[ANN][DASH] Dash (dash.org) | First Self-Funding Self-Governing Crypto Currency

[JollyGood]

Is this really necessary?

Here's to the banana skin. (Avoiding it  )

[toknormal]

I guess we will just have to see if Dash moves into oblivion by lowering the mining blockrewards (your vision) or if Dash will continue with its current price recovery...

Well at least you have evidence on your side since all high 100% mining reward coins have become less valuable while all the low mining reward ones have risen to the top, haven't they.

...because giving away coins for free rather than having them competitively mined makes for such a great store of value !

oops  

[qwizzie]

Sorry tok, i'm off to vote.



https://www.dashcentral.org/p/decision-proposal-block-reward-reallocat
https://app.dashnexus.org/proposals/decision-proposal-block-reward-reallocation/overview

[karoke]

Dicing with Dash

For the first time since I got into Darkcoin, or Dash as it is of course nowadays. I am doubting the project. I shall try to explain why.


https://afbitcoins.wordpress.com/2020/06/17/dicing-with-dash/

afbitcoins, I have read your paper. I agree that there is more than just securing the network. There are monetary principles at stake and these are the ones I am currently trying to understand.
And I am much closer to you and toknormal in this regard than what transpires from my earlier posts. I may come back talking about competitive mining and scarcity as related to Dash when I am ready.

But first I want to understand what I currently do not:

The point of Tok (as I understand it, oversimplifying it) is that the masternodes get "free" coins for their service, contrary to the miners. They need to pay it with electricity bills. That is the "pressure" force.

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. What is a mechanism that restores the equilibrium?

Ok, maybe this answers my questions:

Where I struggle is at the beginning, point 1. that looks at the cost of producing the block. I know that it costs to miners to find blocks, but the link of this cost with the block reward is what bothers me. The block rewards are created by software independently of the mining cost.

Sure, you can look at it that way. i.e. The block has value..."because"...rather than the block has value "because the prevailing level of competition to mine it represents the starting value for the block".

However, taking that approach has consequences - namely that half the supply ends up being held at a zero cost base and free markets do like to massacre high margins where they have the option. So you end up with chronic profit-takes from masternode rewards competing with miners for limited fiat liquidity and undermining them (because they can afford to right down to a price of zero).

It doesn't matter which way you model it IMO, the long-run behaviour (in the absence of massive added service value to justify the MN rewards) tends towards chronic loss of marketcap share.

Hmm .. I am almost starting to understand your point.

But why don't the miners start shutting down their mining equipment and purchase masternodes instead then? The mining rewards would go up, masternode rewards down and soon the equilibrium would be reached (The difficilty adjustment would take care of the rest).

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


This is the part I don't understand. Unless ... the investor values the "mining" more than other services.

[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".

[JollyGood]

 

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

Sorry tok, i'm off to vote.



https://www.dashcentral.org/p/decision-proposal-block-reward-reallocat
https://app.dashnexus.org/proposals/decision-proposal-block-reward-reallocation/overview

[qwizzie]

Sure, if they allow Europeans 

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

Sorry tok, i'm off to vote.



https://www.dashcentral.org/p/decision-proposal-block-reward-reallocat
https://app.dashnexus.org/proposals/decision-proposal-block-reward-reallocation/overview

[karoke]

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.

[karoke]

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.

[qwizzie]

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).

[JollyGood]

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

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

Sure, if they allow Europeans  

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

[qwizzie]

Hell no

No apology needed.

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

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

Sure, if they allow Europeans  

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

[aleix]

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.

[JollyGood]

Thank you qwizzie 

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

Hell no

No apology needed.

[qwizzie]

Thank you qwizzie  

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

Hell no

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%. With our current number of masternodes, 492 Yes minus No votes are needed (they call that net “Yes” votes)

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.

[karoke]

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).

Perfect. Thanks. Will take a look.

[TaoOfSaatoshi]

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https://www.dashnation.com/initiatives/making-dash-nation-on-discord-great-again

[JollyGood]

Thank you, it seems a done deal then with just the margin of votes to be decided even though the outcome is clear.

At the end of the whole voting process I hope there will be a mechanism in place to build bridges between disgruntled miners and investors on one side and masternode operators on the other because having unity and general consensus would make for a far better environment when trying to push the DASH ethos and agenda forward.

Thank you for the link, I will keep an eye on it.

Thank you qwizzie  

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

Hell no

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%. With our current number of masternodes, 492 Yes minus No votes are needed (they call that net “Yes” votes)

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.

[Dahaa]

Congratulations on the 25th place. Next will be a dog coin

[toknormal]

Congratulations on the 25th place. Next will be a dog coin

We don't care about what the market votes for around here.

It's what the masternodes vote for that matters.

(Nor do we want any of the market's expensive hashrate anymore. We gox chanelox. Cheap as chips )