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

[xkcdd]

I didn't sell my dash yet...sorry to disappoint you, go fetch me the remote

LOL, I thought as much, all bark and no bite, eh?  There's a good boy now roll over and play dead.

[qwizzie]

Did anyone see Andreas Antonopoulos' tweet about Bitcoin fees?

"If you want cheap and fast transactions use Visa or Paypal."

It's deleted now and he claimed he was being sarcastic.

No, but i did see a post about PayPal blocking an account that was trading in crypto.
Link : https://www.somagnews.com/paypal-banned-cryptocurrency-traders-account/

After our investigation, we have decided to permanently block your account due to potential risks.
You will no longer be able to make transactions with PayPal.

Gotta love those centralized services  

The user may have burdened the PayPal system
In the news shared by CryptoPotato on the subject, it was emphasized that the PayPal user named TheCoolDoc may have made a costly transaction.
Reportedly, because PayPal is a platform that does not charge transaction fees, the $ 10,000 day trading the user makes in a week may have been costly for the platform.

I guess PayPal was not prepared and ready for crypto daytraders or for traders doing large trades. Strange that PayPal may have underestimated the impact of transaction fees,
when dealing with crypto on their platform. I wonder if more blocked PayPal accounts of traders involved with crypto will follow.

[toknormal]

I have some questions for you:

1/ Why did you never raise your concern about the block reward in 2014, 2015, 2016, 2017, 2018 or 2019? Don't tell me you suddenly had an epiphany in 2020, because anything you say was already true in 2014/2015

First of all, in the early years this wasn't a problem. Mining and masternode operating profitability were far closer to parity. (Remember that price has an asymmetrical effect on them respectively since mining costs are variable and MN costs are fixed). Then two things happened leading up to 2017:

 • price skyrocketed, sending redundant masternode revenue (holder "profit") into orbit
 • the masternode network became fully populated

Since then we've experienced a 3 year continuous bear market and collapsed out of the rankings almost to doge coin level.

The second thing was that I was forced to review the way I looked at and accounted for my own holdings. This was because, up until 2018 I had always casually regarded MN returns as a growth in capital (and took accounting advice to that effect also). So a growth in holdings would represent a capital gain if the overall value of the holding had increased and a capital loss if it had decreased.

But at the end of 2018, the UK tax agency released a fairly detailed document on how crypto holdings and earnings should be accounted for which specifically required the likes of masternode rewards to be reported as income (in line with how other countries do it). As professional background, I've spent around 30 years developing custom business software and doing systems analysis for corporate clients, much of which is based around double-entry bookeeping concepts. Given that background, when you think "revenue" you immediately think "cost". i.e. where's the other side of the entry, at least conceptually.

This lead me to think the whole crypto-mining business model through much more fully than I had done before and consider how it actually works in terms of capital flows and where value gets stored etc. It also brought to the forefront that the masternode revenue was "idle" in the sense that it wasn't retained in the network the way mining revenue is.

Later, Ryan released his famous "tokenomics" presentation. That was what finally woke me up out of my stupour. If he had gone in the other direction (increasing the proportion of the chain that's mined) then at least our thinking would have been congruent in principle. But that was the time when I realised that his thinking was 180 degrees out of whack with mine.

The way I reconciled it was that he's looking at it from an optimal resource usage perspective. In other words he sees the economic objective as being to create coins and transfer them as cheaply as possible and now that we have chainlocks, hashrate isn't needed for that. If that was indeed our objective then he would be right. But it isn't. We're not just building a monetary messaging network but a synthetic store of value which is based on real world monetary archetypes. In this case, a completely different set of criteria applies in which Ryan's perspective is positively toxic IMO because it destroys the store of value dimension. To realise this you have to appreciate the mining model's capital dynamics and how it preserves value by putting a "price" on the extraction of a block from the blockchain. (Seems obvious but it got lost in our obsession over utility IMO).

