[XMR] Monero Speculation

[oblox]

It appears that is Darkcoin becoming a liquidity leader in the "anonymity" space. Its long term fundamentals don't bode well, but once a strong foothold is taken.....

Darkcoin's Achilles heel remains the centralization inherent in the masternodes. It may come down to whether FINCen in the United States rules that the masternodes are an MSB or not. In reality all it takes is a bona fide intent to set up a Darkcoin masternode and the a request for a ruling to FINCen as indicated here http://www.law.cornell.edu/cfr/text/31/1010.711. My take is that the result of such a ruling would be either very bearish (masternodes are MSBs) or very bullish (masternodes are not MSBs) for Darkcoin.

Just wondering how this would even be a remote possibility when masternodes never hold anyone else's coins (they are mixed intrawallet of the end user). No coins flow through the masternode network, rather, the masternodes function as a means of consensus and finding pairs.

Masternodes do not:

1. Transmit money
2. Provide forex
3. Cash/Convert Money

Thus, by existing definition of the MSB's in the US, they are neither.

This case has to be made to FINCen by someone who has a bona fide intent to set up a Darkcoin masternode.

I'm just stating current guidance, masternodes do not qualify as MSBs. You can flirt the idea all you want, but until revisions are made, it is what it is. You, and other XMR fan, are more than willing to get clarification if it helps your case but make sure you are actually describing the functionality of a masternode accurately. Bare in mind, going down this path, there is no difference then to any other node out there for various coins.

[ArticMine]

...
I'm just stating current guidance, masternodes do not qualify as MSBs. You can flirt the idea all you want, but until revisions are made, it is what it is. You, and other XMR fan, are more than willing to get clarification if it helps your case but make sure you are actually describing the functionality of a masternode accurately. Bare in mind, going down this path, there is no difference then to any other node out there for various coins.

No. I am not going to seek this clarification precisely because of my investment in XMR. It would be very wrong on ethical and possibly legal grounds. No this clarification should be sought by someone who is invested in DRK and can make a good case that the masternodes are not MSBs

[oblox]

...
I'm just stating current guidance, masternodes do not qualify as MSBs. You can flirt the idea all you want, but until revisions are made, it is what it is. You, and other XMR fan, are more than willing to get clarification if it helps your case but make sure you are actually describing the functionality of a masternode accurately. Bare in mind, going down this path, there is no difference then to any other node out there for various coins.

No. I am not going to seek this clarification precisely because of my investment in XMR. It would be very wrong on ethical and possibly legal grounds. No this clarification should be sought by someone who is invested in DRK and can make a good case that the masternodes are not MSBs

Again, given the current guidelines, there's no need to seek clarification, as a masternode (and any full node for other coins) doesn't fit any of those qualifications. I'm not here to start the whole XMR/DRK debate again but you did come out with nonsense (at least from the current standings) and it bares correcting. If a bitnode hasn't been ruled a MSB (and it hasn't), then a masternode and any other full node carrying the coin's blockchain wouldn't either unless it performs one or more of those qualifications listed above.

[ArticMine]

...
I'm just stating current guidance, masternodes do not qualify as MSBs. You can flirt the idea all you want, but until revisions are made, it is what it is. You, and other XMR fan, are more than willing to get clarification if it helps your case but make sure you are actually describing the functionality of a masternode accurately. Bare in mind, going down this path, there is no difference then to any other node out there for various coins.

No. I am not going to seek this clarification precisely because of my investment in XMR. It would be very wrong on ethical and possibly legal grounds. No this clarification should be sought by someone who is invested in DRK and can make a good case that the masternodes are not MSBs

Again, given the current guidelines, there's no need to seek clarification, as a masternode (and any full node for other coins) doesn't fit any of those qualifications. I'm not here to start the whole XMR/DRK debate again but you did come out with nonsense (at least from the current standings) and it bares correcting. If a bitnode hasn't been ruled a MSB (and it hasn't), then a masternode and any other full node carrying the coin's blockchain wouldn't either unless it performs one or more of those qualifications listed above.

