Quote from: toknormal on Today at 09:51:15 AM

Quote from: thunderjet on Today at 05:23:30 AM

DASH mining is extremely unprofitable for a long time and what decision DASH team made about it - to make it even more unprofitable ,giving more of coins to masternodes. It is insane decision for one POW coin

It sure is. Because there are 2 significant omissions/flaws in the reasoning behind Spork 21 IMO:

   1. expressing and targeting ROI in Dash instead of USD (irrelevant to an investor)

   2. modelling miners and masternodes as demographic groups instead of compoundable factors in the reward function (makes the analysis almost sociological in nature instead of economic)

So, to correct for these two errors we see that a completely different picture emerges as to the optimal approach.

Masternode ROI now becomes: (Reward + Capital Gain or Loss) / Collateral
Mining ROI now becomes: (Reward[at mining difficulty] + Reward[at zero difficulty])/Mining Cost

This is the more complete and correct description of the Dash protocol economic model which is the one that should have been used to determine an optimal "store of value" configuration IMO since roughly half of Dash's supply is effectively mined at zero difficulty. Any "miner" can therefore avail themselves of primary supply:

• exclusively at mining difficulty
• exclusively at zero difficulty or
• a combination of both

Note that there are two significant implications of this which turn the reasoning behind Spork 21 on its head:

   1. while the Dash protocol can set the reward ratio in Dash, the market sets the reward ratio in Dollars.

   2. following from 1, the Dash-determined reward ratio is IRRELEVANT unless its "tuned" to a market-competitive level. If we set it wrong the market will simply work against us to "set it right"

   3. the argument that "restricting supply to miners" is somehow effective in gaming order book liquidity is moot because in the holistic model the entire supply is mined, just at distinct difficulty levels. It is also rendered moot because of the false assumption that demographics are coupled to reward categories which they clearly don't have to be

   4. the argument over whether or not miners run masternodes to subsidise mining is also moot because the Dash protocol ENCOURAGES IT, since the more masternodes a mining cartel runs, then lower their average mining difficulty level is. Masternodes are also a capital asset that can be cashed in at the end of use (unlike mining rigs) so the incentive for hybrid mining is substantial

***************** HOW TO FIX *****************

The problem is that mining profitability is set DIRECTLY by the free market (through difficulty adjustments) whereas masternode profitability is set INDIRECTLY by the free market with recourse to the coin price. We need to eliminate the tension between the market-optimal reward ratio and the protocol-configured reward ratio to get rid of the drag.

Since masternodes are effectively miners in the sense that they receive the primary supply, the mining profitability margin therefore serves as a reference for this (since it's already responsive to the free market). We can even guess it just by looking at a few coins - getting it anywhere near the right level will be infinitely more optimal for growth than what we have at the moment.

With all due respect, you've been going around in circles for a long time.

The "reserve of energy value" is a fallacy. The energy spent is not a reserve of value, the deposit chosen to dump that energy (which is really "contained capital") is what adequately reserves the value ... or not. And it even projects it, in its case.

If you shit in a box, that energy used is worth nothing. It is the energy used in a WORK that generates wealth that must be preserved in a suitable reserve of value. And by the way, economic dynamics itself creates added wealth to preserve ... if not ... what is prosperity, prosperous growth? Fiat is centralized and effortlessly created garbage, now ... to believe that it does not create wealth is stupid.

Prosperity is basically a soil of inalienable wealth. Various factors contribute to this beyond an energy expenditure in the initial production.

When monetary issues can be generated by other less expensive channels, other factors must be consolidated in DASH to make it a successful project. What you have to do is preserve that wealth created and that it reverts in the chain ... turn that dynamic into one of progressive accumulation of wealth for the general interest. (which, indeed, is practically monopolized in DASH for the Mnodes ... but that is the question to fix, not an EXPENSIVE energy source whose costs have been optimized - which should be positive for the project - ... that this added value - and more - is intercepted in particular interest during the process and prevents contributing to the common good to enrich the ecosystem).

You have a paradigmatic example of this parasitic sacrifice in a DCG CEO who claims to charge the minimum wage ... while taking his warm cake at the expense of his nodes, with which he constantly drains the system. Mining is not the key to anything, man ... it is another agent that suffers speculation for the centralization of DASH, nothing more.