Think of it this way. If you invest in Visa you're not actually buying units of a monetary asset. You're buying equity in a company. Where does Visa's value lie ? In its merchant subscriber base. Visa sells access to markets. The 3% fee the merchant pays is a marketing cost not a transaction cost so it's a brokering system, nothing to do with money really. Meanwhile gold sits in a vault and does nothing all day long. They are very different and we do not want to model Dash on Visa because it's not designed for that. It's a bitcoin clone who's core mission is to store value like gold. What it has over bitcoin is the decoupling of the service layer so we can have on-chain services VERY CHEAPLY without much loss of mined capital. But if we overpay for that service layer we'll just kill the store of value role.

See ? We've come to exactly the opposite conclusions but not because of different or flawed thinking, rather different starting points as to what we're actually building here.

2/ Suppose you are right, what is your ideal proposal in terms of block reward? I remember asking you and you told me something like 90% miners / 5% masternodes / 5% dcg ? Just state it here for the record. Maybe some day we can all look back at it and agree that we were all fools and that you were right.

Right now, any adjustment that exposes more blocks to mining competition would help turn things around IMO. The lowest reward setting is what would cover:

1. the treasury requirements and
2. masternode operating costs

...as a minimum. The highest setting would be what we have at the moment (45% ?). So lets say 20%. That still gives masternodes 10 x over cost and guarantees profitability. This profit margin will only increase with Dash price. Ideally I'd make masternode rewards an inverse function of network difficulty but that's dreamland. Such a relationship would IMO lock in a virtuous cycle whereby all of the new supply was put to maximum use in one of the three dimensions of Dash's economic "engine":

 • wealth preservation (mining)
 • service provision (masternodes)
 • forward investment (treasury)

Anything else is just waste, most of all what I have come to call "non-performing masternode margins". They are also corrosive from a statutory perspective because they generate a large tax liability which creates constant selling pressure. Again that tells you something's way sub-optimal. At $1000 per Dash the masternode network would get paid $300 MILLION per year. Can you fathom that ? Since most of it's pure profit there's a theoretical, say $100 million worth of Dash that needs to get sold just to pay tax authorities and hitting the highest tax rate bands. To me this is bonkers. This doesn't happen with mining.

Capital gain is the game. ROI cannot be measured in Dash, it must be measured in dollars and take the capital gain/loss of the collateral into account otherwise we're simply deluding ourselves (To be precise, the way that the reward is generally accounted for on a statutory basis is through 2 transactions, not 1. You received USD, then you bought Dash with that USD. From that point on the capital gain or loss is calculated and the market price at reward time is your cost base).

3/ Also, if you feel so strongly about it, why not use your bloated ;-) masternode return to enter a proposal with your analysis and desired block reward split? At least you could say afterwards that you really tried

Because there's a job of persuasion to do first. There's no point is floating a proposal that doesn't already have well rooted support and a chance of succeeding. In my opinion the community has barely scratched the surface of this debate. It simply hasn't thought much about these aspects because most people's minds are stuck back in the 2014 "anything goes" world where if you create enough hype and fireworks pumps will come. Also I think that quite a lot of people just want out and would like to stfu till the pump comes. I am not in that category as I genuinely see a future for this project, but only as a "highly mobile bitcoin", not as "Visa with store-of-value".

...let's not drag it out endlessly.

Any systems of governance worth their salt have a permanent opposition. One of the reasons we're in this mess (IMO) is because there was no formal alternative presented when DCG floated their "tokenomics" proposal. It was a "follow the leader" exercise. (That's not DCG's fault, it's the community's). Hopefully that will change but we have the choice of either permanent constructive challenges from within the community or permanent trolling from outside of it IMO.

****
P.S.
****
I've never actually changed my view on this. If you look back my posts from years ago you'll see I've always promoted Dash for its advantages as a versatile mined asset. The subject only became an issue when DCG diverged from this path by signalling their dismissal of mining as a priority factor in store of value. Then the masternode vote endorsed this. So it's the path of Dash that's changed. My line of reasoning has remained the same.

