The Cryptosphere Teaches Economics (Dash is to the cryptosphere as Rome was to Eras….)

The Cryptosphere Teaches Economics

We do not learn economics from sitting in class and listening to a professor. We solely learn economics through practice. The cryptosphere offers one of the top places to learn economics in practice because we see how economic actors behave with each cryptocurrency or crypto-asset’s constructed reality. Since this reality varies significantly, the behavior of actors will vary – for instance, an inflationary cryptocurrency will have far fewer savers than a deflationary cryptocurrency. This page also explains some elements on FinTekNeeks EcoRealities.

The Basics

Bitcoin proves that good ideas are copied, creating competition. When I was a boy, I would get frustrated when my brothers would copy me until my granny pointed out one time that “imitation is the sincerest form of flattery.” She was right. No one copies bad ideas because they’re bad ideas, but good ideas will have thousands of imitations. When people tried to argue against bitcoin because “I could just copy it” I was laughing so hard at their pathetic arguments because it actually proved the very opposite of what they were saying! If bitcoin was a terrible idea, it would have no one trying to imitate it and yet look at how many other copies of it exist. In economics, we call this competition, but the winner is generally the early bird.

Steem teaches inflation. The cryptocurrency Steem experiences 100% inflation per year forever, unless this is later changed.  When I first warned people of this fact, no one cared because “OMG, bright shiny speculation” and there were some people who were dropping $10,000 into the currency Steem at $2+ per Steem, thinking that it would eventually rise to $100. Then inflation did what it’s good at: more Steem kept being printed and people who actually value their time and money didn’t buy or hold onto Steem and the result was that it inflated. In fact, Steem experienced such strong inflation that after we suggested to get rid of it, Steem subsequently crashed over 90% in value! The great thing about Steem is that it’s teaching people how destructive inflation is. As my buddy Fred pointed out, he saw his account “value” drop 80+% in a few months. Does low inflation sound like a problem to you? Didn’t think so.

Zcash shows us a supply shock. Zcash’s first day of trading came with only 100 Zcash. There were points during this day that people were paying over 1000 bitcoins (about $730,000) for 1 Zcash.  One Zcash. Welcome to a supply shock! If the world ran low on water tomorrow because of a major drought, you’d see the price of water rise so fast and furious that you’d be horrified at the prices some people would pay around the world. In fact, as I type this right now, there is a shortage of sugar in Egypt – a supply shock due to low supply and the result is massive inflation in the price of sugar. Supply shocks are painful for most people, though in the case of Zcash, early investors were just fools and fools and their money are soon parted.

We noted that Zcash was significantly overpriced and our theoretical FinTekNeeks Hedge Fund has been obliterating the Zcash longs. As I wrote about Zcash, which is one of many reasons I have no interest in it from the long side:

From my view, it lacks any of the infrastructure that bitcoin has and the community is solving a problem that’s already been solved (Dash, Monero, Shadowcash, Boolberry, etc), so they’re late to the party. Even if they later catch up completely on privacy, these other cryptocurrencies are two steps ahead of them and are working on the next innovation.

In most cases, supply shocks bring a lot of economic hardship to people, such as the sugar supply shock in Egypt that is presently underway (listen to my talk on
blockchain-based solutions with commodities where I mention it). Zcash is not comparable as it was self-inflicted, but it does highlight a good example of one.

Dash is to the cryptosphere as Rome was to Eras. The Roman Era lasted from about 800 BC to 1400 AD – an era that lasted over 2000 years (Roman Kingdom, Roman Republic, Roman Empire, Byzantine Empire). Rome started as an early agricultural empire that went unnoticed for quite some time, but was fundamentally founded on the principal of the natural republic – a system where people with merit rose to the top and ruled over those without merit. Dash is the closest model to the Roman Era in the cryptosphere; with its Masternodes, governance model, and miners, Dash provides users with routes to help govern the success of Dash. For a simple example of this, you can earn 8.65% Dash a year with a Masternode, but it requires 1000 Dash principal. Noting that you will have to set aside Dash for this, would you vote on ideas that will hurt Dash when you’re holding a lot? No. This is what the Roman Era understood and this is what Dash also gets. In modern times, we teach this system in game theory and advocate that a system which encourages cooperation over the long run will succeed for a long time.


Supply and demand both impact price, though other parameters can have an impact, like the belief that a label has value due to it being produced by a manufacturer. In the case of Bitcoin and Dash, we measure supply by the estimated total in existence, whereas with Platinum, Gold, and Silver, we measure these in the current estimated total measured in ounces. These precious metals do have new supplies coming online at certain rates – for an example, Gold is seeing about a 2.2% increase in its supply while Platinum is seeing about a 1.5% increase. In the case of Oil, we measure the supply in total barrel production worldwide. Unlike the cryptocurrencies and precious metals, oil production is in permanent decline.


