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

[qwizzie]

You assume there is some fixed 'cost' for producing a block in POW system, this is false.

No, I'm not doing that.

I'm pointing out that the masternode rewards have to be SOLD to the investors (who pay their mining costs) at the point of mining, even though those investors never receive them and that leaving this issue unaddressed will continue to lose us marketcap share & ranking. (Despite the fact we may accrue some value with the rest of the market).

That is a strange point to make.

Masternode rewards and mining rewards are split during generation and do not interact with each other.
Miners do not expect to receive more them 1,44 Dash and their reward is generated through a coinjoin transaction (Generation + Fees).
Masternode operators do not expect to receive more then 1,44 Dash and their reward is also generated through a coinjoin transaction (Generation + Fees).
Both can be sold to the market or hoarded.
Both are considered as newly generated supply.
Market would not even know if it is circulating a mining reward or a masternode reward, as they are identical to each other.

Miners are doing the exact amount of work (finding a block) in a Dash miners /masternodes model, as the amount of work they would need to do in a Dash miners-only model.
Only difference between a miners /masternodes model and a miners-only model, is that miners receive less of the blockrewards in a miners/masternodes model and more of the blockrewards
in a miners-only model. That is literally the only difference.

With Dash, the miners know exactly how much Dash they receive for their mining activities and have calculated for themselves if that is profitable or not.

Some of us suspect miners have difficulty staying profitable with their old mining equipement and that they are therefore doing more selling then hoarding.
Some of us also suspect masternode operators have far less difficulty staying profitable and that they are therefore doing more hoarding then selling.  

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[toknormal]

Only difference between a miners /masternodes model and a miners-only model, is that miners receive less of the blockrewards

Indeed. That's the point I'm making. The proportion of the block reward received is the ONLY difference.

The proportion of the block mining cost PAID (all blocks & rewards) is the same.

Also, miners are irrelevant in this - it's investors that pay that mining cost. They pay the mining cost of BOTH mining and masternode rewards but only receive the mining reward. The miners-only model is therefore more competitive in this respect.

[aleix]

https://twitter.com/Codiox/status/1279215463243939845




Venezuela.

[qwizzie]

Only difference between a miners /masternodes model and a miners-only model, is that miners receive less of the blockrewards

Indeed. That's the point I'm making. The proportion of the block reward RECEIVED is the only difference.

The proportion of mining cost PAID for mining the chain (all rewards) is the same.

Also, miners are irrelevant in this - it's investors that pay that mining cost. They pay the mining cost of BOTH mining and masternode rewards but only receive the mining reward. The miners-only model is therefore more competitive in this respect.

Investors pay for obtaining a (small) portion of the circulating supply. Miners and masternode operators bring Dash tokens into that circulating supply, through their newly generated coins.
Investors either buy a portion of the circulating supply from newly generated masternode rewards or they buy it from newly generated miners rewards, it does not really matter as it is
just circulating supply to them and to the market / exchanges.

Investors don't pay for mining cost, just like investors don't pay for masternode server renting costs. That should be completely left out of the picture as that has nothing to do with the circulating supply
itself. It plays a factor in profitability calculations for miners and for masternode operators, but not for the market. The market just looks at circulating supply and newly generated supply
(and other marked-related factors, price for example).

 

[toknormal]

Investors pay for obtaining a (small) part of the circulating supply. Miners and masternode operators bring Dash tokens into that circulating supply...Investors don't pay for mining cost, just like investors don't pay for masternode server renting costs

You can describe it this way - it's an anecdotal way of looking at it. But it's not remotely instructive in modelling the aggregate impact of reward ratio on the competitiveness of Dash in the market (i.e. how little investment we need for maximum price support).

I'd say you have 2 choices - go back and read this post again or wait for a certain well known "joke coin" to acquire our ranking which it's now only 25 Sats away from doing. (The "For Dummies" version)

[karoke]

I am trying to understand this issue. Can you please correct me if I got something wrong in the following.

The block reward follows a predictable emission rate. The inflation is known and predictable. How this block reward is distributed between miners, masternodes and treasury in the end does not change the fact that the sw (the protocol) predictably creates new dash at each block. Miners are not the ones to create the block reward to be sold, it is the software as specified in dash specification.

