I sold all my Dash. Here is why and my view on the state of Dash

xdashguy

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I love Dash and may be back as an investor at some point, but I the last few weeks I have had to sell all my holdings and look to greener pastures. Part of the reason can be seen in this thread here: Dash needs to implement Shadowcash technology and truly be anonymous.

Sorry for this long-winded post, but this post is meant to summarize Dash's benefits, economics, and direction as I see it. I definitely welcome alternative viewpoints.

I may definitely be back if Dash grows and gets on a better path compared to alternatives.

The three killer features of Dash have issues:

1) Governance - This was an important idea and could have been very interesting. However, this governance model is unproven and thus far the results are lacking. It has been little more a grants system. The few large projects done with it have all been failures (PR, website design, ATM integration). More importantly, it does really reflect the community (look at the vote coints in the Shadowcash thread compared to the development direction of Dash).

In reality, it may even be creating negative value for the community. The reason is because it makes people not perform tasks that they would have done for free under different circumstances, but with the governance system they are unwilling to do it unless they are funded and paid. When there is no grants system people volunteer. When there is a grants system no one wants to work unless they are getting a grant. Volunteering while others get paid just feels wrong, psychologically.

As a result of this effect, the malinvestments of existing grants, and the lack of real control of development or direction despite the governance model, I would say thus far the governance system benefits are dubious.

2) Fungibility / anonymity - Dash anonymity is severely flawed. People can just mix bitcoin if they want Dash-level anonymity. For people who want real anonymity they can use Monero, which is already has more network than Dash, or Shadowcash.

This is important because there is no market room for a transparent coin. The reason is because people who want public transactions can already use Fiat money. In fact, using a credit card they have protection in the case of not receiving goods, so there is negative incentive to use a crypto. For people who need to transact in a crypto and who also do not care about priivacy, they already have bitcoin. Bitcoin has far higher market acceptance, ecosystem, network size, and liquidity. So, there is really no need for Dash at all as long as it is a transparent coin.

3) InstantSend - This is a great feature, but other coins essentially have this feature due to lower block confirmation times or they outright have or are adding this feature. Dash has not gained from this feature nor will it because it has failed to gain network size before others implement the feature.


Dash has issues with its economic model:

More importantly, the Dash economic model has issues. Some 60% of all coins are tied up into masternodes. That in and of itself is not an issue. The issue is that these masternodes exist in order to create a return on investment. These owners are, by and large, not actually invested long-term in the coin, but are looking for a quick ROI.

The effect of this means is that there is a feedback loop when there is dash price changes. Let me explain:

When Dash price rises it increases the ROI of running a master node. This encourages investors to buy more and more Dash to create more masternodes, which in turn causes the Dash price to rise due to increased demand and removed supply of coins. This feedback loop will continue driving up the price and locked coin supply until some equilibrium is found and it finally stops. That is how you get 60% of all coins in masternodes.

Is what I described really a bad thing? Not necessarily. However, it creates huge future investor risk and uncertainty because the same feedback loop I described also works when the price goes down, but in the opposite direction.

Let's pretend for whatever reason the price goes down 20% tomorrow. Those shrewd, investment-return-oriented masternode operators are going to see the ROI of their masternodes go down. They will say "I have other investment opporunities that produce higher returns, so time to exit my node". The result will be is they will be breaking down their masternodes, freeing up 1000 Dash at a time, and selling it on the market. Further causing the price to decline creating a feedback loop until some equilibrium is met.

As a result, Dash has risk for large and quite sudden price declines. This can happen seemingly randomly due to market forces or for instance it could be when the block reward (and therefore masternode share reward) gets decreased.

The brilliance in Dash as an investment vehicle was the Master nodes:

The reason why Dash has done well in terms of price was due to Evan's shrewdness in reducing supply. He did this in several ways:

1) He literally reduced the total Dash available from 80 million to 20 million. This benefitted early adopters / miners greatly as it reduced future competition for coins.

2) He created masternodes collateral system to tie up coins and take them out of tradeable supply

3) The brilliance of masternodes versus mining nodes is that the ongoing expenses of mining nodes is much higher. A bitcoin miner will be selling > 95% of its mined coins to cover expenses related to mining. A master nodes on the other hand has much less overhead, so even given the low inflation of Dash this inflation impact is reduced even less because the coins are going to people who are not forced to sell them (which keeps them out of tradeable supply).

