Hi,
i would like to setup a masternode.
Right now the reward of running a masternode is about 12% which seems pretty attractive. Although i wonder how this will evolve over time.
In the table as shown here (sorry since this is my first post, i cant post links) it says the reward is decreased by 7.14% each year.
Doesn't that mean that eventually the incentive for running a masternode will be even too little to cover the server costs?
Regards
Sneaker
Similar to Bitcoin, eventually fees will need to replace the block rewards. Looking at March's statistics, the average block is only about 0.4% full, yet about 8.7% of the cost of running a node is currently covered strictly by fees (assuming that you spend 5 USD to host your masternode). Additionally, this is based on a 1 MB block size, which has already been approved to expand to 2 MB. If you assume that our 2 MB blocks eventually become say 70% full, that means that the average block would generate ~$150 in fees for MN owners. It's hard to say what the price per Dash would be if it were being used that much, but it would certainly be high, so $150 may not be a terribly high return. But it at least shows that if we are successful, the model is sustainable without ANY block rewards.
But here's my other thought on it... by even two years from now, the economic incentives will have surely shifted many times. We are still very much experimenting with different models and I promise that we haven't found the optimal model for profitability. Might fees change by then? Might the split to MN owners change by then? Might the number of services for which network fees are charged increase by then, creating new revenue streams? We simply don't know the answers to these questions right now. Two years ago, we didn't have ANY fees for MN owners created yet. InstantX didn't exist. Privacy features were just an idea. My point is that lots of changes are coming. If we are successful and bring a product to market that users want, there will be a way to monetize it. And we have developers that are business-minded and will ensure the model provides proper incentives to sustain a thriving network, which includes masternodes.
Invest in Dash not because the math says you'll get x amount of the block rewards. Invest because you believe that we have a superior and more flexible solution to where block rewards should be allocated. It is obvious that 100% to mining activities (as if that were the
only activity of value to the network) is the wrong answer. Likewise, we have a ways to go toward figuring out what is optimal pricing and allocation. But we have the means to change it, leaders who aren't afraid to try something new, and a community of smart people working to crack the problems (technical and economic).
