XMR vs DRK

[illodin]

It boggles my mind that Evan didn't design the protocol around micropayment channels, where every full node could be incentivised to mix transactions or vote on InstantX transactions or whatever. It would make the anonymity set so much larger.

Perhaps he thought it's better to make sybil attacks harder. It's basically free to launch as many full nodes as required.

He may have thought that (I'm not sure I buy it) but it doesn't work, because there is still no irrevocable cost incurred for bad behavior. If masternodes are profitable then the bad ones are more profitable as the good ones. In a competitive market this will mean that only the bad ones are profitable.

The argument about "losing the value of your coins" doesn't work because it make a few false assumptions including that cheating leads to total collapse and the inability to hedge with derivatives. Both of these and certainly the second only apply in an immature cryptocurrency toy, not in a scaled up system.

Are you talking about DDoS attacks?

No I'm talking about masternode spying.

Ok. Let's assume DRK/DASH gets big, and has a value of $100. (Just an arbitrary number, way below a number where a business model that tries to spy information could be profitable.)

5,000 masternodes, 60% of the block reward goes to masternodes (assume year is 2016), block reward = 5 DRK, 17,280 blocks/month  =>  each masternode earns 10 DRK/month  =>  $1,000 / month.

So, the starting point is $1,000 / month for each masternode, and every node is honest. Also let's assume $100 / month for hosting expenses. How will the honest nodes become unprofitable when some of them start turning dishonest?

Also, what is this data that is spied?

And note, I'm not trying to confront/challenge your predictions, I'd just like to see it from all the angles.

I'm going to bed now but it would be awesome if I had something interesting to read when I wake up. *wink*

[smooth]

It boggles my mind that Evan didn't design the protocol around micropayment channels, where every full node could be incentivised to mix transactions or vote on InstantX transactions or whatever. It would make the anonymity set so much larger.

Perhaps he thought it's better to make sybil attacks harder. It's basically free to launch as many full nodes as required.

He may have thought that (I'm not sure I buy it) but it doesn't work, because there is still no irrevocable cost incurred for bad behavior. If masternodes are profitable then the bad ones are more profitable as the good ones. In a competitive market this will mean that only the bad ones are profitable.

The argument about "losing the value of your coins" doesn't work because it make a few false assumptions including that cheating leads to total collapse and the inability to hedge with derivatives. Both of these and certainly the second only apply in an immature cryptocurrency toy, not in a scaled up system.

Are you talking about DDoS attacks?

No I'm talking about masternode spying.

Ok. Let's assume DRK/DASH gets big, and has a value of $100. (Just an arbitrary number, way below a number where a business model that tries to spy information could be profitable.)

5,000 masternodes, 60% of the block reward goes to masternodes (assume year is 2016), block reward = 5 DRK, 17,280 blocks/month  =>  each masternode earns 10 DRK/month  =>  $1,000 / month.

So, the starting point is $1,000 / month for each masternode, and every node is honest. Also let's assume $100 / month for hosting expenses. How will the honest nodes become unprofitable when some of them start turning dishonest?

Also, what is this data that is spied?

And note, I'm not trying to confront/challenge your predictions, I'd just like to see it from all the angles.

Let's assume hypothetically that holding DRK is riskless. In that case you have a riskless investment that has a return on equity of about 10%. Since that is obviously absurd, something must be wrong with this analysis.

It's often hard to argue with people about ponzi schemes because it seems like it should work and proving that it won't is difficult because we don't know the exact mechanism of failure in advance.

[Maloppo]

I choice DRK because now DRK to the moon
Price now 0.025. Amazing.

[Brilliantrocket]

Let's assume hypothetically that holding DRK is riskless. In that case you have a riskless investment that has a return on equity of about 10%. Since that is obviously absurd, something must be wrong with this analysis.

It's often hard to argue with people about ponzi schemes because it seems like it should work and proving that it won't is difficult because we don't know the exact mechanism of failure in advance.

How exactly is Darkcoin a Ponzi scheme? The payment comes from block reward, not from new participants.

