Why the darkcoin/dash/dashpay instamine matters

[TPTB_need_war]

I recently answered on another thread:

Anyone who bought Dash on the basis, in whole or part, of misleading statements from Evan or the others and then lost money has been scammed.

Prime among those are the ones to whom the instaminers dumped their coins during the initial pump up to 0.0267, a price which has not be reached again in two years. That not only funded the project, it likely put a long of money straight into insiders' pockets. Subsequent pumps and prices inflated by continued double-talk and spin from Evan and others have only added to their ranks.

But smooth, "We're adults therefore any lies that we accept as true (even if advertised) are the fault of our not researching enough (even if developers are actively telling us otherwise), thus scams are impossible"--said the man before being convicted of securities fraud.

But dash isn't a bad coin imo, as I said.

Shitcoins that were fraudulently distributed and continue to be fraudulently distributed with a masternode scam that funnels coins to the insiders (who stole the instamine) perpetually while breaking the security of the anonymity are not bad coins by your illogic.

Nothing is bad. Just eat shit (feces) for breakfast please and report back on your health later.

When you don't understand, why can't you just admit to yourself that you don't understand.

Last time I checked, the colors black and white were distinct. Seems you live in a world with one color: grey. Fried eggs are grey, fried feces is grey, etc...

And finally, because prominent Moneroers, certainly including myself and fluffypony among them, are on record repeatedly telling people not to buy Monero unless they are extreme speculators who are comfortable with the fact they will likely lose money.

You are the moderator of a Monero thread where it's constantly being advertised how buying Monero is a good investment and will make the buyer a lot of money. Because you are the moderator, you have chosen to allow such posts being published and remain visible for all greedy noobs ready to lose their money.

If you had an unmoderated thread instead, you wouldn't have taken the responsibility on what remains published and what doesn't upon yourself and the liability would unequivocally fall upwards to the forum moderators and admins alone. As it currently stands, to further back your stance quoted above, perhaps it would be a good idea from both ethical and legal standpoints for you to start deleting at least the most outrageous m00n posts. Unless you think the value of the asset can only go up and no one will ever lose any money thus not getting scammed by your own definition.

He is totally lost.

Actually I have to agree with illodin here. I have warned americanpegasus et al many times, but they seem to be very hard-headed. And smooth seems to downplay the culpability of this promotion in terms of securities law violations. At least now they seem to keep in their own thread, but that still does not negate illodin's point. Nevertheless this is off topic. Monero did not have an instamine nor does it have an ongoing masternode funnel scam. The false advertising of Dash is not admitting the truth about the instamine and ongoing implications of the masternode scheme. Every security has a prospectus which is required by law to make these facts known to the investors. If investors understood the lies of Evan, they would probably have some inkling that a person like that is incapable of leading Dash to successful adoption in the world and also some inkling of the scam they would be investing in and whether that is the sort of ethics they want to support for crypto-currency.

[Sukovsky]

Who cares anyway. Not like this garbage is actually being used. Just a speculative vehicle based on scammy fundamentals.

[bigs21024]

wow very interesting great read

[TPTB_need_war]

The other question I have is, does all this matter to people who buy dash now?  The devs can no longer victimize people, am I right?

The diagram of how Dash works now (and I suggest you click that quote below and read that entire thread over there):

[...]

Here is diagram of the scam of the flow of electronic digits printed ongoing out of thin air:

PRINTING PRESS ----> INSIDERS -----> INVESTORSFOOLS

[TPTB_need_war]

Days let's posit that your point about slow development of Monero had some validity (really I don't dig into Monero source code so I don't know), I have some reactions:

1. Could you please go post that in a thread about Monero, not in the Dash thread. Motivation/motive of Monero supporters (and myself who does not own a Moneroj) is not a factual answer to concerns about Dash.