These "price tricks" that Evan implemented were good for investors and I liked them. I am not saying they were bad. They were good ideas to earn money for early adopters. #1 was a 1 time benefit though (unless he further convinces the community to reduce it even more). #2 and #3 are ongoing benefits, but their ability to support price has been exhausted in my opinion and the probability of a negative feedback loop starting as previously described is becoming higher.

What about Evolution?

Evolution looks like an interesting concept. However, the development timeline is too far out. Look at how long 12.1 has taken to develop. It is far overdue according to timeline. The official Evolution timeline is about 18 months I believe. If that is the official timeline you have to imagine the actual timeline will be far longer. Let's say 2.5 years.

By that point I am not sure Dash will have any relevancy given the fast paced development of other coins. In addition, what Evolution provides end-users is not really that much different than service providers already provide for Bitcoin. I can already have a wallet in bitcoin that is the same on all my devices (using BP 39 wallet).

Making it easier to use such as paying by username or email versus using real addresses is useful. However, this could be done by central services in bitcoin. Of course decentralized method is better, but in terms of getting adoption I am not sure it matters that much if that aspect of the payment ecosystem is completely decentralized or not. Certainly not enough to have a stagnating coin for 2.5 years while it gets developed.

As a result, I want to see Evolution have more meat to it and I might re-invest when evolution has more meat to it. Btw, the evolution white people still has left the area blank that addresses better privacy / fungibility / anonymity. That is concerning.
 

TroyDASH

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I won't address everything in your post, but I think you are making an error in your evaluation of the economic model. ROI for masternodes should be calculated by annualized percentage return on investment, not raw value. ROI goes down when there are more masternodes, and it goes up when there are fewer masternodes. Price increases or decreases do not cause a feedback loop because of the ROI like you suggest.

Also, while it is true that other coins are very busy developing, some may even have very fast development. But development is not the same thing as adoption. There are very few, if any, altcoins that have even scratched the surface when it comes to adoption. Most of the price movements for altcoins have been driven by speculation and day-traders hoping to make a quick profit, instead of being driven by real-world use as a form of payment. I don't think it is fair to claim that with respect to adoption, Dash is stagnating yet other alts are somehow surging ahead. Any surges you might see are speculation, or market bubbles/pump and dumps. The fact is that all altcoins struggle with adoption (especially retail POS which is virtually non-existent), and it is a long road for any coin including Dash to make inroads there.

I do think your point about governance and building a community that expects to get paid instead of volunteering is worth a closer look. We would do well to do everything we can to encourage more and more people to be enthusiastic about Dash and volunteer their talents and do things on their own.
 
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demo

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I do think your point about governance and building a community that expects to get paid instead of volunteering is worth a closer look. We would do well to do everything we can to encourage more and more people to be enthusiastic about Dash and volunteer their talents and do things on their own.
The solution to this is to vote for more people's projects in the budget. To pay more people to do what they believe is a good job. To invest in research. And in order for more people's projects to be voted into the budget, you have to get rid of the current stupid budget system and create an alternative, bounty enable, budget system. And when I say pay people to do jobs, I mean pay coders, not advertisers!!! I mean pay workers, not talkers! Its up to the community to decide whether they will pay coders or advertisers. But the current stupid dash community of masternodes always decide in favor or the advertisers, and this twisted voting preference is lethal and fatal. The number of the beast is a number of a human, and a human can be either a man or a woman.

So you have to give to more people voting rights, not only the masternodes to be able to vote. Because the current majority of masternodes is stupid, and the only way to fix the stupidity of the majority is to invite more people to vote. This is the only road. This is what history teaches. Either you give to more people voting rights, or else the evolution process stops and you die.

And all this depends on whether you decide to vote with numbers or not. Because voting with numbers is (among others) a crucial prerequisite in order to implement the alternative, bounty enable, budget system. This is your first initial step, that will ignite everything else, that will ignite the evolution process. So go now and cast the third vote, and start implementing voting with numbers. Either dash does exactly what I am telling, or dash is lost.
 