One critical difference is the minimum capital requirement to set up a DRK masternode. This is fundamentally different from the XBT, XMR LTC etc cases. To a regulator this smacks of the minimum capital requirement to set up a bank.

[dewdeded]

ArticMine: So, if you believe DarkCoin MN can/could be MSB:

You believe the same about DarkWallets Bitcoin Mixing Nodes? Can/could they be MSBs too?

[oblox]

...
I'm just stating current guidance, masternodes do not qualify as MSBs. You can flirt the idea all you want, but until revisions are made, it is what it is. You, and other XMR fan, are more than willing to get clarification if it helps your case but make sure you are actually describing the functionality of a masternode accurately. Bare in mind, going down this path, there is no difference then to any other node out there for various coins.

No. I am not going to seek this clarification precisely because of my investment in XMR. It would be very wrong on ethical and possibly legal grounds. No this clarification should be sought by someone who is invested in DRK and can make a good case that the masternodes are not MSBs

Again, given the current guidelines, there's no need to seek clarification, as a masternode (and any full node for other coins) doesn't fit any of those qualifications. I'm not here to start the whole XMR/DRK debate again but you did come out with nonsense (at least from the current standings) and it bares correcting. If a bitnode hasn't been ruled a MSB (and it hasn't), then a masternode and any other full node carrying the coin's blockchain wouldn't either unless it performs one or more of those qualifications listed above.

One critical difference is the minimum capital requirement to set up a DRK masternode. This is fundamentally different from the XBT, XMR LTC etc cases. To a regulator this smacks of the minimum capital requirement to set up a bank.

Yet said capital isn't used other than allowing one to setup a masternode. Those funds serve no other purpose then reserving your right to run a node. You're not posting capital in order to collateralize funds through your "business".

[illodin]

What's your opinion on Proof-of-Stake coins, you need money to provide service (securing the blockchain) and to profit?

[dewdeded]

IHMO sooner or later the minimum capital requirement will be droped anyway(, if DarkCoin goes big).

[smooth]

What's your opinion on Proof-of-Stake coins, you need money to provide service (securing the blockchain) and profit?

illodin, is this related to Monero Speculation somehow?  Seems a bit off topic.

Let's also wrap up this Masternode MSB discussion. It's interesting as DRK is obviously a competitor of Monero in some ways, but getting into the specific details of the MSB vs. non-MSB debate should be done elsewhere

[GingerAle]

...
I'm just stating current guidance, masternodes do not qualify as MSBs. You can flirt the idea all you want, but until revisions are made, it is what it is. You, and other XMR fan, are more than willing to get clarification if it helps your case but make sure you are actually describing the functionality of a masternode accurately. Bare in mind, going down this path, there is no difference then to any other node out there for various coins.

No. I am not going to seek this clarification precisely because of my investment in XMR. It would be very wrong on ethical and possibly legal grounds. No this clarification should be sought by someone who is invested in DRK and can make a good case that the masternodes are not MSBs

Again, given the current guidelines, there's no need to seek clarification, as a masternode (and any full node for other coins) doesn't fit any of those qualifications. I'm not here to start the whole XMR/DRK debate again but you did come out with nonsense (at least from the current standings) and it bares correcting. If a bitnode hasn't been ruled a MSB (and it hasn't), then a masternode and any other full node carrying the coin's blockchain wouldn't either unless it performs one or more of those qualifications listed above.

One critical difference is the minimum capital requirement to set up a DRK masternode. This is fundamentally different from the XBT, XMR LTC etc cases. To a regulator this smacks of the minimum capital requirement to set up a bank.

Yet said capital isn't used other than allowing one to setup a masternode. Those funds serve no other purpose then reserving your right to run a node. You're not posting capital in order to collateralize funds through your "business".