2. The concern we've expressed about the Dash distribution is that it unfairly skews the control over the float and the profit from the coin to a smaller group. If you are implying this corrupt financial structure enables Dash to have more funds to develop their coin faster, my reaction is the technology of Dash isn't even at the level of a high school junior programmer. Don't forget I found a high school level probability math error in the InstantX white paper a year after it was released. Who the hell is doing your peer review? The anonymity is not end-to-end principled (a foundational principle of correct network protocol design), is horrendously slow, is not autonomous, and the masternodes could violate anonymity of users.

So to make it clear. The likelihood that the float of Dash is significantly owned by those in the instamine and who likely owned masternodes hence thus maintaining their share of the coin supply is what in your estimation?

Very low. In my estimation Evan should be from around 100k to 400k tops - as he was just one of the two "partners" and Hagan / internetape has already sold much or all of his stash in the lower price ranges.

Please account for 1.9 million instamined. I know someone who attempted to mine during that sham and only was able to get 500 (i.e. 0.005 million) DRK.

So you are claiming they did not sell into the pump, thus they could not have possibly offloaded 1.5 million DRK into the free market so I assume they could ONLY have sold them to other whales in bulk.

Evan probably had to face some serious losses as well:

Wild speculation.

Masternode rewards came online much later, when coin supply wasn't at 2mn, but more like 4.5mn+ and that was the low reward-scheme... like 10% or something because it was planned to gradually escalate in terms of pow/pos balance... I think the 50-50 reward was coded to be reached in small increments by q3 or q4 '15... yet by that time coins had reached 6mn. So from the instamine till then, another 4mn coins had been added to the supply, mainly by PoW....

What was the hash difficulty during this 2.5mm mined before masternodes were created? I would presume that insiders used the resources they gained from the instamine to rent massive cloud resources to mine out a majority of that 2.5mm. That isn't a wild speculation, because it is the rational thing for them to do so no one can compete with them when selling on a pump given they already control the coin and they have no intention of wide distribution and wide adoption, because for one thing they are not technically capable of it.

So on one hand you have large scale redistribution of the first 2mn coins (I know of whales that bought large packages like 20-40-100k DRKs for peanuts, back in the 0.00002 - 0.0005 range, and were even buying the ccex hacked DRKs dumps over at poloniex, down at 0.0008 or something).

So we are confirming that insiders were hoarding DRK.

The problem is there was never a wide interest in holding DRK and adopting it for use. That has always and will always be the problem.

All these things reshuffled the distribution so much that most darkcoiners understood that the instamine is a non-issue

A redistribution to whales is not a non-issue. It is precisely the death of the free market for the float and the wide adoption needed to drive network effects.

[smooth]

More deceptive and misleading statements about the instamine that Dash continues to use to scam investors even now, this time an in "Official Communication".

https://dashpay.atlassian.net/wiki/display/OC/Dash+Instamine+Issue+Clarification

Repeats many of the unsupportable or false claims mentioned in the OP from the old Darkcoin FAQ such as coins being redistributed, the nature of the distribution, and where and how large holders obtained their coins. Omits critical information about key events surrounding the instamine such as the early launch and the deliberate withholding of development plans until after the instamine was complete.

Also mischaracterizes the origin of the instamine coins as being the Litecoin difficulty adjustment algorithm which is absolutely false. Most of the "extra coins" came from the absurdly-high block rewards due to a "bug" (500 coins/block IIRC, roughly 285 times higher than now). If Dash had constant block rewards as did Litecoin (for four years), its instamine would have been very small, as Litecoin's was (in fact even smaller, since the Dash had a difficulty adjustments at 4x the frequency of Litecoin).

[iCEBREAKER]

More deceptive and misleading statements about the instamine that Dash continues to use to scam investors even now, this time an in "Official Communication".

https://dashpay.atlassian.net/wiki/display/OC/Dash+Instamine+Issue+Clarification

Repeats many of the unsupportable or false claims mentioned in the OP from the old Darkcoin FAQ such as coins being redistributed, the nature of the distribution, and where and how large holders obtained their coins. Omits critical information about key events surrounding the instamine such as the early launch and the deliberate withholding of development plans until after the instamine was complete.