[xkcdd]

Then two things happened leading up to 2017:

 • price skyrocketed, sending redundant masternode revenue (holder "profit") into orbit
 • the masternode network became fully populated

Since then we've experienced a 3 year continuous bear market and collapsed out of the rankings almost to doge coin level.

I agree with this, when the price was low the masternodes were not that profitable, I remember someone telling me that when they first started with their masternodes it was a loss maker initially.  Now since the price went up so much the profit in them is well above cost for now.

The second thing was that I was forced to review the way I looked at and accounted for my own holdings. This was because, up until 2018 I had always casually regarded MN returns as a growth in capital (and took accounting advice to that effect also). So a growth in holdings would represent a capital gain if the overall value of the holding had increased and a capital loss if it had decreased.

But at the end of 2018, the UK tax agency released a fairly detailed document on how crypto holdings and earnings should be accounted for which specifically required the likes of masternode rewards to be reported as income (in line with how other countries do it). As professional background,  blah blah....

OK, here.  Now I understand where you've gone seriously awry.  Let's pause here a moment and dissect it for you.  For some reason you think your government's tax department got it right how to tax MNs rewards and using their faulty accounting you apply that to the network and come up with 2+2=5.  I see that now.  Let's fix that for you.  The govt says that coin your mnode mints at the time it spits it out is instantly your income at market rates.  Now hang on a second.

• 1. Even if you wanted too, you can't sell a mined coin until after 101 confirmations.
• 2. It has no value til it is sold.
• 3. You don't know what the market value of that coin is until you execute the trade are a matched with a buyer.  We have liquidity issues, panic pumps and panic dumps, the ticker price of DASH is just an estimate, the actual price you will only ever know until when you execute the trade.

To give you an analogy that might help, a gold miner recovers some gold from the ground, Her Majesty does not declare that those gold are immediately deemed as income, instead the gold is refined and SOLD on market at which time it is ph ucking income.  Furthermore, the government classify cryptoCURRENCIES as commodities because they are terrified of losing control of the fiat scam, but in doing so, they must tax it as though it were a commodity which is valueless until sold!  Instead they are treating it as though I paid you in pounds for services rendered, that is not what is going on here.  I am (the network) paying you in clams that are valueless until such time as you convert them for actual money.

You've made a mistake here by not recognising that DASH is not money in the eyes of the government which accounted for in pounds, dollars, or whatever the case may be.



Now onto the discussion of costs, you claim the masternode network costs $300M per year at $1000 DASH, but it doesn't,  the hosting costs are far less than that. What does cost that much is the mining which you've said here is barely profitable below $100 USD per coin.  So, miners are forced to sell to pay for electricty (the major expense) and for that we get an abdundance of network security over and beyond what the network actually requires.  So, DASH's electric bill if you will is very large, it is like we don't turn off the lights in rooms we are not using and heat the pool all year round.  Ie wasteful.  OTOH the mnode network is quite efficient, MNOS have the ability to save a large amount of their reward, so as history has shown, the price is largely dictated by the mnodes.  Now here's the thing that you don't understand at all about investing/trading.  It is all a confidence game, if the MNOs are feeling confident and bullish, they will hold back DASH in order to sell it for more later (greed).  OTOH if they are feeling bearish, they will preferentially sell now for fear that future prices will be lower.  The MNOs have this option because a large part of their reward does not need to be cashed in for expenses.  This makes the price of the coin far more volatile than others, eg Bitcoin.

Understanding the psychology of the market is front and centre in understanding the price moves, you've simply drawn the wrong conclusions by over thinking it .  You'd think someone that has been in this space as long as you and dealt with a thousand morons like purplelardo would know this space is far less sophisticated than you think it is.

Here's the thing, look to the confidence in the mnodes to see if the price pumps.  If they are confident, the price will pump, if not it dumps, everything else is a diversion.

[dafdaf]

At $1000 per Dash the masternode network would get paid $300 MILLION per year. Can you fathom that ? Since most of it's pure profit there's a theoretical, say $100 million worth of Dash that needs to get sold just to pay tax authorities and hitting the highest tax rate bands. To me this is bonkers. This doesn't happen with mining.