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Dunedoo

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xdashguy, I knew you wouldn't fully leave Dash. Your post just proved this.
Its like your married and not happy with how things are going and say 'thats it' but you don't really mean it and you come back and want to cuddle up.

Great to see your still around!
 

Solarminer

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Hopefully this thread can be reviewed and changes implement to address some of these limitations. If not, the irrational slander comments will again prove how Dash needs to own up to its problems instead of assuming they are invincible while labeling others.

As for the budget and the community, I see a lot of questionable budgets from core. At the very least, they are letting projects slip without giving any details on what is going on. Any large company would have fired many people by now. The masternodes are also to blame for allowing non-performing projects with no reporting to continue.

The main reason InstantX hasn't been a benefit is because the core isn't pushing it. ATMs, exchanges, wallets, and everything they are doing should use instantx. Or even a cheap merchant terminal could be made to take InstantX. Instead the core is working on the exact opposite with debit cards or one way ATMs which negate the need for InstantX entirely.

The interesting thing with Fungibility is that Dash previously was fungible. Now coinfirm(that Dash initiated and helped) is tracking transactions and is categorizing mixed and unmixed transactions. This makes it easier for merchants to deny mixed coins, which hurts Dash's fungibility. Babyg even had an article published stating this exact thing. Dash now needs a solution that all coins are mixed to remain fungible.

Evolution I think is only slated for 6 months now. 12.1 has some parts of it. But I do think there will be some heavy competition for instant/locked and fungible options in just a few months.
 
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alex-ru

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... For people who want real anonymity...
For users who need a real (not theoretical) anonymity is important to understand: the anonymity mainly depends not on the mixing method, but from the "quantity" and "quality" of people with whom you do the mixing. Achieving real anonymity lies not in finding some "magic cryptography" to mix between 100 drug dealers, but in using a mass of anonymous currency, with millions of ordinary users, among which you can get lost.

Only Dash is successfully working towards real anonymity, which makes Dash available to millions of users, with the help of Evolution. Others are simply hiding behind the facade of formulas, the advantages and vulnerabilities of which are understandable only ten professors worldwide.

For investors seeking long-term growth it is important to understand that a currency that can be a real Digital Cash has the investment opportunities that are greater by orders of magnitude, than shares of "Coin, which is not actually a currency, but is just another concealed mixing service".

IMO
 

demo

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For users who need a real (not theoretical) anonymity is important to understand: the anonymity mainly depends not on the mixing method, but from the "quantity" and "quality" of people with whom you do the mixing. Achieving real anonymity lies not in finding some "magic cryptography" to mix between 100 drug dealers, but in using a mass of anonymous currency, with millions of ordinary users, among which you can get lost.
Only Dash is successfully working towards real anonymity, which makes Dash available to millions of users, with the help of Evolution. Others are simply hiding behind the facade of formulas, the advantages and vulnerabilities of which are understandable only ten professors worldwide.
IMO
Opinions are like assholes, everybody has one. Are you kidding me?

Zero Knowledge proof of identity is a protocol. And this protocol is QUALITY, not quantity.

Instead of talking advertising style bullshits, you have better follow NOW Zcoin's and Zcash's way of doing , and fund an appropriate project in the budget.

THIS IS AGAIN YOUR ONLY CHANGE IN ORDER TO EVOLVE AND SURVIVE. Either you do exactly what I am telling you, or you are lost. I urge you to follow the way of the real evolution, and not the false evolution road.
 
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xdashguy

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I won't address everything in your post, but I think you are making an error in your evaluation of the economic model. ROI for masternodes should be calculated by annualized percentage return on investment, not raw value. ROI goes down when there are more masternodes, and it goes up when there are fewer masternodes. Price increases or decreases do not cause a feedback loop because of the ROI like you suggest.
There was not an error in my economic analysis. The feedback loop exists as mentioned. When price rises it causes the annualized ROI to increased. This causes more masternode interest due to higher ROI, which further causes the price to rise as new masternodes are created locking up 1000s of more Dash. Until, as I stated, an equilibrium is met which would be when enough masternodes are created to reduce the ROI to its existing levels.

