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

[Nthelight]

So, why again must the solution involve lowering the percentage that goes to masternodes?

As pointed out, DASH is having a difficult time getting more than 5000 masternodes. With everything as it is, doesn't this suggest the incentives are not high enough to build up the masternode network further? Is 5000 enough? Shouldn't we want more?

At 5000 masternodes, and assuming 1.48 DASH reward to masternodes per block (this will go up by about 1% every quarter for the next 4+ years), a masternode owner gets just about 5.18 DASH a month, about 62.2 DASH a year... is that really that excessive? 6.2%? Many competitors offer more.

At 6000 masternodes, 4.32 DASH/mth or 51.8/yr... 5.2%
At 7000 masternodes, 3.7 DASH/mth or 44.4/yr... 4.4%

It's been mentioned people run Bitcoin full nodes for free. However they don't require the massive 1000 coin collateral like DASH does. Who would run a full DASH node with such a collateral requirement unless the incentives justified it?

Check this again:
https://bitcointalk.org/index.php?topic=421615.msg55745983#msg55745983

As toknormal has been trying to explain, we want capital gains and should not be blinded by "revenue in Dash". If the economics theory regarding PoW is correct we could have a much higher return in USD, with a lower ROI in Dash. ROI in Dash isn't necessarily what investors are looking for, they calculate what the ROI in USD is.

There needs to be general demand for Dash, not only because of masternodes.

As I've presented before, I believe trustless shared masternodes would go a long way to alleviate the concerns toknormal continues to bring up. So not sure why it has been dismissed out of hand.

This could very well push the masternode count to 7000, forcing non-shared masternode owners to consider the risk of having such a large number of coins tied up for only 4% too much and moving out as they are replaced by shared masternodes. A slow, controlled way to increase masternodes while increasing community involvement.   

Another thing to seriously consider is lowering the collateral required to run a masternode. I may be wrong, but I thought Evan Duffield once said that once DASH is $100, the collateral should be reduced to 500. This simple change could go a long way in spreading out the masternode rewards to more people as well...

Trustless masternodes doesn't address the discussed issue as long as the split for MNs remain the same.

There is also no technical need for more masternodes and there would be no (service) benefit to end users.

The idea as such is not dismissed though, trustless masternodes can be implemented, the collateral required for masternodes can be lowered, it's just not a priority now. All devs are focused on Dash Platform and Dashpay.

I haven't heard any analysis from our core devs what the impact would be if we changed requirements, e.g. in managing the deterministic MN list, quorum selection and so on. I believe since DIP003 it would be easier for the network to manage a huge increase in the list of MNs, so it can probably be done without any serious concerns as far as I know.

[1714016709]

1714016709

[1714016709]

1714016709

[1714016709]

1714016709

[1714016709]

1714016709

[Nthelight]

Source : https://terminal.bytetree.com/dash
Conclusion : Dash miners are selling more than they mine and running down inventory

What i am currently not sure about is if the MRI in Dash case is specific to miners or to miners & masternodes. Which means the following will mostly be my personal assumptions :

I think that Dash miners are currently far more in a selling mood then a hoarding mood and that has been driving the price down. I also think it is far more likely that miners are in a position
that they need to sell their mining rewards to pay for the electricity and possibly pay off their earlier bought mining equipment. Masternode operators on the other hand have relatively low costs, they are not in a position that they need to sell their masternode rewards. They can simply save up their masternode rewards and sell them during a bull market / bull run.

I know i have not been selling any of my masternode rewards, there is just little personal incentive for me to do that, when in 6 months we could be in a drastically different bull market. What i have been doing with my masternode rewards is moving them to a certain exchange, where i can stake that Dash. I am still in the process of determining if that is something i want to do longterm or not (there is risk versus reward evaluation to be done for these kind of centralized staking options).  
  

Thanks for this interesting link, but I'm not sure you can draw any strong conclusions from it.

The rolling inventory (MRI) is based on the total generated coins by miners. The site makes no distinction between masternodes and miners, it simply looks at the generated coins in each coinbase transaction. The calculated rolling inventory refers to both masternodes and miners. It's possible though to create our own version of this with a Dash Miner RI & Dash MN RI.

It's important though to point out that this simply looks at 'first spend' and this does not automatically equate to 'selling', so referring to this as "selling pressure" without any deeper analysis is likely misleading.

