Crazy Idea - Coin Merger!

DashDude

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Jul 10, 2017
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This one is a bit out there, but has anyone considered a merger/buyout of another coin?

Metcalf's law suggests that due to network effects a network's value grows by it's number of users squared. Therefore if two coins with approximately the same number of users merged it's number of users would double and the coin market cap would increase by 4 times! Why not take advantage of this phenomenon and merge coins that are reasonably compatible to begin with?

There are a few ways this could be done. If the leadership of both coins agreed they could simply replace two different coins with one single coin. This would be kind of a strong arm approach since the old chains would have to be canceled out somehow.

Another approach would be to offer users of another coin an equal value in DASH coin. New DASH coins would have to be created (probably by hard fork) to fund this, but it could be made non-inflationary by "burning" the old coins that are being tendered for the new DASH coins. The advantage of this approach is that people who don't want to move to DASH don't have to.

Now many of you might be thinking that if someone wants to switch coins why not just sell the old coin and buy the new one? Well, this certainly works, but when you do this you only receive 1 for 1 value. By doing a merger the nominal value still goes up 1 for 1 (to prevent price inflation), but due to the network effect and Metcalf's law it should increase by a lot more over time.

I understand that crypto people tend to strongly support their favorite coin so they might not be inclined to merge with another coin. However, if it was sold the right way and the community leaders were on board it might work.

The timing is also important. Currently we are still in an expansionary period with new coins being created every week it seems. However, this won't last forever. A consolidation phase will kick in eventually. At that point some coins will have two choices - fade away into irrelevance or merge and become stronger.

Choosing the right coin to merge with is also critical. Some are just not compatible. For example, small block Bitcoin would be a non-starter to merge with DASH. However, what about a big block BCC? What about Litecoin? These coins are ideologically fairly close to DASH (though I think they trail feature wise).

OK, like I said - this is just something I think we might see some day in the future. What do you think of this idea?
 
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AnarchicCluster

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Dec 22, 2014
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Yeah, we tried to merge with ShadowCash back in the day but it wasn't to gain more users only to get their developers work for Dash (Darkcoin at that time).

It is not a bad idea but very difficult to pull off. Frankly, Bitcoin Cash comes the closest to our vision of development so we could pitch that to them if Bitcoin Cash doesn't work out. If it does, I don't see any coin wanting to merge with us.
 

DashDude

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Jul 10, 2017
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Wow! I was not aware this had been proposed before. Maybe the idea isn't so crazy after all. Before I posted I searched for past coin mergers and only came up with one announcement for something called Gorilla Teeth which doesn't seem to exist today.

Agree with @TroyDASH about all the stars having to be aligned. I mentioned several "ifs" in my note.

Also agree with @AnarchicCluster regarding Bitcoin Cash. Their attempt to recreate what we are already doing (and doing better) is what made me think of this in the first place. At a minimum our marketing efforts should be targeting Bitcoin Cash. Then, after the novelty of their new chain wears off, say in 6 months, maybe they'd consider a merger...

Another thing to remember - previous studies have shown that 90% of the build out of a revolutionary new technology happens AFTER the inevitable bubble crashes. We saw this with the internet where there was a huge crash in 2000, but look where it's at today. Most of the build out happened after the crash. The same will happen with crypto. Some day there will be a big price bubble & crash and everyone will wonder how the coin price can keep going down even though the crypto adoption rate is still going up. We will likely see some coin mergers in this phase.
 

n00bkid

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Oct 25, 2015
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Very interesting idea. Would certainly get some headlines -- at minimum -- and presents an interesting growth strategy, if it were to work.

I'll keep an eye out for potential merge partners. I agree that Bitcoin Cash is likely the closest in terms of mission.
 

TroyDASH

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Jul 31, 2015
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Very interesting idea. Would certainly get some headlines -- at minimum -- and presents an interesting growth strategy, if it were to work.

I'll keep an eye out for potential merge partners. I agree that Bitcoin Cash is likely the closest in terms of mission.
Bitcoin cash seems to be the closest ideologically and seems to me to be a great match (once the price is more stable). Dash brings superior governance and scaling solution to the table, and BCC brings more network effects. But it would be such a massive undertaking and both the Dash and BCC community would need to be overwhelmingly supportive for it to happen, and I don't see any evidence of that...yet. Get Roger Ver and Ryan Taylor on board first and then let's talk :p
 
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DashDude

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@TroyDASH - I'm going to make a fool of myself by making a prediction. BCC won't die, but it won't be very popular either. In 3 months the Segwit2x 2MB hard fork will take place as planned and this will deflate the BCC crowd who will realize that they won't be taking over the crypto world. Might be a good time for a merger then.
 

TroyDASH

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Jul 31, 2015
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@TroyDASH - I'm going to make a fool of myself by making a prediction. BCC won't die, but it won't be very popular either. In 3 months the Segwit2x 2MB hard fork will take place as planned and this will deflate the BCC crowd who will realize that they won't be taking over the crypto world. Might be a good time for a merger then.
That is an entirely reasonable prediction, IMO. A merger though would be so incredibly unprecedented and bold that I love the thought of it, but I can't imagine it getting widespread support among the communities and core teams. It would be really cool if it did happen though because it sounds like something that could potentially benefit everyone, being both Dash's and BCCs ticket to #1 digital cash.
 

solarguy

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Mar 15, 2017
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Metcalf's law is a real phenomenon, and a powerful one. But...as noted...there are not too many potential partners for us to dance with.

Also, I want to collect or make new users from people that have never been exposed in any meaningful way to any cryptocurrency. If Dash is the only one that makes meaningful and effective appeals to the unbanked in Venezuela and India, Metcalf and his law won't matter.

We might suddenly need all that research about how to scale a few orders of magnitude and do it gracefully though...
 

Etin

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Jul 2, 2017
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Interesting I was thinking about that not for DASH in particular but just an observation as someone new to this space. In course of studying various coins to choose what to invest in I came to the conclusion mergers may soon have to happen as many Projects seem to burn out or run out of steam, some with no original ideas other clones of others, a lot have no unique selling point or purpose it becomes a case of survival of the fittest.
 
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solarguy

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This is really interesting. Would like to know more about how this works though!
If you are specifically asking about Metcalf's law, it's an observation that when the first fax machine was invented, it was not especially useful--nobody to fax to. 2 fax machines is a little bit useful. 100 is better. 50 million makes it hard to kill off, even though the technology itself is very obsolete.

The relationship is not linear. If you double the size of the network, it is not twice as valuable, but more like 2 squared or 4x as valuable. That's why buying a network (another coin) might bring disproportional gains in value.

But the limiting factor is that Dash has very few peers with our feature set. Further, our community may have as much or more effect as our network size.

complicated...