The Myth of the Masternode Sell-Off

The Myth of the Masternode Sell-Off

Over the years, critics have claimed that the Dash Masternode network is susceptible to centralization. Initially, the charge was that only a few early adopters own Masternodes, and so they control the network. This argument has begun to fade as it’s become clear that Masternode owners are a diverse bunch. However, Dash detractors have come up with another potential centralization threat: when the price of Dash skyrockets, existing Masternode owners will sell and only big pockets will be able to afford buying them out and setting up their own Masternodes. According to this argument, the network will then become centralized around these wealthy players.

Could this happen? Is the Masternode network in danger of being only in the hands of those with big pockets, i.e. corporations and government agencies? Fortunately, we have some data to help us evaluate this criticism.

How Do Masternode Owners Respond to Huge Price Increases?

Consider this calendar year. The price of Dash has risen from $11 at the beginning of the year to over $400 earlier this month. That’s a 3,536% increase in only eight months! This means that one Masternode was worth over $400,000—a large enough sum to be considered life-changing for many people. Surely, if Masternode owners are going to sell because the value of their Masternodes increases, many would have done so this year. Let’s look at the data to see if this actually happened (note: all data taken from dashninja.pl as of 9/18/17).

What we want to examine is how long each Masternode has been active. If a Masternode is sold, then the node is dropped from the active list, because the 1,000 Dash collateral would be transferred to another owner. So as long as a Masternode is active, it has not been sold.

Before looking more closely at how many Masternodes have gone offline during this year’s price increase, note that there are other reasons a Masternode might be dropped from the network. The Masternode owner might move the Masternode to another physical server, which would require being dropped from the active list temporarily. Or the Masternode owner might move the 1,000 collateral to another address (for example, if she were moving the collateral to a hardware wallet). Or the server itself could experience a problem and go down for a few hours. In all such cases, the Masternode would be dropped from the payment queue and show as a “new” Masternode later, even though it didn’t change ownership. So when we look at how many Masternodes have been active during the recent price run, we must remember that this is the minimum number of Masternodes that have not been sold. In all likelihood, the number is actually much higher, since the events described above are not rare.

Stable Ownership

The longest any current Masternode has been active is around 31 weeks. This is how long it’s been since all Masternodes were required to perform a major upgrade, during which all Masternodes had to update their software and be rebooted. Since that upgrade, 558 Masternodes (12% of total active) have been continuously active. At first, this might appear a small number, but remember the various reasons a Masternode can become temporarily inactive without the owner selling it. To get a sense if there is a “sell-off” when prices spike, we need to further examine how many Masternodes remained active during this year’s price increases.

Let’s now look at the price of Dash compared to the number of running Masternodes that haven’t dropped from the payment queue during that time. For convenience, I chose two points of reference for correlating the price of Dash with the number of Masternodes remaining active: when the Dash price was $200 and when it was $100. If a Masternode was running when the price was $200 and is still running, that means the Masternode owner turned down the chance to cash out for at least double his initial investment. (It’s more probable that the Masternode owner’s cost basis for the Masternode is far less than $200,000, as he likely bought his collateral Dash over time at a lower overall price.) Further, if a Masternode was running at $100 and is still running, that owner turned down the chance to cash out for at least quadruple her initial investment (assuming she bought at the maximum of $100/Dash, a conservative estimate). Looking at these numbers, what do we find

Dash briefly reached $200 on July 5, 2017, which was over ten weeks ago, meaning one Masternode was worth $200,000. Those who owned a Masternode at that point have since had an opportunity to sell their Masternodes for around $400,000. Yet, looking at the Masternode stats, there are currently 3,264 Masternodes (71% of the total active) that have been running for longer than ten weeks. This means that these owners saw a doubling of their investment and didn’t sell.

What about since Dash was $100? That first occurred on May 7, 2017, nineteen weeks ago. According to the data, there are 2,190 Masternodes (48% of the total active) that have been running for over nineteen weeks. That means at least almost half of all Masternode owners saw a quadrupling of their value in just a few months without selling them.

