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

[qwizzie]

How the market sees it: How i see it :

Fixed it for you, you are welcome.

[toknormal]

Fixed it for you, you are welcome.

Whether it's how I see it or market sees it, it doesn't stop 5000 masternodes pocketing capital from the chain that should be going towards raising the scarcity value (and therefore opening price) of each new block. That's what other chains are doing and it's the single biggest difference between us and them.

It's also a phenomenon which markets are at liberty to price in as they see fit (and are currently doing so).

[qwizzie]

Fixed it for you, you are welcome.

Whether it's how I see it or market sees it, it doesn't stop 5000 masternodes pocketing capital from the chain that should be going towards raising the scarcity value (and therefore opening price) of each new block. That's what other chains are doing and it's the single biggest difference between us and them.

It's also a phenomenon which markets are at liberty to price in as they see fit (and are currently doing so).

5000 masternodes pocketing capital from the chain versus large whales of various other crypto projects holding huge crypto investments on cold wallets or on exchanges and therefore pocketing capital from the chain.
No difference.

https://www.investopedia.com/articles/people/091516/top-5-investors-investing-bitcoin.asp
https://news.bitcoin.com/here-are-the-top-public-companies-that-have-adopted-bitcoin-as-a-reserve-asset/

At least with Dash, the masternode operators (like yourself) have a chance to participate in the Dash governance system (which you don't participate in).

Lets also not forget where most other crypto projects are working towards or have already implemented :

https://www.coindesk.com/tokenized-bitcoin-wrapped-bitcoin-on-ethereum (Bitcoin)
https://newsroom.dash.org/112220-dash-partners-with-stakehound-enabling-ethereum-defi-users-to-earn-rewards-with-stakeddash (Dash)
https://medium.com/@stakehound/nem-group-is-joining-defi-rally-by-launching-stakedxem-with-stakehound-platform-263cb84e84c6 (NEM)
https://decrypt.co/30257/new-defi-protocol-bitcoin-cash-zcash-swaps-ethereum (Bitcoin Cash & Zcash)

[toknormal]

5000 masternodes pocketing capital from the chain versus large whales of various other crypto projects holding huge crypto investments on cold wallets or on exchanges and therefore pocketing capital from the chain.
No difference.

Yes difference. Because the whales of other chains participated in a capital flow which started with an investment directly IN the chain to support the opening price of each block before it was traded. When a Dash masternode reward coin is sold on the other hand there is no such investment in the chain. It's an exchange between 1 holder who acquired their holding with a zero costbase, and a trader who's dollars go straight into that holder's pocket.

[qwizzie]

5000 masternodes pocketing capital from the chain versus large whales of various other crypto projects holding huge crypto investments on cold wallets or on exchanges and therefore pocketing capital from the chain.
No difference.

Yes difference. Because the whales of other chains participated in a capital flow with the chain where they invested their money directly IN the chain to support the opening price of each block. When a Dash masternode reward coin is sold, on the other hand there is no such investment in the chain.

Such old weak repetitive arguments of you. Masternode rewards do have an investment behind them, you just choose to ignore it and place no value to it.
Good luck convincing people of that.

Miners : invested in mining hardware and continue to pay electricity.
Masternodes : invested 1000 Dash directly into the chain and continue to pay server renting costs

This does make me wonder who is more likely to invest their money directly IN the chain : miners who buy their mining hardware equipment on the traditional market (for example https://mineshop.eu/),
or Dash Masternode operators who are forced to buy 1000 Dash on the crypto market ? Difficult, difficult  


 

[toknormal]

Miners : invested in mining hardware and continue to pay electricity.
Masternodes : invested 1000 Dash directly into the chain and continue to pay server renting costs

Again, very deceptive of you as always in deflecting the discussion away from where the problem is to where it isn't.

Firstly, my previous post is concerned with the masternode reward, not the collateral. It's those rewards that arrive with a zero cost base. That leaves the market at liberty to price it as such.

Secondly, the 1000 Dash is not "invested" in the chain. In fact it isn't invested anywhere - the owner continues to hold it and own it. An "investment" is where you swap one form of capital for another, for example when a miner "invests" $USD in raising the scarcity value of the next block and receives coin in return who's opening price is proportional to the hashrate they contributed to the cause.