This also works in reverse. When price declines it affects the annualized expected ROI, which will encourage masternodes to exit in favor of greater opporunities. It is not only if price were reduced that would cause this, but if the block reward was reduced (which affects the master node reward).
 

xdashguy

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New xdashguy, I knew you wouldn't fully leave Dash. Your post just proved this.
You have me confused with someone else. I never left and I am not leaving. Selling my Dash does not mean I am leaving the community. Now stay on point of this thread topic. Provide opinions related to what was mentioned.

New From this read I gather you are going full retard with Shadowcoin. Best of luck with that..
Not at all. I am more bullish about Bitcoin than Shadowcash at this moment. Shadowcash is not ready.

Only Dash is successfully working towards real anonymity, which makes Dash available to millions of users, with the help of Evolution. Others are simply hiding behind the facade of formulas, the advantages and vulnerabilities of which are understandable only ten professors worldwide.
Mixing is not anonymity or fungibility. Bitcoin already has mixing (though not integrated in the wallet and as "decentralized" as Dash's) and probably mixes more value per day than Dash does given mixing is almost non-existent in Dash (hence the need to actually pay "liquidity providers" to mass coins back and force and pretend mixing is being done at any real level). With side chains coming in Bitcoin, new privacy techniques will be added, so any gap that might exist between Dash and Bitcoin today will be narrowed in the future. Dash's feature advantage is eroding and the features it is working on have dubious advantages.
 
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alex-ru

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Mixing is not anonymity or fungibility.
Mixing - it is one of the ways (along with "ring signatures", "zero knowledge", ...) to create uncertainty.
To achieve uncertainty of 1/1,000,000 - in practice you have to have this million of users!

But if just 100 or 1,000 users are using those ring signatures - you can never create (in practice) uncertainty over the above 1/100 or 1/1,000 respectively.
 
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xdashguy

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Regarding Mixing. Bitcoin ecosystem already has this feature: https://github.com/JoinMarket-Org/joinmarket/wiki

It is a decentralized CoinJoin implementation (just like Dash). Even though it is not built into the wallet like Dash's coinjoin market, it has more liquidity which means it is already better than Dash's. So, bitcoin is already doing better than Dash and it is not even a bitcoin core feature.

Now, that is not all. Bitcoin ecosystem is shortly going to mix CoinShuffle (Coindesks first transaction done recently on test net: http://www.coindesk.com/bitcoin-privacy-advances-first-coinshuffle-transaction/. Mycelium wallet integrates coinshuffle in their wallet which brings feature-parity with Dash: http://www.livebitcoinnews.com/mycelium-announces-successful-coinshuffle-implementation/).

You can read about CoinShuffle which is an improvement on CoinJoin here: https://en.wikipedia.org/wiki/CoinJoin

So, while Dash is stuck with CoinJoin Bitcoin and its wallets are already moving onto superior tech.
 

xdashguy

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But if just 100 or 1,000 users are using those ring signatures - you can never create (in practice) uncertainty over the above 1/100 or 1/1,000 respectively.
With mixing participation rate is much more important (less so with cryptographic solutions). I am glad you agree on that point. Which is why I say bitcoin already offers more secure mixing than Dash given bitcoins much larger participation rate and community size.
 

alex-ru

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CoinShuffle is flawed by design, PrivarteSend works way different than CoinJoin, Bitcoin Mixers are not the solution, ... - all these were explained here many, many times - lots of information and explanation available for everybody who want to become competent in these questions.
 

alex-ru

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Second shadowcash topic here - so spammy... :(
 

demo

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You have me confused with someone else. I never left and I am not leaving. Selling my Dash does not mean I am leaving the community.
Of course you left the community. You sold your dash, and you have no voting rights now.
You used to be free and able to decide about dash's future.
And now you are a slave, you are muppet show old guy quoting from the balcony seats, you have to accept the decisions of the stupid masternodes community without being able to really interfere with a power that only your vote gives. This is abjection, this is where the greed for money leads you.
 
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demo

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Instead of talking bullshits, why dont you define a bounty (by voting with numbers) to whoever will manage to implement Zerocash protocol for dash?

This is the correct way of doing things. Stop talking and start voting (with numbers).
 

demo

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Mixing - it is one of the ways (along with "ring signatures", "zero knowledge", ...) to create uncertainty.
To achieve uncertainty of 1/1,000,000 - in practice you have to have this million of users!