Again, note these are the minimum possible numbers. All Masternodes that went offline for reasons other than selling would not be included, even though ownership did not change.

Confidence in the Future

Clearly, Masternode owners have generally held onto their Masternodes in spite of a large value increase in their investment. Why is this the case? Two primary reasons come to mind.

First, each Masternode receives a block reward of 1.8 Dash every seven days or so. So as the value of Dash rises (and the value of the Masternode collateral increases), the value of those weekly payments also increases. Each Masternode owner faces a choice: do I cash out my Masternode for a big single payday, or do I keep it for smaller, yet regular, paydays every seven days—paydays that are more valuable now? Most appear to be choosing the cash flow.

Second, the stability of the Masternode owners reflects confidence in the future of Dash. Yes, the price of Dash has increased from $11 to $400 this year, but most Masternode owners likely believe it will increase even more in the future. They are willing to defer a big payout now for a potentially much larger one down the road (or, more likely, much larger block reward payments down the road).

Of course, over time Masternodes will be bought and sold. There are many reasons an owner might sell her Masternode, many of them unrelated to her feelings about Dash. Yet up to now most Masternode owners have continued to run their Masternodes even during dramatic price rises. The threat of Masternode ownership becoming centralized under big-pocket investors is, at least so far, a myth not backed by the data.


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Dash Rebounds, Gains Against Bitcoin in Post-China Drama Crypto Recovery

Dash Rebounds, Gains Against Bitcoin in Post-China Drama Crypto Recovery

Dash has bounced back after a rough week in the markets, gaining against Bitcoin.

Over the past week, market uncertainty resulting from China’s announcement of shutting down cryptocurrency exchanges caused the crypto markets to crash, dipping from about $145 billion combined to around $97 billion over a few days. Since then, they have recovered to about $136 billion. Dash dropped from around $326 to a low of $220, and has since recovered back to $326. During this recovery, Dash made gains against the price of Bitcoin as well. For most of the past week during the market uncertainty, Dash remained at about 0.075 BTC. Over the weekend Dash grew to 0.087 BTC, to a present value of 0.083 BTC.

China exchange regulations shook markets, which have since shifted to other pairs

A series of events transpiring in China, from the government issuing an ICO ban to its shuttering of cryptocurrency exchanges (and all the rumors in between), led to a significant downturn in the markets, shaking out almost half of cryptocurrency’s value for a moment. Since then, the markets have recovered on strong trading volume from elsewhere, particularly other Asian countries. Bitcoin’s #2 and #3 sources of trading volume are Japanese yen and Korean won trading pairs, with its top Chinese yuan pair a distant #6 with 3.41% of volume (contrasted with a combined 10.39% of volume claimed by JPY and KRW pairs).

Dash remains significantly more isolated from the effects of Chinese markets, with only 1.33% of volume coming from CNY pairs. KRW trading, meanwhile, holds an impressive first place with $16.5 million 24-hour volume, 27.61% of the market.

First stages of Evolution and conference announcements may be bullish for Dash

Good news may continue in the markets for Dash with a series of new integrations and upcoming events giving the potential to bolster the price. This weekend, the first Dash conference, funded by the masternode network, will be held in London, where the Core team has prepared a series of announcements. Over the past week, Dash has been added to both Qryptos and CEX.io. Finally, the Dash version of the Copay multisig wallet is entering alpha testing, with the first stages of the Evolution roadmap, including a fee reduction of one decimal point and a 2mb block size increase, being implemented this quarter.