Are you sure? In several jurisdictions that I know, masternode rewards are exactly like mining income, tax-wise. (i.e. earnings for services on a given network)
Also, do you imply that miners sell less frequently than masternode operators?

[robertrodriguez]

I didn't sell my dash yet...sorry to disappoint you, go fetch me the remote

LOL, I thought as much, all bark and no bite, eh?  There's a good boy now roll over and play dead.

mind your own business you peasant, you crawl back into the cave you came from

[toknormal]

For some reason you think your government's tax department got it right how to tax MNs rewards and using their faulty accounting you apply that to the network and come up with 2+2=5.

No, I'm not doing that. You've never understood this argument and I don't expect you to understand it now. Just more "it has value if people say it has" and "it depends if they sell or not" hand waving.

At $1000 per Dash the masternode network would get paid $300 MILLION per year. Can you fathom that ? Since most of it's pure profit there's a theoretical, say $100 million worth of Dash that needs to get sold just to pay tax authorities and hitting the highest tax rate bands. To me this is bonkers. This doesn't happen with mining.

Are you sure? In several jurisdictions that I know, masternode rewards are exactly like mining income, tax-wise. (i.e. earnings for services on a given network)
Also, do you imply that miners sell less frequently than masternode operators?

Yes, I'm sure. Masternodes have fixed operating costs and miners have variable ones that scale (due to difficulty increase with price & competition). Masternode costs do not scale, so as Dash price increases, almost all of masternode income is taxable whereas the same is not true for mining income. Nothing to do with tax jurisdiction, it's the Dash protocol split into fixed and variable operating cost.

[birdonthewire]

Incentivizing is certainly a good strategy to achieve an objective, but it's possible that we are over incentivizing the Dash MN network.

- Of course ... but being a crazy economic burden, it is not the worst distortion: The worst is the incentive in governance ... which implies the economic and any other that occurs to the elite who enjoy it and impose it on the rest . The economic return, to the extent that it was established, is only the expression of a fundamental imbalance in DASH: That in any term, 200 people send that vote on tens or hundreds of thousands who - erroneously - believe they are linked to the price of the token. And even this is not correct, since the particular incentive of a minimum part of the members of the initial ecosystem has exceeded the general incentive - in fact, attacking that general interest and therefore, the DASH price continuously.


Dash masternodes are so awesome and it's going to become so much more than what it is today.

- Those incredible DASH Mnodes were "one more profile" of a collective system of various actors that, by nullifying the expansion of governance - and returns - offered years ago with the perspective of Shared Mnodes, key to a decentralized collective movement, have been appropriate of ALL the DASH structure in the terms they literally want ... and that only express the interest of less than 1% of the actors that make up the DASH ecosystem ... which is literally the "anti-crypto" / anti-decentralization .




However, I am sure this is not the feeling for everyone. There are probably many people for whom running a MN is all about getting that return, not primarily about supporting the project. This is a consequence of constantly showing the ROI for running a MN. I don't support this, as MNs are not investment vehicles. They really aren't, but some people tried to present it as such or at least made it into a carrot luring in new people. It worked obviously, but over subsidizing the MNs has led to a very large network, but isn't actually required at all, when we look at the actual usage we have. It's like saying we built a super high way with 32 lanes, but don't mention that only 10 cars are driving on it.

It all comes down to this arbitrary setting of the block reward split.

- No, that is just one expression of the limitless arbitrary action provided by centralizing governance. And that's WHAT it all boils down to. From there, any approach is possible in DASH, no matter how crazy it sounds. The immorality of that group does the rest ... even this centralized scam.