Also mischaracterizes the origin of the instamine coins as being the Litecoin difficulty adjustment algorithm which is absolutely false. Most of the "extra coins" came from the absurdly-high block rewards due to a "bug" (500 coins/block IIRC, roughly 285 times higher than now). If Dash had constant block rewards as did Litecoin (for four years), its instamine would have been very small, as Litecoin's was (in fact even smaller, since the Dash had a difficulty adjustments at 4x the frequency of Litecoin).

[Duffplanations Intensify]

How many coats of gloss is Duffield going to apply in his endless attempts to polish the instamine turd?

Does he really think the intrinsic problems with instamines (compounded by Masternode Ponzi marketing) are resolved with hand-waving and probabilistic happy talk?

Great catch on the miscaracterization of the instamine as somehow being "Lightcoin's fault."  Since LTC has constant block rewards, the immensely profitable instamine fiasco is clearly the result of Evan's incompetence and/or malfeasance in implementing dynamic subsidies.

"Oops, we accidentally 33% of all Dash that will ever exist.  It was not intentional and is probably fine anyway.  Please believe me and invest in a Masternode."  -Evan Duffield, basically

"With respect, hope is not a strategy."  -Edward Snowden

[TPTB_need_war]

3. Once the issue was recognized, the founder of the coin issued a fix within a few hours to adjust the difficulty more quickly than the algorithm included in the Litecoin code.

Appears they've just incriminated themselves, by admitting they didn't immediately halt the mining by informing the public and declaring a fork with a restart was forthcoming, but instead let the instamine run on for several hours.

4. The only two members of the development team at the time were Evan Duffield and InternetApe. InternetApe sold all his coins early on, and is no longer involved with the project. All other members of the current team joined later. InternetApe was able to accumulate 160K DASH over the first weeks of the project so that should provide an idea of the range a founding member was able to accumulate. So the launch issues and high rewards happened to everyone equally and there was no bad intention, just part of a young hobby project that later became a much more serious project.

How can Evan know that Kyle Hagan sold all his DRK unless Evan was controlling Kyle's mining equipment. Notice how Evan refused to disclose how many DRK he mined. He also doesn't disclose who Kyle sold his DRK to and for what price.

[smooth]

3. Once the issue was recognized, the founder of the coin issued a fix within a few hours to adjust the difficulty more quickly than the algorithm included in the Litecoin code.

Appears they've just incriminated themselves, by admitting they didn't immediately halt the mining by informing the public and declaring a fork with a restart was forthcoming, but instead let the instamine run on for several hours.

I'm doubting that such a fix even happened. I've seen no evidence of it.

The fix I see was one to correct the extra coin rewards. That was announced roughly 17 hours after launch, with the fix to go into effect about 1 1/2 days after launch (ending the instamine):

I confirm that block reward with current difficulty is again 500, this is weird.

Everyone using the linux based version please update your source from GitHub! I fixed the code that is causing the strange block rewards and it goes active at block 4500! If you do not upgrade you'll be left behind!

Just update from GitHub here: https://github.com/evan82/xcoin

There was an earlier fix for a "critical bug" about one hour after launch but I've never worked out exactly what it was that changed. I don't think it was related to difficulty or block rewards:

Everyone please update to the new version on the git repo, there was a serious error that I just fixed:

terminate called after throwing an instance of 'std::runtime_error'
  what():  CreateNewBlock() : ConnectBlock failed
Aborted (core dumped)

So as far as I can tell the claimed difficulty adjustment fix from the above so called Instamine Clarification "official statement" never happened.

[TPTB_need_war]

smooth are you not understanding my logic? Everything Evan is writing in that document appears to me to be incriminating. Here is another example:

6. These early mined tokens had no value at the time and many people just traded them OTC or sold them in exchanges very early on. There was no benchmark and no way to know Dash was going to grow and become a bigger project so most first day miners just sold their coins.

How can he know what the first day miners did on OTC unless he was buying all the coins that were sold or was in communication with all the first day miners.

He claiming or admitting that the first day miners were a close knit group.

[smooth]

smooth are you not understanding my logic? Everything Evan is writing in that document appears to me to be incriminating. Here is another example:

Did you see me disagree?

