An Open Letter From Evan and Ryan Regarding Dash Marketing

[demo]

I remember your posts about mining. And as I already said, the fact that people had wrong assumptions about how mining profitability is going to evolve after market is flooded with ASICs (i.e. underestimated the number of ASICs that can be shipped in a short period of time) has nothing to do with governance. Market is simply reacting as it should: too much of hashpower supply with a fixed mining reward and relatively stable price makes mining not profitable - works as designed, nothing to fix here. If you think that every time mining becomes not profitable (because a lot of people started mining) block reward should be significantly increased to make it profitable again, than I have bad news for you - it doesn't work this way. This would just attract even more miners and would require to inflate the currency even more. And so on. Basically, the moment you'd try to regulate supply to make everyone happy is going to be the end of the currency.

Why the collateral fee of the masternodes is a hardcoded number (1000 dash) and it is not subject of a market negotiation? Why there is a maximum number of Masternodes and you dont let the masternodes to be as many as the market desires? Why you designed this artificial masternodes scarcity?

While you expect others to obey to the market rules, the Mastenodes aristocracy is deliberately designed (by the core team) to be a market protected element of the community. Why the core team designed this protectionism, for the benefit of the masternodes, and against the will (and the interest) of the whole Dash community?

If you really like market freedom, apply it to everyone and do not exclude the masternodes (or yourself. Being a salary paid employee, you are not fully exposed to the market, are you?) from it.

 

[UdjinM6]

Why the collateral fee of the masternodes is not a subject of market negotiation? Why there is a maximum number of Masternodes and you dont let the masternodes to be as many as the market desires? Why you designed this artificial masternodes scarcity?

While you expect others to obey to the market rules, the Mastenodes aristocracy is deliberately designed (by the core team) to be a market protected element of the community. Why the core team designed this protectionism, for the benefit of the masternodes, and against the will (and the interest) of the whole Dash community?

If you really like market freedom, apply it to everyone and do not exclude the masternodes (and yourself, as a salary paid core developer) from it.

Let me put it this way:
Why the total supply is not a subject of market negotiation? Why there is a maximum number of coins and you dont let the coins to be as many as the market desires? Why you designed this artificial coins scarcity?

If you are argueing that we should lower collateral fee to let more people host MNs, then it was already discussed a million times or so. tl;dr: This would change almost nothing. Assuming that we would lower it N times, current MNOs would just have to maintain N time more nodes which is going to bump their expenses ~N times and would also bump related network traffic N times for everyone else. Plus some new MNOs would join too but their number would be relatively small if not negligible. Overall it's going to be the same system with the same distribution of voting power but with higher expenses for everyone. That's why we are aiming to make trustless shared MNs a reality - it's the way to actually include more people in the governance process without bringing additional expenses and unnecessary traffic bloat.

 

[Checkerama]

I remember your posts about mining....

The conversation expanded into governance.

 

[demo]

Let me put it this way:
Why the total supply is not a subject of market negotiation? Why there is a maximum number of coins and you dont let the coins to be as many as the market desires? Why you designed this artificial coins scarcity?

You compare the uncomperables. The scarcity of money is unrelated to the scarcity of the masternodes. Some things need to be scarce, while some others dont. I mean , why turn the Masternodes scarce and the collateral fee stable, and not turn the miners scarce and fix the difficulty algorithm so that it will fit to the scarce number of those miners? Do you think the idea of scarce miners is absurd? The same it is with the idea of scarce masternodes.

If you are argueing that we should lower collateral fee to let more people host MNs, then it was already discussed a million times or so. tl;dr: This would change almost nothing. Assuming that we would lower it N times, current MNOs would just have to maintain N time more nodes which is going to bump their expenses ~N times and would also bump related network traffic N times for everyone else. Plus some new MNOs would join too but their number would be relatively small if not negligible. Overall it's going to be the same system with the same distribution of voting power but with higher expenses for everyone. That's why we are aiming to make trustless shared MNs a reality - it's the way to actually include more people in the governance process without bringing additional expenses and unnecessary traffic bloat.

Your approach is not scientific. There is no proof that the masternodes should be 10000 and their collateral fee should be 1000 dash. Prove it in a scientific way. For example dynamicaly and mathematicaly relate the hardcoded numbers (10000 and 1000) to the needed (by the community) bandwidth or to the needed (by the community) transactions load, and you may convince me.

 

[camosoul]

That's why we are aiming to make trustless shared MNs a reality

I'm concerned that increasing granularity will return us to hoardcoin levels of illiquidity.

The deliberately large chunks needed, and the hurdle of requiring trust in the current model, are the barriers to entry that maintain duffs in a liquid state.

I understand the objective, but it seems to ignore the trade-off that comes with it... The easier it becomes to hoard, the less will be liquid... The whole point is that it's not easy to hoard 1000 DASH, thus, smaller amounts remain liquid.

If you make it so that smaller amounts can be tied up just the same... It becomes staking, and nobody will spend.

Wasn't DASH Digital Cash? Instead, it becomes a hodl/hoard that creates more of itself instead of merely going up in fiat valuation... Same result of not being used as Digital Cash, but by a different failure mode.