But if just 100 or 1,000 users are using those ring signatures - you can never create (in practice) uncertainty over the above 1/100 or 1/1,000 respectively.

The uncertainity resides in the routing protocol in the Network layer. Whatever you are mixing with ring signatures, and whatever onion routing protocol you are using in the application layer, and whatever zeroknowledge proof you are trying to establish, if you are using the underlying BGP routing protocol (which is the major protocol used in internet), they can analyze your data in the Autonomous System and discover you, sooner or later. So you ve better watch out to which Autonomous System you belong.
 
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TroyDASH

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There was not an error in my economic analysis. The feedback loop exists as mentioned. When price rises it causes the annualized ROI to increased. This causes more masternode interest due to higher ROI, which further causes the price to rise as new masternodes are created locking up 1000s of more Dash. Until, as I stated, an equilibrium is met which would be when enough masternodes are created to reduce the ROI to its existing levels.

This also works in reverse. When price declines it affects the annualized expected ROI, which will encourage masternodes to exit in favor of greater opporunities. It is not only if price were reduced that would cause this, but if the block reward was reduced (which affects the master node reward).
It would be a mistake for masternode operators to use past market performance/price momentum to influence calculation of future ROI. The feedback loop you are describing is called FOMO or panic selling, which is a factor for all tradeable currencies. The ROI for owning a masternode is a dampening factor on this, not an accelerating factor, because of the inverse relationship between ROI and masternode count.
 
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Dworf

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sad to see how argument turn into personal attacks

here is my opinion

Security of value is the highest priority - this is what no cryptocurrency provides as of now. But Bitcoin is far ahead due the pure network size and hashrate.

Anonymity is very important - full anonymity is given as soon as no transaction can be linked to any identity anymore. This is given transactions on the blockchain are "broken" through mixing (DASH) or the transaction mechanics is inherently anonymous (ZEC). But anyways other methods than blockchain analysis are possible - eg. time and amount can be used to link identities with transactions. Basically for now usage on Darkmarkets seems to be the primary usecase for full anonymity. But all trading of real life goods also requires real life delivery which is easy to identify for any investigator. In that sense mixing is more than enough.

Transaction speed - for big transactions speed is usually not of importance. The Bitcoin blockchain with less than one hour average transaction exec time is sufficient to buy a car or a house (blockchain safety is more important in these cases). For micro payments tx speed is very important. In these cases only instant transactions work because nobody wants to wait even minutes for a coffee payment.

Network size - the number of users and the transaction load which they produce gives the network and its currency the real value. And probably nobody who transmits money in a third world country cares for anonymity - they just want to be sure not to pay high fees and get their money.

In conclusion and in regards to DASH its obvious that there is a good mix of all these features. DASH does not fall behind in any of the requirements. But it has a big potential of gaining a very big user base with instant transactions and micro payments. Governance and masternodes may have catapulted its value up to this point. But the future is mass adoption where governance and blockchain funded projects will help to drive it further.

One more comment on the "feedbak loop": The number of masternodes can be inspected here: http://178.254.23.111/~pub/Dash/Dash_Info.html
No masternode owner is bound to hold the collateral longer than he wants. It can be sold as soon as required. The assumption that at some point suddenly a large number will be liquidated is simply wrong. And 1000 DASH for a couple of nodes is not a big factor. In Bitcoin thousands of cold wallets exist with bigger collateral and higher volatility in the Bitcoin market. The bigger question is if there is a better medium to long term investment. But that is a point that hits all altcoins as we can see every day - Bitcoin goes up then altcoins go down and vice versa.
 
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Solarminer

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In conclusion and in regards to DASH its obvious that there is a good mix of all these features. DASH does not fall behind in any of the requirements. But it has a big potential of gaining a very big user base with instant transactions and micro payments. Governance and masternodes may have catapulted its value up to this point. But the future is mass adoption where governance and blockchain funded projects will help to drive it further.

