DASH: Decentralized Governance or Centralized Tyranny?
Tyranny of the few sold as “Decentralized Governance”
by Jabba-Q, "The Coins Prophet" of the Satoshi Watch
The DASH Masternodes, a two tier concept by Evan Duffield was a stroke of genius.. Masternodes primary function is to carry out the anonymization phase of the Darksend protocol and to validate transactions almost instantly but by adding governance funding (45% to the miners, 45% to the MN operator and 10% for the governance) Evan has created a perpetual, von Neumann like machines that create value out of thin air and, by the virtue of self-replicating, even more masternodes out of DASH your masternodes churn out.
OK, in all fairness, "the value," as new DASH, is not really coming "out of thin air," rather each DASH represents, as Peter Van Valkenburg wrote about Bitcoin, "a unique answer to a math problem and proof that you solved that problem or else had the unique record of the solution transferred to your control." Not that chained hashing algorithm, in DASH eco-system called X11 for the proof-of-work, does anything really useful, but let us not nitpick for now.
A Miracle or a Mirage?
DASH guys are boasting Governance (Duffield first wrote about it here) as some sort of a "decentralized" miracle while it's more of a mirage. Ponder our legacy governance and its charade called "elections" to better understand what we mean by this. In democratic elections, notwithstanding all the power of political parties, money, media, propaganda and manipulation that create a circus-like charade, all citizens over a certain age have a right to vote after all, to vote, that is "to govern" through their elected representatives. DASH has some, seemingly independent, "DASH Nation" so to further simplify things, let us assume that each DASH holder is a member of the DASH nation / community, governed by the glorious Decentralized Governance by the Blockchain.
Governance, in democracy -- at least in theory -- shall be the "Government of the people, by the people and for the people," as Abraham Lincoln, the 16th president of the United States proclaimed in his famed Gettysburg Address. In DASH governance system, alas, only the plutocracy matters. Unless you have $100K (that is one hundred thousand US dollars) to fork out for the Masternode (each masternode is required to hold 1,000 DASH in order to be operative), as per price on March 24, 2017, you have absolutely ZERO rights to vote no matter if you hold 1 or 999 DASH. And even with 1,000 DASH, you have no right to vote unless you operate a masternode i.e. lock your DASH for a while. (yeah, I know, it can be sold at any time, DASH "locked in" the masternode, but that's not the point)
Unless you have the money, your voice is non-existent. You do not even have an illusion the legacy world gives you every once a while with its elections.
Moreover, if you have $10,000,000.00 for one hundred (100) masternodes you, one sole person, have 100x more votes than a poor beggar with only $100,000.00 and one (1) meager vote.
Plutocracy rules in a merry little world of DASH's "Decentralized Governance by Blockchain."
Not even the famous 1% (or 0.1%) in the fiat, legacy world have so much power over a single vote like the 1% in the DASH has. There are quite a few individuals controlling well over 100 masternodes / votes. Evan Duffield, has been told, alone controls 200 - 300 MN; Edward Moncada a quiet director of the DASH Foundation controls over 500 - 600 masternodes. It is safe to say that, out of 4,132 active masternodes on March 24, 2017, the key guys, so-called "DASH core" control well over 33% if not more, of all the votes.
Moreover, as DASH's price rises, most of the people do not give a damn about voting, so only about 25% - 40% of the all available votes are being cast. And that's an optimistic view. Just take a look at the latest payouts / votes (source Eric Sammons's Dash Vote Tracker) and you'll see the votes low turnout seven days before the deadline:
Most of the proposals came from the "Core" so the "Core" rules it all. Moncada & Duffield votes combined account for more than 50% of the usual number of the votes cast. "Decentralized" it is not. Do not forget another cute little, grossly undemocratic, feature of the "decentralized governance" by DASH. In the legacy world, if you get 51% of the votes it means you win. Not with the DGBB. Duffield invented "Net vote" idea so you need to get more "YES" than "NO" votes.
The total “Net Votes,” which is the total of “Yes” votes minus the total of “No” votes, must exceed 10% of all Masternodes. So if there are 3,955 masternodes, there must be over 395 “Net Votes.” Theoretically, you, a poor "non-core" slob, could submit a proposal and gather, by diligent direct promotion, full 790 "YES" votes. Hell, for the sake of argument make it a full 1,185 "YES" votes, a feast very unlikely to happen.
Now, if Duffield and Moncada dislike your proposal they can cast a their cumulative votes, say 800 "NO" votes, and your proposal is DOA, for it now has only 385 "Net Yes" votes. Despite having overwhelming 1,185 "YES" votes (59.69%) and only "NO" 800 against, you have lost. Two guys ruling the DASH Governance have just overridden the popular vote with a click of a mouse. The centralization can not get more centralized than in the DASH's "decentralized governance by blockchain."
Corporations are Private Tyrannies Anyway
Kindly please take a minute, two in fact, and listen to Noam Chomsky:
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There's so much wrong with the centralized power.
Evan Duffield's genius might be in danger to morph into a nightmarish scenario in which snake oil salesmen like Ryan Taylor, a guy in charge of finance (he submits ALL proposal so they all can appear coming from the "core" even if a friend is doing it) can enrich themselves beyond imagination and "govern" the poor masses of sheep-like investors into the abyss.
Speaking of investing abyss, think of the "legendary" Dash-Lamassu ATM integration proposal (the third biggest payout in the history of the DGBB) That proposal, from December 2015, ran for 12 months and received 7,323.12 DASH which has a value, as of February 26, 2017, of $205,413.52!! In fairness to Taylor, it wasn't him but a very special character, a certain Daniel Diaz, who was in charge of that failed proposal and as such he justifies a special attention and we hope to get back to him soon.