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Appearance on Special Free Talk Live Show at the Free State Bitcoin Shoppe

Appearance on Special Free Talk Live Show at the Free State Bitcoin Shoppe

I had the pleasure of appearing on Free Talk Live over the weekend to talk about Dash. Free Talk Live is a radio show and podcast sponsored by the Dash network (and have submitted a proposal for renewal) that has a long history of focus on cryptocurrency, with many important figures making appearances as guests all the way back to Gavin Andresen during his Bitcoin Core days. The special show was recorded at the Free State Bitcoin Shoppe, a crypto-only store in Portsmouth, New Hampshire.

I talked about Dash’s upcoming improvements and its global presence, including successful outreach in Ghana, Venezuela, Ukraine, and Austria.

Listen in here starting at 80:55

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Leah Stella Stephens AKA stellabelle Proposals Review

Leah Stella Stephens AKA stellabelle Proposals Review

Stellabelle came to Dash as a super energetic person that joined in on the DashNation slack with lots of great ideas and the energy and drive to work on them.  She seems to have disappeared quietly but has left a lasting body of work and I think a few new people that may be long term Dashers.  She has been on social media for a number of years with popular Steemit, Medium and YouTube channels.

DASH For Newbies Blog And Video Series
Owner: stellabelle
One-time payment: 25 DASH  (added on 2017-03-17)
Votes: 629 Yes / 45 No / 26 Abstain  Pre-proposal thread

3 articles written per week and a total of 3+ YouTube videos. The videos will be put on my existing Stellabelle YouTube channel in a folder named DASH For Newbies. I’ll be doing social media as well.

Leveraging my existing follower base on Medium and Steemit, I will write 3 Dash articles per week and post them to my accounts. Some of them will also be published in the Hackernoon Magazine which has 83K followers, since I’m already a contributing writer. [Followers on Medium: 1300, Followers on Steemit: 1890]. These will be shared on Twitter, and I’ll create weekly Twitter Moments from notable DASH posts.

Stellabelle intro video about her first proposal.

There is a “Dash for Newbies YouTube playlist” which is a series of 12 videos about Dash and contests she ran to get people involved.

There is also a Dash for Newbies series on medium.com which includes a series of interviews with “Women of Dash.”

This video is a first proposal wrap-up and intro to her next proposal

DASH FOR NEWBIES: Medium, YouTube + New Contests
Owner: stellabelle – 35 DASH for 3 months totaling 105 DASH (added on 2017-04-20)  Votes: 836 Yes / 227 No / 16 Abstain  – Dash.org pre-proposal thread

DASH FOR NEWBIES Medium Publication:
Write 25 engaging articles for DASH FOR NEWBIES and Hackernoon.
Edit at least 3 articles from Dash community members which will be published in Medium publication.
Goal: to double the subscribers

Create 10 high-energy videos for the DASH FOR NEWBIES collection.
Goal: to double the subscribers

DASH FOR NEWBIES Contests on Social Media:
2 Contests per month: art, writing and community-building contests
Combined prize money will be 4.5 Dash per month
Advertising costs: 2 Dash per month
Goal: to reach people who don’t know about Bitcoin

Women of Dash Slack:
Work to build up membership of this Slack channel and create collaborative projects. One video project is already being worked on from Diddy and will be viewable soon.

This proposal is a continuation of the work I’ve already been doing since the beginning of March. The video above has more detailed info the stats of DASH FOR NEWBIES for one month, but here’s a highlight:

MEDIUM: 28 articles – 53 new subscribers – 8,600 views (total)

YOUTUBE: 5 videos – 55 new subscribers –7214 views (1300 views Newbies)

Women of Dash Slack: 51 members
This new proposal builds upon the momentum I’ve started in the last month.
I’ve received a lot of new Twitter and Steemit followers since starting this new work for Dash. Also, my articles in Hackernoon (which has over 95,000 suscribers) have been generating a lot of new people entering Dash. Additionally, I’ve recently been contacted by Jeremy Epstein, author and entrepreneur, who seeks to do an interview with me. He found my Dash DAO article in Hackernoon. It’s getting the word out, for sure.

The People of Dash Series was always interesting.