[FreedomCoin]

I see Dash is up 700% on Blocktivity.. what happened?

https://blocktivity.info/

[Nthelight]

There are two types of mined coins from an investor perspective:

 • ones that deploy the capital they draw from order books in upwards difficulty adjustments
 • ones that deploy the capital they draw from order books in masternode Lambos

FTFY

[Nthelight]

I see Dash is up 700% on Blocktivity.. what happened?

https://blocktivity.info/

Mmmmm....

[jdmcg]

It's been mentioned people run Bitcoin full nodes for free. However they don't require the massive 1000 coin collateral like DASH does.

How does that justify a revenue straight out of the blockchain other than on a basis that's commercially competitive ? As price rises that profit simply keeps rising and rising without limit. Simply having the 1000 Dash balance there doesn't generate any revenue (unless you count mitigating sybil attacks as a 'revenue generation') activity.

Other coins have their supply locked up in wallets just the same as Dash. How is it that you think that having 5 BTC worth in a cold wallet on the Dash network entitles you to mine all day long at zero difficulty without consequences for the marketcap whereas having 5 BTC in a cold wallet on the bitcoin network doesn't ? There are over 10,000 wallets on the bitcoin network with over 150 BTC "locked up" in them. That's 30,000 Dash each.

Do you imagine how BTC's price would crash if it suddenly gave away half the coin supply for nothing to everyone with 5 BTC or more in a cold wallet instead of spending it on upwards difficulty adjustments ?

You are making many statements based on premises that I and many disagree with, of which you haven't adequately proven. I've already acknowledged that your position has some merit but you weigh it too highly. Problems are not solved by moving from one extreme to another.

More masternodes means less reward per masternode as well as more total cost to run all the masternodes throughout the network. This would at least help address some points you keep making.

Anyways, I guess one point I was trying to make was that if you were to reduce the percentage of rewards going to masternodes, you'd need to also reduce the collateral required. We already see that with the current rewards, the masternode count is slow to increase. If the percentage was reduced to 20% for masternode owners and the collateral kept the same, logically we should expect the masternode count to drop to 1600 or so. Is that considered sufficient? Do you not imagine the price shock such a drastic change could cause?

Now on to mining... it seems to be a bit of a mirage. It's busy work to trick people into getting into a rat race and is an ingenious way to get people to compete. It traps many who think they are going to make money into running their machines just so they can attempt to pay off their initial investment. Don't get me wrong, mining can be and is profitable for those with already deep pockets who can continue to compete. It was a good mechanism to get people involved into a new technology when the concept of Bitcoin was so new. But slowly, BTC and the alts, are being recognized as better forms of money on better merits. At some point people won't need to be tricked into competing for it and just buy it.

Please answer this question that you continue to side step. Why, if someone is willing to spend so much money (and time) to mine, wouldn't they spend the same or even less money to just purchase the coin and sell it at a profit later? You do know that the only reason mining is ever profitable is because someone else wants to pay a higher price than the person who originally mined it, right?

Why are so many coins that don't have mining increasing in marketcap?

Why are the coins in the top 50 in marketcap predominantly not mined?

Do you imagine that mining should result in a coin always increasing in price? What happens if BTC or another coin is used by everyone and becomes common place? Would you expect it to continue to increase in price after that or stabilize to some extent?

Which drives up price more? Mining or speculation?

I don't imagine any of these questions are so easy to answer but you seem to think the answers are so easy and that simply changing the rewards from 60/40 to 20/80 would solve all problems and not introduce far worse ones.

So prove it by creating a new altcoin, like a testnet for DASH, much like LTC supposedly is for BTC. Then you can freely experiment and see what really works in the real world.

[toknormal]

More masternodes means less reward per masternode as well as more total cost to run all the masternodes throughout the network.

That's only the reward "share" you're alluding to. The actual reward at an aggregate level is a constant and independent of the number of nodes. It's essentially the proportion of the chain mined at "zero difficulty". Thats the bottom line and you can slice it up any way you like within that overall constraint obviously. The actual number of nodes is not the problem, it's rather profitability dynamics between the two groups and their increasing asymmetry as price rises. It's simply an unstable model for all the reasons I outlined in previous posts.

Anyways, I guess one point I was trying to make was that if you were to reduce the percentage of rewards going to masternodes, you'd need to also reduce the collateral required.

I don't see how this follows. The collateral is arbitrary as it is. If running a masternode is more profitable than not running one then the network will get populated. As previously mentioned masternodes churn so lots of them have ALREADY been sold. It's in fact possible for the entire compliment of 5000 nodes to be sold and for the network to still be populated at a steady count of 5000 because they simply change hands at different times.

