It has seemed strange to me that ETH has benefited the most in the recent alt run up because ETH is not necessarily positioned as P2P money and is thus not a direct replacement.
What is the argument for Dash or Bitshares to replace bitcoin and how are full nodes incentivized and what are the governance mechanisms?
That is a good observation. I personally think Dash is the cryptocurrency that is best positioned to replace Bitcoin in a worse case scenario. So I will explain briefly what some of its main features are, at the risk of being called out evangelizing an alt coin.
First of all the incentivized full nodes, called master nodes, are essentially paid full nodes. That get 45% of the block reward, the miners also get 45%, the other 10% is used for funding. I will get back to that soon since that is what makes it very interesting.
To run a masternode requires collateral, in the case of Dash it requires a thousand dash. This prevents any type of sybile or spoofing attacks, or that anyone can take over the network for that matter, it also helps to ensure that the masternodes incentives align well with the network. The block reward is shared among the masternodes in a similar way to how mining works in Bitcoin, meaning that master nodes are actually self balancing in regards to incentive just like mining.
The masternodes actually govern development, or more accurately, they decide where this 10% of the block reward goes. Anyone can make a proposal which is then voted on by the entire network of masternodes, essentially sending Dash to any address in order to fund their proposal. This is done in a completely decentralized and distributed fashion. This means that Dash is essentially a self funding blockchain or a Decentralized Autonomous Organization.
I think this is very exiting, I think these types of organizations are a good path for the future.
One of the things Bitcoin has going for it is its simplicity in its design, if its governance mechanism does work well enough then you can argue for its superiority and its dominant position is justified. If its governance mechanism proves itself to be flawed then you can see how something like Dash might have solved these problems and could be the way forward.
In regards to some of its other features, compared to solving the scaling and governance issues, it does not seem as important in regards to our discussion here, however it is worth mentioning that Dash is capable of doing "instant" (few seconds) confirmed transactions. So you get close to the equivalent level of security of a single confirmation instantly, which can be very useful in retail situations for example. Dash has the option anonymize the links between transactions, this is a option however unlike Monero. Transparency is still possible, and it is obvious if coins are being purposely anonymized. I think this is important for certain social and ethical reasons, when corporations and governments get more involved for example, I think it would be good if we can keep a very close eye on them.
Dash had no pre-mine, pre-sale or anything like that, there is some controversy about when it was first launched, to much was mined in the first two days then should have been, the emission schedule was changed when that happened to fix the problem. Some people still shout scam or pre-mine because of this event, personally I do not think much off it since those coins have since been redistributed and everyone has had a chance to buy in when the price was much lower. The history is still out there, Dash used to be called XCoin, before it was called DarkCoin. It would have been wrong for me not to mention this.
Dash block time is obviously faster as well which leads to a much higher TPS, when the block size issue arises masternodes will simply vote to increase the blocksize, it seems like that is the position of the Dash community presently to support this as well. To be honest some of these altcoin communities are like a breath of fresh air compared to Bitcoin right now, especially before I discovered this great community in this Bitcoin forum. It is also good to consider that almost all of the masternodes are run in datacentres, so increasing the blocksize will not be as big of an issue for those reasons as well. There are already three and half thousand masternodes on the Dash network, approaching the amount of nodes Bitcoin has with a market cap of less then twenty five million I think is impressive.
There we go a short explanation of Dash, and why I think it is one of the best P2P money alternatives to Bitcoin, if requested I can start another thread in this forum to discuss this some more as well.
I will not get into explaining Bitshares, it is far more centralized by design and has a much more complex governance mechanism. I favor simplicity, so if Bitcoins governance mechanism does not work then its best alternative would be something like Dash and only after that maybe something like Bitshares. Increasing the complexity I suppose as we try to discover how to implement decentralized governance. I am hoping that Bitcoins incentive mechanisms through proof of work will work well enough, elegant in its simplicity of design most likely madly complex when applied to the real world, in terms of how the game theory and balance of power actually works.
Even if Bitcoin does remain the dominant cryptocurrency in the world, I am sure it can happily co exists with these alternatives as well as it already does today. I think the altcoins represent the very ethos of Bitcoin itself by representing the very principles of decentralization and freedom.