This newly created DASH has to be SOLD to the market, to investors. Shouldn't this be the "primary supply" as referred before by toknormal? Why should investors care about the distribution of the block reward? The investor sees the specified, known and predictable coin emission rate (the inflation). This is all that interests him (isn't it?). Who bears the cost of creating the block is irrelevant to the investor. If this is not true, than implicitly the investor values more the 'work' of one of the parties that gets the block reward over the others (for example it values more the service performed by miners than the service performed by masternodes and/or treasury in this case).

It seems to me that there are some more or less hidden assumptions behind different points of view expressed here that need to be made explicit.

For Toknormal the assumption is that it is the competitive mining (scarcity) that gives value to Dash (to any blockchain for that matter). So PoS coins are not as valuable as pure PoW ones for store of value. It is a monetary reasoning (the more hashrate the better).

For the other camp, the assumption is perhaps that mining serves the purpose of securing the blockchain (and producing much needed randomness at the same time). It is a technical reasoning (just enough hashrate is needed to be the 'dominant' coin). It is the utility of the coin that gives it value.

Perhaps we need to agree on the assumptions first to have a constructive debate.

[qwizzie]

Marketcap rankings come and go in this expanding crypto industry, last thing anyone should do is get obsessed over them.
There is more to a crypto project, then just rating it on its current marketcap.

Funny detail :

Dash had a marketcap of around 14 million USD, when it presented its Dash Evolution concept in 2015
Dash currently has a marketcap of 694 million USD.

I have absolutely no problem with Dash current marketcap.
 

[toknormal]

For Toknormal the assumption is that it is the competitive mining (scarcity) that gives value to Dash

That's not what I'm arguing here. (Though philosophically I do subscribe to that idea).

I'm pointing out that investors in the primary (mined) supply who pay 100% of the mining costs receive only half the proportional supply they do with other coins (100% mining reward ones). We therefore lose marketcap share to them.

Masternodes do not "bring coins into existence" as quizzie asserts in the sense of bearing the cost of their production. Miners do. But miners aren't the problem because they just pass the cost on to the market and difficulty adjustments can keep them viable. The overhead (of the "free masternode coins") is felt in terms of loss of marketcap share as the phenomenon acts like an "anti-magnet" to new capital. See this post.

[qwizzie]

Perhaps we need to agree on the assumptions first to have a constructive debate.

I think you described this camp pretty well :

For the other camp, the assumption is perhaps that mining serves the purpose of securing the blockchain (and producing much needed randomness at the same time). It is a technical reasoning (just enough hashrate is needed to be the 'dominant' coin). It is the utility of the coin that gives it value.

And yes, i agree that investors don't care who generated the block and who got what reward. It is just circulating supply that they want to buy from the market or sell to the market.
Toknormal just spins this strange theory around it, that just does not make much sense. It makes no sense on itself and it makes no sense as an explanation for
our marketcap loss (which seems to fluctuate heavily between bear markets and bull markets anyways).
  

[zasad@]

Where can I find data on the issue of dash coins and hard forks?
The last time I read this information on this forum
www.dash.org/forum/threads/dash-max-supply.15771
but now the links do not work

[qwizzie]

Where can I find data on the issue of dash coins and hard forks?
The last time I read this information on this forum
www.dash.org/forum/threads/dash-max-supply.15771
but now the links do not work

If you don't receive an answer here, then create a thread about it here : https://www.reddit.com/r/dashpay/new/
(longer visible)

[karoke]

For Toknormal the assumption is that it is the competitive mining (scarcity) that gives value to Dash

That's not what I'm arguing here. (Though philosophically I do subscribe to that idea).

I'm pointing out that investors in the primary (mined) supply who pay 100% of the mining costs receive only half the proportional supply they do with other coins (100% mining reward ones). We therefore lose marketcap share to them.

Masternodes do not "bring coins into existence" as quizzie asserts in the sense of bearing the cost of their production. Miners do. But miners aren't the problem because they just pass the cost on to the market and difficulty adjustments can keep them viable. The overhead (of the "free masternode coins") is felt in terms of loss of marketcap share as the phenomenon acts like an "anti-magnet" to new capital. See this post.

