compare market cap and node count and we are way ahead of the game and are already "out performing "
Why don't we halve the Masternode collateral requirement now?
- Thread starter halso
- Start date
compare market cap and node count and we are way ahead of the game and are already "out performing "
rustycase
Active member
Ultimately, this is an empirical question. If we believe reducing the collateral to 500 will lead to at least a 25% sustained price increase, we should do it. If not, then no.
Here is a summary of my analysis:
I must say, halso, I simply am unable to agree with your assumptions, and synthesis.
HUGE admission that I am a Newbie ! They write books about what I do Not know !
I am stunned The DAO has not collapsed. It's not even in zombie status... It's appreciating in value daily !
...and it's not that I do not respect the concept represented in The DAO... I Do like it !
(My problem is with the trading price. It did not suit me well for speculation.)
I do have a singular goal, and that is to support DASH.
All else is speculation, to that end.
Abuelo btc is respected because it is, what it is.
DASH is indeed many improvements upon btc, yet it has not yet gained public recognition in such spectacular fashion as those which enjoy higher market volume.
IMO, DASH could lose credibility, to some unknown extent, if the MN premium were to be halved, or even reduced.
ED's vision is a valid product with standalone merit.
I do believe respectable growth is acceptable, in contradistiction to the tumultuous frenzy of speculative activity evident in others.
The known geopolitical aspects in ownership of some digital coins is disconcerting, to me. The market Does show 'the dog wagging his tail.'
I am pleased to see DASH has not devoted energy in that respect and mining is suitably delineated. (Though I am concerned with the imminent reduction in reward.)
Best
rc
Regular fullnodes like in bitcoin - yes, of course. Masternodes - no, the point of collateral is to make sure MN quorums can't be sybil-attacked and if you already put collateral to setup MN why not getting paid for it?
rustycase
Active member
Halso, from what I have read, DASH performance is superior to btc.
From personal experience, I know I waited for the First confirmation when TX btc. Why ?
I do not think it is a problem with incentives.
Recognition shall grow, in time.
Newbie opinion !!!!
Gosh, they Do write books about what I don't know ! lol
As I said, earlier, MN Pools are indeed a valid option which would develop growth.
Best
rc
halso
Active member
ec1warc1
Active member
I am putting together a Masternode that I want to hosted in Colombia, where I live. The hosting cost starts at 90,000 pesos per month (USD$30). If I have to host 2 to get the same ROI, forget it. I will host them with Digital O or some other cheap provider in the USA. That would destroy the advantage of a distributed worldwide network, in my view - so keep it at 1000 dash per node.
rustycase
Active member
I am putting together a Masternode that I want to hosted in Colombia, where I live. The hosting cost starts at 90,000 pesos per month (USD$30). If I have to host 2 to get the same ROI, forget it. I will host them with Digital O or some other cheap provider in the USA. That would destroy the advantage of a distributed worldwide network, in my view - so keep it at 1000 dash per node.
This is Great!
I would like to see decentralized affairs conducted locally.
Perhaps, " Regular fullnodes like in bitcoin - yes, of course. Masternodes - no... " You could set up a number of regular nodes within your area and through them, promote, or even solicit funding for Master Nodes ???
Best
rc
ashmoran
Member
This question has gone round and round in my head a number of times. I think it will be easier to frame the problem if we word the question as "What is the optimal number of masternodes?" and derive the masternode capital requirement from that.
One way to look at this is in terms of democratic representation. If there are 4000 masternodes and 4000 Dash users, on average everyone gets a vote (every proposal is near enough a referendum). However if there are 4000 masternodes and 40,000,000 Dash users (let's say defined by making a Dash transaction once per month), every masternode is representing 10,000 users. 400,000,000 Dash users is one vote per 100,000 individuals.
The larger the value of the masternode collateral, the more incentive a masternode operator has to study and understand the issues required in designing a cryptocurrency. An interesting point comes when masternode income is enough to sustain its operator. Let's take 50k USD/y as an example, as it is possible to live in most of Europe (even London) with that amount of income. Then at 10% annual masternode return, a DASH price of 500 USD/DASH and a 1000 DASH collateral would give pretty much every masternode operator a very livable income.
