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More power to the rich?

Discussion in 'General Discussion' started by Kim Koldtoft, Mar 23, 2017.

  1. Kim Koldtoft

    Kim Koldtoft New Member

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    I am new to Dash and at this early stage, very excited about the project. So excited even, that I exchanged half of my bitcoin to Dash. To a great extend, thanks to the great work of Amanda and her DASH: Detailed videos. Very informative.

    However
    I am curious as to what the community's thoughts are on the mechanism, that allows master nodes to vote on changes to the protocol, as well as allocation of funds. (If I have understood this correctly).

    My concern is 70% in the perception this could give and 30% the practical challenges it could cause.

    If Dash picks up, it's very likely, that the funds required to run a master node, could be (and would have to be) out of reach for the typical (non early investor, non tech geek) consumer, who I believe is the target consumer.

    So I suspect, the question that everyone will be asking, is...
    What prevents this rich minority, to vote in changes that is to their own advantage, at the cost of the average consumer, exactly like the so called 1% does now, by using their resources and influence to affect the law makes

    In these early phases, this is not a problem, as the master nodes are economically motivated, to have Dash becomes a commercial success, but once that has been achieved, won't this become a widely spread concern, among regular users?


    Thank you very much for taking the time to read this. Any feedback would be greatly appreciated

    Kind regards,
    Kim Koldtoft
     
  2. Vedran Yoweri

    Vedran Yoweri Active Member

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    Dash is just cash, it will not solve human problems like envy, influence or business sense.
     
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  3. Kim Koldtoft

    Kim Koldtoft New Member

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    I think it's fair to say that it aims to solve some of those "problems". But anyway, I don't think envy, business sense or influence are problems, and they are not really what I am talking about. Influence is fine, but being able to control a currency, by having lots of money, is something quite different.

    The point I am raising, is that the master node votes, could be seen as (and kind of is) a return to centralized currency, which is a concern, that is at least to some extend solved by other coins like bitcoin, where the miners could be seen as the voters.

    Am I making any sense at all here?

    Edit: Maybe there are some limitations on what master nodes can decide, that makes my point mute. Like I assume that can't just vote more Dash in to existence, like a state can do with paper money?
     
  4. Vedran Yoweri

    Vedran Yoweri Active Member

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    Bad or stupid proposals are being put forward all the time. MNO's will always vote for what's best for Dash. You know a better way?
     
  5. Leonidas

    Leonidas Active Member

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    You make an excellent point. Masternodes are incentivized to do what's best for the network so that dash is adopted widely, then increases in value which brings more money to the masternode. But as money is gathered, it is true that motivation can be disminished : if you become very rich and got more than your return on investment, psycholigacaly there's a difference : greed could come into play, and without even being conscious of it, your actions could contribute to the crash of the system. Why is that ? Because, even if it crashes, in the end you would have been a winner as your balance would be positive.

    I don't think restraining the power of the Masternodes is the way to go but broadening the votes could be a solution (read last time something like 1 dash = 1 vote, like that anybody who has skin in the game can have a say)
     
  6. Kim Koldtoft

    Kim Koldtoft New Member

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    MNO's will always do what's best for MNO's. So as long as what's best for MNO's is best for Dash, then yes. But I specifically mentioned that once Dash becomes main-stream, those values might no longer align.

    Imagine that 10% of the worlds population uses dash and something like one in ten thousand are MNO's. It's pretty much guaranteed that the incentives of the few will not be perfectly aligned with the wishes of the many. (sorry to sound like a socialist... and Spock)

    As for suggested solutions, I did not have anything in mind, so whatever I can come up with on the spot, won't be a complete or thought out solution. It would obviously have to move away from centralization. One simple suggestion could be.

    - Once a change is voted in by MNO's there could be a "confirmation process" or a "window of time to challenge the vote", from a 2nd group of voters/users, who's economic incentives does not align with the MNO's. This would slow the process by however much time this process would take, but mitigate the problem somewhat.
     