These guys, that control such vast amounts of money the governance creates have no controlling mechanism in place. The merry Diaz is still in charge of the "Business Development" at DASH, despite the fiasco with that Lamassu idiotic proposal. Imagine any normal corporation not firing him?
Evan talks about "Wells Fargo" type of service coming out of Evolution, Taylor talks about PayPal 2.0 stuff coming out of DASH and as long as we live in an unfair world ruled by the plutocrats, well, good for them. But do not insult our intelligence by the "Decentralized Governance" mantra while two - three "core" guys can outweigh the votes of hundreds "small" individuals and push their own agenda without any consequences. Not unlike the Wall Street "geniuses" one might say, the guys that get the money for free and do with it what pleases them.
Lamassu is Dead, Long live Lamassu
Governance hides many other little scam opportunities, like for example a proposal “admin-hr-avt-201702“ by Taylor. He wrote in his legendary opaque nonsensical language, when describing the proposal: "We believe by addressing these topics now, we can create a far more effective organization that makes the most use of our limited resources. From creating a more productive recruiting process, to getting new members productive quickly, to ensuring we retain talent without overpaying, to managing our HR risks more effectively, we feel that this project can deliver massive value to our network."
Buried in the massive blah-blah-blah goulash a-la Taylor there are a several cute facts hidden:
-- 360 DASH or $5,000.00 USD was the value of the proposal at the time he submitted it
-- those $5,000.00 he'll be paying to the contractor some HR firm
-- 360 DASH today represent $36,000.00 and the question is, where that "surplus" money, from this or other proposal, goes?
We are NOT saying Taylors of DASH governance are skimming from it, but the transparency and decentralization are for sure NOT the key ingredients of the DASH Governance feature and it would be nice of them to stop selling their product as decentralizing value while DASH is moving toward a corporation and acts like a corporation already, with calcified "core" on the business side that sells gibberish and is drunk on all the money the "governance" is giving them.
Herein lie dangers for DASH's and its future, something that needs deeper and further analysis.
Evan Duffield, possibly a Benjamin Franklin of crypto, has created a wonderful child that might grow up into a Frankenstein. As long as the price goes up, we are all happy. But how that differentiates from the "happiness" APPL stock rise gave us? In a nutshell: stop selling us snake oil of plutocratic tyranny as decentralized governance.
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In the meantime you might wish to read The Veritas Team's REVIEW OF THE DASH GOVERNANCE SYSTEM, Analysis and Suggestions for Improvement study.
Sometimes decentralized governance just doesn't work.
Yes, lots of centralization with Dash Master Nodes, but with 4K+ MNs, Dash has a solid "bank board" with a reserve coin system that protects users from market speculation in cryptos. Dash $ valuation over the last two weeks has had the lowest $ volatility of the top 3 cryptos. Dash long and prosper!
I have been Shapeshifting my Mist wallet Ether to my Dash wallet and the transaction speeds are like nothing I have seen.
very nice post
Is this supposed to be a serious appraisal or a thinly veiled sour-grape from a disenfranchised ex-holder ? It’s difficult to tell the difference but I’ll give it the benefit of the doubt ;)
First of all, Dash's decentralised governance system was designed to enfranchise holders, not non-holders. In that respect it's working completely as intended. The scewed logic above attempts to make a slightly ludicrous comparison with democracy which works on a "1 person 1 vote" basis that would in fact be suicidal of it were applied directly to an asset governance and not weighted in favour of those with most at risk.
Secondly, lets stop for a moment and draw attention to the one significant aspect of governance that this article blatantly ignores: scope.
A classic governance model such as bitcoin's notionally delegates control to three significant stakeholder categories: miners, merchants and developers. Holders only have an indirect influence through markets - i.e. if they don't like the direction of travel their only recourse is to divest themselves of the asset in markets.
Dash adds a fourth stakeholder category to represent holders but even that does not give them 'control' over all aspects of policy - or even the significant ones. It’s influence is significant but its scope is confined to only two aspects:
an executive role in the allocation of the periodic block reward to development proposals from contractors
a consultative role in the form of informal polling of holding community opinion
Majority mining still rules ultimately over protocol. Merchants still decide what to support and developers can write what code they want independently of Dash's governance system. They may even have that protocol accepted by miners in which case they've bypassed it completely.
Finally, though Dash may have its 'whales' like every other asset does, it's in fact one of the better distributed of the cryptos - far better than Bitcoin for example. The founder just divested himself of 80% of his holdings and OTC trades for the last 2 years have accounted for the largest known holder seeing a reduction of 300-400 masternodes to around 80. Despite that, none of them were ever anywhere near the "Satoshi'" level of centralised holding and all of them are well outnumbered when it comes to voting potential.
The perspective presented in this article therefore represents little more than a troll-like attempt to paste some-kind of faux ethical conflict onto what is actually an extremely successful and growing initiative.
@jabba-q dash is a small very small experiment in making, now if you are really really worried about the whole centralization thing ,
why not stop facebook , amazon , Microsoft basically any successful company ??
Yes dash is plutocracy , you buy your votes , whats wrong with that anyway ?
let me burst your little bubble , this same thing happens in any company , you buy your shares to get your voice now if you think this is a utterly unfair blah blah
create a competition to dash and make it bigger than it , you are very welcome
we dash holders love it , we love competition