The problem is measuring returns in Dash. It looks profitable when in fact is isn't because the return needs to be measured in dollars taking into account the capital gain/loss of the entire holding. ROI in Dash would only be meaningful if we were a stablecoin.

Please answer this question that you continue to side step. Why, if someone is willing to spend so much money (and time) to mine, wouldn't they spend the same or even less money to just purchase the coin and sell it at a profit later?

Because mining is a business. It's income oriented whereas speculative trading is capital gain oriented. They compliment each other. Mining is a competitive thing so if nobody else is doing it there's enormous profit to be made for you. As more join in it reaches an equilibrium point of diminishing returns and that's your prevailing network hashrate level.

Your (and other's) claim is that by reducing the proportion of the supply that's mined we become more competitive and improve our store of value. I dispute this claim because I observe that the store of value is directly related to how much scarcity is baked into the blockchain. You can measure it because it's a simple cost calculation that's easily demonstrated using basic accounting. The price that the miner "pays" for the coin is different from the price that the masternode "pays" for their coin and therefore when the secondary sale occurs that price is baked into the accounting for that sale. If the miner sells below cost, they'll have discounted that price, part of which will still show up as a loss. The miner still paid the full price for the coin and it therefore represents the "opening price" for the block. On the other hand if a masternode sells, even at zero price they'll have broken even.

This is the asymmetry that's cancerous to marketcap growth IMO. You dismiss it by making recourse to anecdotal arguments such as "but masternodes don't sell". It doesn't matter. These anecdotal hypotheses are irrelevant to the valuation of the capital flows within the protocol because they're there and they don't change based on how they're denominated. Whether masternodes "sell" or not is irrelevant to the argument, what is relevant is how much of the blockchain new supply capital is wasted and how much is invested back into the chain.

[arielbit]

I'm going to sum up this loooooooooooooooong discussion alright?

masternodes are miners (don't use the technical crap on me )

masternodes get the majority of the rewards

masternodes are the majority of the network with special powers to vote.

masternodes will decide to reduce their rewards? --not gonna happen. END OF STORY!! 

[robertrodriguez]

I'm going to sum up this loooooooooooooooong discussion alright?

masternodes are miners (don't use the technical crap on me )

masternodes get the majority of the rewards

masternodes are the majority of the network with special powers to vote.

masternodes will decide to reduce their rewards? --not gonna happen. END OF STORY!! 

masternodes want Dash to 1k again or not? simple yes or no......

[arielbit]

I'm going to sum up this loooooooooooooooong discussion alright?

masternodes are miners (don't use the technical crap on me )

masternodes get the majority of the rewards

masternodes are the majority of the network with special powers to vote.

masternodes will decide to reduce their rewards? --not gonna happen. END OF STORY!! 

masternodes want Dash to 1k again or not? simple yes or no......

1k, 10k, 100k, 1$, 10$....all the same as long as they get the majority.

[robertrodriguez]

I'm going to sum up this loooooooooooooooong discussion alright?

masternodes are miners (don't use the technical crap on me )

masternodes get the majority of the rewards

masternodes are the majority of the network with special powers to vote.

masternodes will decide to reduce their rewards? --not gonna happen. END OF STORY!! 

masternodes want Dash to 1k again or not? simple yes or no......

1k, 10k, 100k, 1$, 10$....all the same as long as they get the majority.

got it! that's a NO/don't care answer! good to know

[arielbit]

I'm going to sum up this loooooooooooooooong discussion alright?

masternodes are miners (don't use the technical crap on me )

masternodes get the majority of the rewards

masternodes are the majority of the network with special powers to vote.

masternodes will decide to reduce their rewards? --not gonna happen. END OF STORY!! 

masternodes want Dash to 1k again or not? simple yes or no......

1k, 10k, 100k, 1$, 10$....all the same as long as they get the majority.

got it! that's a NO/don't care answer! good to know

It is staying on top of the food chain because "you can" so "you will".

[jdmcg]

As I've presented before, I believe trustless shared masternodes would go a long way to alleviate the concerns toknormal continues to bring up. So not sure why it has been dismissed out of hand.

This could very well push the masternode count to 7000, forcing non-shared masternode owners to consider the risk of having such a large number of coins tied up for only 4% too much and moving out as they are replaced by shared masternodes. A slow, controlled way to increase masternodes while increasing community involvement.   