  7. Kim Koldtoft

    Kim Koldtoft New Member

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    Thanks. Yes exactly.

    You could make a "2 pool" voting system, so every vote has to pass 2 voting sessions.

    1. Get approved by the master nodes (like now)
    2. Once approved by the master nodes, get more than X % of the votes, from the "people" where 1 Dash is 1 Vote.

    I don't know if it's possible to make it so master nodes can't vote again as "people votes", at least with the same Dash they used as Masternotes, but that kind of restriction would make some sense t least.

    For some "technical" stuff, the "people" won't care, but if the Masternodes try to vote in something unfair like, "all Masternodes should get free sports cars" then people would take an interest, and votes against it.
     
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  8. lynx

    lynx Active Member

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    Users vote by choosing which crypto they would like to use. Competition is what keeps every market agent in check. If the interests of MNOs aren't aligned with the interests of the users, users will choose a more suitable crypto.
     
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  9. Vedran Yoweri

    Vedran Yoweri Active Member

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    The economic incentives of MNO's are the same as for everybody who owns Dash, they want the value to rise. The 1000 Dash collateral makes them much more honest in voting than somebody who owns only one.
    If you let people vote who have no stake in the value of Dash, what would happen you think? Why can't someone from Singapore vote for the next president of the USA?
    I still don't see any logic in this discussion.
     
  10. ericsammons

    ericsammons Active Member
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    You have a common misunderstanding here. Masternode ownership is *not* targeted to "typical (non-tech-geek) consumers." In fact, it requires tech knowledge and a significant commitment to Dash to run a Masternode. Dash itself - the currency - is what is targeted to non-tech-geek consumers.

    Masternodes exist to serve and perform the network's advanced features; they are not primarily meant to be investment vehicles for average users.
     
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  11. Kim Koldtoft

    Kim Koldtoft New Member

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    Yes. That's pretty much my point. So if we can mitigate this misalignment issue, we can keep Dash, a more competitive crypto.

    Which is why I was looking for some mechanism to keep the interest of the MNO's aligned or in check, with the interest of the users, once their interest inevitably miss-aligns.
     
  12. demo

    demo Well-known Member

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    Dash Address:
    XnpT2YQaYpyh7F9twM6EtDMn1TCDCEEgNX
    It also depends on how much coins they have in another monetary system.
    If Dash becomes rival to the dollar, then someone who owns a lot of dollars may want Dash's price to fall. Thats why he buys Dash, in order to destroy it.

    The same thing are doing some big companies, who buy small companies who own a brilliant patent, not in order to get profit from the patent, but in order to bury and hide the patent. Because this patent is a danger for their survival.

    The 1000 Dash collateral makes them much more honest in voting than somebody who owns only one. The 1000 Dash collateral along with how much money in other currencies they own, makes them more honest in voting.

    So the honesty criterion is not amount_of_Dash as you claim, but it is amount_of_Dash/total_fortune .

    A poor guys whose whole fortune is 500$ he is much more honest in voting when he owns 1 Dash than another guy who owns 1000 Dash but his fortune in dollars is 9000000$
     
    #12 demo, Mar 23, 2017
    Last edited: Mar 23, 2017
  13. Vedran Yoweri

    Vedran Yoweri Active Member

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    Could someone explain this to me: "But I specifically mentioned that once Dash becomes main-stream, those values might no longer align."
    How or why would these values no longer align?
     
  14. Kim Koldtoft

    Kim Koldtoft New Member

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    Let me try to explain the logic that I am advocating a little better then. Imagine a future where 1000 people own 1000 dash each, which is valued at 1 billion USD in today's money. The average user use Dash as their main currency. They get paid their salary, pay their bills ect. and obviously they will never come anyway near 1000 dash. But if they all pool together, they might outnumber the 1000 masternodes.