[smooth]

Let's assume hypothetically that holding DRK is riskless. In that case you have a riskless investment that has a return on equity of about 10%. Since that is obviously absurd, something must be wrong with this analysis.

It's often hard to argue with people about ponzi schemes because it seems like it should work and proving that it won't is difficult because we don't know the exact mechanism of failure in advance.

How exactly is Darkcoin a Ponzi scheme? The payment comes from block reward, not from new participants.

See above.

Hint: that is only true if you denominate returns in DRK

[Brilliantrocket]

See above.

Hint: that is only true if you denominate returns in DRK

The term Ponzi scheme refers to a very specific type of scam. One where current investors' gains are paid from funds contributed by new investors. Are you somehow involving inflation?

[Lebubar]

Piss in a violin...

Speaking, bla bla bla, arguing,  all day long to say nothing, this is the Trollero Devs work!

Pathetic!

[smooth]

See above.

Hint: that is only true if you denominate returns in DRK

The term Ponzi scheme refers to a very specific type of scam. One where current investors' gains are paid from funds contributed by new investors. Are you somehow involving inflation?

I'm using the term in a broader economic sense.

Note, however, that the literal defintion applies in some ways when you realize that the value of a coin where new coins are being created will not decline automatically by a given inflation rate. It will decline instantly to zero if no new capital is being added.

EDIT: somewhat does not apply to PoS coins where the new coins go to existing coin holders; those are closer to merely being inflationary.

[hodlmybtc]

I choice DRK because now DRK to the moon
Price now 0.025. Amazing.

Stupid money all looking to get rich fast, no matter what coin it is.

Price is overbought in literally every timescale and you decide to buy? Great strategy buy high sell low?  

[BlockaFett]

See above.

Hint: that is only true if you denominate returns in DRK

The term Ponzi scheme refers to a very specific type of scam. One where current investors' gains are paid from funds contributed by new investors. Are you somehow involving inflation?

I'm using the term in a broader economic sense.

Note, however, that the literal defintion applies in some ways when you realize that the value of a coin where new coins are being created will not decline automatically by a given inflation rate. It will decline instantly to zero if no new capital is being added.

EDIT: somewhat does not apply to PoS coins where the new coins go to existing coin holders; those are closer to merely being inflationary.

so in what sense are *you* using the term when you accuse DRK of being a 'ponzi scheme'?  How do people become ponzies when buying DRK?  If you are trying to help DRK investors as you say maybe you could give some specifics?

[smooth]

See above.

Hint: that is only true if you denominate returns in DRK

The term Ponzi scheme refers to a very specific type of scam. One where current investors' gains are paid from funds contributed by new investors. Are you somehow involving inflation?

I'm using the term in a broader economic sense.

Note, however, that the literal defintion applies in some ways when you realize that the value of a coin where new coins are being created will not decline automatically by a given inflation rate. It will decline instantly to zero if no new capital is being added.

EDIT: somewhat does not apply to PoS coins where the new coins go to existing coin holders; those are closer to merely being inflationary.

so in what sense are *you* using the term when you accuse DRK of being a 'ponzi scheme'?  How do people become ponzies when buying DRK?  If you are trying to help DRK investors as you say maybe you could give some specifics?

To the extent that people are buying masternodes for yield they are relying on other people to continue buying to support the price of DRK. If they stop buying the price of DRK will fall and the yield will fall as well.

The original question was about the profitability of masternodes assuming a constant DRK price, and that depends on assumptions that are not consistent with a non-ponzi (using the term broadly) investment.

If you are buying DRK speculatively, that's a different matter. In that case it just has to go up for you to make money, and then you sell at the right time, sure. However, the fact that the masternodes are a big part of the system at this point means they can't be ignored in analyzing the entire picture.

EDIT: clarified original context

[megges]

It boggles my mind that Evan didn't design the protocol around micropayment channels, where every full node could be incentivised to mix transactions or vote on InstantX transactions or whatever. It would make the anonymity set so much larger.

Perhaps he thought it's better to make sybil attacks harder. It's basically free to launch as many full nodes as required.