I have seen the post and I understand (most of) it.

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

I think that the cost of producing a block reward is irrelevant for the investor, unless the investor values the "mining" more than other services. The investor does not think who bears the cost of producing the block.

So I am not convinced that the investors receive only half the coin they pay for. They receive exactly the coins they payed for.

If we, however, assume that mining per se adds value (the 'philosophical' assumption that you subscribe to) to the network, then I understand your argument and agree with you.

[qwizzie]

investors in the primary (mined) supply who pay 100% of the mining costs receive only half the proportional supply they do with other coins (100% mining reward ones). We therefore lose marketcap share to them.

We don't lose marketcap share simply because miners (in theory) get less revenue then other PoW projects. Revenue that has been calculated for profit by miners, before they even started mining.
Revenue that is scheduled to get tighter and tighter, because each year our block rewards get reduced with 7,1%

Also we do not lose marketcap share to just other PoW coins, but we also lose marketcap share to non-mineable, PoS, Stable and Exchange coins (who all joined our expanding crypto industry).
Which means other factors are at work here, then Toknormal's strange 'investor paying 100% mining costs, but receiving only half' theory.

[Dahaa]

You do nothing for investors. You even refused your applications. Suck out the last of the people thanks to the old glory. But soon it will end !!! Even a dog coin will soon overtake you

[aleix]

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

We need to take into consideration that the collateral of masternodes are also a "working" mechanism in this ecuation. The 70.000$ can be located anywere else. The more reward, the more masternodes, the more collateral locked.

And always remember the main point for me (economics aside): We don't need the 45% PoW force anymore. DASH as a project don't need to waste the energy for it. And that's something important for me, and I'm sure for more people out there.

[toknormal]

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

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

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

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

[afbitcoins]

I'm disappointed that this one remark (the scammy question) is all that has been noted about my post. I've removed that question from my post now. It was not my opinion, rather put as a question intended to highlight what some will accuse Dash of being.  Anyway I would urge you to read my post again. Now without that offending one line.  

@qwizzie Yes its true Dash has always (since very early days at least) been a masternode coin. This is one of the reasons I invested and stayed invested. Masternodes are a fantastic innovation. I think I can also speak for toknormal on this if I say neither of us dislike masternodes. The point as I see it is that they don't come without cost. If the reward favours masternode more, the cost to pay for the masternode layer goes up.

The original schedule would not have been good for Dash as store of value. Nor will Ryan's proposal be good for Dash as a store of value. Dash has already paid too much for masternodes layer which is why Dash is not a top 5 coin.

As much mining as possible IS good for Dash as a store of value. Masternodes add value but at a cost. If the cost is too high it negates the benefits.

These are my opinions. I don't want to see Dash spiral down the rankings. Dash has potential to be a top project. This is a bannana skin for Dash, we can slip and fall.

  

Excellent article. Your opinions and view were very well articulated.

Everybody at some point will question their investments because that is part and parcel of the investing and reflecting cycle but the way you expressed your views on the where it seems the future will be moving away from PoW towards PoS. If you expressed your views and concerns then you have a right to them. I broadly agree with most of what you wrote in your article. Masternode owners already benefit to the tune of a massive 40% share of block rewards and they have considerable voting power on top - so there seems to be a huge conflict on interest to say the least.

My answer to the question you asked in your article is categoric and resounding "Yes it does": "Does it seem a bit scammy for masternode owners to decide by vote, amongst themselves, to give themselves more and miners less ?"

Dicing with Dash

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


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

How can it be considered 'scammy' when our orginal blockreward schedule also included a planned reduction in blockrewards for miners ? With a 60% (masternodes) and 40% (miners) end goal !!