    The interest of the 1000 billionaires are clearly not perfectly aligned with the interest of the common users. So what is to prevent them from adding fee's that goes to the Masternotes, or some other measure of that sort, that benefits them, but harms the users.

    I understand that the users could then change to another Crypto, but that Masternodes don't care, because it's not in their interest to keep Dash alive. It's in their interest to maximize their own income. So it makes sense to have a system in place that keeps the Masternodes in check or in some way makes sure that the Masternodes incentives are always aligned with the majority of the Dash community (users).


    I apparently did not make myself clear enough. Sorry about that. I was not trying to communicate that Masternodes was not tech-geeks. I get that they are.
     
  15. Kim Koldtoft

    Kim Koldtoft New Member

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    @ Vedran Yoweri
    The logic is that everyone always have their own interest at hand, including the Masternodes. They are incentives to do whats best for Dash, because it's best for them. But if Dash goes up in value (which it would if it goes main-stream), their incentives could easily shift, so their self interest would be to get more Dash for them-self, even if it harms the overall user or the community.

    Ps. Loving your avatar
     
  16. lynx

    lynx Active Member

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    Actually, competition is the very mechanism that keeps the interest of the MNOs aligned or in check with the interest of the users. There will never be a willful misalignment, because users abandoning Dash is against the interest of MNOs.
     
  17. Vedran Yoweri

    Vedran Yoweri Active Member

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    They are perfectly aligned. Such a move would damage the credibility of Dash and thus the value of the coin. They would lose millions and millions in a day. Common users would lose very little in this case.
    I'm still missing logic in this. Explain to me why MNO's would not care if they loose al their money.
     
  18. Kim Koldtoft

    Kim Koldtoft New Member

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    They care if they lose all their money, or even any money, but that is not correlated to the overall health off the Dash community.

    For example if the Masternodes vote to create more Dash and award those newly created Dash to them selves. This will increase their own wealth (hence they will gain money, not lose them) and devalue all dash a little bit. Exactly like normal inflation, where the state creates the money, and devalues the currency for everyone holding it.

    This will benefit the masternodes but harm everyone else, given that they don't overdo it, and everyone switches to another Crypto.

    Can you not imagine a change that would benefit the masternodes economically, while damaging the overall community? And if you can't then simply add a delay to the damage, like there is with inflation. So the masternodes them selves, can sell all their Dash, before the value is harmed.
     
  19. lynx

    lynx Active Member

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    Yeah, @Vedran Yoweri , that's because it makes no sense.

    It's like a restaurant owner that managed to please his costumers so well he became a billionaire owner of a chain of restaurants. All of a sudden, he will buy a top hat and monocle and stop caring about the quality of his food. Then he can just add water to the beer and serve rotten food, as long as he doesn't overdo it.
     
  20. Kim Koldtoft

    Kim Koldtoft New Member

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    I really want to keep a positive and somber tone, but I truely think that this is a terrible and dishonest analogy.

    And clearly there are endless cases of successful businesses that have made decisions that harms their own brand and their customers, in order to gain short term benefits. So this argument kind of collapses in on itself.
     
  21. lynx

    lynx Active Member

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    @Kim Koldtoft
    It is only a poor analogy insofar as he could try to do it in secret and the blockchain is transparent. People will instantly know if there is water in the beer and how much. I stand by it.
     
  22. Kim Koldtoft

    Kim Koldtoft New Member

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    Or in so far, that you do it to such a small degree, that it harms each customer only very little but benefits you allot. Like you add 1 drop of water to each bear, and because you have 1000 restaurant, you save a fortune and the customers don't really care about 1 drop. It is exactly like inflation, which would be my primary concern.
     
  23. Vedran Yoweri

    Vedran Yoweri Active Member

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    Don't agree. Value Dash up, everybody wins. Value Dash down, everybody loses. Please provide an example for above statement, it's not realistic.
    No. I don't see the difference between what is good for somebody holding 5 Dash or 500 Dash.
     