Incriminating or not, at best it is obviously all double-talk, half truths, and speculation presented as fact. That alone is enough to make any sane person want to stay the fuck away.

[iCEBREAKER]

3. Once the issue was recognized, the founder of the coin issued a fix within a few hours to adjust the difficulty more quickly than the algorithm included in the Litecoin code.

Appears they've just incriminated themselves, by admitting they didn't immediately halt the mining by informing the public and declaring a fork with a restart was forthcoming, but instead let the instamine run on for several hours.

4. The only two members of the development team at the time were Evan Duffield and InternetApe. InternetApe sold all his coins early on, and is no longer involved with the project. All other members of the current team joined later. InternetApe was able to accumulate 160K DASH over the first weeks of the project so that should provide an idea of the range a founding member was able to accumulate. So the launch issues and high rewards happened to everyone equally and there was no bad intention, just part of a young hobby project that later became a much more serious project.

How can Evan know that Kyle Hagan sold all his DRK unless Evan was controlling Kyle's mining equipment. Notice how Evan refused to disclose how many DRK he mined. He also doesn't disclose who Kyle sold his DRK to and for what price.

Where were the rest of THE (non-profit, WTF!) DARKCOIN FOUNDATION, INC during the Day of The Instamine, and how many Masternodes did they fund with the proceeds?

[TPTB_need_war]

smooth are you not understanding my logic? Everything Evan is writing in that document appears to me to be incriminating. Here is another example:

Did you see me disagree?

Incriminating or not, at best it is obviously all double-talk, half truths, and speculation presented as fact. That alone is enough to make any sane person want to stay the fuck away.

It is either fact that he could know what he claims to know, in which case they need to disclose all the facts they knew. For example, if they can know what all first miners did, then they must disclose the numbers.

Else it is speculation painted as fact which is a violation of proper disclosure for investment securities.

So either way, it appears to be incriminating w.r.t. securities law in the USA, but note IANAL.

The House of Cards known as XCoin, DarkCoin, DRK, Dash, Dashpay, appears to be nearing its deathstar destiny.

[The Sceptical Chymist]

smooth are you not understanding my logic? Everything Evan is writing in that document appears to me to be incriminating. Here is another example:

6. These early mined tokens had no value at the time and many people just traded them OTC or sold them in exchanges very early on. There was no benchmark and no way to know Dash was going to grow and become a bigger project so most first day miners just sold their coins.

How can he know what the first day miners did on OTC unless he was buying all the coins that were sold or was in communication with all the first day miners.

He claiming or admitting that the first day miners were a close knit group.

Interesting.   I wouldn't mind hearing an explanation for how he knows this but I doubt that will be forthcoming.   Can it.possibly be that he's inferring it from exchange transaction volume or some such thing?

[TPTB_need_war]

Do they have a world-class dev team and a professional, devoted community?

Correct, Dash does not have.

...its creating a self-supporting and self-expanding ecosystem as well.

Like Tao said, the team Dash has gathered is amazing.  They're nice enough to let me hang around and watch what's going on, and I gotta tell you, it's hard to keep up with their brilliant ideas.  Evan just posted this:

You're on the right track! Imagine instead of just proposals and contracts, we also have category, group, user, company, project, project-report and project-milestone. Then the governance system (what was previously the budget system) will explicitly have a system for tracking what's happening in our economy that we're funding. Imagine the system knows when reports are due, if companies are behind on their milestones...etc. It's the autonomous part of our decentralized autonomous organization. Next we fund other DAOs into existence. I think we'll be able to manage thousands.

This whole structure I'm building is done using a self-referencing tree, so we'll have companies, that can own companies, that have people working for them. These are also the same users for evo, parts of this tree can be flagged to be stored in DashDrive instead of our governance mempool.

This is a huge upgrade by the way. If I'm going to touch the budget system, I'm going to make it as perfect as possible before we continue on. This is a vastly important part of our system.

Now if that doesn't send shivers down your spine, well.... you must not understand.