He may have thought that (I'm not sure I buy it) but it doesn't work, because there is still no irrevocable cost incurred for bad behavior. If masternodes are profitable then the bad ones are more profitable as the good ones. In a competitive market this will mean that only the bad ones are profitable.

The argument about "losing the value of your coins" doesn't work because it make a few false assumptions including that cheating leads to total collapse and the inability to hedge with derivatives. Both of these and certainly the second only apply in an immature cryptocurrency toy, not in a scaled up system.

Are you talking about DDoS attacks?

No I'm talking about masternode spying.

Ok. Let's assume DRK/DASH gets big, and has a value of $100. (Just an arbitrary number, way below a number where a business model that tries to spy information could be profitable.)

5,000 masternodes, 60% of the block reward goes to masternodes (assume year is 2016), block reward = 5 DRK, 17,280 blocks/month  =>  each masternode earns 10 DRK/month  =>  $1,000 / month.

So, the starting point is $1,000 / month for each masternode, and every node is honest. Also let's assume $100 / month for hosting expenses. How will the honest nodes become unprofitable when some of them start turning dishonest?

Also, what is this data that is spied?

And note, I'm not trying to confront/challenge your predictions, I'd just like to see it from all the angles.

Let's assume hypothetically that holding DRK is riskless. In that case you have a riskless investment that has a return on equity of about 10%. Since that is obviously absurd, something must be wrong with this analysis.

It's often hard to argue with people about ponzi schemes because it seems like it should work and proving that it won't is difficult because we don't know the exact mechanism of failure in advance.

The talked ROI is indeed not an ROI, because everyone has invested dollars at the beginning, these figures going around are not a "return of investment",  masternode payments are in DRK and DRK<->Dollar changes. (and your investment was in dollar, so these percentage figures of masternode drk returns are absolutly pointless in the relation to your initial invest because you cant know the price of drk in the future.)

So in the end the 10% has not to be absurd, the price of DRK has just to adjust. And voila it could be also a negative ROI.

[smooth]

It boggles my mind that Evan didn't design the protocol around micropayment channels, where every full node could be incentivised to mix transactions or vote on InstantX transactions or whatever. It would make the anonymity set so much larger.

Perhaps he thought it's better to make sybil attacks harder. It's basically free to launch as many full nodes as required.

He may have thought that (I'm not sure I buy it) but it doesn't work, because there is still no irrevocable cost incurred for bad behavior. If masternodes are profitable then the bad ones are more profitable as the good ones. In a competitive market this will mean that only the bad ones are profitable.

The argument about "losing the value of your coins" doesn't work because it make a few false assumptions including that cheating leads to total collapse and the inability to hedge with derivatives. Both of these and certainly the second only apply in an immature cryptocurrency toy, not in a scaled up system.

Are you talking about DDoS attacks?

No I'm talking about masternode spying.

Ok. Let's assume DRK/DASH gets big, and has a value of $100. (Just an arbitrary number, way below a number where a business model that tries to spy information could be profitable.)

5,000 masternodes, 60% of the block reward goes to masternodes (assume year is 2016), block reward = 5 DRK, 17,280 blocks/month  =>  each masternode earns 10 DRK/month  =>  $1,000 / month.

So, the starting point is $1,000 / month for each masternode, and every node is honest. Also let's assume $100 / month for hosting expenses. How will the honest nodes become unprofitable when some of them start turning dishonest?

Also, what is this data that is spied?

And note, I'm not trying to confront/challenge your predictions, I'd just like to see it from all the angles.

Let's assume hypothetically that holding DRK is riskless. In that case you have a riskless investment that has a return on equity of about 10%. Since that is obviously absurd, something must be wrong with this analysis.

It's often hard to argue with people about ponzi schemes because it seems like it should work and proving that it won't is difficult because we don't know the exact mechanism of failure in advance.

The talked ROI is indeed not an ROI, because everyone has invested dollars at the beginning, these figures going around are not a "return of investment",  masternode payments are in DRK and DRK<->Dollar changes. (and your investment was in dollar, so these percentage figures of masternode drk returns are absolutly pointless in the relation to your initial invest because you cant know the price of drk in the future.)