And while running a node you qualify for MN reward portion of block reward, but if you go under 1000 DRK you no longer are eligible for that block reward..... so you're kinda posting capital in order to collateralize funds.

indeed, from https://www.darkcoin.io/about/what-is-darkcoin/masternodes-and-proof-of-service/

"In order to run a Masternode, a user must put up 1000 DRK as something akin to collateral, though unlike traditional collateral, the DRK never leaves the user’s possession. It can be moved or spent at any time by the user – doing so simply removes the Masternode from service and makes it ineligible to receive rewards."

but here we are in a monero thread devolving into a DRK thread.

( FYI, psychedelik.com dark channel is hittin it right now. No connection to DRK. )

[oblox]

...
I'm just stating current guidance, masternodes do not qualify as MSBs. You can flirt the idea all you want, but until revisions are made, it is what it is. You, and other XMR fan, are more than willing to get clarification if it helps your case but make sure you are actually describing the functionality of a masternode accurately. Bare in mind, going down this path, there is no difference then to any other node out there for various coins.

No. I am not going to seek this clarification precisely because of my investment in XMR. It would be very wrong on ethical and possibly legal grounds. No this clarification should be sought by someone who is invested in DRK and can make a good case that the masternodes are not MSBs

Again, given the current guidelines, there's no need to seek clarification, as a masternode (and any full node for other coins) doesn't fit any of those qualifications. I'm not here to start the whole XMR/DRK debate again but you did come out with nonsense (at least from the current standings) and it bares correcting. If a bitnode hasn't been ruled a MSB (and it hasn't), then a masternode and any other full node carrying the coin's blockchain wouldn't either unless it performs one or more of those qualifications listed above.

One critical difference is the minimum capital requirement to set up a DRK masternode. This is fundamentally different from the XBT, XMR LTC etc cases. To a regulator this smacks of the minimum capital requirement to set up a bank.

Yet said capital isn't used other than allowing one to setup a masternode. Those funds serve no other purpose then reserving your right to run a node. You're not posting capital in order to collateralize funds through your "business".

And while running a node you qualify for MN reward portion of block reward, but if you go under 1000 DRK you no longer are eligible for that block reward..... so you're kinda posting capital in order to collateralize funds.

indeed, from https://www.darkcoin.io/about/what-is-darkcoin/masternodes-and-proof-of-service/

"In order to run a Masternode, a user must put up 1000 DRK as something akin to collateral, though unlike traditional collateral, the DRK never leaves the user’s possession. It can be moved or spent at any time by the user – doing so simply removes the Masternode from service and makes it ineligible to receive rewards."

but here we are in a monero thread devolving into a DRK thread.

( FYI, psychedelik.com dark channel is hittin it right now. No connection to DRK. )

If by collateralize funds, you mean your own, then sure, but you're not doing it for anyone other than yourself. Purely individual. Then POS coins should be ruled as MSB's. How far down the rabbit hole do you want to dive to form fit something that doesn't function as an MSB given current guidance?

Having said that, I'm respecting that this is venturing off topic of what this thread is about so if the conversation needs continuing, feel free to bring it on over to the DRK thread. I only brought it up because it was brought up initially in here so it was worth at least giving some sort of answer vs blindly letting it linger. You can stop with the subtle jabs.

[David Latapie]

Edit: The case for Darkcoin masternodes being MSB is actually very simple. The facilitate the exchange of one kind of DRK (un mixed) for another kind of DRK (mixed). This process adds value to the DRK of holder. The masternode is compensated for this service. So they are exchanging / converting money.

DRK is not money. BTC is at best a commodity.

Case (unfortunately) closed?

[smooth]

Edit: The case for Darkcoin masternodes being MSB is actually very simple. The facilitate the exchange of one kind of DRK (un mixed) for another kind of DRK (mixed). This process adds value to the DRK of holder. The masternode is compensated for this service. So they are exchanging / converting money.

DRK is not money. BTC is at best a commodity.