Would it be a good balance to have 4000 full-time masternode operators holding 500k USD collateral voting on proposals in the name of 10,000 Dash users each? What if the Dash price reaches 5000 USD and there are still only 10,000 users per masternode, are the interests of these 4000 masternode operators (now holding 5M USD each) still sufficiently aligned with everyday users, or are they going to start to believe they are more important, and try to turn Dash into a "settlement layer", like Blockstream has done with Bitcoin?
But say masternode operators start acting like banking oligarchs (anyone who has used the UK banking system may be able to appreciate the it appears to be run for the banks, not by the banks) – if they can be convinced that a collateral reduction is in their interest, how low is low enough? If you could slash the annual income of a masternode operator per node from 500k USD to 5k USD, you may kick out the rich and self-entitled oligarchs (or you may not, they may just continue to run more nodes), but you also substantially reduce the return of a node and the value of holding one. Will the new owners after this round of selloffs and purchases be as incentivised to dedicate their time to making good Dash decisions as the ones who made a comfortable living off it before?
I don't have any answers to these questions, a least not yet. However, I am fairly sure they are all valid questions, ie all the cause and effect I am assuming by asking them really does play out in the real world. (If anything looks suspect, just say!)
There is existing research into modelling and simulating both democratic and economic systems, and I'm just starting to look at it now. My hope is that it will be possible to create a theory for the effect the number of masternodes has on the Dash network. Not an exact, predictive theory like relativity or electromagnetism, but one that indicates the potential effects of changing the masternode collateral from 1000 to 100 to 10 DASH, given estimates of other parameters. Sometimes surprisingly simple models can give insights into sociological situations, for example Schelling's Segregation Model – sorry for the alliteration, I couldn't avoid it.
A useful comparison is the blocksize debate in Bitcoin, because there isn't a theory for the blocksize limit, which indicates the effects of a given blocksize limit given a certain number of transactions, nodes, high and low speed network links (etc), Blockstream has been able to turn the debate into a holy war with little more philosophical merit than the war between the Bigenders and the Littlenders in Gulliver's Travels over which end of a hard boiled egg to crack open. Dash has a much better incentive base than Bitcoin, but that won't stop someone malicious coming along and trying to stall development by dividing the masternode operators. For example, if Dash starts to overtake Bitcoin, Blockstream may go back to their investors and say that their most profitable strategy is to build the Lightning Network on top of Dash, and that they will spend the rest of their millions lobbying the masternode operators to do so. Now? Convincing 4000 masternode operators each with a financial stake in the future of Dash each to do something stupid for their investment will obviously be much harder than convincing 5 miners with no stake in the future to do the same, but it will be yet an order of magnitude harder if there is a theory that says "According to our assumptions about how masternode operators work, changing the collateral/blocksize/fees/rewards like that, will have an effect something like this", because then everyone will be able to debate the cause and effect of those assumptions, instead of spreading FUD.
This is what has been going round in my head anyway. I've been reading about agent based modelling of social systems for a few years now and I've just got my head back into it to see what I can apply to Dash.
To return to your original points, I'll pick out these two, a possible advantage and disadvantage:
In short: whenever there is a debate over "Value X is too high/low", I think it could be of net benefit in the long run to create a mode for how how that variable behaves which can be simulated, in order to challenge the results of a simulation, rather than risk a stalemate of opinions. It will probably be hard work, but it may well avoid an equivalent of the Blockstream Blocksize Bamboozle being played against Dash,
This started off as a quick reply and rapidly turned into an essay (I do that a lot, sorry). I'm interested to know what anyone thinks though. I have some free time to spend on Dash, so if this seems like a productive avenue to peruse I'll delve deeper, if not, I'm interested to know why not, and more specifically why it might not solve the problems I think it might.
One way to look at this is in terms of democratic representation. If there are 4000 masternodes and 4000 Dash users, on average everyone gets a vote (every proposal is near enough a referendum). However if there are 4000 masternodes and 40,000,000 Dash users (let's say defined by making a Dash transaction once per month), every masternode is representing 10,000 users. 400,000,000 Dash users is one vote per 100,000 individuals.
The larger the value of the masternode collateral, the more incentive a masternode operator has to study and understand the issues required in designing a cryptocurrency. An interesting point comes when masternode income is enough to sustain its operator. Let's take 50k USD/y as an example, as it is possible to live in most of Europe (even London) with that amount of income. Then at 10% annual masternode return, a DASH price of 500 USD/DASH and a 1000 DASH collateral would give pretty much every masternode operator a very livable income.