  24. Kim Koldtoft

    Kim Koldtoft New Member

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    Super simplified example:
    I am a Masternode and I Vote to create 1000 dash and give them to me. 5 minutes after I get my 1000 dash, I sell all my (now 2000) dash at full current value.
    A few weeks later, the value of Dash will go down a little due to inflation, but I don't care, because I am out.

    In fact, I don't even have to be out. I can just sell the 1000 dash I gave myself, so even if my remaining 1000 dash, lose some of their value, it is still a net gain for me.
     
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  25. GrandMasterDash

    GrandMasterDash Well-known Member
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    There are a couple of issues here. First of all, the fixed number of 1000 dash is not only a problem to "the poor", it's also a problem from the other side; that deep pockets might be buying up whole masternodes. But then again, dash is not claiming to be a non-profit. Dash has both centralised and decentralised components. All cryptos are effectively distributed businesses with varying degrees of centralisation-dencentralised. And thus the end users ultimately decides which ones have the winning formula. The overall outcome is not a single crypto ("business"), there will be multiple winners, all with their own unique take on things. Computer programming languages would make a good analogy; there's a handful that have stood the test of time, though their position in the league tables change. More diversified cryptos are coming, such as those issued by governments.

    Regarding governance, I think it would be wise for dash to look at how decred uses PoS-PoW to manage it's protocol; everyone gets the chance to buy voting tickets and earn some rewards in the process.... but decred is a long way from being grandma-friendly.

    Generally speaking, you're not alone with your concerns. But having said that, there is a lot of stuff that goes on behind the scenes.
     
  26. Dandy

    Dandy Member

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    As a relatively fresh masternode owner that invested a big chunk of life savings into it, I can tell you that I definitely won't vote for anything that hurts Dash as a whole.
    No governance mechanism is perfect, but I think that Dash masternode system is one of the better ones and that's why I got into Dash in the first place.
    Also, I fully expect to have to invest into the hardware of the masternode down the line, so I can support the network as it grows and starts putting more demands on masternodes.

    As someone already said, cryptocurrency market is extremely competitive and people will very quickly shift to some other currency if masternodes start making bad decisions.
     
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  27. Vedran Yoweri

    Vedran Yoweri Active Member

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    This is how it works in the real world:
    - I create proposal to give myself 1000 Dash.
    - Every other MNO is like *grin* and votes it down like a mofo.
    Please come up with something realistic.
     
  28. Kim Koldtoft

    Kim Koldtoft New Member

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    The example is simple, to avoid a debate about practicalities and variables, of which there are an infinite amount.

    So another example I just made up... There are plans for a system where people can make interest on Dash if they "lock" them in a savings account (or at least so I have herd, I don't know the details). Sounds like a brilliant idea to me... So should a bigger saving yield a higher % interest, like it is in a bank? How is a decision like that, not affected by the amount of Dash you have?

    I have 10 Dash, I think everyone should get the same % of interest on their savings
    I have 1000 Dash, I think more Dash should yield a higher % of interest, exactly like it is in a bank.

    And even if this is a non issue, for this example I just came up with, it seems naive to assume that no decision like that, will ever come up, and that the people who are in the "non voting class" won't view that as a negative.

    And as I wrote in my original post, I think this is mostly a perception issue.
     
  29. Dandy

    Dandy Member

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    The % of interest should be the same, regardless of the amount (I'm pretty sure that's how it works in banks also, at least in my country). But there must be some additional income for masternodes because they also have hardware costs involved and they have to pay monthly for hosting.

    Also, if any masternode tries or even succeeds in pushing a harmful decision for the Dash ecosystem, the rest of the masternodes will quickly vote to plug that hole in the future, so it can't happen again.
     
  30. Vedran Yoweri

    Vedran Yoweri Active Member

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    MNO would choose the best option for the value of the Dash, like in every vote.
    Some choices will be hard, but that's not an argument.