So in the end the 10% has not to be absurd, the price of DRK has just to adjust. And voila it could be also a negative ROI.

So how would this help in answering illodin's question?

[megges]

It boggles my mind that Evan didn't design the protocol around micropayment channels, where every full node could be incentivised to mix transactions or vote on InstantX transactions or whatever. It would make the anonymity set so much larger.

Perhaps he thought it's better to make sybil attacks harder. It's basically free to launch as many full nodes as required.

He may have thought that (I'm not sure I buy it) but it doesn't work, because there is still no irrevocable cost incurred for bad behavior. If masternodes are profitable then the bad ones are more profitable as the good ones. In a competitive market this will mean that only the bad ones are profitable.

The argument about "losing the value of your coins" doesn't work because it make a few false assumptions including that cheating leads to total collapse and the inability to hedge with derivatives. Both of these and certainly the second only apply in an immature cryptocurrency toy, not in a scaled up system.

Are you talking about DDoS attacks?

No I'm talking about masternode spying.

Ok. Let's assume DRK/DASH gets big, and has a value of $100. (Just an arbitrary number, way below a number where a business model that tries to spy information could be profitable.)

5,000 masternodes, 60% of the block reward goes to masternodes (assume year is 2016), block reward = 5 DRK, 17,280 blocks/month  =>  each masternode earns 10 DRK/month  =>  $1,000 / month.

So, the starting point is $1,000 / month for each masternode, and every node is honest. Also let's assume $100 / month for hosting expenses. How will the honest nodes become unprofitable when some of them start turning dishonest?

Also, what is this data that is spied?

And note, I'm not trying to confront/challenge your predictions, I'd just like to see it from all the angles.

Let's assume hypothetically that holding DRK is riskless. In that case you have a riskless investment that has a return on equity of about 10%. Since that is obviously absurd, something must be wrong with this analysis.

It's often hard to argue with people about ponzi schemes because it seems like it should work and proving that it won't is difficult because we don't know the exact mechanism of failure in advance.

The talked ROI is indeed not an ROI, because everyone has invested dollars at the beginning, these figures going around are not a "return of investment",  masternode payments are in DRK and DRK<->Dollar changes. (and your investment was in dollar, so these percentage figures of masternode drk returns are absolutly pointless in the relation to your initial invest because you cant know the price of drk in the future.)

So in the end the 10% has not to be absurd, the price of DRK has just to adjust. And voila it could be also a negative ROI.

So how would this help in answering illodin's question?

you said Since that is obviously absurd, something must be wrong with this analysis.

my point is that you're right and the missing point is that the masternode ROI is not in dollar, so the initial roi can also go negativ in dollars, and there are no false promises it won't so i can't see any ponzi in it.

[smooth]

It boggles my mind that Evan didn't design the protocol around micropayment channels, where every full node could be incentivised to mix transactions or vote on InstantX transactions or whatever. It would make the anonymity set so much larger.

Perhaps he thought it's better to make sybil attacks harder. It's basically free to launch as many full nodes as required.

He may have thought that (I'm not sure I buy it) but it doesn't work, because there is still no irrevocable cost incurred for bad behavior. If masternodes are profitable then the bad ones are more profitable as the good ones. In a competitive market this will mean that only the bad ones are profitable.

The argument about "losing the value of your coins" doesn't work because it make a few false assumptions including that cheating leads to total collapse and the inability to hedge with derivatives. Both of these and certainly the second only apply in an immature cryptocurrency toy, not in a scaled up system.

Are you talking about DDoS attacks?

No I'm talking about masternode spying.

Ok. Let's assume DRK/DASH gets big, and has a value of $100. (Just an arbitrary number, way below a number where a business model that tries to spy information could be profitable.)

5,000 masternodes, 60% of the block reward goes to masternodes (assume year is 2016), block reward = 5 DRK, 17,280 blocks/month  =>  each masternode earns 10 DRK/month  =>  $1,000 / month.

So, the starting point is $1,000 / month for each masternode, and every node is honest. Also let's assume $100 / month for hosting expenses. How will the honest nodes become unprofitable when some of them start turning dishonest?