Stellabelle also has a good series of articles on Hacker Noon.

There where several “art” contests.  The work involved in coordinating a successful contest like that has surprised a number of people.  Here is one of the runner ups voted “MOST LOVING” it is by Juliet Annerino.


Some people go at something new with all of the energy they have and then become bored with it and move on to the next new thing.  Or something comes up in life that diverts their interest to more pressing matters so they “have to” move on.

I don’t know Stellabelle or why she entered or exited the Dash community so I am only speaking as an observer.  She is an example of someone that came into the Dash community and “made an impression” for the few months she was around.


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Cryptocurrency Isn’t So Decentralized… Yet

Cryptocurrency Isn’t So Decentralized… Yet

Cryptocurrency has risen in the markets and imaginations of traders around the world in recent years, all on the premise and promise of peer-to-peer decentralized financial networks that can’t be effectively stopped by entrenched powers such as corporations and governments. While I wholeheartedly agree with this mission statement, and believe this incredible technology will eventually fulfill that purpose, I see that we still have a long way to go. The crypto world is still pretty centralized and vulnerable.

Pure speculation centralized crypto around exchanges

At present, most cryptocurrency use is focused on speculation and day trading. For evidence of this, look at two events and their affect on the price: Bitcoin’s fees and confirmation times spiking, and China shutting down exchanges. The first had a drastic effect on the coin’s practicality for the use for which it was intended, yet the price remained highly resilient. The second represented a shuttering of a minority of trading volume, but the resulting drop cut the collective value of cryptocurrency almost in half. The clear lesson: the market cares most about trading, and centralized exchanges are a very easy target to take this down.

Bitcoin remains the “infrastructure hog,” can crash the markets

The next point of centralization is paradoxically in a decentralized network. As the frontrunner of cryptocurrencies, Bitcoin has a significant lead in valuation as well as integrations and infrastructure. While there is nothing inherently wrong or vulnerable about this, centralizing functionality around a single chain makes all others vulnerable to what happens to the first. Normally, bad news for a single coin affects only that one project, but when Bitcoin drama is involved, the whole field shakes. No matter how censorship-resistant a coin aims to be, it remains beholden to the leader of its field.

Tools for true decentralization are there, but must be used

The good news is that the tools for operating a truly decentralized and censorship-resistant ecosystem already exist. In particular with Bitcoin and Dash, many avenues exist for buying peer-to-peer in a way that can’t be shut down in a particular country (and with Bisq that can’t be shut down at all). While services like BitPay and Coinbase offer easy and seamless conversion of funds in order to facilitate use of crypto as currency in the short term, simple wallets allow it to be used as digital cash right now. The challenge is to create enough of a network effect in the local economy in order for cryptocurrency to become widely accepted, which takes effort but is perfectly doable. Building a network of peer-to-peer trading and a local digital currency economy can create a very robust decentralized and censorship-resistant ecosystem for long-term strength and growth, but in the short-term is not the most convenient option. At this point, such an avenue must be deliberately selected.

Whether or not crypto is inevitable, progress can be set back years

I believe that blockchain technology will give rise to digital currency that can’t be controlled or stopped by any outside entity. I also believe, however, that while such an outcome is inevitable, it can be set back years, decades even, if the right combination of disasters occurs. The difference between focusing on digital currency as a regulated financial asset used through a variety of large centralized services, and a peer-to-peer digital cash used as everyday money and able to be acquired almost anywhere through a robust decentralized trading network, is many years difference in achieving a financially free world. In those lost years, how much human innovation is also lost? How much wealth? How many human lives?

The stakes are high, and cryptocurrency is so far a little too centralized. Let’s get to work changing that.

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Dmitriy Baimuratov on Dash Business Adoption in Ukraine

Dmitriy Baimuratov on Dash Business Adoption in Ukraine

Dmitriy Baimuratov of CryptoGroup has been spearheading the integration of Dash into businesses in Ukraine, including making local news headlines for using Dash to pay at the Givi Rubenstein restaurant in Kiev. I spoke with Baimuratov about the progress and challenges facing Dash adoption in Ukraine.

