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Author Topic: [ANN][DASH] Dash (dash.org) | First Self-Funding Self-Governing Crypto Currency  (Read 9603784 times)
toknormal
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Today at 12:00:14 PM
Last edit: Today at 12:46:22 PM by toknormal

How and why this 'pressure' on the investors is manifested? Should the investor be interested in how much the distribution of the block rewards is skewed from an 'optimal|ideal|equilibrium'? He cares about the emission schedule and what not, but not about the 'inner' distribution of rewards and who bears the cost of producing the block

Of course an average "investor doesn't care" about the inner distribution. The question is rather, how does reducing the mining reward reduce the aggregate mining cost passed on to the market ? That's the aim of the DCG proposal. (Although it's stated in terms of miners supplying less Dash to the market but actually, to be consistent with their premise that miners sell to cover costs, it should be restated as "drawing less fiat from the market").

Mining costs are denominated in fiat (because electricity companies). Therefore it's the fiat cost that's passed to the market to pay. To achieve the objective of "drawing less fiat" therefore the mining costs would have to be less (in relative terms). For the mining costs to reduce, competition for the next block would have to also reduce. That only happens when demand for the coin overall reduces, not necessarily by changing the reward ratio. (As quizzie has most helpfully pointed out above).

In my observations, a reduction in reward ratio does not manifest in reduced aggregate mining costs. Instead it manifests in reduced marketcap share and reduced capital influx relative to 100% mining reward coins. In other words less competitive as an investment.

Since the market (miners or investors) covers the mining cost but only receives partial supply, it reacts by devaluing the balance of the supply it doesn't receive, since this represents the supposed "value added tax" to pay for the masternode network. It can do this happily without masternode revenues becoming unprofitable (they're at near 100% margin). Even miners can stay viable via difficulty adjustments if necessary. The only aspect that loses out is the capital value of our holdings. That decreases relative to competing 100% mining ratio assets.

When I say "devalue" I don't necessarily mean devalue in absolute terms but relative to competing mined chains. That's why ranking IS important. Not per se, but because it shows up the opportunity cost of our protocol decisions such as reward splits.

Why it is the market that intervenes to massacre high margins?

There's some commentary about this back here. See from "consider why bear markets happen". Also here on the problem of distinct groups of holders at different cost bases and chronic "profit taking".
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Today at 12:16:35 PM

 Grin

Will you use your DASH voting as a trial run for the November 2020 Presidential election?
 


qwizzie
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Today at 12:18:16 PM

Sure, if they allow Europeans  Tongue


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Today at 12:53:39 PM

How and why this 'pressure' on the investors is manifested? Should the investor be interested in how much the distribution of the block rewards is skewed from an 'optimal|ideal|equilibrium'? He cares about the emission schedule and what not, but not about the 'inner' distribution of rewards and who bears the cost of producing the block

Of course an average "investor doesn't care" about the inner distribution. The question is rather, how does reducing the mining reward reduce the aggregate mining cost passed on to the market ? That's the aim of the DCG proposal. (Although it's stated in terms of miners supplying less Dash to the market but actually, to be consistent with their premise that miners sell to cover costs, it should be restated as "drawing less fiat from the market").

Mining costs are denominated in fiat (because electricity companies). Therefore it's the fiat cost that's passed to the market to pay. To achieve the objective of "drawing less fiat" therefore the mining costs would have to be less (in relative terms). For the mining costs to reduce, competition for the next block would have to also reduce. That only happens when demand for the coin overall reduces, not necessarily by changing the reward ratio. (As quizzie has most helpfully pointed out above).

In my observations, a reduction in reward ratio does not manifest in reduced aggregate mining costs. Instead it manifests in reduced marketcap share and reduced capital influx relative to 100% mining reward coins. In other words less competitive as an investment.

Since the market (miners or investors) covers the mining cost but only receives partial supply, it reacts by devaluing the balance of the supply it doesn't receive, since this represents the supposed "value added tax" to pay for the masternode network. It can do this happily without masternode revenues becoming unprofitable (they're at near 100% margin). Even miners can stay viable via difficulty adjustments if necessary. The only aspect that loses out is the capital value of our holdings. That decreases relative to competing 100% mining ratio assets.

When I say "devalue" I don't necessarily mean devalue in absolute terms but relative to competing mined chains. That's why ranking IS important. Not per se, but because it shows up the opportunity cost of our protocol decisions such as reward splits.

Why it is the market that intervenes to massacre high margins?

There's some commentary about this back here. See from "consider why bear markets happen". Also here on the problem of distinct groups of holders at different cost bases and chronic "profit taking".



But shouldn't in theory reducing the mining reward reduce the aggregate mining cost passed on to the market?

What I assumed was:

mining rewards reduced => some miners shut down (buy masternodes instead or exit altogether) => more rewards for other miners, aggregate mining cost reduced

The equilibrium would be restored with less hashrate, but there is plenty of it to secure the network left.