Also, what is this data that is spied?

And note, I'm not trying to confront/challenge your predictions, I'd just like to see it from all the angles.

Let's assume hypothetically that holding DRK is riskless. In that case you have a riskless investment that has a return on equity of about 10%. Since that is obviously absurd, something must be wrong with this analysis.

It's often hard to argue with people about ponzi schemes because it seems like it should work and proving that it won't is difficult because we don't know the exact mechanism of failure in advance.

The talked ROI is indeed not an ROI, because everyone has invested dollars at the beginning, these figures going around are not a "return of investment",  masternode payments are in DRK and DRK<->Dollar changes. (and your investment was in dollar, so these percentage figures of masternode drk returns are absolutly pointless in the relation to your initial invest because you cant know the price of drk in the future.)

So in the end the 10% has not to be absurd, the price of DRK has just to adjust. And voila it could be also a negative ROI.

So how would this help in answering illodin's question?

you said Since that is obviously absurd, something must be wrong with this analysis.

my point is that you're right and the missing point is that the masternode ROI is not in dollar, so the initial roi can also go negativ in dollars, and there are no false promises it won't so i can't see any ponzi in it.

You are getting fixated on the ponzi question which was a tool of analysis.

His question was

So, the starting point is $1,000 / month for each masternode, and every node is honest. Also let's assume $100 / month for hosting expenses. How will the honest nodes become unprofitable when some of them start turning dishonest?

Care to answer that?

[BlockaFett]

See above.

Hint: that is only true if you denominate returns in DRK

The term Ponzi scheme refers to a very specific type of scam. One where current investors' gains are paid from funds contributed by new investors. Are you somehow involving inflation?

I'm using the term in a broader economic sense.

Note, however, that the literal defintion applies in some ways when you realize that the value of a coin where new coins are being created will not decline automatically by a given inflation rate. It will decline instantly to zero if no new capital is being added.

EDIT: somewhat does not apply to PoS coins where the new coins go to existing coin holders; those are closer to merely being inflationary.

so in what sense are *you* using the term when you accuse DRK of being a 'ponzi scheme'?  How do people become ponzies when buying DRK?  If you are trying to help DRK investors as you say maybe you could give some specifics?

To the extent that people are buying masternodes for yield they are relying on other people to continue buying to support the price of DRK. If they stop buying the price of DRK will fall and the yield will fall as well.

The original question was about the profitability of masternodes, and that depends on assumptions that are not consistent with a non-ponzi (using the term broadly) investment.

If you are buying DRK speculatively, that's a different matter. In that case it just has to go up for you to make money, and then you sell at the right time, sure. However, the fact that the masternodes are a big part of the system at this point means they can't be ignored in analyzing the entire picture.

That can be applied to any coin production.  Masternodes pay out DRK coins, same as mining pays out DRK coins or POS in another coin.  

Where you are confused is that you think there is an exchange rate obligation, which there isn't.

And even if there were, a ponzi scheme would require an additional loss of the principal of the funds, i.e. the 1000 DRK, which obviously there isn't.

This is real basic economics, you shouldn't accuse people without understanding the terms you are using.

So the ponzi scheme is now debunked.

[smooth]

See above.

Hint: that is only true if you denominate returns in DRK

The term Ponzi scheme refers to a very specific type of scam. One where current investors' gains are paid from funds contributed by new investors. Are you somehow involving inflation?

I'm using the term in a broader economic sense.

Note, however, that the literal defintion applies in some ways when you realize that the value of a coin where new coins are being created will not decline automatically by a given inflation rate. It will decline instantly to zero if no new capital is being added.

EDIT: somewhat does not apply to PoS coins where the new coins go to existing coin holders; those are closer to merely being inflationary.

so in what sense are *you* using the term when you accuse DRK of being a 'ponzi scheme'?  How do people become ponzies when buying DRK?  If you are trying to help DRK investors as you say maybe you could give some specifics?