Another thing to seriously consider is lowering the collateral required to run a masternode. I may be wrong, but I thought Evan Duffield once said that once DASH is $100, the collateral should be reduced to 500. This simple change could go a long way in spreading out the masternode rewards to more people as well...

Trustless masternodes doesn't address the discussed issue as long as the split for MNs remain the same.

There is also no technical need for more masternodes and there would be no (service) benefit to end users.

More masternodes, more people are invested. 5000 masternodes was a great milestone to reach but it was essentially reached last bull run...

If one masternode costs $25/mth to run, two masternodes would cost $50/mth to run. If collateral requirements were lowered/trustless shared masternodes introduced, perhaps 20000 masternodes could be reached.

At that number the masternode costs would 4x, the return in DASH would be 1/4th of what it is now.

DASH should strive for greater decentralization.

More masternodes means less reward per masternode as well as more total cost to run all the masternodes throughout the network.

That's only the reward "share" you're alluding to. The actual reward at an aggregate level is a constant and independent of the number of nodes. It's essentially the proportion of the chain mined at "zero difficulty". Thats the bottom line and you can slice it up any way you like within that overall constraint obviously. The actual number of nodes is not the problem, it's rather profitability dynamics between the two groups and their increasing asymmetry as price rises. It's simply an unstable model for all the reasons I outlined in previous posts.

But costs do increase if by decreasing collateral, more masternodes result. The reward in DASH also decreases per masternode owner to a more reasonable compensation (or at least it moves it in the right direction). Once 20000 is reached perhaps a further adjustment would be needed.

Your thesis is entirely based on equating a masternode to a 0% difficulty miner which conveniently ignores the $25/mth hosting cost.

Anyways, I guess one point I was trying to make was that if you were to reduce the percentage of rewards going to masternodes, you'd need to also reduce the collateral required.

I don't see how this follows. The collateral is arbitrary as it is. If running a masternode is more profitable than not running one then the network will get populated. As previously mentioned masternodes churn so lots of them have ALREADY been sold. It's in fact possible for the entire compliment of 5000 nodes to be sold and for the network to still be populated at a steady count of 5000 because they simply change hands at different times.

The problem is measuring returns in Dash. It looks profitable when in fact is isn't because the return needs to be measured in dollars taking into account the capital gain/loss of the entire holding. ROI in Dash would only be meaningful if we were a stablecoin.

There's a reason it's plateauing around 5000. Think risk/reward.

Who's measuring ROI in DASH? The Dash network can only pay in DASH to both masternodes and miners.

Please answer this question that you continue to side step. Why, if someone is willing to spend so much money (and time) to mine, wouldn't they spend the same or even less money to just purchase the coin and sell it at a profit later?

Because mining is a business. It's income oriented whereas speculative trading is capital gain oriented. They compliment each other. Mining is a competitive thing so if nobody else is doing it there's enormous profit to be made for you. As more join in it reaches an equilibrium point of diminishing returns and that's your prevailing network hashrate level.

Most jurisdictions view trading as a business too... if you're buying and holding long term, then maybe it's capital gains.

Your (and other's) claim is that by reducing the proportion of the supply that's mined we become more competitive and improve our store of value.

This has never been my claim. The abstract notion of what or what is not a store of value is not something I care to proclaim.

What I did say, and you well know, is that the implementation that's to change the reward split from 50/50 to 60/40 over the next 5 years is negligible. Anything you're arguing now would have to be just as true for DASH back in 2015 because this change substantially changed nothing.

[toknormal]

Anything you're arguing now would have to be just as true for DASH back in 2015 because this change substantially changed nothing.

Mining and masternode operating profitability was far closer to parity back then than it is today, let alone when we hit our heady highs.

You avoided the point of asymmetric profitability completely.

If one company A makes widgets at a manufacturing cost of $100 a pop and company B makes exactly the same specification widget at a cost of $1 a pop what do you think will happen ? They are 2 markets with distinct dynamics. Company B can afford to outbid company A and they end up with a price somewhere between $1 and $100.

How does this situation reconcile itself ? Company A buys shares in company B and then uses some of its dividends to subsidise its manufacturing process.

I think you are in denial of this basic concept.

[birdonthewire]

So prove it by creating a new altcoin, like a testnet for DASH, much like LTC supposedly is for BTC. Then you can freely experiment and see what really works in the real world.