Would it be a good balance to have 4000 full-time masternode operators holding 500k USD collateral voting on proposals in the name of 10,000 Dash users each? What if the Dash price reaches 5000 USD and there are still only 10,000 users per masternode, are the interests of these 4000 masternode operators (now holding 5M USD each) still sufficiently aligned with everyday users, or are they going to start to believe they are more important, and try to turn Dash into a "settlement layer", like Blockstream has done with Bitcoin?
But say masternode operators start acting like banking oligarchs (anyone who has used the UK banking system may be able to appreciate the it appears to be run for the banks, not by the banks) – if they can be convinced that a collateral reduction is in their interest, how low is low enough? If you could slash the annual income of a masternode operator per node from 500k USD to 5k USD, you may kick out the rich and self-entitled oligarchs (or you may not, they may just continue to run more nodes), but you also substantially reduce the return of a node and the value of holding one. Will the new owners after this round of selloffs and purchases be as incentivised to dedicate their time to making good Dash decisions as the ones who made a comfortable living off it before?
I don't have any answers to these questions, a least not yet. However, I am fairly sure they are all valid questions, ie all the cause and effect I am assuming by asking them really does play out in the real world. (If anything looks suspect, just say!)
There is existing research into modelling and simulating both democratic and economic systems, and I'm just starting to look at it now. My hope is that it will be possible to create a theory for the effect the number of masternodes has on the Dash network. Not an exact, predictive theory like relativity or electromagnetism, but one that indicates the potential effects of changing the masternode collateral from 1000 to 100 to 10 DASH, given estimates of other parameters. Sometimes surprisingly simple models can give insights into sociological situations, for example Schelling's Segregation Model – sorry for the alliteration, I couldn't avoid it
. A useful comparison is the blocksize debate in Bitcoin, because there isn't a theory for the blocksize limit, which indicates the effects of a given blocksize limit given a certain number of transactions, nodes, high and low speed network links (etc), Blockstream has been able to turn the debate into a holy war with little more philosophical merit than the war between the Bigenders and the Littlenders in Gulliver's Travels over which end of a hard boiled egg to crack open. Dash has a much better incentive base than Bitcoin, but that won't stop someone malicious coming along and trying to stall development by dividing the masternode operators. For example, if Dash starts to overtake Bitcoin, Blockstream may go back to their investors and say that their most profitable strategy is to build the Lightning Network on top of Dash, and that they will spend the rest of their millions lobbying the masternode operators to do so. Now? Convincing 4000 masternode operators each with a financial stake in the future of Dash each to do something stupid for their investment will obviously be much harder than convincing 5 miners with no stake in the future to do the same, but it will be yet an order of magnitude harder if there is a theory that says "According to our assumptions about how masternode operators work, changing the collateral/blocksize/fees/rewards like that, will have an effect something like this", because then everyone will be able to debate the cause and effect of those assumptions, instead of spreading FUD.
This is what has been going round in my head anyway. I've been reading about agent based modelling of social systems for a few years now and I've just got my head back into it to see what I can apply to Dash.
To return to your original points, I'll pick out these two, a possible advantage and disadvantage:
- Media bonanza - Dash now has the most nodes of all the cryptos.
- The % return per node may decrease (however this is likely to be offset by the increase in price)
In short: whenever there is a debate over "Value X is too high/low", I think it could be of net benefit in the long run to create a mode for how how that variable behaves which can be simulated, in order to challenge the results of a simulation, rather than risk a stalemate of opinions. It will probably be hard work, but it may well avoid an equivalent of the Blockstream Blocksize Bamboozle being played against Dash,
This started off as a quick reply and rapidly turned into an essay (I do that a lot, sorry). I'm interested to know what anyone thinks though. I have some free time to spend on Dash, so if this seems like a productive avenue to peruse I'll delve deeper, if not, I'm interested to know why not, and more specifically why it might not solve the problems I think it might.
ec1warc1
Active member
wow..... what can I say after that essay? You have spurred a couple of thoughts in my mind about master nodes:
1. at 4000 masternodes, 4 million Dash are kept out of circulation. Correct me if my math is wrong, but aren't there only 6.6 million dash in the first place? That means that about 60% of the currency is tied up by those providing a service for the currency, not including the miners. Most of the currency's current users are most likely participants in the maintenance of the service itself. Conclusion: there is plenty of room for new users, which as they come into becoming users, will only raise the price of the currency.
