Venezuela: Why the crypto price drop and bear market is positive for mass adoption

[DeepBlue]

With the significant price drop in the entire crypto market many people have expressed their discouragement and dismay about the loss in value of DASH at this time. However there is an upside to this drop in price.

The following is my opinion only and not intended as financial advice.
When the DASH price was high real world users (not speculators) to the market were put off from buying DASH because of the high price. Now that the price has significantly fallen however those very same people now have a opportunity to buy DASH with considerably less risk. The other important factor consider is the large whale speculators that have millions to invest are currently sitting on the sidelines waiting for the bear market to end. In my opinion this is the ideal time for real world users however to enter the market. Millions of people in Venezuela could consider buying DASH with considerably less risk of significant decrease in prices, since a large amount of the price fall has already occurred. Yes, the price could fall further however with DASH we have the Masternodes that have collateral tied up with DASH and Masternodes do not tend to sell. This will add some stability to the price once the speculators have left.

There are currently 4871 Active Masternodes currently according to https://www.dashninja.pl and 5005 if we also include the inactive Masternodes. Since the inactive masternodes have also not sold this gives a total of locked in DASH of:

5005 x1000 = 5005000 DASH locked up by masternodes and inactive masternodes

According to coinmarketcap.com are 8,508,492 DASH coins available on the market. This would mean, under worse case scenario, even if everyone who does not own a masternode sells their DASH (which is very unlikely to happen) this would give a DASH base price of 37.64 USD

(5005000/8508492 x 64) = 37.64 USD

Since MNOs are investing for DASH for the long term this means my estimate for the worse possible case scenario for DASH to fall to around $40 USD .

Once again I am stating this is not financial advice. It is just some approximate calculations showing that the rate of drop of price is likely to significantly slow down since it appears the worse of the fall may possibly be over. Provided the MNOs keep their masternodes and believe in DASH long term future new entrants to DASH have an opportunity to enter the market with a much smaller risk of loss due to speculative investors. This is exactly what we want. We want all the speculative investors to leave DASH so that the price stabilises at an affordable level for real world users e.g in Venezuela to start taking up DASH.

I believe that the DASH price drop is very beneficial for real world users to start to take up DASH and for this reason I believe the price drop is one of the best things that could have happened for DASH for mass adoption in Venezuela.

We are now at the point of DASH taking off in Venezuela with the large franchises like Church's chicken and Subway now accepting DASH, with the likelyhood that other big brands may also see the benefits that DASH is bringing to these businesses and feel encouraged to follow suite. It means that real world adopters that get on board now could well benefit from the DASH price rise later on.

We need real world adopters and long term believers and investors (MN). We do not want speculators that can only cause wild fluctuations in price.

If we also look at the charts at coin market cap you will see that after a huge drop in a cryptocurrency it enters a long period of a relatively stable price. After Mount Gox was hacked and the bitcoin price had fallen to around $200 the price stayed relatively stable around that value for around two years before it started rising again. this is exactly what we want. We do not want volatility. We want a stable price so that real world users can get on board now.

In my opinion now could be one of the best times for real world adopters to get on board with DASH and that is how we build a stable currency.

 

[Quentin]

Hi DeepBlue,

Basically what your formula shows is
5005000/8508492 x 64 = proportionOfDashLockedByMasternodes x CURRENT price. The thing is, if we take the same formula one month ago where the number of masternodes and coin supply was similar and the price was at 135$, by following your reasoning, that would give a base price of DASH of about 80$. But today we see that we are significantly lower than this base price.

Clearly to me this reasoning is not applicable since to my opinion (but I am not an expert at all...) prices in a speculative market is almost entirely fixed by trading, more specifically on the order book and on the liquidity associated. Yes that's true that the coins locked by masternodes can not be sold, but it also remove some trading liquidity.

Let's consider the extreme case where all the DASH are locked in masternodes and only 1 DASH is available for trading. If the order book only contain one selling order and a seller decides to sell it at 1$, so dash price will be at 1$ and the market cap at 8,5 millions approximately.
What I want to say is that coins locked in masternodes don't necessarily impact the price in a positive way. The fact is, at the time of writing, DASH lost 95,89% from ATH, while "similar" coins without masternodes like monero or litecoin "only" lost 92,79% and 92,85% respectively.

Yes the bear market will last a long time and we have to be prepared for it T_T
However, I am very happy to hear Ryan that DCG takes very important decisions and makes sacrifices to make the group sustainable as long as possible, I feel VERY grateful and proud of the ecosystem at this right moment, really

I also think that low prices helps to adoption since people know that the price should reverse at a certain point, but I would say that high prices don't hinder adoption also(I know that you did not deny it in your post) : with high price, you simply buy less DASH, but you still have DASH to buy items, whatever you have 0.03 or 0.5, and I am not sure it makes so much differences in practise...

 

[camosoul]

This would mean, under worse case scenario, even if everyone who does not own a masternode sells their DASH (which is very unlikely to happen) this would give a DASH base price of 37.64 USD

The market price does not act in this linear fashion, not even close... As with a few of your other posts, your optimism seems to be based on not understanding things.

"That's not how this works! That's not how any of this works!"

As much as you hate me for it, I will continue to expose you to reality and you can be offended and triggered instead of learning from it...

It's entirely possible for every masternode to HODL, and half of the current liquid holdings to also HODL, and still go back to pennies.

Whether or not that happens depends on DASH actually doing something productive.

Instead of sitting on the potential utility of features, causing those features to become kinetic utility.

The hype of promoting one's self as the next big thing someday maybe, get on board, we're going to the moon; is dead.

The fools got burned, and the clueless are still clueless.