Regulators are frequently treating cryptocurrencies as money, although economists might disagree whether they are money. However, I don't find this entirely unreasonable when the cryptocurrencies are used as money to pay for goods are services. In practice this rarely happens in practice except possibly for drugs, which indeed was what got Charlie Shrem got in trouble.

[ArticMine]

Edit: The case for Darkcoin masternodes being MSB is actually very simple. The facilitate the exchange of one kind of DRK (un mixed) for another kind of DRK (mixed). This process adds value to the DRK of holder. The masternode is compensated for this service. So they are exchanging / converting money.

DRK is not money. BTC is at best a commodity.

Case (unfortunately) closed?

No. Crypto-currencies starting with XMR are money. There is already a legal precedent in the United States when Trendon Shavers aka Pirateat40 argued that very point in court against the US Government and lost. I for one would argue that XMR is money in Canada for the purposes of the Excise Tax Act. http://laws-lois.justice.gc.ca/eng/acts/e-15/. Why because of this:

“money”

« argent »

    “money” includes any currency, cheque, promissory note, letter of credit, draft, traveller’s cheque, bill of exchange, postal note, money order, postal remittance and other similar instrument, whether Canadian or foreign, but does not include currency the fair market value of which exceeds its stated value as legal tender in the country of issuance or currency that is supplied or held for its numismatic value;

Bold my emphasis. The implication is that there is no GST payable on XMR. The same argument can be made for any crypto- currency. By the way this legislation dates from the late 1980's but unlike the Australian case it was drafted properly. In the EU we see how more and more jurisdictions are coming to the sensible conclusion of treating crypto-currecncy as money for the purposes of VAT. So regulating DRK masternodes as MSBs is a small price to pay to avoid paying GST or VAT on XMR, XBT or DRK for that matter.

Edit: Treating crypto-currencies a money has a profound consequence in any jurisdiction that has a GST or VAT. With the notable exception of the United States that is the world's strongest economies.

[jehst]

In the end, if DRK does well, it brings attention to the privacy niche. People who look into the privacy niche more will eventually find out about XMR.

[ArticMine]

In the end, if DRK does well, it brings attention to the privacy niche. People who look into the privacy niche more will eventually find out about XMR.

Maybe, but there are many examples where the superior technology simply lost. The current reality is that DRK has over 7x the capitalization and 20x the volume. So unless the message of the superior XMR privacy technology gets out it could be to late. The reality is that XMR has many advantages over DRK including:

1) No regulatory risk over the centralized masternodes.
 
2) No 1 MB blocksize limit. DRK to my knowledge has not addressed the issue of the 1 MB blocksize limit that is currently plaguing XBT.

3) No Proof of Stake attack vector. Many think of DRK as a Proof of Work coin. This is true as far as transactions but not privacy. Privacy is secured by what amounts to a form of Proof of Stake. There is a reason for the 1000 DRK capital requirements for masternodes. So yes the "Second Pirate Savings and Trust" attack on proof of stake I describe in this post https://bitcointalk.org/index.php?topic=897488.msg10182752#msg10182752 is actually possible against DRK. Where the attacker uses borrowed stake to create a large number of malicious masternodes.

For 1 and 3 above XMR wins because of the use of ring signatures and a single user level set of nodes
For 2 XMR again wins because of adaptive limits.

The technical superiority of XMR is clear; however the market on the other hand is currently sending a different message. One interesting aspect here is that DRK requires a significant percentage of DRK to be tied up in the masternodes, These coins are not available to the market. This of course is not the case with XMR.

[oblox]

In the end, if DRK does well, it brings attention to the privacy niche. People who look into the privacy niche more will eventually find out about XMR.

Maybe, but there are many examples where the superior technology simply lost. The current reality is that DRK has over 7x the capitalization and 20x the volume. So unless the message of the superior XMR privacy technology gets out it could be to late. The reality is that XMR has many advantages over DRK including:

1) No regulatory risk over the centralized masternodes.
 