Ratios are economic and financial measurements meant to convey the value and pricing accuracy of an item. A simple example of this is a price-to-earnings ratio; a security with a price-to-earnings ratio of 200 means that the security’s price is 200 multiples of its earnings. Our ratios look at the supply ratios to compare value.


Indicators show health assessments or measurements of economic parameters. For an example, if inflation is 3.5%, this is an inflation indicator showing that the currency experiencing inflation is losing 3.5% of its value every year. Economic Indicators and Strategies are exclusive for clients and these update from time to time so that clients know how we see markets and where we see opportunities. For the Beta release, the Indicators and Strategies are the FTN COSIWA, FTN Inflation, FTN NII, and FTN Allocation.

Testnet Release: Dash Payment Processor / WooCommerce

Dash Payment Processor - Checkout Process (2).png.jpeg

On behalf of the Evolution Backend team I’m pleased to announce the ‘testnet’ release of Dash Payment Processor. This system is meant to be operated by a merchant to allow for the usage of Dash as a payment option without third parties being involved.

The quickest way to get a feel for how this system works is to visit and place an “order”. You’ll notice that after the submit button is pressed a response will be provided back containing payment information. If the requested payment is sent you’ll see a “Payment Callback” occur. It’s also worth mentioning that this system fully supports InstantSend.

Included in this release is a WooCommerce Plugin. This plugin was created to act as a “Proof of Concept” for the system as a whole. It enables WooCommerce to use the Dash Payment Processor as it would any other payment method. Plugins and extensions for other e-commerce platforms can be developed in the same way; these libraries facilitate the checkout process and also allow for block confirmations to occur before the sale is finalized. A demonstration of this plugin is available at

Dash Payment Processor uses a BIP32 HD Wallet Seed or Electrum Wallet Seed as the basis for Payment Address generation. More information on this and other mechanics of the API is available in the Official Project Wiki.


Official Project Wiki:

Technical Details:
Interested in setting up your own Payment Processor? There’s a bit of setup involved, if you have any questions please contact me through PM and I’ll try to give you a hand as quickly as I can.

Prerequisites (Ubuntu 14.04 or 16.04 recommended):

1. Node Version Manager:

2. LAMP Stack:…x-apache-mysql-php-lamp-stack-on-ubuntu-14-04

3. WordPress:

4. WooCommerce:

Part 1: Install Dash Payment Processor

nvm install v4.0.0

(close terminal window and reopen for nvm to take effect – important!)

npm install -g bitcore-node-dash

bitcore-node-dash create mynode -d ~/.bitcore/data –testnet

cd mynode

bitcore-node-dash install insight-api-dash

bitcore-node-dash install dash-payment-processor

cd node_modules/dash-payment-processor/config

nano AppConfig.js // configure wallet seed and worldcoin api key

cp DBConfig-template.js DBConfig.js

nano DBConfig.js // add mysql database user/pass

cd ../resources

mysql -u<mysql username> -p < mysql-schema.sql

cd ../../../

bitcore-node-dash start

At this point, you should have a full Bitcore node up and running. This node will sync the entire Dash Blockchain and provide a local Insight API that the Payment Processor can use to detect and verify transactions. At this point we can proceed with installing the WooCommerce plugin.

Part 2: Install the WooCommerce Plugin

1. Download from

2. From the WordPress Admin interface, click plugins then click “Add New”.

3. At the top of the screen find the “Upload Plugin” button and choose the zip file download previously.

4. Click the “Activate Plugin” button, once the plugin has been activated you’ll find it included in the listing of Installed Plugins.

5. From “Installed Plugins”, locate “Dashpay – WooCommerce Gateway” and click on Settings.

6. Select “DASH Checkout” from the list of available payment methods.

7. Check the “Enable this payment gateway” checkbox.

8. Configure the “Payment Service API” and “Insight API” option to point to your server.

Dash’s More Incredible 2016

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I’ve been a bit busy this month, so I’ve been putting off writing this year’s letter. But this morning at 3:30am, I awoke from a dream that ended with an unidentified woman slowly telling me in a calm and tranquil voice that “2017 is the year Dash proves itself to the world.” Sadly, this is not simply a made-up story off of which to base my letter. It really happened, and that prompted me to start writing immediately. Besides illustrating that I ponder Dash entirely too much, the woman’s phrase summed up perfectly where I think the project is right now… on the verge of proving itself to the world, like a rumbling volcano sitting right below the surface waiting to explode.

Rereading the last letter, 2015 was, by all measures, an incredible year. InstantSend was introduced in the spring and the current iteration of the budget system was released in August. Our market cap grew 112% that year, much faster than Bitcoin’s 51%.