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Jerry Banfield Proposals Review – Dash Force News

Jerry Banfield Proposals Review – Dash Force News

This is a story about someone that I think has a less than stellar reputation in the Dash community (no not CS ).  As someone that was pretty new during the ending of the relationship I can only look at the “aftermath.”  I think the issues mostly boil down to personality and temperament.  I may be treading in deep water here but not everyone fits into a specific community.  Dash doesn’t seem to be filled with “high strung, drama loving” folks and Jerry Banfield comes off as very high energy and admits to trying to add “drama” to his videos.

Jerry submitted seven different proposals for creating and advertising videos.  He was funded for 2 and while I don’t have the detailed results it looks like he got viewership levels that where at least as good as other similar proposals.  According to his reporting he spent most of what he received (or more) on Facebook and YouTube advertising.

Here is another marketing mystery. Does the audience attracted to different presenters have different value?  Is it possible that one person attracts short term speculators and another attracts longer term investors that see a valuable community?  If they each generate 100 new wallet downloads what are the long term results for Dash?  I know that my “confirmation bias” says the latter is much more valuable but that is based on my intuition not on facts.

Help Me Share Dash with Millions on Facebook and YouTube!  Amount: 497 DASH (added on 2017-01-09)  Votes: 40 Yes / 446 No / 0 Abstain  pre-proposal on Dash.org forum

Would you VOTE YES on this proposal help me use youtube.com/jerrybanfield and facebook.com/jbanfield and skillshare.com/r/jerrybanfield to SHARE MY EXCITEMENT ABOUT DASH with the millions of people watching my videos?  My vision is that YOUR YES VOTE will lead to the price of Dash increasing on average 1% DAILY as a result of newly funded Dash wallets and masternodes launched by my followers!  When you vote yes, I agree to mention Dash in 50+ videos new videos by February 2017, launch an exclusive live stream about Dash, add annotations to all my existing popular videos, and continue working on my Dash video course!

Even thinking you can provide a 1% per day price increase is kind of way out there. But on the value side he includes a link to a video that explains how he gets big advertising returns on Facebook.  The few minutes I could watch seems to offer good ideas.

Promote Anonymous Dash Payments to 200,000 Hackers a Month on YouTube!
Amount: 49 DASH for 6 months= 294 (added on 2017-01-11)
Votes: 166 Yes / 439 No / 0 Abstain  Pre-proposal thread

Would you help me share Dash with 200,000+ YouTube viewers watching my hacking tutorials every month?  Educating hackers about how to use Dash is the perfect opportunity to bring an audience interested in anonymity into our community!  My 11 hacking videos at http://jerry.tips/2ikJATj have received 2.6+ million views in the last year with the average viewer watching 6+ minutes which gives me space to tell them about Dash!

10 New Dash Video Tutorials!
One-time payment: 29 DASH (added on 2017-01-27)

Video tutorials are the most powerful way I know of online to get people to learn WHY to use Dash and immediately follow that up with HOW to get started.  You are here with me today because I have two friends that sold me on WHY Dash is awesome.  When I was ready to learn HOW to get started, I looked for video tutorials to help me get started with the basics of setting up a wallet and hosting a masternode.

10 New Dash Video Tutorials for 12.1!
One-time payment: 29 DASH (added on 2017-02-19)
FUNDED  pre-proposal on Dash.org forum

Facebook Ads for Dash Tutorials
One-time payment: 39 DASH (added on 2017-02-25)
FUNDED – pre-proposal on Dash.org forum

When you fund this, I will spend 34 Dash on Facebook ads featuring the 10 video tutorials funded in my last proposal all of which I made into one complete 2 hour Dash masternode investment tutorial video at https://www.facebook.com/jbanfield/videos/1349575128395993/ which I just published as an updated version with a new encryption tutorial based on the comments below!