2. Going back to the original idea of the post.... should the dash required to hold a masternode be halved from 1000 to 500? The problem is that if you decrease the deposit in order to populate the network with more masternodes, the payout to the owner of each node will also be cut roughly in half. The cost to maintain such nodes will remain the same. Node holders will transfer their nodes to the cheapest hosting providers, making for clusters of masternodes in the same data centers. To make matters worse, when the next version of Dash comes out, the requirements for the server will increase, making the cost to host a masternode more expensive than it currently is. The Dash Documentation Wiki for masternodes states that Dash Evolution Masternodes Version 13.x will require:
1. at 4000 masternodes, 4 million Dash are kept out of circulation. Correct me if my math is wrong, but aren't there only 6.6 million dash in the first place? That means that about 60% of the currency is tied up by those providing a service for the currency, not including the miners. Most of the currency's current users are most likely participants in the maintenance of the service itself. Conclusion: there is plenty of room for new users, which as they come into becoming users, will only raise the price of the currency.
2. Going back to the original idea of the post.... should the dash required to hold a masternode be halved from 1000 to 500? The problem is that if you decrease the deposit in order to populate the network with more masternodes, the payout to the owner of each node will also be cut roughly in half. The cost to maintain such nodes will remain the same. Node holders will transfer their nodes to the cheapest hosting providers, making for clusters of masternodes in the same data centers. To make matters worse, when the next version of Dash comes out, the requirements for the server will increase, making the cost to host a masternode more expensive than it currently is. The Dash Documentation Wiki for masternodes states that Dash Evolution Masternodes Version 13.x will require:
High-CPU machines for heavy crypto processing (job-queue workers)
High-DISK machines for network metadata storage/archival, (third-party storage/rent-a-drive)
High-NET machines for peer-distribution (bittorrent) of: blockchain data (bootstrapping), compiled wallets, other future common downloads.
At that point, we will need node holders who can handle the higher cost of hosting, the technical know how to do so efficiently, and enough of them in order to keep the network up. The cheap solution for masternode hosting that is currently working will likely need some major tweaking. Rhaspberry Pi in great numbers? Probably not.High-DISK machines for network metadata storage/archival, (third-party storage/rent-a-drive)
High-NET machines for peer-distribution (bittorrent) of: blockchain data (bootstrapping), compiled wallets, other future common downloads.
ashmoran
Member
That's a very good point, we don't want to push masternode operators to using commodity hardware. I suspect in the long run that might solve itself, as the masternode hardware requirements grow to the point a masternode needs a dedicated server. What will prove helpful is some sort of containerisation for masternodes like Dockr that will make it easier for people to deploy their own servers rather than relying on hosted services. With any luck, the masternode income will eventually reach the point a masternode operator can pay a sysadmin part-time for work required to maintain one. I see the real value of a masternode operator is in the quality of their voting, and the server maintenance is important and necessary work, but not differentiating.
Ultimately, nothing stops all the masternode operators using the one cheapest server hosting company, so they will have to value decentralisation and some of them may have to make conscious choices to run a masternode in a different location.
halso
Active member
Great to see this thread is still annoying people's heads 2 months later!
@ashmoran you make a good point. What is the optimal number of masternodes? In the Whitepaper it suggests a collateral halving when dash reaches $100. But i presume this will be subject to a vote, and based in initial feedback on this thread, i'm not sure it would pass.
re: dash vs. bitcoin node count. The gap is narrowing, dash is rising fast and bitcoin is dropping fast. Hopefully we'll see catch up before the end of this year. When it does happen, i encourage everyone to email any journalist / blogger that has every written about crypto and spread the news.
@ashmoran you make a good point. What is the optimal number of masternodes? In the Whitepaper it suggests a collateral halving when dash reaches $100. But i presume this will be subject to a vote, and based in initial feedback on this thread, i'm not sure it would pass.
re: dash vs. bitcoin node count. The gap is narrowing, dash is rising fast and bitcoin is dropping fast. Hopefully we'll see catch up before the end of this year. When it does happen, i encourage everyone to email any journalist / blogger that has every written about crypto and spread the news.
