Bitcoin is competing with other payment solutions; however it could also lead to a situation where a mining cartel tries to take the market cap for themselves.

Edit 1: The Dash market cap is around 530,000 XBT and I understand that the pirateat40 losses were closer to 700,000 XBT. Still it is getting close.
Edit 2: It is possible to use demurrage to generate miner rewards while keeping the total number of coins constant, as in Freicoin. Demurrage may also work generate to miner rewards in order to secure sidechains with a fixed number of coins.

This issue is the ratio of the min RingCT tx size ~13000 bytes to the min effective blocksize 60000 bytes. This forces a very high penalty for an additional tx and causes the backlog. The hardfork addresses this  by increasing the min blocksize to 300000 bytes which will allow a RingCT tx ~13000 bytes to pay its penalty if the tx is added at just over the new 300000 byte min effective blocksize  provided this tx uses the new 4x default fee or a higher fee. The new default fee at 4x when the median blocksize is below 300000 bytes is 80% of the old default fee at 1x when the median blocksize was below 60000 bytes. This should allow for smooth blocksize scaling for txs that pay the default or higher fee.

The result is that a tx paying the default fee (4x) should under normal circumstances have no problems getting mined. There is a now a cheaper option (1x) where in exchange for the lower fee the sender accepts the risk of delay and under certain rare circumstances the possibility it may not get mined at all.

I should point out that if there is a very sudden sharp increase in tx demand and a fast confirmation is important then paying the higher 20x fee or even 166x fee may be appropriate. That is after all the purpose of the higher fee levels.

The supply of mined gold increases at a rate of over 1% a year. This has nothing to do with USD. I posted the link above. In the example one starts with 165,000 tons and adds an additional 2,500 tons per year from mining that is an annual inflation rate of 2500/165000 or 1.52%.

Edit: The mined gold is what is relevant economically.

It could for example in the aftermath of the Dash bubble bursting if the following scenario were to materialize
https://bitcointalk.org/index.php?topic=753252.msg18203247#msg18203247

If the dumpers are short XMR they have to buy XMR to cover their positions. This is the essence of a short squeeze.

Actually no. The constant inflation economic model for gold is far more accurate than the fixed supply economic model.
http://www.westcoastplacer.com/how-much-gold-is-left-on-earth/  This furthermore does not take for example into account the mining of asteroids for gold or production of gold in nuclear reactors.

Edit: We are dealing with practical economic models here, such as the inflation rate lasting longer than the history of humans on earth.

Gold itself has inflation. http://www.numbersleuth.org/worlds-gold/ So the money supply of Monero in terms of gold would actually fall annually once Monero reached tail emission if the current inflation rate of gold ~1.5% were to continue.

Bulls make money, Bears make money, Pigs get slaughtered
https://www.fool.com/knowledge-center/bulls-make-money-bears-make-money-pigs-get-slaught.aspx
Watch the DASH/XMR market
https://bitcointalk.org/index.php?topic=753252.msg18203247#msg18203247

There is more to this, but is is fair to say that low XMR interest rates may be in part at least fuelling the Dash bubble. I am going to start with the changes in the Dash masternode network. http://178.254.23.111/~pub/Dash/Dash_Info.html What is very significant is the drop in the number of masternodes ~500 masternodes or 500,000 Dash just before the start of the Dash price rise. Now quizzie made the argument that these masternodes were kicked off the Dash network due to a software upgrade. That was fair enough at the time but the reality is that these masternodes have for the most part not returned to the Dash masternode network. So I am forced to look again at my original argument leveraged longs.


First the spork activation can make a good cover for someone planning such a leveraged long with minimal impact on the market.  One still has to ask the question where did the 500,000 Dash go. The price moved up sharply so it was not dumped, furthermore there is very little Dash available for lending. This leaves collateral for a leveraged longs as a reasonable plausible alternative. Such positions have up to now being very profitable.

So how does one set up a Dash leveraged  long position on Poloniex for example?. One deposits Dash into Poloniex and then borrows another coin to sell short for more Dash. It is here where Monero comes in. The combination of very low Monero interest rates, a very large availability of Monero for lending, a highly liquid Monero market, together with a bearish bias until the beginning of March made Monero a very attractive candidate for the short side of the long Dash position. Furthermore as long a Dash rises at a faster rate than Monero the Dash / Monero spread is fine and in fact the rising Monero price may serve to further fuel the Dash bubble. The key market to watch here is DASH/XMR https://poloniex.com/exchange#xmr_dash Dash is currently trading for ~5 XMR this is below the ~7.8 XMR in August of 2016 for example. So the Dash bubble may still have some legs.  The net result of all of this is that the Dash bubble may be fuelled in part by low Monero interest rates, and the development of sizable Long Dash / Short Monero positions.

Like any bubble the current Dash bubble will eventually crash and the pigs will go to the slaughterhouse. The impact on the broader Monero markets would be: A rising  default risk of Monero loans collateralized by Dash and a significant overall Monero short squeeze. Should this occur those who have taken delivery of their XMR  should be in the strongest position to profit from the resulting blood on the streets.

Yes. Without a permanent block reward that does not diminish over time POW coins are destined to fail. This includes Bitcoin, Dash, Litecoin, Ethereum Classic, etc. So the topic should actually be Altcoins without permanent inflation destined to fail. Another here would be to replace inflation with demurrage. There are altcoins however that do not have this issue. Starting with Ethereum, (although in this case the tail emission has not being finalized), Monero, Dogecoin etc. Freicoin was the original demurrage crypto currency and demurrage may actually have a place in sidechains.

There are two very common misconceptions: The first is that gold does not have inflation. In fact the inflation rate of gold is around 1% and gold has been around for millennia as the "gold standard" for hard money and preservation of wealth. This has worked to a large degree because of the growth in economic activity. Monero for example has a tail emission of 0.6 XMR per block which is jut under 1%, the historical inflation rate of gold. As rough comparison this would be equivalent to a minimum tail emission in Bitcoin of 3 XBT per block. The second misconception is that this issue is "far into the future" This is simply not the case. Bitcoin going under 3 XBT per block is not far into the future but rather under 12 years away.

You mean Dash formally known as Darkcoin as opposed to DSH (Dashcoin) the clone of Bytecoin sans the pre / ninja mine. My comment on this bubble is that when it bursts and burst it will I would not want to be caught short Monero. The risk is just to high.

A great example of a nerd project that went mainstream in a big way with zero marketing is Google. Even better Google has built up a multibillion dollar business getting others to pay them for marketing.

We saw a sharp increase in XMR/XBT in response to the ETP rejection by the SEC. https://poloniex.com/exchange#btc_xmr

Bitcoin will need to trade on its fundamentals again rather than than hype over the listing of this ETP. I have read the SEC rejection https://www.sec.gov/rules/sro/batsbzx/2017/34-80206.pdf and it does make some very valid points, regarding the potential for manipulation of the XBT/USD exchange rate. This can to a significant extent be traced to the fact that the majority of the Bitcoin hashrate is behind the Great Firewall of China.

Edit: ... and China's CNY exchange controls.