Masternode Payment schedule :

if(nHeight > 158000) ret += blockValue / 20; //25.0% - 2014-10-23
if(nHeight > 158000+((576*30)*1)) ret += blockValue / 20; //30.0% - 2014-11-23
if(nHeight > 158000+((576*30)*2)) ret += blockValue / 20; //35.0% - 2014-12-23
if(nHeight > 158000+((576*30)*3)) ret += blockValue / 40; //37.5% - 2015-01-23
if(nHeight > 158000+((576*30)*4)) ret += blockValue / 40; //40.0% - 2015-02-23
if(nHeight > 158000+((576*30)*5)) ret += blockValue / 40; //42.5% - 2015-03-23
if(nHeight > 158000+((576*30)*6)) ret += blockValue / 40; //45.0% - 2015-04-23
if(nHeight > 158000+((576*30)*7)) ret += blockValue / 40; //47.5% - 2015-05-23
if(nHeight > 158000+((576*30)*9)) ret += blockValue / 40; //50.0% - 2015-07-23
if(nHeight > 158000+((576*30)*11)) ret += blockValue / 40; //52.5% - 2015-09-23
if(nHeight > 158000+((576*30)*13)) ret += blockValue / 40; //55.0% - 2015-11-23
if(nHeight > 158000+((576*30)*15)) ret += blockValue / 40; //57.5% - 2016-01-23
if(nHeight > 158000+((576*30)*17)) ret += blockValue / 40; //60.0% - 2016-03-23

Does that mean Darkcoin/Dash was scammy from the start ? I don't think so. Miners and masternode operators knew very well what they were getting themselves into (at least those that paid attention).
And yes, we stopped in 2015 with a 45%/45%/10% blockreward split (which was very very fortunate for miners), but that does not mean we are not allowed to change this when we need to.
And it certainly does not mean that by changing it (again), this crypto project suddenly becomes a scam project.  

I am going to repeat this once more, Darkcoin/Dash is and always has been a masternodes-focussed cryptocurrency. If people only start to realize that now (6 years later), then that means those people did not really understand Dash all that well or understand where its power and decision-making lays.  

I understood that perfectly well in 2014 / 2015 --> https://bitcointalk.org/index.php?topic=860067.0 and seeing the explosion of masternodes that followed in those early years many many others understood that as well.
People can try to bend this crypto project into a form that they want or desire as much as they want, but if that conflicts with a crypto project's identity and that which really drives such a crypto project,
then those efforts will be pretty pointless and not very realistic.  

[afbitcoins]

So far Dash is managing to stay in the proof of work category of coins (although not holding a high enough ranking as it should have), this is quite remarkable considering how economically Dash already has large proof of stake component. We are just about getting away with it at the moment. But if we move further towards proof of stake, how long until we are valued as proof of stake ?

[toknormal]

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

[qwizzie]

In my view there is too much focus on Dash marketcap / marketcap rank and too little attention on Dash far more important growth factors (transactions, users, adoption, use cases, masternodes, hashrate, volume).

Personally i don't care about marketcap, it is something that will grow during bull markets and get smaller during bear markets. It is a very abstract number for me. It was once $14 million in 2015, grew to well
over $1 billion during the 2017 bull run and is now at around $700 million. I care even less about marketcap ranks, considering we are in an expanding crypto industry that has seen an influx of new crypto projects
(ICO's, Exchange Tokens, Stablecoins). Websites like coinmarketcap just throws everything together and rate them only on marketcap. No wonder Dash (and a lot of other crypto projects) have lost marketcap rank.
 
I don't have a fear of Dash price spiraling downwards any further, because i think Dash already hit its low point ($36) four months ago when Bitcoin crashed so heavily, and Dash has been on a path of recovery ever since.
Also i don't think that increasing Dash masternode rewards and decreasing Dash miners rewards over 5 years, will cause a spiraling downwards price effect. I am not even sure it will slow Dash ever growing hashrate.
(oh look, another new ATH)  


Source : https://bitinfocharts.com/comparison/dash-hashrate.html

And yes, i do think that Dash hashrate purpose is sufficiently securing the Dash blockchain (which it clearly does in abundance, specially now that we also have ChainLocks active on our blockchain)
and that utility gives a cryptocurrency its value. I think Ryan proposed solution will improve Dash economics, give users less inflation and provide a more stabilizing effect on the Dash price over time.
Which will benefit miners, masternode operators and users.