Shudders not shivers. Evan doesn't understand how to generate network effects.

By running all investment through a funnel which siphons the community wealth through the masternode scam, he is actually killed the network effects.

Dalmation Dogecoin imitation gimicks notwithstanding.

It is really hiralious. Please let Evan continue to clusterfuck his Dash scam.

The instamine means nothing.  Not only were most of those coins sold off, and bought and sold multiple times, it really doesn't matter.

IANAL, yet appears the end game is perhaps jail time for him and perhaps all you pumpers as well who continue to spread illegal prospectus.

The team behind Dash, including myself, is relentless and will not stop until we reach our goals. If a certain aspect of Dash threatens our survival, make no mistake, we will make every attempt and due diligence until it is fixed. There are no such flaws right now.

The "features" you tout are flaws and you don't even realize it. That is how hopelessly clueless your "worm-class" development team is.

...with Dash currently having the upper hand due to superior technology with self governance and funding.

Liar. Illegal hype.

Taoway is that you? you're the guy that first broke the darkcoin scam are you not? Are you the same person? I heard that you are.

You are the one we should all be thankful too for bringing the outright scam to our attention. You probably helped us stop Dash becoming a MUCH larger problem.

Was he bought off to stop attacking? Attack to force Evan to sell you some cheap DRK and in exchange you agree to become a pumper. Not beyond the realm of plausibility. Only they know.

[TPTB_need_war]

Hey, I heard that you can break InstantX. When can we expect that to happen? I will personally tip you if you do it. Don't disappoint me. Generalize this said you could.

I found a high school level probability math error in the InstantX white paper that had been there for a guess roughly a year and nobody had done the peer review. So this tells you there is no world-class development team.

The white paper was claiming astronomical odds of colluding masternodes able to corrupt the InstantX transactions. I showed the probability was much more reasonable. I forget the exact quantification, but it roughly dropped in the range of a some akair double-digit percentage of the masternodes would enable corrupting afair single-digit x% of the InstantX transactions.

So the difficulty in attacking that version of InstantX (assuming it hasn't been somehow improved in some yet undocumented manner) is I need to acquire the masternodes and then I need to do the development coding. I would thus risk destroying the value of all that DRK locked up for masternodes because the price of DRK would likely plummet if I attack it. I don't know if there is any way for me to short DRK with sufficient size and liquidity and also why would I want to risk a short position on trying to prove this? I have neither the funds nor time to waste on that when working on my project is worth $millions to me in opportunity cost. I have said that in the future if Dash is not already dead and I have $millions, then I will likely pay a hacker to destroy Dash because I view it (my opinion) as an major scam that is defrauding our community.

The reason the InstantX flaw (and other flaws) matter is because:

1. It exemplifies how inept the Dash development team is. There are surely more flaws lurking that no one has peer reviewed.

2. If Dash scales up, then there will be many hackers with the motivation to attack it and short it. So these flaws although not worth any of us attacking now, actually insure it is quite implausible that Dash could ever scale up to do anything in real adoption. Also the masternode scam violates the principle of trustless, non-centralization which is necessary to promote network effects (i.e. for others to invest their company in your technology).

On top of that, afaics (based on limited information Evan has released) Evolution is flawed and really doesn't solve any problems of scaling. I will wait until after it is released to explain why. So that will be hanging over your head.

[TPTB_need_war]

TaoOfSaatoshi deleted this information from his illegal Dash hype thread:

The Tao/Satoshi Index

A reply of yours, quoted below, was deleted by the starter of a self-moderated topic. There are no rules of self-moderation, so this deletion cannot be appealed. Do not continue posting in this topic if the topic-starter has requested that you leave.

You can create a new topic if you are unsatisfied with this one. If the topic-starter is scamming, post about it in Scam Accusations.

True index is ¹/₆₆₃ = 0.0015

If it is any consolation, Dash's coinmarketcap.com marketcap is closer to its "Adoption-adjusted Market Cap" than Ethereum's and Litecoin's are.

I thus suggest an idea for a new metric for ranking altcoins.