It already is trustless; if you have the appropriately large chunk. The trust model of shares is a feature, not a bug. It's not supposed to be that easy...

We had this discussion way back when MNs were invented. 1000 was chosen exactly and because of what I just said. Is this yet another category in which DASH has lost it's way? Did you forget?

This would change almost nothing.

No, it would drastically alter the thing nobody wants to talk about anymore, which was the very reason for the choice when MNs were invented. The impact on MN participation and vote dynamics wouldn't change much, but liquidity would shrink to nearly nothing. It'll be PeerCoin all over again.

 

[UdjinM6]

I'm concerned that reducing granularity (increasing duff resolution) will return us to hoardcoin levels of illiquidity.

The deliberately large chunks needed, and the hurdle of requiring trust in the current model, are the barriers to entry that hold duffs in a liquid state.

I understand the objective, but it seems to ignore the trade-off that comes with it... The easier it becomes to hoard, the less will be liquid... The whole point is that it's not easy to hoard 1000 DASH, thus, all smaller amounts remain liquid because there's no advantage in the alternative...

We are thinking about introducing a major/minor share system i.e. to became a masternode some set of shares would have to have at least one major share. And if the major share would be smth like 600 DASH and minor smth like 100 DASH I don't think it would affect the system too much.

 

[demo]

We had this discussion way back when MNs were invented. 1000 was chosen exactly and because of what I just said. Is this yet another category in which DASH has lost it's way? Did you forget?

No, it would drastically alter the thing nobody wants to talk about anymore, which was the very reason for the choice when MNs were invented. The impact on MN participation and vote dynamics wouldn't change much, but liquidity would shrink to nearly nothing. It'll be PeerCoin all over again.

So 1000 dash as a masternode collateral fee, was selected in order to preserve liquidity?
That's interesting, I never thought about it!
But how this 1000 number has been selected? Why not 999 or 1001? Is there any math for it?
Lets say that the masternode collateral fee is reduced to 500 dash, and the masternodes max number remains stable to 10000. Doesn't this increases liquidity?

You missed some important parameters:
In order for liquidity to shrink to nearly nothing, you have to both decrease the masternodes collateral fee AND increase the maximum number of masternodes, AND keep stable (or increase) the masternodes reward payment.

How much to decrease or increase these parameters? Lets vote the numbers of course!

 

[demo]

You missed some important parameters:
In order for liquidity to shrink to nearly nothing, you have to both decrease the masternodes collateral fee AND increase the maximum number of masternodes, AND keep stable (or increase) the masternodes reward payment.

How much to decrease or increase these parameters? Lets vote the numbers of course!

Furthermore, and as long as the above parameters are correlated in order to affect liquidity, you should be able to vote these numbers using sliders.

 

[GrandMasterDash]

I agree, we shouldn't be solely encouraging hoarding. However, having said that, I'm happy with the idea so long as there is a counterweight that encourages spending. Perhaps the hoarding can be linked to merchant discounts in some way?

Spending X at a listed merchant entitles you to save X for Y days?

 

[Checkerama]

I'm concerned that increasing granularity will return us to hoardcoin levels of illiquidity.

The deliberately large chunks needed, and the hurdle of requiring trust in the current model, are the barriers to entry that maintain duffs in a liquid state.

I understand the objective, but it seems to ignore the trade-off that comes with it... The easier it becomes to hoard, the less will be liquid... The whole point is that it's not easy to hoard 1000 DASH, thus, smaller amounts remain liquid.

If you make it so that smaller amounts can be tied up just the same... It becomes staking, and nobody will spend.

Wasn't DASH Digital Cash? Instead, it becomes a hodl/hoard that creates more of itself instead of merely going up in fiat valuation... Same result of not being used as Digital Cash, but by a different failure mode.

It already is trustless; if you have the appropriately large chunk. The trust model of shares is a feature, not a bug. It's not supposed to be that easy...

We had this discussion way back when MNs were invented. 1000 was chosen exactly and because of what I just said. Is this yet another category in which DASH has lost it's way? Did you forget?

No, it would drastically alter the thing nobody wants to talk about anymore, which was the very reason for the choice when MNs were invented. The impact on MN participation and vote dynamics wouldn't change much, but liquidity would shrink to nearly nothing. It'll be PeerCoin all over again.

YEEEEEEEEESSSSSSSSSSSSSS someone else that gets it!!!!!!!!

 

[Checkerama]

So 1000 dash as a masternode collateral fee, was selected in order to preserve liquidity?
That's interesting, I never thought about it!
But how this 1000 number has been selected? Why not 999 or 1001? Is there any math for it?
Lets say that the masternode collateral fee is reduced to 500 dash, and the masternodes max number remains stable to 10000. Doesn't this increases liquidity?

You missed some important parameters:
In order for liquidity to shrink to nearly nothing, you have to both decrease the masternodes collateral fee AND increase the maximum number of masternodes, AND keep stable (or increase) the masternodes reward payment.

How much to decrease or increase these parameters? Lets vote the numbers of course!