What results can we expect?  I have spent about $1,000 advertising the first pinned post on my page at https://www.facebook.com/jbanfield which has reached 786,417 people an average of two times each with 151,000+ people watching the video, 500+ shares, 250+ comments, and an average cost of $0.06 per website visitor.  How much would we all benefit from this level of interest and sharing about Dash?

10+ Dash Videos for March!
One-time payment: 39 DASH  (added on 2017-03-01)
Votes: 519 Yes / 141 No / 28 Abstain – pre-proposal on Dash.org forum

For March, I have a lot of exciting new video ideas that I hope will be complimentary with Amanda B. Johnson’s Dash Detailed show and capitalize on the recent publicity from the Dash price increase by making taking an action such as buying Dash or launching a masternode seem easy and worthwhile.  One idea I have is for a 1 to 2 hour “top 10 Bitcoin myths” video which will show limitations of Bitcoin and then provide a tutorial of accomplishing the same task with Dash.  For example, one video would show how Bitcoin is not anonymous and then show how to use PrivateSend for true anonymity in Dash.  Another would show Bitcoin blockchain delays in payments and show how Dash can send instantly.  My vision for these new videos is to help convert more people researching Bitcoin into Dash users and to inspire viewers with no crypto experience to start off with buying a little bit of Dash.

In this post added to the Dash forum on March 23rd he provides his First Dash Investor Report on Two Funded Budget Proposals!  It includes some good statistics along with this video:

Full Time Dash Video Production with 51% for Facebook and YouTube Ads!
Monthly amount: 215 DASH each for 3 months.
Votes: 86 Yes / 543 No / 27 Abstain – pre-proposal on Dash.org forum

Will you fund this proposal essentially to hire me full time to be of service to:
Create new Dash videos at https://www.youtube.com/jerrybanfield and at https://www.facebook.com/jbanfield
Spend 110 Dash a month equal to 51.6% of this proposal funding on advertising split evenly between Facebook and YouTube.  Every $1 spent on Facebook ads from the last proposal has reached around 500 people.  Each $1 spent on YouTube advertising with Google AdWords for video has averaged about $0.01 per view leading to 11 minutes watched or about 20 hours watched per $1 spent.  This is the only proposal I know of with a clear plan supported by data to advertise Dash on a large scale using the two most powerful advertising platforms in the world.  If you are not able to get these results with ads online yourself, watch my tutorials showing how at at https://www.youtube.com/watch?v=VqCCAIeW4KY and https://www.youtube.com/watch?v=bbUnSXNGl08.
Actively participate in Dash forums, slack, and collaboration with others to help me make the best qualify videos.

Shortly after the last proposal failed to pass on March 26th this was streamed live:  DASH MASTERNODE OWNERS VOTE TO BURN THE CRYPTO MONEY INSTEAD OF HIRING ME TO MAKE MORE VIDEOS!  https://youtu.be/cgp9BttgAY0. It is basically a 48 minute rant on why he should get funded.

On May 10th he came back with another pre-proposal Dash Marketplace Live Preproposal Video which was never submitted.


Jerry is not Amanda.  Jerry currently has over 200K YouTube subscribers much more than the 17K the Dash channel has. But what are the psychographic profiles of each group?  Yes I have lead you to the Harvard Business Review Psychographics Are Just as Important for Marketers as Demographics to help make my point that all viewers/leads are not the same.

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Dash/Fiat Trading Pairs Added to CEX.io Exchange

Dash/Fiat Trading Pairs Added to CEX.io Exchange

Cryptocurrency exchange CEX.io has added Dash, including fiat currency trading pairs.