Even if you’ve read the article before, I encourage you to read it and reflect on how substantially our position has changed over the last year. Although our future seemed uncertain at the time, early signs of the budget system’s impact were beginning to emerge. We’d sent Evan to a couple of events, acquired the domain, and set aside some funding for the team. It was a modest start.

In last year’s letter, I recanted on promises of predictions for 2016, because “predictions have a funny way of later making you look quite stupid.” Instead, I made a resolution to increase my commitment to Dash in terms of time and resources.

Having successfully avoided the pitfalls of making predictions, I instead became the victim of the pitfalls of making commitments. Passions, it turns out, have a funny way of later making rather modest commitments into exceedingly large ones. I promised to buy another masternode, but I bought many more than that. I promised to apply substantial time to the project and in April quit a six-figure job to join Dash full-time for less than minimum wage.

I ended last year’s letter with a call to action, with a message of hope that I could inspire readers to find new ways to contribute… vote, introduce Dash to people you know, start a masternode. It seems that many of you felt the same call of passion as I did. Every one is its own unique story and journey, visionaries that see where Dash is headed, each one finding new ways to apply their talents toward the betterment of Dash.

Amanda B. Johnson discontinued The Daily Decrypt to focus on a dedicated Dash: Detailed show. Several of our developers quit more lucrative positions to join Dash full-time. There are literally dozens of similar stories — individuals making sacrifices to become a part of this amazing new type of organization, and help it succeed.

“If we all made contributions large and small, what will we be saying at the end of 2016? What will the world be saying about us at the end of 2016? Time will tell.” This was the question I left for the year ahead to answer. So what did time tell us? Simply put, Dash is well on its way toward a great destiny.

The results are astounding. Our market cap growth accelerated to 289%, once again more than double Bitcoin and the market as a whole. Our price increased 240%. Our budget has more than tripled over the last year, which is enabling us to open offices, hire more developers, sustain ongoing PR and marketing efforts, hire more business development reps, and fund integration efforts with even the industry’s largest players.

As we’ve grown, network health measures have improved. Here are some highlights from the fourth quarter. Our daily price volatility fell by almost half, hitting a record low and making the currency less risky to hold. Our average daily trading volume was up an astounding 1,742%, breaking the previous records from 2014. Total transaction fees also hit a record, which are generated primarily from increased use of our premium features like PrivateSend and InstantSend. Payment volume increased 243%. Hashrate increased 1,416%, making the network more secure than ever. Our YouTube subscribers grew 49% from just the third quarter.

Our community knows that Dash — and what we are doing — is completely different from the rest of the industry. We have solved the major pain points with governance and funding sustainability, and remain focused on delivering a great user experience with InstantSent, PrivateSend, and Evolution. We know that our vision for cryptocurrency will dramatically expand its usefulness and provide financial freedom to an incredible number of everyday people. I believe 2017 is the year our vision begins to be appreciated by the wider cryptocurrency community.

By all measures, we enter 2017 in a markedly different position. It is a position of strength, stability, rapid growth, increasing professionalism, and focus. More importantly, the industry in which we operate is beginning to open up to the idea of multi-currency operation, and our project is earning respect from industry leaders, decision-makers, and influencers. Ethereum was the big story of 2016, and despite its challenges with The DAO and Ethereum Classic, it paved the way for alternatives like ours. From my vantage point, I am perceiving a dramatic change in the tone of conversations with executives of leading companies and major institutions, and we are likely to see that translate into some amazing developments this year.

In 2017, business development will become a major theme, as we continue working full-steam on delivering Evolution. We now have full-time integrations support. We are also expanding the business development team, and formalizing our strategy from “opportunistic” to “targeted”. Our pipeline of new integrations has never been stronger, or easier to develop.

Given our track record, our newfound strength, and the new environment in which we operate, I’m going to go out on a limb this year to make several bold predictions for 2017. I have that much confidence in the outcome. First, Dash will — for the fourth year in a row — outperform the growth rate of both Bitcoin and the digital currency industry as a whole by at least double. Second, Dash will grow at least triple digits. Third, Dash will be ranked within the top four by market cap before the end of the year. And most importantly, Dash will dramatically expand its reach and relevancy in the market, expanding our connective tissue across the industry through our business development efforts.

I believe that 2017 is the year Dash truly finds its legs and proves this morning’s dream to be true. But we can only do it together. For those that have heeded my call from last year, thank you… just look at what we’ve achieved! For those that haven’t, but are passionate about Dash, I’d encourage you to step off the sidelines and dive in to the project in any way you can. If we all do that, 2017 can be the year we all changed the world of digital currency and financial services forever.

The grapes this year are looking awfully plump!