[qwizzie]

Miners : invested in mining hardware and continue to pay electricity.
Masternodes : invested 1000 Dash directly into the chain and continue to pay server renting costs

Again, very deceptive of you as always in deflecting the discussion away from where the problem is to where it isn't.

Firstly, my previous post is concerned with the masternode reward, not the collateral. It's those rewards that arrive with a zero cost base. That leaves the market at liberty to price it as such.

Secondly, the 1000 Dash is not "invested" in the chain. In fact it isn't invested anywhere - the owner continues to hold it and own it. An "investment" is where you swap one form of capital for another, for example when a miner "invests" $USD in raising the scarcity value of the next block and receives coin in return who's opening price is proportional to the hashrate they contributed to that cause.

You can't look at masternode rewards without also looking at the masternode collateral, because without the masternode collateral you would not have any masternode rewards. Plain and simple.
People swapping Euro / USD / FIAT for Dash to acquire their Dash collateral, pretty much makes them an investor. An investor that invests directly in the chain.

Hashrate unfortunately has no direct relation to price, our constant new hashrate ATH's did not increase our price in any way. All what miners do is provide an abundance of security to our network and provide
a lot of selling power on the crypto market. The abundance is unnecessary and is getting addressed through the blockreward re-allocation proposal, the selling power is hopefully compensated by making the masternodes more attractive to buy (improving Dash store of value), which seems to be working really well already, as the masternodes numbers just had a new ATH.    

Now it is just waiting until this retest of lows (in Dash case the retest of 0.0053) is concluded and the Altcoins market in general starts picking up again.

[toknormal]

You can't look at masternode rewards without also looking at the masternode collateral, because without the masternode collateral you would not have any masternode rewards.

Yes you would. They just wouldn't be called "masternode rewards" but "mining rewards" instead and the fiat they attract on being sold would be directed straight into raising the cost of producing the next block. i.e. increasing its scarcity value which is what store-of-value markets are buying.

People swapping Euro / USD / FIAT for Dash to acquire their Dash collateral, pretty much makes them an investor...

...in holiday cruises for masternodes, not in the mining & difficulty level of the blockchain.

Hashrate unfortunately has no direct relation to price, our constant new hashrate ATH's did not increase our price in any way.

<facepalm> Of course it didn't, because whatever our hashrate is, it's only directed at less than half of the coin supply anyway. And now the market is pricing in an even smaller exposure to mining. The rest of the blocks are generated for free (with a zero cost base. Ask my tax accountant who forces me to sell them to cover the tax for that reason because the liability is generated as soon as you receive the reward).

All what miners do is provide an abundance of security to our network...

Please tell that to the store-of-value market, because it didn't realise it was actually investing in cheaply secured networks. It thought it was buying high scarcity coins emerging from expensive to mine blocks. It (specially the bitcoin market) could have saved itself a lot of time & money.

[qwizzie]

Please tell that to the store-of-value market, because it didn't realise it was actually investing in cheaply secured networks. It thought it was buying high scarcity coins emerging from expensive to mine blocks. It (specially the bitcoin market) could have saved itself a lot of time & money.

I tried to tell the store of-value market about Ethereum Classic (getting 51% attacked three times in a month and all), exposing a very cheaply secured network. It did not react at all
Luckily Dash has ChainLocks and it would not surprise me the least if Dash hashrate will simply continue printing new ATH's, even after the blockreward re-allocation change gets implemented.
 

[toknormal]

it would not surprise me the least if Dash hashrate will simply continue printing new ATH's, even after the blockreward re-allocation change gets implemented.

It wouldn't surprise me either which is why the insanity of firewalling half the supply off from that hashrate and giving it away for free is becoming apparent to all.

[qwizzie]

it would not surprise me the least if Dash hashrate will simply continue printing new ATH's, even after the blockreward re-allocation change gets implemented.

It wouldn't surprise me either which is why the insanity of firewalling half the supply off from that hashrate and giving it away for free is becoming apparent to all.

If you really believe all that nonsense about 'the insanity of firewalling half the supply off from hashrate and giving it away for free', then you should not have invested in Dash in the first place.
It was clearly mentioned in Dash emission rate schedule, how the blockreward allocation pans out for miners and masternodes over time.

You should have left Dash ages ago. You should have left this Dash ANN ages ago. You should have sold your masternode(s) ages ago.
Yet you did not. Your thoughts and opinions about Dash, seem to directly clash with your actions (to stay invested in Dash and keep your masternode(s) running).