A scam consists of causing, through sufficient deception, a displacement of assets for their own benefit or that of others ... which is exactly what the DAO hijackers reproduce every day with their commercial strategy of information intoxication. The DAO hijackers, instead of interested taboos, lies and half-truths, have very easy to legitimize their trap: Show yourself as a high-performance private project as a means of payment, making it very clear to users that the assaulted DAO takes the banknotes from the system and the user enters them. That is transparency and free market. The point is that the people who come to crypto not only want a revolution in monetary uses, but also integration, growth and participation in a decentralized project. A model that works proven. But in those terms, the choice is VERY easy, because any other project will respect, integrate , prosper and welcome them better.








I would definitely prefer to see Dash at $500 with a 5% MN return than Dash at $100 with a 60% return, but I'm not convinced that your intended block reward split would actually lead to a significant increase in price. I agree though that in your model the overal network cost (in the strict accounting sense ;-) ) would drastically go down obviously.

- Normal. This is how you would work for a currency, that is, a common interest proportional to the volume of possession, which is a perfect sample of productivity and collective synergy ... but that is not the current case of DASH, which works for the private interest of a minimum group of beneficiaries of a network.

The parasitic hierarchy that DASH generated at the time, increasingly unsustainable without decentralization and collective commitment, has repeatedly shown disregard for the token's fiat price for the benefit of its possession and private advantage. The ridiculous, obscene, price of DASH is the best proof of this. And unfortunately, the unhealthy inbreeding that that small group has already developed by now in their eternal circles and punches in the air, does not even allow her to see the elemental logic that you apply to that point. No common cause will satisfy them ... all measures lead to the reassertion of their centralized control of the project ... even if they harm it (and by extension, its most precious asset: Abundant exposure to the DASH token ... and its price. Due to technological qualities, ridiculous price ... which, however, is not expressed in those terms ... due to the absence of the necessary recognition of a public that values ​​technology ... but more cleanliness and elemental respect)




As I tried to point out in my previous reply, a booming price appreciation depends on so many factors that are non-technical, where Dash needs to improve a lot. There are several non-technical elements that would have a much higher impact on price I suspect. We need much better promotion, which can be done at no cost, simply due to higher involvement and effort from community members to increase excitement and so on. We need to show the world that we are a movement with the ideals of Satoshi in mind, but with massive improvements which benefit end users. Those non-technical factors matter a lot in the crypto wars and much smaller projects than ours are doing better in that regard. Everyone involved should be active on social media spreading the word, but the community is still recovering from a terrible bear market and the "nevorlution" crap, so sentiment is a bit low. It's a bit sad cause we are effectively really close now with Dashpay already running on testnet in preparation for the upcoming public statement. Sentiment will hopefully turn around soon. To be honest, lots of alt projects are deep down in the dumps and suffering too, it's really not just Dash. Bitcoin is kicking everyone's ass. We're perhaps just feeling it more because we used to be a Top10 coin.

- Without the slightest doubt that you need it ... but it is that you have despised, impoverished and marginalized the real community that can create it spontaneously. This free promotion thing is especially hilarious in the case of DASH. The benefits ... are for four ... but the effort is collective. That approach is as round as a donut. ; D (And the DAO hijackers sure love it.)

In DASH everything has a cost because everything has been structured like this by DASH's power layer, based on immediate, parallel and elitist economic incentives. That "movement" and that "community", which anyone in crypto understands by it, in DASH simply DOES NOT EXIST. The DASH community is 200 people voting the expression of the 1000 active Mnodes - in the current proposals -.

Surely you haven't seen Vitalik or Antonopoulos tweeting "the community" to vote for their currency to enter, for example, a minor exchange in Thailand? ... Normal, because the REAL community of both projects expresses itself automatically, spontaneously, since any variation in the price of their token affects them automatically, regardless of the number of coins owned. However, RyanTaylor , CEO de DCG, and 3 or 4 other - ridiculous - references of DASH (normally, proven information manipulators ) do it constantly - and pathetically - ... because what anyone understands by "community" in DASH neither exists nor is expressed. If you do not have a thousand tokens in DASH you are not a member of the community ... you are only "a customer". Some are THE ASSET and others are the exploiters of that asset ... and, amazing! ...Those who charge are surprised that the exploited party does not react automatically in favor of their occurrences and interests. Really, the the lack of contact with the reality of this band is pure abracadabra.  