2) No 1 MB blocksize limit. DRK to my knowledge has not addressed the issue of the 1 MB blocksize limit that is currently plaguing XBT.

3) No Proof of Stake attack vector. Many think of DRK as a Proof of Work coin. This is true as far as transactions but not privacy. Privacy is secured by what amounts to a form of Proof of Stake. There is a reason for the 1000 DRK capital requirements for masternodes. So yes the "Second Pirate Savings and Trust" attack on proof of stake I describe in this post https://bitcointalk.org/index.php?topic=897488.msg10182752#msg10182752 is actually possible against DRK. Where the attacker uses borrowed stake to create a large number of malicious masternodes.

For 1 and 3 above XMR wins because of the use of ring signatures and a single user level set of nodes
For 2 XMR again wins because of adaptive limits.

The technical superiority of XMR is clear; however the market on the other hand is currently sending a different message. One interesting aspect here is that DRK requires a significant percentage of DRK to be tied up in the masternodes, These coins are not available to the market. This of course is not the case with XMR.

1. Here we go again...
2. Not that it is a problem now but I'd wager this will be forked in as the coin continues to push release (albeit, excessively)
3. lol, apparently you aren't familiar with probabilities. Good luck getting loaned that many coins to get a small chance of succeed. Further, with breaking the inputs up across multiple nodes through blinding would further prevent any meaningful analysis.

As for the coins tied in masternodes, it's digital currency... it can be split out to as many decimals as you want to provide liquidity. Quit thinking in fiat terms of whole coin this, whole dollar that.

[smooth]

3. lol, apparently you aren't familiar with probabilities. Good luck getting loaned that many coins to get a small chance of succeed. Further, with breaking the inputs up across multiple nodes through blinding would further prevent any meaningful analysis.

You have no idea how hard it will be to borrow coins and/or trade derivatives in a more mature market where ownership is distributed and investors are shopping for yield. Right now you have a relatively small number of early adopters hoarding coins and stashing them in masternodes for yield, but as the market matures that won't be the case.

The technical superiority of Monero isn't really in question. Here's what the inventor of CoinJoin had to say about it (Monero is a fork/fair-relaunch of Bytecoin):

"The privacy achieved by Bytecoin is better than any existing-in-production privacy tools (e.g. CoinJoin) and also as good as or better than every theoretical system I've heard proposed except for Zerocash."

https://news.ycombinator.com/item?id=7766161

Nevertheless ArticMine makes a good point that technical superiority doesn't always prevail.

[ArticMine]

...

1. Here we go again...
2. Not that it is a problem now but I'd wager this will be forked in as the coin continues to push release (albeit, excessively)
3. lol, apparently you aren't familiar with probabilities. Good luck getting loaned that many coins to get a small chance of succeed. Further, with breaking the inputs up across multiple nodes through blinding would further prevent any meaningful analysis.

As for the coins tied in masternodes, it's digital currency... it can be split out to as many decimals as you want to provide liquidity. Quit thinking in fiat terms of whole coin this, whole dollar that.

1. The little point in debating this. Eventually someone will ask for a ruling from FINCen and resolve this.
2. We are in agreement here. DRK needs to hard fork just like XBT over this issue. All I can say is that the 1 MB blocksize limit in XBT, rather than privacy, is what drove me to XMR in the first place.
3. This is a classic POW vs POS argument. I happen to be strongly in the POW camp which is one of the reasons I support XMR. I also believe that borrowed stake is the Achilles Heel of POS. There are many who disagree with me on this and are in the POS camp. The trouble that DRK faces is that one has to believe in both POW and POS to support DRK. If one is a POW believer seeking privacy then XMR is for you. If one is a POS believer there are other pure POS alts that offer privacy.

[smooth]

DRK has over 7x the capitalization and 20x the volume.

20x the volume is not typical, there was just unusually high volume in the past 24 hours for DRK, but the same has happened with XMR on occasion. According to btcwisdom the 30 day numbers are currently 6251 and 1360, which is <5x.