From an investor point of view that looks very strange. Suspiciously strange.

[Dahaa]

Soon, soon the dashes will disappear everywhere. qwizzie start looking for a new job

it would not surprise me the least if Dash hashrate will simply continue printing new ATH's, even after the blockreward re-allocation change gets implemented.

It wouldn't surprise me either which is why the insanity of firewalling half the supply off from that hashrate and giving it away for free is becoming apparent to all.

If you really believe all that nonsense about 'firewalling half the supply off from hashrate and giving it away for free', then you should not have invested in Dash in the first place.
It was clearly mentioned in Dash emission rate schedule, how the blockreward allocation pans out for miners and masternodes over time.

You should have left Dash ages ago. You should have left this Dash ANN ages ago. You should have sold your masternode(s) ages ago.
Yet you did not. Your thoughts and opinions about Dash, seem to directly clash with your actions (to stay invested in Dash and keep your masternode(s) running).

From an investor point of view that looks very strange. Suspiciously strange.

[Dahaa]

0.0055 shame my predictions are getting closer

[toknormal]

You should have left Dash ages ago. You should have left this Dash ANN ages ago. You should have sold your masternode(s) ages ago.
Yet you did not. Your thoughts and opinions about Dash, seem to directly clash with your actions (to stay invested in Dash and keep your masternode(s) running).

From an investor point of view that looks very strange. Suspiciously strange.

There's nothing strange about it. I invested in a proof of work coin that inherited bitcoin's protocol and target market, but more versatile than bitcoin at the point of use.

The arguments I've been promoting on here are far more consistent with that principle than yours have been. There's therefore a reason to stay invested because this coin has a governance mechanism and I believe that the community will eventually have to face the fact that the appraisal made last year regarding the economics of the protocol was faulty and that the conclusion drawn was exactly the opposite of the correct one. i.e. it's the masternode margins we can afford to compromise and the hashrate we DO need. (Or at least its restoration to a majority of the coin supply). That is because masternode margins in dollar terms will restore themselves once the chain starts to recapitalise.

It was faulty IMO because it was based on optimising orderbook dynamics instead of aggregate capital flows. It isn't enough just to minimise traffic to orderbooks because it matters what the fiat being drawn from order books is being spent on. If it's being invested in raising the cost base of the primary supply, then coins hitting order books isn't a problem. If it's being wasted on uneconomic margins and drawdowns that leave emerging blocks undercapitalised then it IS a problem. (I don't blame DCG for this b.t.w., it's not their problem, it's the governing community's).

Apart from reasoned accounting, there is anecdotal evidence for this everywhere you look - not least that of the top ten mined coins, 9 of them send ALL of their supply to order books (if not, the miner's own bank account) and all nine, bar one, are capitalised to a greater extent than Dash, in most cases by multiples. This even has a knock-on effect on utility because we're being trounced by litecoin on transaction count now which proves that utility bells and whistles are worthless unless you have the basic mining model well balanced and competitive (with other coins).

So I'm not the contrarian here IMO. The points I've made are exactly the same ones I've made since 2014. Why are they not acceptable now ? Because a vote was taken ? This is a monetary asset, not a golf club. The same market economics apply regardless of what the "committee" says.

[qwizzie]

You should have left Dash ages ago. You should have left this Dash ANN ages ago. You should have sold your masternode(s) ages ago.
Yet you did not. Your thoughts and opinions about Dash, seem to directly clash with your actions (to stay invested in Dash and keep your masternode(s) running).

From an investor point of view that looks very strange. Suspiciously strange.

There's nothing strange about it. I invested in a proof of work coin that inherited bitcoin's protocol and target market, but more versatile than bitcoin at the point of use.

The arguments I've been promoting on here are far more consistent with that principle than yours have been. There's therefore a reason to stay invested because this coin has a governance mechanism and I believe that the community will eventually have to face the fact that the appraisal made last year regarding the economics of the protocol was faulty and that the conclusion drawn exactly the opposite of the correct one. i.e. it's the masternode margins we don't need and the hashrate we DO need. (Or at least its application to a majority of the coin supply needs to be restored).

That is not what you stated earlier, let me quote what you said earlier :  

insanity of firewalling half the supply off from that hashrate and giving it away for free is becoming apparent to all.