To the extent that people are buying masternodes for yield they are relying on other people to continue buying to support the price of DRK. If they stop buying the price of DRK will fall and the yield will fall as well.

The original question was about the profitability of masternodes, and that depends on assumptions that are not consistent with a non-ponzi (using the term broadly) investment.

If you are buying DRK speculatively, that's a different matter. In that case it just has to go up for you to make money, and then you sell at the right time, sure. However, the fact that the masternodes are a big part of the system at this point means they can't be ignored in analyzing the entire picture.

That can be applied to any coin production.

No it can't because "any coin" does not rely on paying a high (or even positive) yield to masternodes to (supposedly) incentivize their proper operation.

[BlockaFett]

See above.

Hint: that is only true if you denominate returns in DRK

The term Ponzi scheme refers to a very specific type of scam. One where current investors' gains are paid from funds contributed by new investors. Are you somehow involving inflation?

I'm using the term in a broader economic sense.

Note, however, that the literal defintion applies in some ways when you realize that the value of a coin where new coins are being created will not decline automatically by a given inflation rate. It will decline instantly to zero if no new capital is being added.

EDIT: somewhat does not apply to PoS coins where the new coins go to existing coin holders; those are closer to merely being inflationary.

so in what sense are *you* using the term when you accuse DRK of being a 'ponzi scheme'?  How do people become ponzies when buying DRK?  If you are trying to help DRK investors as you say maybe you could give some specifics?

To the extent that people are buying masternodes for yield they are relying on other people to continue buying to support the price of DRK. If they stop buying the price of DRK will fall and the yield will fall as well.

The original question was about the profitability of masternodes, and that depends on assumptions that are not consistent with a non-ponzi (using the term broadly) investment.

If you are buying DRK speculatively, that's a different matter. In that case it just has to go up for you to make money, and then you sell at the right time, sure. However, the fact that the masternodes are a big part of the system at this point means they can't be ignored in analyzing the entire picture.

That can be applied to any coin production.

No it can't because "any coin" does not rely on paying a high (or even positive) yield to masternodes to (supposedly) incentivize their proper operation.

All coin production produces a yield to incentivize producers that is the foundation of Crypto  

"high (or even positive)" - you are not making any sense

As a Monero dev, why attack DRK and accuse it of being a ponzi scheme on your vigilante mission to find any dirt on DRK, if you have no idea what you are talking about

[saddambitcoin]

[smooth]

See above.

Hint: that is only true if you denominate returns in DRK

The term Ponzi scheme refers to a very specific type of scam. One where current investors' gains are paid from funds contributed by new investors. Are you somehow involving inflation?

I'm using the term in a broader economic sense.

Note, however, that the literal defintion applies in some ways when you realize that the value of a coin where new coins are being created will not decline automatically by a given inflation rate. It will decline instantly to zero if no new capital is being added.

EDIT: somewhat does not apply to PoS coins where the new coins go to existing coin holders; those are closer to merely being inflationary.

so in what sense are *you* using the term when you accuse DRK of being a 'ponzi scheme'?  How do people become ponzies when buying DRK?  If you are trying to help DRK investors as you say maybe you could give some specifics?

To the extent that people are buying masternodes for yield they are relying on other people to continue buying to support the price of DRK. If they stop buying the price of DRK will fall and the yield will fall as well.

The original question was about the profitability of masternodes, and that depends on assumptions that are not consistent with a non-ponzi (using the term broadly) investment.

If you are buying DRK speculatively, that's a different matter. In that case it just has to go up for you to make money, and then you sell at the right time, sure. However, the fact that the masternodes are a big part of the system at this point means they can't be ignored in analyzing the entire picture.

That can be applied to any coin production.

No it can't because "any coin" does not rely on paying a high (or even positive) yield to masternodes to (supposedly) incentivize their proper operation.

All coin production produces a yield to incentivize producers that is the foundation of Crypto 

Miners lose their return if they violate the rule that mining is intended to incentivize (to simplify, by mining on other than the longest chain). Masternodes do not lose their return if they spy on people, and probably not if they do some other malicious things too. Not the same.

if you have no idea what you are talking about

Or it could be that.