One more comment on the "feedbak loop": The number of masternodes can be inspected here: http://178.254.23.111/~pub/Dash/Dash_Info.html
No masternode owner is bound to hold the collateral longer than he wants. It can be sold as soon as required. The assumption that at some point suddenly a large number will be liquidated is simply wrong. And 1000 DASH for a couple of nodes is not a big factor. In Bitcoin thousands of cold wallets exist with bigger collateral and higher volatility in the Bitcoin market. The bigger question is if there is a better medium to long term investment. But that is a point that hits all altcoins as we can see every day - Bitcoin goes up then altcoins go down and vice versa.
Dash HAD the best mix of features. They will soon be passed by. I will just leave the coins out so it doesn't sound like I am trying push users away from Dash.
  • One coin has instant locked transaction in .4 seconds that are respendable in 1 minute. (far cry from 1 second and respendable in 15 minutes)
  • One coin has mixing that takes about 45 minutes. (far cry from the 2 days it takes Dash)
  • Other coins mix when they spend so no wait at all.
  • One coin has a dual address system so one address is always in a private/mixed network and the other is public. Sending private to private is always fungible and anonymous.
  • One coin has a variable block size
  • A few coins have a governance system and more will be adding it.
  • 2 coins have the magic API wallet system. One is already testing an API wallet.
  • One coin has a separate backed and lightweight frontend with all the user options.
  • Lightning and/or Thunder could actually work.
  • Many coins have wallets with built in market places, coin loaning options, exchanges inside wallet, 2nd layer assets,

There are a lot of good technologies out there. One coin in particular has many of these features and is not wasting time talking about how to spend budget money on advertising. lawyers, or conferences. They are just writing code and give solid weekly updates.

I think the feedback loop with masternodes will not look like a drop in masternodes. There are are more and more coins put into Dash every day from block rewards. So the number of masternodes will keep growing. The problem is that the value of masternodes will fall. Once enough of a drop happens, the budgets will get smaller, and that further causes a collapse. It could be saved, but the mistakes I have seen make a drop likely.
 
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Solarminer

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It would be a mistake for masternode operators to use past market performance/price momentum to influence calculation of future ROI. The feedback loop you are describing is called FOMO or panic selling, which is a factor for all tradeable currencies. The ROI for owning a masternode is a dampening factor on this, not an accelerating factor, because of the inverse relationship between ROI and masternode count.
I see what you are getting at. Masternode earnings are canceled out at about a 5% loss in the price of dash/year. And there is an incentive to keep a node going since it takes some time to setup. So you have that sunk cost of setup stopping you from having to do it again. So if Dash is dropping more than 5% investors are losing ground. Actually, the Dash appreciation has been far more influential than the rewards in the first part of this year. You would have seen a 300% gain if you timed it right. If you get an extra 10% from rewards that is just some gravy.

The fundamental direction of Dash has changed from last year. So I wouldn't put too much value on what happened up until now to what will happen in the future.

There are coins with a lower inflation rate. So comparing a coin that is inflating at 15% a year like Dash is not going to do as well as one that is only inflating at 1% a year. That 15% in coins needs to be paid by new buyers for the price to stay stable. If there are no new buyers, price drops.
 
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alex-ru

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... One coin ..
Two coin, three coin, ...

We will see dozens of Dash Evolution clones soon... We have seen all this before - with Bitcoin forks...

You can copy everything and "improve" some variables, ... but... they will be just another copy with no long-term value, because they become out-of-date soon after cloning.

Dash has the most powerful and the most protected 2-tier-decentralized Network. And it does matter in many ways...

"Network effect" will protect Masternode network from cloning the same way as it protects Bitcoin now.
Daredevils can try to play against it ... But better to play on Dash's side...
 

Solarminer

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Two coin, three coin, ...

We will see dozens of Dash Evolution clones soon... We have seen all this before - with Bitcoin forks...

You can copy everything and "improve" some variables, ... but... they will be just another copy with no long-term value, because they become out-of-date soon after cloning.

Dash has the most powerful and the most protected 2-tier-decentralized Network. And it does matter in many ways...

"Network effect" will protect Masternode network from cloning the same way as it protects Bitcoin now.
Daredevils can try to play against it ... But better to play on Dash's side...
I am not talking about clones. There are some new and some old coins that have added features that are now better than what Dash has - including a 2 tier and 3 tier network system. One coin I didn't even mention is redesigning the internet and will have an instant and anonymous coin. I don't think you want me to put the names of all the coins here. It isn't my intent to tell people to sell Dash and buy xyz. I would much rather the developers understand some limitations and work on making improvements.
 