With half of the supply off i assume you mean our current blockreward allocation 50% masternodes / 50% miners (or to be precise the 45% / 45% / 10%), not the yet to be activated block reward reallocation change that leads to 60% / 40% (or to be precise 54% / 36% / 10%).

If you are indeed referring to the 50% / 50% blockreward allocation, then i am not sure why you even started with Dash. Why stay so long with a coin that you think is 'insanely firewalling half the supply off from the hashrate and give it away from free' for 6 years already ? While that coin is showing no signs of taking an interest in your point of view ? Why not simply switch 6 years ago to a '100% mining competitive' coin with governance, if the whole thing bothered you so much ? Why setup your own masternode(s) for all those years and not participate in the governance system these last few years, even though you claim to be invested because of that governance mechanism ? Is it then just for collecting the masternode rewards these days ? Why setup masternodes for yourself in the first place, when you claim masternodes cause the 'insanity of firewalling half the supply off from that hashrate and giving it away for free' ?

So many questions and so little answers.


 

[toknormal]

If you are indeed referring to the 50% / 50% blockreward allocation, then i am not sure why you even started with Dash.

Because the principle is very powerful and there is a clear market for this - store of value coin that has a trustless on-chain service protocol decoupled from the mining one.

A corrosive reward ratio can break it though. That's the problem I see - like drowning a slice of bread in too much butter - the sandwich will become valueless to most. It's not difficult to address which is why I think it's worth arguing for.

[jdmcg]

Ok, maybe you're looking at this the wrong way. Do you at least concede that? Are you presenting fact or theory?

Here's something to think about...

1) The block reward is not given out until a block is mined.
2) No miners, no block reward.
3) The block reward currently is roughly 2.88 DASH.
4) The miner is able to stay in business even though they only receive roughly 1.44 DASH per block

Now, if they got 100% of the reward and the hashrate/cost remained the same wouldn't there be enormous pressure for the price to be cut in half?

After all if the miner is profitable enough to stay in business by selling 1.44 DASH, they could easily sell 2.88 DASH at 50% off and still be just as well off.

So, maybe this 50/50 split we currently have puts upward pressure on the price? And maybe that more than offsets the price that masternodes sell at since they don't sell it for $0...

[afbitcoins]

Ok, maybe you're looking at this the wrong way. Do you at least concede that? Are you presenting fact or theory?

Here's something to think about...

1) The block reward is not given out until a block is mined.
2) No miners, no block reward.
3) The block reward currently is roughly 2.88 DASH.
4) The miner is able to stay in business even though they only receive roughly 1.44 DASH per block

Now, if they got 100% of the reward and the hashrate/cost remained the same wouldn't there be enormous pressure for the price to be cut in half?

After all if the miner is profitable enough to stay in business by selling 1.44 DASH, they could easily sell 2.88 DASH at 50% off and still be just as well off.

So, maybe this 50/50 split we currently have puts upward pressure on the price? And maybe that more than offsets the price that masternodes sell at since they don't sell it for $0...

The mining difficulty would adjust higher, making the scarcity /store of value attribute much stronger.

Consider that in 100% proof of work coins they already have 100% of the reward. This idea is already tested and in action in real crypto market

[qwizzie]

Ok, maybe you're looking at this the wrong way. Do you at least concede that? Are you presenting fact or theory?

Here's something to think about...

1) The block reward is not given out until a block is mined.
2) No miners, no block reward.
3) The block reward currently is roughly 2.88 DASH.
4) The miner is able to stay in business even though they only receive roughly 1.44 DASH per block

Now, if they got 100% of the reward and the hashrate/cost remained the same wouldn't there be enormous pressure for the price to be cut in half?

After all if the miner is profitable enough to stay in business by selling 1.44 DASH, they could easily sell 2.88 DASH at 50% off and still be just as well off.

So, maybe this 50/50 split we currently have puts upward pressure on the price? And maybe that more than offsets the price that masternodes sell at since they don't sell it for $0...

The mining difficulty would adjust higher, making the scarcity /store of value attribute much stronger.

Consider that in 100% proof of work coins they already have 100% of the reward. This idea is already tested and in action in real crypto market

So why is it not working for Bitcoin Cash and Zcash then ? They have 100% proof of work with 100% of the reward and have the exact same negative price performance as Dash.