CEX.io is a UK-based cryptocurrency exchange with over one million users worldwide. With the new integration, Dash trading pairs have been added for USD, GBP and EUR, facilitating the buying of Dash directly for users around the world without having to first go through Bitcoin. According to Dash Core CEO Ryan Taylor, this addition is a particular achievement because of CEX.io’s selectivity:

“We are especially proud to see Dash added as the latest digital currency on CEX.IO’s platform, as they are very selective about the currencies they choose to add. For me, it further validates that Dash is now clearly among the few digital currencies that are relevant for consumers.”

CEX.io CEO Alex Lutskevych was impressed with Dash, particularly with InstantSend, which allows transactions to be confirmed instantly:

“It’s obvious that Dash matures fast. Most importantly, Dash’s InstantSend function is incredibly impressive; in my opinion it has already paved the way for and surpassed Bitcoin’s Lightning Network, which will allow for faster Bitcoin transactions to take place. Dash are true standard setters.”

New fiat gateways to simplify acquiring Dash

The addition of a new exchange assists in making Dash more independent from Bitcoin, and therefore more valuable, according to Lutskevych:

“The main deterrent of digital currency to typical investors is time and cost issues associated with access. To buy most digital currencies, people usually need to make a double exchange, for example; like fiat to bitcoin, and then bitcoin to Dash, and it can take an eternity for both transactions to settle. We have solved that dilemma. Greater access to Dash means more adoption, and more ways people can spend it on everyday goods and services or save it. More adoption means more popularity. And more popularity means more value.”

Most important in this ease of access is the ability to seamlessly buy Dash via credit card and bank transfer, which CEO.io offers. To be added in the future is a functionality to allow Dash to be easily bought in “bundles” of a certain fiat denomination via credit or debit card, making an easy buying option for customers not willing to go through the traditional trading experience.

Markets rebound after finding bottom over China exchange shutdown

The cryptocurrency markets have taken a recent tumble over news of Chinese regulators ordering a stop to trading on the country’s cryptocurrency exchanges, losing over $80 billion this month after an all-time high of $179 billion. However, on news that Chinese officials may allow two of the largest exchanges to remain operational for longer in order to properly complete the shutdown, the markets have since experienced a sharp rebound, growing from a low of $97 billion to $120 billion at time of writing, over the course of a few hours. For its part, Dash grew from a low of $220 to a present price of $280.

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All Chinese Exchanges May Stop Trading, Crypto Crash Continues

All Chinese Exchanges May Stop Trading, Crypto Crash Continues

All cryptocurrency exchanges in China may soon stop trading, news which has had a heavy negative impact of the cryptocurrency markets.

As reported by Washington Post researcher Luna Lin, Chinese regulators have required that exchanges make plans to shut down by the day’s end:

The resulting uncertainty has caused the cryptocurrency markets to crash, dropping from a combined market cap of $134 billion on Thursday to a recent low of $97 billion on Friday. This is down from a high of $179 billion at the beginning of the month. Dash fell to a recent low of $220 (down from a late-August high of $409), and Bitcoin fell to $2,946 (down from a high of just under $5,000).

Exchanges will begin the process of shutting down

As a result of the regulatory crackdown, Chinese exchanges are making plans to stop trading. Yesterday, BTCC announced that it would cease trading by the 30th of September after carefully considering the regulatory announcement earlier this month. While it intends to keep its mining pool operational, ViaBTC announced today that it would similarly shut down, with registration closing on the 25th and the website itself shutting down on the 30th.

According to Bitmain co-founder Jihan Wu, some of the larger exchanges may remain operational longer because of their size and the logistics of shutting down:

A rough path to end the “China liability”?

While the collapse of Chinese exchanges has been rough on cryptocurrency users, it has the potential to help inoculate the market against future crashes from localized regulatory pressure. News from China long held disproportionate sway over the crypto markets, and future news may have a less significant effect.

Additionally, trouble from centralized exchanges can cause larger portions of the market to flow through decentralized and peer-to-peer trading platforms. This would lead to greater censorship resistance in the markets, a prime selling point of using cryptocurrency to begin with.

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