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alex-ru

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I would much rather the developers understand some limitations and work on making improvements.
I also want Dash team to have an "intelligence service" inside to monitor all promising crypto-projects permanently and to implement all useful technologies into Dash ahead of time...

No need to copy Bitcoin's mistake of feeling "I am the only one perfection".
 

ashmoran

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In reality, it may even be creating negative value for the community. The reason is because it makes people not perform tasks that they would have done for free under different circumstances, but with the governance system they are unwilling to do it unless they are funded and paid. When there is no grants system people volunteer. When there is a grants system no one wants to work unless they are getting a grant. Volunteering while others get paid just feels wrong, psychologically.

As a result of this effect, the malinvestments of existing grants, and the lack of real control of development or direction despite the governance model, I would say thus far the governance system benefits are dubious.
Here is an idea that has crossed my mind once before, that I think may help solve this problem: collateralised proposals.

The weakness of the current treasury system is that payments are made entirely based on good faith. Masternode operators must vote entirely based on whether they think the developer will deliver the goods. There is a positive mathematical expectation for proposals, because if a proposal is funded, it earns X DASH, and if it fails, it earns 0 DASH; there is no negative component for failure.

The current situation is distorted because the total monthly claims on the treasury are less than the 10% maximum block reward. There is no real downside to funding everything, because there is no possibility that one proposal will deny a better one money: there is money for everything. This will change when demand exceeds supply, and only the best proposers (those judged most likely to deliver) will be funded.

One possible improvement to this would be to demand a collateral bond to back each proposal. So say someone proposes to create DashPay, BitPay for Dash, and want (for example) 100 DASH/month for 12 months. They would have to submit their proposal, but also solicit for backers. Dash savers could then bid to back the proposal. One person may pledge 1200 DASH for 10% annual return, another 1000 DASH for 8% annual return. If the project succeeds, the backer is repaid their bond plus interest; if it fails, the bond is forfeit and is reinvested into future proposals.

My examples here are simply toy illustrations. I know essentially nothing about finance, and someone with experience in investing could probably come up with more useful, practical scenarios very quickly. But the point is, it should be possible to introduce a negative component to the expectation of a proposal. This would force proposers to think and act more carefully. They would have to compete in a market for collateral, which would result in a natural interest rate for investment. Any relationship between proposers and backers would have to be handled through the existing legal system as it is not enforceable cryptographically (as far as I can see).

Would this solve the problem you describe, or are there missing pieces it doesn't address?
 

Solarminer

Well-known Member
Apr 4, 2015
762
922
163
Here is an idea that has crossed my mind once before, that I think may help solve this problem: collateralised proposals.

The weakness of the current treasury system is that payments are made entirely based on good faith. Masternode operators must vote entirely based on whether they think the developer will deliver the goods. There is a positive mathematical expectation for proposals, because if a proposal is funded, it earns X DASH, and if it fails, it earns 0 DASH; there is no negative component for failure.

The current situation is distorted because the total monthly claims on the treasury are less than the 10% maximum block reward. There is no real downside to funding everything, because there is no possibility that one proposal will deny a better one money: there is money for everything. This will change when demand exceeds supply, and only the best proposers (those judged most likely to deliver) will be funded.

One possible improvement to this would be to demand a collateral bond to back each proposal. So say someone proposes to create DashPay, BitPay for Dash, and want (for example) 100 DASH/month for 12 months. They would have to submit their proposal, but also solicit for backers. Dash savers could then bid to back the proposal. One person may pledge 1200 DASH for 10% annual return, another 1000 DASH for 8% annual return. If the project succeeds, the backer is repaid their bond plus interest; if it fails, the bond is forfeit and is reinvested into future proposals.

My examples here are simply toy illustrations. I know essentially nothing about finance, and someone with experience in investing could probably come up with more useful, practical scenarios very quickly. But the point is, it should be possible to introduce a negative component to the expectation of a proposal. This would force proposers to think and act more carefully. They would have to compete in a market for collateral, which would result in a natural interest rate for investment. Any relationship between proposers and backers would have to be handled through the existing legal system as it is not enforceable cryptographically (as far as I can see).