That interests me.
What limitations would it have to fork DASH? Would it keep its properties? (ChainLocks, Instant Send, Private Send, etc).
  I remember reading that there are several patents on the project's technology.
I extend the query to anyone who can provide criteria in that regard, of course.
Thank you.

[T15K6]

can i start mining dash on server computers?

[jdmcg]

Anything you're arguing now would have to be just as true for DASH back in 2015 because this change substantially changed nothing.

Mining and masternode operating profitability was far closer to parity back then than it is today, let alone when we hit our heady highs.

You avoided the point of asymmetric profitability completely.

If one company A makes widgets at a manufacturing cost of $100 a pop and company B makes exactly the same specification widget at a cost of $1 a pop what do you think will happen ? They are 2 markets with distinct dynamics. Company B can afford to outbid company A and they end up with a price somewhere between $1 and $100.

How does this situation reconcile itself ? Company A buys shares in company B and then uses some of its dividends to subsidise its manufacturing process.

I think you are in denial of this basic concept.

Since you've exaggerated the problem, you are forced to present an exaggerated solution.

Ignoring masternode costs, no matter how small they might seem to you does not mean they don't exist. Ignoring the collateral requirement for a masternode likewise does not make it go away or not somehow part of the equation.

My solution takes a more cautious approach to shrink a masternode's reward gradually all while still incentivizing new masternodes to be set up to create a better and more inclusive and decentralized network.

I might be more on board with your approach if you could remove the collateral requirement altogether (without opening the DASH network up to malicious masternodes who have nothing at stake). Then perhaps you'd be comparing apples to apples.

So, I just don't see how your sledge hammer approach doesn't fundamentally break DASH's masternode network.

[toknormal]

Ignoring masternode costs, no matter how small they might seem to you does not mean they don't exist.

It's not a question of them existing or not, it's that they're fixed. That is the significant factor here. I don't think you've once addressed this so permit me to conclude that you've "ignored" it.

Ignoring the collateral requirement for a masternode likewise does not make it go away or not somehow part of the equation.

How does this affect anything exactly ? It's not a component of the operating cost which is what affects profitability.

[jdmcg]

Ignoring masternode costs, no matter how small they might seem to you does not mean they don't exist.

It's not a question of them existing or not, it's that they're fixed. That is the significant factor here. I don't think you've once addressed this so permit me to conclude that you've "ignored" it.

Ignoring the collateral requirement for a masternode likewise does not make it go away or not somehow part of the equation.

How does this affect anything exactly ? It's not a component of the operating cost which is what affects profitability.

Costs are fixed per masternode, yes, not once ignored by me. When you say masternodes are miners with 0% difficulty, that is what most would call ignoring the reality that masternodes have costs.

Masternode collateral is part of the equation. Not the operating cost but still part of the equation. You have conveniently ignored this in presenting your solution. I believe if you kept the collateral at 1000 DASH and reduced the masternode share from 60% to 20%, that masternode count would sharply decrease initially (destroying any perceived store of value theory you have) and bounce back (if the price would recover) and settle around 1600 to restore the approximate 6% return in DASH that the network seems to have settled with now.

You wouldn't have fixed the problem at all. Instead DASH would become more centralized with 2/3rd's fewer masternodes that still only have fixed costs while still enjoying rewards above costs much higher than the miners.

[toknormal]

Masternode collateral is part of the equation. Not the operating cost but still part of the equation.

It isn't really. It's what entitles you to operate a node and receive a reward that makes the activity profitable but it's not part of the accounting equation. Mining reward is, masternode reward is, mining cost is and masternode hosting costs are but the collateral isn't.

I believe if you kept the collateral at 1000 DASH and reduced the masternode share from 60% to 20%, that masternode count would sharply decrease initially (destroying any perceived store of value theory you have) and bounce back (if the price would recover) and settle around 1600 to restore the approximate 6% return in DASH that the network seems to have settled with now.

You wouldn't have fixed the problem at all. Instead DASH would become more centralized with 2/3rd's fewer masternodes that still only have fixed costs while still enjoying rewards above costs much higher than the miners.

None of that is a problem. Also you've missed the biggest gain - the single objective of the whole exercise which is that we'd have attracted a huge amount of mining back to the chain and secured (in a monetary sense) a far larger portion of the supply. The point of doing that is to raise the opening price of far more blocks in the so called "primary market". It isn't the masternode count that supports the marketcap it's the price of a coin mined at "source".