Posted in Cryptos on December 12th, 2016
The following article covers a token or element in the cryptosphere. The cryptosphere is new and exciting, but changes rapidly and often in ways that do not benefit users. By the time this article is published, changes may have already occurred. Most tokens in the cryptosphere are complete scams that are get-rich-quick-schemes for insiders. Often, we cannot know this beforehand and only later discover this. A person should only trade with money that they’re willing to lose because losses are guaranteed. If you choose to participate in purchasing a token in the cryptosphere, you should do so with the full expectation of a loss and you should also expect it to change in a manner that does not benefit you. There are very few good ideas in the cryptosphere. Finally, by reading this post, you agree that you’ve read our disclosure.
In this post, we evaluate some of the numbers behind the crypto-token Dash and ponder if Dash is really a competitor of bitcoin, or a crypto-token that has set out to achieve something greater in purpose (though this means nothing if there is no work). Remember, that when it comes to crypto-token, you should only trade with money that you’re willing to lose because losses are guaranteed. If you use Dash, you might be interested in subscribing to Amanda Johnson’s Dash Detailed YouTube show, which provides useful information about Dash. In a recent video, she attempts to explain why Dash is only 7th in market capitalization and I highly suggest readers watch it, even though I have a different perspective.
Long time students of ours from our other site will remember our initial pro-con assessment of Dash when it was $3. With a price of $12 now, Dash has performed better than bitcoin over the same time. Still, our pro-con assessments should still be considered.
I estimate that there will be 18.5 million Dash in the long run, though the supply reduction is slow, whereas bitcoin’s supply availability drops much faster than Dash’s supply. Bitcoin is experiencing a supply-shock of its own right now because miners right after the halvening this year insisted they were still profitable post halvening, but overestimated how profitable they would be as time passed. The result of this is that they’ve had to cover a lot of their short positions and the price has spiked when they’ve lost those shorts. Most bitcoinaires don’t get this; generally, when bitcoin rises, we tend to hear “China! China!” but the reality is that miners have been facing a bigger squeeze than they expected (many miners are in China, so volume there should exist).
By contrast, Dash’s supply drop is more controlled, which means that it won’t have these spiking supply shocks (yet). There’s a reason that we predict that Dash will break $100 over the long run, assuming Dash continues to innovate at its pace. But at $12 right now, no one sees this because people are willing to sell.
This means that fundamentally Dash is rare, but people are willing to sell it at a low price. Why? Part of this is that Dash feels easy to earn with a masternode. Another part is that people want the “next bitcoin” and keep searching for it while getting hot and bothered over the next great idea. Very few, if any ideas, in the cryptosphere are great. No one will read that sentence either. Zcash was the latest one, even though it crashed unlike bitcoin, Dash and Ether. We favored the latter 3 and they’ve done better. There will be many others and the weak hands in Dash will continue being flushed out; people without an attention span will close out their masternode and chase the profit of the new thing.
One risk-reward assessment might show that the current price of Dash – $12 – even with the feel of easier accumulation overlooks that the fundamental drives may change from participants willing to let go to participants unwilling to.
Of course, losses are guaranteed in life, and Dash may be a loss in the long run – there’s no way to know whether or not that many strong hands will appear in Dash over time. Likewise, there are other financial events that could occur which make people lose confidence in all crypto-tokens, or Dash itself, and then it doesn’t matter who’s a strong or weak hand at that point. Finally, people selling and buying Dash are pricing Dash right now; most people are saying that the current price of $8 is too high of a risk and are selling. Part of this is also due to the fact that Dash doesn’t have as much infrastructure as bitcoin, but when you compare where Dash is today to where bitcoin was after three years, Dash wins big. If Dash continues its innovation, in ten years, there will be many opportunities. Still, the current vote with the sell volume is that sellers don’t believe Dash will innovate.
The strong hands of Dash may risk thousands to get Dash, but with either masternodes and (or) miners, they can continue to grow their Dash with very little additional risk (such as electricity cost of a masternode). This represents an opportunity with Dash. The example being a risk of several thousand dollars to get several thousand Dash that could grow by a thousand Dash a year equates to low risk way to accumulate more of what could end up being a strong crypto-tokens in the long run.
No idea is perfect. Outside of some of of the positives of Dash, there are concerns:
All of what I wrote above this applies to every crypto-community. So far, I’ve been impressed with how Dash addresses these concerns, but this isn’t a one-time event. A community must constantly address these concerns, or fail.
Back to Amanda’s interesting video – is Dash a threat to bitcoin? Bitcoin is familiar. Dash is not. If one simply looks at the amount of attention in the cryptosphere, the majority of it focuses on bitcoin. Most public articles write about bitcoin. Bitcoin feels like a topic that everyone knows about; Dash not so much. Bitcoin also has led the infrastructure, Dash hasn’t. In a sense, bitcoin gives us a preview of what may (or may not) be possible. There is more infrastructure in bitcoin than Dash. To Dash’s credit, it’s much newer than bitcoin and where Dash is today compared to where bitcoin was at its age is much further ahead. Does this matter? We’ll see.