Dash              -95,6% Price Down from ATH
Bitcoin Cash    -93,8% Price Down from ATH
Zcash             -93,5% Price Down from ATH
  
Source : messari.io

What can we conclude from that ?

Also i don't see how higher mining difficulty increase scarcity. With Dash the difficulty gets adjusted after each block thanks to Dash Dark Gravity Wave, which means the supply generation stays the same. There is no increased scarcity or increased store of value from an increase in mining difficulty.

https://docs.dash.org/en/stable/introduction/features.html

[toknormal]

Now, if they got 100% of the reward and the hashrate/cost remained the same wouldn't there be enormous pressure for the price to be cut in half?

First of all, it's a general given in commerce that if you give a market twice the goods for the same price, you'll instantly become more competitive.

1. Support the Price in the Primary Market

So it isn't a question of hashrate per se, it's about increasing the amount of competition there is for Dash's primary supply (the new mined supply). We have a massive reserve available there to attract back demand because we're currently at a 50% deficit over our mined neighbours so ANY restoration of mining reward between that and 100% will do it. I realise that masternode holders want holiday cruises, but f*k'm. They'll get their margins restored via capital gain anyway so lets put them to good use in arresting the decapitalisation of the chain.

As an example of how low margins can generate huge businesses, look at those mining operations in Iceland. They turnover millions. More than half of all of Iceland's electricity generating capacity goes into bitcoin mining , yet they operate on wafer thin margins. The capital value of bitcoin grows. Meanwhile masternodes operate on huge margins and their capital value is paltry and shrinking. That is because those margins are not being re-invested in raising the mining difficulty as they are with our competitors. They are supposed to be invested in service capacity but that cost is non-existent by comparison so meanwhile it needs to be going into applying scarcity to the half of our supply that's currently a free giveaway.

Ironically, they're also not working to attract new demand for masternodes either. Why is that ? Because with such a large collateral investment, capital gain or loss makes far more difference to ROI than the reward ratio. If the reward ratio isn't set right and acts to leech the capital value of the chain instead of nourish it, then masternodes are a loss maker at any protocol reward since the external market calculates ROI in dollars, not Dash.

2. Stop Masking that Value off from the Secondary Market

Now lets turn to the exchange of existing coins between one holder and the next (the so called "secondary market"). This is where the issue of capital flows comes in that I mentioned in an earlier post. The problem here is that if any holder in the chain of exchange is able to acquire a coin at zero cost then the store of value archetype is broken.

So lets say you mine 100 bars of gold out of the ground and it costs you $1000 to mine each one. You sell 50 of them for $1000 and you give the other 50 away for nothing. The cost of mining (scarcity value) of the 50 free bars then doesn't get transmitted through to the market because any loss that would have been incurred from selling below mining cost has already been taken for them. From an accounting perspective, they are holding a capital asset but also a huge capital gain, so it's in their interest to realise that gain as fast as possible because there will be competition for liquidity from others that are in the same position since 100% gains are rare and realised ones are even rarer. The asset will not hold its value because everyone got it for free and this acts as a corrosive force to the overall value of the chain.

Miners, however are not in the same boat. They incur a financial penalty for selling below cost which in their case is non-zero. They have to take the loss themselves. They're also always having to invest hashrate in the chain to get anything out of it. That hashrate isn't "wasted", because it increases the scarcity of the coin in proportion to demand. But it doesn't work if somewhere else coins are being released with a zero cost base. You then have a leaky boat in terms of capital value from the chain.

The cherry on top is that miner's low profit margin exposes them to negligible statutory selling pressure from tax authorities, unlike their masternode counterparts who instantly incurr a liability of between 30% to 70% of their reward as soon as they receive it (depending on what jurisdiction theyr'e in). This constitutes yet another source of massive and chronic sell pressure.

Conclusion: Large masternode margins are disastrous for business:

 • they give traders a reason to constantly go short because they know they're a capital bleeder
 • they make the primary supply depressingly uncompetitive compared with our neighbours
 • they don't work anyway (because the market simply adjusts the dollar reward ratio as it sees fit)
 • they give miners a reason to run masternodes to subsidise their mining costs, which deprives the primary supply of mining competition and instead crashes order books with their "free rewards"
 
..and worst of all...

 • they are bad for masternodes, since they have the most to lose from capital losses being the biggest capital holders