All the historical chart analysis and Ouija Boarding of the "analysists" means nothing at this point. This was not an arbitrary crash. It's a fundamental shift in the underlying support no longer being hype, and now people who expect actual results and a real foundation in where they put their money.

2019 will be the year of "put up or shut up." And even at that, its likely to take a lot less than a year to be decided. Crypto moves at the speed of crypto, which is faster than anything else ever. Realistically, it'll likely be decided by end of Q1 2019. DASH doesn't seem to be in the running at all...

DASH could have made 2015 the year of "Slaughter by the massively superior product," but DASH failed to make the move... DASH has allowed over a dozen golden opportunities to pass it by because it's focus is in the wrong place. Now DASH is playing catch-up to the very game that it invented... And, I don't see much being done to actually catch up. DASH has focused on technical perfections that really don't matter that much while the rest of the world passed it by. DASH chose to dwell in the space well beyond the point of diminishing returns.

The only real advantage DASH has now is in hosting the blockchain on MasterNodes and DAPIing all their clients into light clients, to push the delimiter between private and public blockchains closer to the public side. Even that is tenuous since no blockchain can be perpetual. Perpetual BlockChain is Chronic BlockChain. At best, DASH can buy itself time to Borg itself the BlockChain replacement tech that some other one-trick-pony invents, by being able to mandate more storage from the MNs. Something which is likely to take the simple form of roll-forward MN proxy transactions that allow a rolling ledger, and all other advancements merely serving as compression.

Pretty much everything else that's been done is a very over-polished turd.

One can argue perfection may be very helpful, and we'll likely see a less perfect model gain some adoption only to collapse on it's rickety foundation... But history is rife with "good enough" beating out "perfect that failed to launch." I'm convinced we're watching that happen right before our eyes in DASH.

VHS beat BETAMAX, and they both beat LaserDisc... That was a race where the crappiest, lowest quality, clumsiest, and most expensive one came out on top! But, who uses any of those today? The worst option won, and then became extinct due to other developments... Sadly, that looks like the path DASH has chosen.

 

[DeepBlue]

I stand corrected on my proposed calculations of the minimum DASH price thanks to @Quentin and dare I say it @camosoul. The minimum price indeed could be lower than $40 USD even if MNOs don't sell out because it depends on the price that people are willing to pay for the DASH on the open market.

However I stand by my comments that the significant price drop is beneficial to real world user uptake.

 

[DeepBlue]

One other, maybe unseen way the price drop is of great value is that it shows us that we need to find a way to keep stability in the price. Every time there is an issue that affects crypto mass adoption it points to the very features and developments we need to create to deal with that issue. For the price drop issue I have suggested a solution that we could develop here:

https://www.dash.org/forum/threads/what-dash-needs-to-set-it-above-all-other-cryptos.43036/

We want as many problems as possible to arise. Then we solve each problem one by one. This is a painful experience to go through, but it is pointing the way to how we will establish DASH as a major world currency. If we tackle each problem, each obstacle and each drawback with a solution we get stronger and stronger with time. Eventually organizations and individuals will want to start using DASH because we will deal with all problems and issues that are currently arising from using it. Each obstacle and drawback is of tremendous value if we work consistently to address that issue and to remove, one by one each obstacle.

 

[camosoul]

It is the adoption that must push the price ... and not the other way around.

Precisely. 2017 was nothing but Tulip FOMO. Nothing of substance was done.

Even those who don't really know what the hell is going on are wary. They fear what they don't know much more, and FOMO will not override it again. Even legitimate projects, like DASH, will be met with skepticism and outright rejection simply for being mentioned. at all. It'll get everyone's FOMO resistance hackles up. So much as mentioning a crypto will trigger instant "IT'S ALL HYPE, SCREW YOU SHILL!!!" responses. I've seen a bunch of this already... Mention any crypto's name, the rage instantly ensues...

The path for "adoption" has never been steeper...

This "stablecoin" non-sense is a premature band-aid of people trying to get rich quick off of forcing a thing before it's time. It's the sae driving factor of every ANN thread in 2011, tot he scam ICOs still coming up today. It's just a different angle posing as a solution. No different from any other one-trick-pony coin, but this one-trick is a popular buzzword tied a perceived issue that it, in the end, won't fix. It appears substantive, but, again, only when viewed through eyes of ignorance. Maybe something will come of it. who knows. DASH figured out a long time ago that one-trick pony coins have good ideas that can be combined to do something actually useful. Just Borg it...

PeerCoin's proof of stake, useless on it's own, was morphed into Proof of Service for MasterNodes.
Storj morphs into DashDrive.
DAO Blockchain voting, er, well the budget/governance is a calamity, but it's there. The clay can be molded, if ever someone so decides...
Electrum Light Clients with Trusted Servers becomes DAPI.
Crude CoinJoin is barely recognizable as PrivateSend improves it into real Steganographic Privacy. It still needs some love; moar speed (but not so much it defeats the purpose) and massive dust collection superblocks maybe?

...resistance is futile.

If tomorrow you stopped financing proposals, the use in Venezuelan and markets of that type simply would disappear, because Dash is not an adequate means of payment. Without a Stable coin, it is so inadequate, even for a country in hyperinflation ... like what Dash is priced against the dollar, it's that simple.

But it is amazing the ability of this project to live behind reality.

Build it and they Will come has morphed into "Keep building forever, no one can come because the doors are still closed for perpetual renovations..."

I get that, by far, the best part of DASH is it's developers. But, developing can't be the only thing you do. So far, everyone not coding has proven to be ideologically venomous dead weight.

 

[camosoul]

Lolwut?