This is another taboo interested in a 200-person project that lives off the acceptance and use of those clients, NOT ON THEIR INTEGRATION. (On the contrary, any answer in that sense is MARGINALIZATION). The hyper-centralization of DASH is clearly expressed at these junctures. Look at any tweet from BTC or ETH, and even from "second, third or fourth division" chains: They generate endless threads with TENS, HUNDREDS of responses. Those of DASH, BETWEEN ZERO AND THREE OR FOUR. I repeat: BETWEEN ZERO AND THREE OR FOUR. It is literally and bleakly so. But absolutely logical and normal, of course. Theater in DASH only works within the scope of its hyper-centralized ecosystem.

And the public is dumb, ok ... but not SO OR SO MUCH TIME.

[birdonthewire]

Think of it this way. If you invest in Visa you're not actually buying units of a monetary asset. You're buying equity in a company. Where does Visa's value lie ? In its merchant subscriber base. Visa sells access to markets. The 3% fee the merchant pays is a marketing cost not a transaction cost so it's a brokering system, nothing to do with money really. Meanwhile gold sits in a vault and does nothing all day long. They are very different and we do not want to model Dash on Visa because it's not designed for that. It's a bitcoin clone who's core mission is to store value like gold. What it has over bitcoin is the decoupling of the service layer so we can have on-chain services VERY CHEAPLY without much loss of mined capital. But if we overpay for that service layer we'll just kill the store of value role.

Exact: The "CUSTOMERS". Splendid point if we also connect it with a previous quote from another member ridiculing a tweet from Antonopoulos about VISA (and it is that the practical and real position of DASH is as fallacious and hypocritical as his).

The thing is, VISA is a private, centralized initiative ... that is, the opposite of what crypto would aspire to be. But that DASH starts from that basic concept while deceiving and manipulating that legion of users as if they were members of the project, which is what it has been doing for years, is pathetic. And neither crypto, nor centralized ... or well, as much as VISA. That is the measure of DASH in the crypto industry.

But in crypto, people will find other projects, even if they are less technologically gifted ... and will integrate into them. Although Rtaylor puts the word "community" demagogically in his mouth another million times (the answer of the sector, although some take it as scandalous undeserved, has long been clear: DASH is a centralized scam that nobody wants to approach).

The key is that, beyond the current biased and speculative demagoguery of DASH at that point, the original approach offered to INTEGRATE these users (micro-holders) proportionally in the project. And the absence of Shared Mnodes and marginalization of any activity or reward from the deceived public, a key proposition in financing the entire project for years, creates a blatant scam.

[toknormal]

Ask yourself why successful store of value beats utility, even when it comes to merchant payments.

It's because it needs to be money first and a fancy messaging service second and in crypto money is mined value. (Dash mentioned - as an "also ran").

[qwizzie]

I wonder how long this discussion and effort to change toknormal perception will continue, toknormal will never change his views and will never adapt his perception or change his assumptions.
This is a discussion that has been going on since July this year (if not longer), maybe it is time to give it a rest.

I am just glad i live in The Netherlands and that we have a rather relaxed property tax on anything relating to virtual currency. With no difference between miners or masternodes, no difference
between Bitcoin, Dash or Litecoin or all those 5000 other Altcoins, no difference between holding traditional stocks or holding crypto or holding Euro's on a bankaccount (they all get property-taxed
the same way). With Germany crypto falls under private money, if it has been hold more then a year (it gets exempt from capital gains tax then). This of course encourage longterm crypto holding in Germany.

Source :

The Netherlands : property tax, the cost basis can only be carried back to January 1st of the given tax year, after which it resets
Source : https://tokentax.co/guides/crypto-taxes-in-the-netherlands/#overview-of-dutch-crypto-taxation

Germany : only income tax if crypto is sold after being held less then a year. Otherwise it is treated as private money (exempt from capital gains tax)
Source : https://tokentax.co/guides/crypto-taxes-in-germany/

Most of the Dash masternodes in Europe are located in The Netherlands and Germany.


