Curious... wouldn't it be a good thing to have more masternodes? That would mean less reward for any individual masternode owner...
You'd have to define and denominate "reward" first. If you're only interested in measuring ROI denominated in Dash, then yes, possibly. But if you're measuring ROI in terms of purchasing power then you have to take into account capital gain or capital loss also.
In the second case, the ROI isn't determined by the Dash protocol but jointly decided between the Dash protocol and the external markets. Both have a say in how Dash is valued, and consequently the masternode ROI. In terms of purchasing power, the external market can adjust the reward ratio as it sees fit, so for us not to take account of that is suicidal and that market has been telling us we've got it wrong for a long time.
Another thing that is huge but was never taken account of in the protocol revision discussions: the problem of making the protocol only appeal to masternodes is that there's a restricted number of them and that number is already saturated for the most part. 1000 Dash has to be contiguous. That leaves the rest of the coin supply to trade as it sees fit and therefore in total control of the capital value of those nodes (see my post on
Duffenomics as to how the two parts of the supply interact with each other).
The tail wagging the dog. We've all felt it- those invested in masternodes got screwed because the rest of the Dash coin supply was subject to free markets and was not getting the same return on its investment as it was with bitcoin, Litcoin, Monero, ZCash et al. (DO NOT think I'm advocating for Dash interest on non-masternode holdings - nobody gives a f* about having more Dash if it's continuously worthless. This post is about making a fixed amount of Dash have a higher purchasing power, not about how to slice a cake into ever thinner slices. That's the last thing Dash needs).
With a mined coin, all there is to invest in is hashrate. That's what makes the next block expensive and if Dash only applies its hash to 4/10 of its block while others apply it to 10/10, it's a no brainer where the investment's going to go. You can't even argue on utility because that hashrate thing is so powerful, the coin that has more hashrate gets more utility. Ease of use doesn't get a look in.
Dash says: "we don't need all this hashrate".
Market says: "we don't need you. We want to invest in hashrate and you only apply it to 4 out of 10 of your blocks"
The "store of value" market is investing in hashrate and the coin it gets is evidence of its investment. If the coin you give it represents evidence of 40% hashrate and 60% masternode luxury cruises, the market will not be very happy and devalue us.
How do We Fix It ?Masternodes can still get those holiday cruises, but from capital gain once the market gets its return. The way Dash can do that is twofold:
1. make it deliver capital value instantly the same as bitcoin does (by investing their cash in mining and applying than mining to as many of our blocks as possible to
make them scarce and expensive)
2. HAVING DONE THAT.....make it competitive. Do things that other mined currencies can't
If you don't do 1 then 2 is worthless. It costs peanuts. Paypal can do it. 1 is essential which is why we need to so three things IMO:
A. attract as much hashrate away from other coins as is humanly possible
B. apply it to as many of our blocks as is humanly possible. That will raise the opening price of all new blocks
C. within that constraint, decouple ourselves from our "hashrate"competitors by providing utility that they can only dream of while maintaining or capital value offering
We can do "C" because of the decoupled protocol. The beauty of it is that is allows us to maintain an extremely high mining reward ratio (e.g. 90%) while offering utility that's impossible for single-tier coins like litecoin or bitcoin.
But we have to work with the market to do it. We have to give the market what it gets from bitcoin in terms of mining scarcity and then breakaway competitively by offering it utility on top without compromising the market's investment.
The way to do that using a rule-of-thimb rather than a supercomputer is simply to keep the masternode and mining rewards at parity as the price rises. Masternodes will be happy because their capital investment is so huge that their reward is blown to smithereens by capital loss. The reward ratio is meaningless unless they're at a capital gain.
We must therefore double down on our heritage as a mined coin IMO and make that work for investors. Then once we're commercially healthy again from an investor-miner model, restore competitively. That's where the utility comes in. But we have to have things in perspective. Mining is the engine and bodywork of the car. Utility is the colour, shape and profile. If you don't have an engine and bodywork that's competitive, no amount of paint is going to make it work for the buyer.
How much more of a kicking are we going to take before we wake up and respond to what the market is telling us ?
This is what it's buying:
vvv
