@toknormal. Are you thinking of reducing your exposure to dash if/when this vote to increase masternode reward goes through
I won't have the choice. My exposure in "dollar terms" will automatically be reduced for me by the free market which will understand that 60% of its investment isn't an investment at all but an
expense.
Anyone who understands double entry bookeeping will see that. Whatever "income" masternodes draw is pure margin that has to be passed on to the market - "disguised" as an investment when it's actually an expense. That component of Dash's price does not go towards making competitive mining more "competitive" in Dash's case. With Litecoin it does. With Bitcoin it does and even with Monero it does. For us to compete in that regard we'd need a much higher mining reward ratio.
It's like paying a miner $1000 to mine you some gold and then paying a cleaner another $1200 to polish it for you. Ok if the polished gold increased its value by 110% over the dirty gold, but if not.....the investor's gonna buy Litecoin and use a hand cloth of their own to shine it up.
Evan's original plan was that the "polisher" (Dash's service layer in this case) would add value to
at least an extent that justified the premium charged to the market over the mining element and that should still be the idea long term. But meantime, while we're waiting for service demand to emerge and service provision to support it, lets give the investors what they want:
1. - more dash for the buck they pay to miners and get ourselves competitive again with the other BTC clones
2. - the prospect of "cherry on top" service layer that boosts the value of their investment
It only needs a tiny bit of sacrifice in priority 1 to fulfill priority 2 because if we reverse the current situation, the market will do the work of revaluing the coin upwards and that will give masternodes greater dollar valued rewards anyway. What we're doing right now is trying to stuff more gasoline in the engine when all it needs is more air to burn the fuel supply it already has. There was never a problem with demand for masternodes. Nor do we have a (competitive) problem on plain wallet ROI. Our competitors don't have it and still blow us out of the park on rankings.
We DO need to compete with them on mining reward however because that's the primary supply that's delivered to investors. Miners are just a proxy (if DCG's demographic claims are anything to go by). If we give those investors less of the supply (proportionaly) than other coins, we'll simply lose market share to other coins. If we make them pay for all the mining cost (by purchasing the miner reward) and then pay
again to acquire the balance of the primary supply from masternodes - we'll lose market share again.
We need to restore competitivity for our miners instead of bleeding them dry to the extent that they can't even command a decent price anymore being so undermined by masternodes who can afford to give it away and still break even. Difficulty adjustments can save miners long term but they don't save investors because the capital losses end up on our doorsteps. That masternode income does nothing to boost the value of the coin at the moment (in relation to other mined coins) other than letting users download the blockchain a bit quicker. It's almost all margin and will therefore get eroded by the market - unfortunately at the expense of ALL investors, not just node holders.
Indeed !
Has it never occurred to people that @babygiraffe might not actually mind if the community takes its own course ? Just because he presented a proposal doesn't mean people need to follow it. He has a job to do which is to present a RECOMMENDATION for the community to debate around. His job isn't to direct the community, it's to direct DCG and
serve the community which he's done admirably IMO. It's our job to direct ourselves and make sure that whatever we do works and receives proper cross examination.
The DCG proposal will not be successful unless it's presented with challenges, alternatives and stimulated wider debate. Even if it gets rejected, it will still have served its purpose and DCG will have done its job professionally. It's a grain of sand around which to grow a pearl.
Pictorially presented, the question is who to market to ? To whom should we appear more competitive ?
• the people that bring capital into the Dash ecosystem or
• the people that draw down that capital without replenishing it ?
By increasing the mining reward ratio, we're not giving more to miners, we're giving more to
investors and thereby attracting marketcap share back from the competitors to whom we lost it. That will stabilise price, restart growth and deliver far higher dollar-valued rewards to masternodes.