Source : https://chainz.cryptoid.info/dash/masternodes.dws

Note : Look at that explosive growth of masternodes in Germany, i think they doubled during this bear market alone Their number of masternodes used to be roughly equal to The Netherlands.
Here is another link that shows some (outdated ?) info on masternodes locations : https://masternodes.online/currencies/DASH/ (The Netherlands 407 masternodes, Germany 469 masternodes)

I also think that toknormal behavior has been influenced by the (changed) jurisdiction of his country regarding masternodes and how masternode rewards are subject to income tax in the UK, i think it indeed has colored his perception. Nothing that can be done about it though, from what i have seen from toknormal so far. It is strange to see how jurisdiction can have such a profound influence on how people treat crypto, plan their strategy around and base their assumptions upon.

There was a time investors could live upon the interest of one's savings accounts, those days are pretty much gone due to banks all over the world lowering their interest rates and even moving to negative interest rates. What can be done is (partly or completely) live upon the crypto interest of one's crypto investments. I think this trend of fiat interest disappearing and crypto interest emerging (Masternodes projects / Proof of Stake projects / DeFi projects / Crypto Lending) will only get stronger over time. I think some countries (due to their stance on crypto / jurisdiction) are more suited for that, then others.  
 
  

[toknormal]

I am just glad i live in The Netherlands and that we have a rather relaxed property tax on anything relating to virtual currency. With no difference between miners or masternodes

The difference is the same in any country. Re-read me previous remark from 2 posts back.

[qwizzie]

I am just glad i live in The Netherlands and that we have a rather relaxed property tax on anything relating to virtual currency. With no difference between miners or masternodes

The difference is the same in any country. Re-read me previous remark from 2 posts back.

UK has income tax on Masternode rewards. Of course that is not the same as The Netherlands where it all falls under property tax.

almost all of masternode income is taxable whereas the same is not true for mining income.

Also incorrect for The Netherlands and Germany (where most of the Dash masternodes are located in Europe).
They are either both taxed under property tax (The Netherlands) or after a year private money and exempt from capital gains tax (Germany).

You are basing your assumptions on the UK jurisdiction, you are just not willing to admit it.
Which is fine. It will however mean there will never be any middleground. Ever.

[toknormal]

UK has income tax on Masternode rewards. Of course that is not the same as The Netherlands where it all falls under property tax.

Incorrect. It's exactly the same in the Netherlands as everywhere else.



The Dash protocol is also the same in the Netherlands as everywhere else because operating costs are fixed whereas mining operating costs are variable. Therefore almost all of the masternode reward is exposed to taxation whereas only a small portion of mining rewards are and this asymmetry only becomes ever more staarlas price rises.

[qwizzie]

UK has income tax on Masternode rewards. Of course that is not the same as The Netherlands where it all falls under property tax.

Incorrect. It's exactly the same in the Netherlands as everywhere else.

That is for registered businesses, not for masternode operators that have some 1000 Dash on a hardware wallet somewhere.
It is just property tax then (box 3).
Source : https://tokentax.co/guides/crypto-taxes-in-the-netherlands/#overview-of-dutch-crypto-taxation

All capital gains and losses are reported in Box 3 of your Dutch tax return. Your tax brackets for capital gains on property are determined by your net gain minus
losses from the current tax year only.

This just shows how little you know about how taxes on crypto are applied in Europe (outside the UK), yet you continue to make assumptions based on that.
Which is why discussions are pointless, you only look at it from an UK stance (masternode rewards are subject to income tax) and you are turning a blind eye to the jurisdiction of
other European countries, that have far more masternodes located then the UK.

Operating costs miners / masternodes : irrelevevant
Fixed / Variable costs : irrelevant

Dash / Bitcoin / Euro on bank / traditional stocks : all the same. Either its property taxed (The Netherlands) or after a year it falls under private money and gets exempt from capital gains tax (Germany). No wonder the number of masternodes in Germany is rising so rapidly, directly challenging the US. Most are hold longer then a year and then fall under private money and are exempt from capital gains tax. If i was a German masternode operator, i would also save up my masternode rewards for at least a year (if my situation would allow it).