Sqrt(M x H)

M = Mean transactions fees paid per unit time to decentralized proof-of-work miners
H = hash rate (normalized in electricity cost per hash to SHA256).

Using M = Sent avg. per hour, H = Hashrate (normalized):

Coin |	Relative Adoption |	Ratio |	Adoption-adjusted Market Cap
1.Bitcoin	6.5×10¹²	1	$6.4 billion
2.Namecoin	8.6x10¹⁰	1/76	$85 million
3.Ethereum	6.6x10¹⁰	1/99	$65 million
4.Litecoin	1.3x10¹⁰	1/500	$13 million
5.Dash	9.8x10⁹	1/663	$10 million
6.Blackcoin	7.4x10⁸	1/8784	$0.7 million
7.Dogecoin	6.1x10⁸	1/10656	$0.6 million
8.Auroracoin	5.8x10⁶	1/1120690	$5,931

I edited the table above so readers can see the "Adoption-adjusted Market Caps".

You can see how pitiful the altcoins are.

Edit: your investment money is being siphoned off into the pockets of the insiders of these coins. None of it is achieving any significant adoption.

[cryptohunter]

the board is once again getting filled with dash spam.

That taoofsaatoshi has been useful in the past but now has turned full dash spammer on the main board. They should be limited to their thread. The coin is generally accepted to be a scam by the majority of the board. They have a cheek coming back to the main section spamming it over and over again.

[LiskEnterprise]

scams seem to quite well it is a shame

[cryptohunter]

scams seem to quite well it is a shame

it is a shame documented evidence of the scam...

Let's take a look at the first 5 h of Darkcoin (XCoin at that time)...

https://bitcointalk.org/index.php?topic=421615.msg4589219#msg4589219
Edufield said (after failed launch) that he will wait the next day to launch DRK (XCoin at that time) it is 11 pm.

https://bitcointalk.org/index.php?topic=421615.msg4591407#msg4591407
Edufield disregard windows wallet and daemon and hurry up his launch, presumably to not have windows miners on board.

https://bitcointalk.org/index.php?topic=421615.msg4592827#msg4592827
Edufield say he added four nodes for the launch at 4 am (5 hours later, despite his promise to wait). The 4 nodes from Edufield are 3 amazons AWS + another unknown (whois IP). Launch started at 3h54 am.

https://bitcointalk.org/index.php?topic=421615.msg4593601#msg4593601
Edufield said the github version was not updated, nobody could compile and only Edufield was able to mine until that time. It is 5.09 am and Edufield instamined alone 1153 block at 500 DRK + 60 block at reward 277 = 593120 DRK for him alone in about 1 hour.

https://bitcointalk.org/index.php?topic=421615.msg4593987#msg4593987
No windows wallet confirmed at 5h47 am, despite a user attempt to make one avaiable, that Edufield dismissed quickly.

https://bitcointalk.org/index.php?topic=421615.msg4594096#msg4594096
Illodin, understand dev has instamined alot of coin.

https://bitcointalk.org/index.php?topic=421615.msg4595573#msg4595573
From this list of nodes, at 8h34 am (4h40 after launch) there were 50 Amazon AWS node and 50 microsoft cloud computing instamining DRK (checked using IP whois service). This is 100/124 nodes using cloud computing to instamine DRK. We are at block 2870 and block reward is 500. From block 1153-1729 block reward is 277. After that it is 500 again hence 2294 block at 500 + 576 at 277 = 1306552 DRK (worth about 13M$ now) were instamined in less than 5 hour by Edufield and coworkers using about 100 cloud mining instances. Edufield himself instamined in not even 5 h from 600K to 1169K DRK ((1306K-600K)*100/124 + 600K) depending how many of the 100 cloud mining instance were its own. All this while having purposefully set the difficult ridiculously low and block reward 100 times what it is now.

From 6M$ - 13M$ in 5 h, Edufield did some lucrative work here!

Edufield is nominee for the Master Scammer 2014 award!

With this evidence alone I am not sure why he is not sitting in jail yet.