What you are saying is that in practice the miners don't shut down, but continue to mine at a reduced profit? So aggregate mining cost stays the same, but there are more masternode rewards to be sold.
That would explain it. What is the evidence for it? Is there a miner here that can confirm or add some info?

I understand the second part now, thank you.

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Today at 01:32:16 PM


And always remember the main point for me (economics aside): We don't need the 45% PoW force anymore. DASH as a project don't need to waste the energy for it. And that's something important for me, and I'm sure for more people out there.


Not wasting energy is also very important for me. But I also like PoW for 'philosophical' and monetary reasons related to competitive mining and scarcity giving value to a blockchain. That is what currently motivates me to study some interesting solutions that keep harnessing PoW while not wasting energy.

The PoW is still necessary in Dash because it provides an entropy pool for the randomness used by Chainlocks (for random selection of LLMQ, masternodes, etc).
It is also a fall-back method when for some reason (very improbable but it can happen) Chainlocks fail to lock the block.

Are there other reasons for PoW now that we have Chainlocks? Where can I find more information that would allow me to estimate how much entropy is needed?

If someone knowledgeable would be so kind to point me in the right direction I would be grateful.
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Today at 01:39:03 PM


And always remember the main point for me (economics aside): We don't need the 45% PoW force anymore. DASH as a project don't need to waste the energy for it. And that's something important for me, and I'm sure for more people out there.


Not wasting energy is also very important for me. But I also like PoW for 'philosophical' and monetary reasons related to competitive mining and scarcity giving value to a blockchain. That is what currently motivates me to study some interesting solutions that keep harnessing PoW while not wasting energy.

The PoW is still necessary in Dash because it provides an entropy pool for the randomness used by Chainlocks (for random selection of LLMQ, masternodes, etc).
It is also a fall-back method when for some reason (very improbable but it can happen) Chainlocks fail to lock the block.

Are there other reasons for PoW now that we have Chainlocks? Where can I find more information that would allow me to estimate how much entropy is needed?

If someone knowledgeable would be so kind to point me in the right direction I would be grateful.

Have you read this thread ? https://www.dash.org/forum/threads/source-of-entropy.49136/
I am not sure it gives you a clear answer, but it is the thread that discusses entropy specifically and explains why ChainLocks could fail (due to BLS signatures still having the possibility to fail).

Learn from the past, set detailed and vivid goals for the future and live in the only moment of time over which you have any control : now
JollyGood
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Today at 01:41:04 PM

Darn.... there I was thinking you were an American  Grin

I guess an apology is in order, I hope you accept


Sure, if they allow Europeans  Tongue

Grin

Will you use your DASH voting as a trial run for the November 2020 Presidential election?

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Today at 01:41:45 PM

Hell no Smiley

No apology needed.

Darn.... there I was thinking you were an American  Grin

I guess an apology is in order, I hope you accept

Sure, if they allow Europeans  Tongue

Grin

Will you use your DASH voting as a trial run for the November 2020 Presidential election?

Learn from the past, set detailed and vivid goals for the future and live in the only moment of time over which you have any control : now
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Today at 02:05:20 PM


The PoW is still necessary in Dash because it provides an entropy pool for the randomness used by Chainlocks (for random selection of LLMQ, masternodes, etc).
It is also a fall-back method when for some reason (very improbable but it can happen) Chainlocks fail to lock the block.


Sure, I know. 10% - 20% is enough for that.

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JollyGood
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Today at 02:09:38 PM

Thank you qwizzie  Wink

Going back to DASH, what do you think the outcome of the voting will be and when will they announce it?

Hell no Smiley

No apology needed.

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Today at 02:13:16 PM
Last edit: Today at 02:24:43 PM by qwizzie

Thank you qwizzie  Wink

Going back to DASH, what do you think the outcome of the voting will be and when will they announce it?

Hell no Smiley

No apology needed.

Voting deadline is in 17 days. I suspect it will pass.
It is currently at 185 Yes votes and 13 No votes.

Link : https://app.dashnexus.org/proposals/leaderboard

Voting threshold for this decision proposal to pass is at 10% / 492 Yes minus No votes (they call that net “Yes” votes)

Quote
A vote of 10% net “Yes” votes shall have the effect of instructing DCG to incorporate the above block reward allocations into the Dash Core software and to provide a mechanism
for the consensus rule change to activate on the network subject to safe thresholds of network adoption. Any changes are dependent on adequate support / implementation from the
decentralized network to ensure the adoption of the consensus changes, which is outside the direct control of DCG.

A higher % of approval then that 10%, will provide a signal that this proposal is well supported.
It will be interesting to see how high that percentage gets.

Learn from the past, set detailed and vivid goals for the future and live in the only moment of time over which you have any control : now
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