[toknormal]

This just shows how little you know about how taxes on crypto are applied in Europe (outside the UK), yet you continue to make assumptions based on that.
Which is why discussions are pointless

Go back and read this post.

The principle being described is one of asymmetric profitability amongst reward categories in the Dash protocol. The aspect of taxation only comes into it because it's a general principle - anywhere - that it's the net profit element of a business that exposes it to taxation. So it follows that masternode rewards incur a massively disproportionate selling pressure from statutory sources compared to miners. An asymmetry which only grows as price rises. Also, it's a general principle in good business practice that paying excessive tax is a waste which indicates you've got something wrong with the gearing of your operation (such as not investing enough back into it).

Contrary to your assertions, the Netherlands is no different from anywhere else in observing this principle. Masternodes ARE businesses and if your idea of growth is that they remain as a server in some teenage kids basement rather than the kind of institutionalised operations that we started to get a hint of during the last bull run then you've set your sights lower than me.

[qwizzie]

Masternodes ARE businesses

Not to our tax agency, sorry. I live in The Netherlands and actually report property tax on my crypto, so i know what i am talking about.
Please don't make things up, just to serve your assumptions (which are clearly incorrect for The Netherlands and i suspect for Germany as well).

US, The Netherlands and Germany together form the largest concentration of Dash masternodes. Two of them in Europe have a crypto-friendly stance, geared towards
property tax and private money classification. US seems more geared towards income tax.

I think this will affect how masternode operators in those countries treat crypto, plan their strategy around it and base their assumptions on it.

[toknormal]

I live in The Netherlands and actually report property tax on my crypto, so i know what i am talking about.

It doesn't matter, go back and read your own country's rules. It's an effective income tax because your masternode reward will simply be filed as a capital gain from the start of the tax year (Jan-Dec) with a zero cost base. Same difference and same asymmetrically applied sell pressure compared to mining. The only advantage of that system is that you don't incur a liability if your overall holdings incur a capital loss which offsets the annual reward earned by the node. So you'll have incurred no liability the last few years.

But you need for Dash to be a poor store of value and decrease in price for that to work. (Well it's worked for you the last few years )

[qwizzie]

I live in The Netherlands and actually report property tax on my crypto, so i know what i am talking about.

It doesn't matter, go back and read your own country's rules. It's an effective income tax because your masternode reward will simply be filed as a capital gain from the start of the tax year (Jan-Dec) with a zero cost base. Same difference and same asymmetrically applied sell pressure compared to mining. The only advantage of that system is that you don't incur a liability if your overall holdings incur a capital loss which offsets the annual reward earned by the node. So you'll have incurred no liability the last few years.

But you need for Dash to be a poor store of value and decrease in price for that to work. (Well it's worked for you the last few years )

I am just gonna stick with property tax, as that is what it actually is.

And yes, a low Dash price at the start of the new year, followed by a Dash price rise later that year would be a nice outcome for property tax that only get measured at the start of each year
and resets to zero at the end of that year. 2017 had a very nice outcome in that regard (measured at Eur 11,36 at the start of that year and then grew rather high during that year).
I kinda hope on a repeat of that for 2021. Although you do need to be prepared to face a potentially higher measurement price the next year (2022).

[jdmcg]

There is an effort to make crypto taxation the same across all jurisdictions... hopefully they come up with something fair...

https://btcmanager.com/crypto-tax-reporting-standard-2021-oecd-director/?utm_source=onesignal&utm_medium=push&utm_campaign=push%notification

As for me, mining/masternode coins are taxed as 100% income but only at the price they are sold at. Until they are sold, they are not taxed at all and considered as part of your business inventory.

The US taxes mining/masternode coins as if you sold them the day you received them, which creates an accounting nightmare for anyone mining or hosting masternodes for more than a few different cryptos.