Would this solve the problem you describe, or are there missing pieces it doesn't address?
That is interesting with a bond type requirement.

The bigger problem is the lack of reporting and apparent free rides for proposals that are from core. Almost like the masternodes are owned by core or are getting a kickback for each proposal they vote yes on.
 

Dworf

Member
Jun 25, 2016
103
37
78
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... One coin ...
I just hope you do not mean On?co1n (the scam). It is pretty dangerous just to mention names like that in this context because you build up a reference for unexperienced readers which will be linked over Google searches.

Regarding other cryptocurrencies there is not a single one with a comparable set of features. Broken down to single arguments there are a lot of anonymous cryptocurrencies, some with fast transactions (what is quite different from instant) and many with a different feature set. Most of them have close to zero adoption, no infrastructure and/or no tools available. Some even lack of a working GUI wallet. For DASH there is a working infrastructure with debit cards, all kind of wallets, market presence on major exchanges and fast paced adoption. Even without Evolution there are many reasons to use DASH right now.

By the way - the headline of this thread reminds me to Mike Hearn's announcement: "I will no longer be taking part in Bitcoin development and have sold all my coins."
 

Solarminer

Well-known Member
Apr 4, 2015
762
922
163
I just hope you do not mean On?co1n (the scam). It is pretty dangerous just to mention names like that in this context because you build up a reference for unexperienced readers which will be linked over Google searches.

Regarding other cryptocurrencies there is not a single one with a comparable set of features. Broken down to single arguments there are a lot of anonymous cryptocurrencies, some with fast transactions (what is quite different from instant) and many with a different feature set. Most of them have close to zero adoption, no infrastructure and/or no tools available. Some even lack of a working GUI wallet. For DASH there is a working infrastructure with debit cards, all kind of wallets, market presence on major exchanges and fast paced adoption. Even without Evolution there are many reasons to use DASH right now.

By the way - the headline of this thread reminds me to Mike Hearn's announcement: "I will no longer be taking part in Bitcoin development and have sold all my coins."
Absolutely did not mean one coin. Yes One Coin is a scam. I was just trying to be generic with amount of different options are available. Read the shadowcash thread posted above for the hint on the coin that does have the key Dash features.
 

David

Well-known Member
Dash Support Group
Jun 21, 2014
618
628
163
Dash HAD the best mix of features. They will soon be passed by. I will just leave the coins out so it doesn't sound like I am trying push users away from Dash.
  • One coin has instant locked transaction in .4 seconds that are respendable in 1 minute. (far cry from 1 second and respendable in 15 minutes)
  • One coin has mixing that takes about 45 minutes. (far cry from the 2 days it takes Dash)
  • Other coins mix when they spend so no wait at all.
  • One coin has a dual address system so one address is always in a private/mixed network and the other is public. Sending private to private is always fungible and anonymous.
  • One coin has a variable block size
  • A few coins have a governance system and more will be adding it.
  • 2 coins have the magic API wallet system. One is already testing an API wallet.
  • One coin has a separate backed and lightweight frontend with all the user options.
  • Lightning and/or Thunder could actually work.
  • Many coins have wallets with built in market places, coin loaning options, exchanges inside wallet, 2nd layer assets,
Do any of them implement all of these things together, in one coin?

There are a lot of good technologies out there. One coin in particular has many of these features and is not wasting time talking about how to spend budget money on advertising. lawyers, or conferences. They are just writing code and give solid weekly updates.
That's probably why I've never heard of them. As I've said before, you could invent the cure for cancer and without advertising, it would be worthless.

I want to make an observation about Zcash, since it was mentioned. I think it's a really neat coin and I'll be interested in following it. Its value has already declined from a maximum of $2.5 million per coin to $600 per coin...a lot of people lost a lot of money on the first day. But eventually it will stabilize.

In any event, one of the weaknesses of Zcash is, as the development team freely states, that it's impossible to verify how many Zcash there are. You can never know for certain that somebody isn't out there creating tons and tons of Zcash, because there's no transparency to the blockchain. That's great in terms of privacy, and sucky in terms of making sure the software is working as intended.