While it does liberate half of the currency the MNs already possess, it also increases centralization of masternodes - people who now had 1000 DASH will just turn it to 2 masternodes if they can afford it, and the barrier of entry would be that much easier for others already hoarding their DASH and saving it till they can dump it.

The only way to ensure constant MN rotation is to decrease their reward system by a large amount - theres no reason they should both be winning in both the valuation of their 1000 DASH AND in a 8% return per year of their investment (which right now makes a retardedly large monthly dividend for simply maintaining a server which is, at best, a 100 dollar per month fee)

 

[GrandMasterDash]

...which right now makes a retardedly large monthly dividend for simply maintaining a server which is, at best, a 100 dollar per month fee

Except you forgot to account for the upcoming dedicated hardware, co-location and maintenance costs. Or the redundancy and recovery plan to stay online 24-7 . Trust me, the thought of losing thousands of dollars is a VERY GOOD incentive, not least because dash is competing with other masternode systems.

 

[TroyDASH]

While it does liberate half of the currency the MNs already possess, it also increases centralization of masternodes - people who now had 1000 DASH will just turn it to 2 masternodes if they can afford it, and the barrier of entry would be that much easier for others already hoarding their DASH and saving it till they can dump it.

The only way to ensure constant MN rotation is to decrease their reward system by a large amount - theres no reason they should both be winning in both the valuation of their 1000 DASH AND in a 8% return per year of their investment (which right now makes a retardedly large monthly dividend for simply maintaining a server which is, at best, a 100 dollar per month fee)

View attachment 5554

Everyone who holds dash, not just Masternode operators, reap the benefits of the increasing valuation of their holdings. I think I mentioned in one of the Reddit threads, this year non-masternode dash holders have made roughly 9500% ROI, and masternode operators (and MN share owners) have made about 10300% ROI, because of the additional 7-8%. If you're claiming that something is unfair about the MN payments, the increase (or decrease) in the value of the currency shouldn't be factored in.

 

[Checkerama]

Everyone who holds dash, not just Masternode operators, reap the benefits of the increasing valuation of their holdings. I think I mentioned in one of the Reddit threads, this year non-masternode dash holders have made roughly 9500% ROI, and masternode operators (and MN share owners) have made about 10300% ROI, because of the additional 7-8%. If you're claiming that something is unfair about the MN payments, the increase (or decrease) in the value of the currency shouldn't be factored in.

Your common sense seems to be off - did you just breeze over the fact you have 1000 DASH locked as well? So that means you're making over twice as much as the average DASH holder (10300 + 9500).

 

[Checkerama]

Except you forgot to account for the upcoming dedicated hardware, co-location and maintenance costs. Or the redundancy and recovery plan to stay online 24-7 . Trust me, the thought of losing thousands of dollars is a VERY GOOD incentive, not least because dash is competing with other masternode systems.

Right, because the DASH community is going to support equipment that is still theoretical, doesn't exist yet, and hasn't even been priced yet so you could sit with 20,000% ROI for barely doing anything more than sit on more DASH than the average user holds?

Save the mental gymnastics for the olympics, fellers. You aren't going to convince anyone but yourselves that MNO profits are ridiculously high for doing nothing.

 

[GrandMasterDash]

Right, because the DASH community is going to support equipment that is still theoretical, doesn't exist yet, and hasn't even been priced yet so you could sit with 20,000% ROI for barely doing anything more than sit on more DASH than the average user holds?

Save the mental gymnastics for the olympics, fellers. You aren't going to convince anyone but yourselves that MNO profits are ridiculously high for doing nothing.

Aaah, poor Checkerama. did mummy not buy you a masternode for Christmas? Life so unfair!

But, having said that, if you wasn't so busy sulking about life's inequalities, you'd know there are many other projects with very affordable masternodes. My apologies for throwing mental gymnastics to come to that conclusion.

 

[JGCMiner]

???

Why did this turn into yet another “complain about MN income” thread? Objectively, that is way off-topic. I hope the mods take care of this.

There are other places in the forums where this subject can be discussed.

 

[TroyDASH]

Your common sense seems to be off - did you just breeze over the fact you have 1000 DASH locked as well? So that means you're making over twice as much as the average DASH holder (10300 + 9500).

Why are you adding them?
10300% = how much MNOs made
9500% = how much non-MNOs made
10300/9500 = 8% more, just as to be expected.

 

[Checkerama]

Why are you adding them?
10300% = how much MNOs made
9500% = how much non-MNOs made
10300/9500 = 8% more, just as to be expected.

*facepalm* because your 1000 DASH is not spent, it is locked, so your 9500% calculation is how much you have also made off of holding your 1000 DASH. the 10300% is simply off of the 8% return per year.

 

[Checkerama]

???

Why did this turn into yet another “complain about MN income” thread? Objectively, that is way off-topic. I hope the mods take care of this.

There are other places in the forums where this subject can be discussed.

Actually it was a "how do we not allow DASH to turn into a hyperdeflationary currency where everyone simply hoards it" discussion before someone decided they were gonna pull a fast one and try to justify their ridiculous ROIs. I can't allow that.