ErrorId
Active member
I've been thinking about this myself and have come to the conclusion that the higher the price, the higher quality of investor you get. Once shared nodes that let you keep control of your private key come in the problem will be solved, unless we get there a lot sooner then I think we will.
ErrorId
Active member
To me a quality investor is someone who takes care of their investment by being active in it's governance. Without going through all the budget proposals I'd say that the highest participation was maybe around 60% of masternodes, meaning almost half of the investors didn't care enough about their investment to copy & paste a very simple command into their wallet console and guide it's development. Those are probably the same people that got in really early and mined or picked up their coins on the cheap. I think that the people getting in now are going to be much more involved.
As for point 2 I'm assuming you're talking about institutional investors. Personally I hope they keep playing with their derivatives and stay the hell away from Dash for a long time.
Also, I consider Dash one of the majors, our current price per coin is in the top 5 of all crypto-currencies and we will never have as many coins as some of the current top 10 as were going to top out around 16 million or so.
ec1warc1
Active member
I agree with @Thomas Quinlan on some of his points, for example that few newcomers will enter the MasterNode business because the cost of entry will be so high. Already more than half of the entire supply of dash is tied up in the master nodes. I must also say that owning a masternode is not the only way to make money in the Dash economy and it is possible it is not even the most cost effective way to participate. I have started mining only Dash with https://www.genesis-mining.com and I am happy with the results. No need to buy hardware, and it looks to me that I will earn my investment back in the first year, making all profits in the second year. I will be making some youtube vids about this soon. If you want to get started, my discount code is: AoN5UM - you save 3% and my mining goes up 3% for the referral - win/win! Hope the referral is ok on this forum. Thumbs down me if it sucks. But it is my opinion and I hope it is ok to say so here.
noobtrader
Active member
maybe if we limit collateral, we can limit at certain price range, so MN hosting would still be profitable.
OK, I know I might be bashed for my opinion, but, anyway: this is not about politics, this is about tech.
I don't agree lowering (or raising) the Masternode collateral limits just to please the "poor guys" or the "rich guys" in the community, because that would make no sense at all.
Also, it would be stupid to do so, just as a marketing stunt, IMHO.
This must be a technical decision: what is best for DASH performance.
But, a possible solution would be that of the spreadcoin guys: no fixed limit for the collateral, but else, a fixed optimal number of Masternodes....
...Say the developers calculate that the network needs 5k Masternodes in order to operate perfectly in the current context. So the network will only recognise 5 thousand Masternodes, and there will be a set of minimal requirements for a Masternode to be accepted, like reliance, speed, responsiveness, ping and whatever is important according to the technical point of view.
The Collateral amount will be freely set by each Masternode operator, and the bigger values will have preference over the smaller values when the nodes are similar in the above technical requirements.
This would be enough from the technical point of view of the network structure, and would, at the same time, give some peace of heart to those so worried with "unfair financial apartheid".
Free market is so beautiful!
I don't agree lowering (or raising) the Masternode collateral limits just to please the "poor guys" or the "rich guys" in the community, because that would make no sense at all.
Also, it would be stupid to do so, just as a marketing stunt, IMHO.
This must be a technical decision: what is best for DASH performance.
But, a possible solution would be that of the spreadcoin guys: no fixed limit for the collateral, but else, a fixed optimal number of Masternodes....
...Say the developers calculate that the network needs 5k Masternodes in order to operate perfectly in the current context. So the network will only recognise 5 thousand Masternodes, and there will be a set of minimal requirements for a Masternode to be accepted, like reliance, speed, responsiveness, ping and whatever is important according to the technical point of view.
The Collateral amount will be freely set by each Masternode operator, and the bigger values will have preference over the smaller values when the nodes are similar in the above technical requirements.
This would be enough from the technical point of view of the network structure, and would, at the same time, give some peace of heart to those so worried with "unfair financial apartheid".
Free market is so beautiful!
ec1warc1
Active member
So... a MN with a larger deposit would get more voting rights and earn more? Interesting idea. It could end up reducing the number of MNs because people could put all their DASH in one node and enjoy the economic benefits of a larger payout while maintaining only one node.