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Privacy Coin Review: Digital Cash (DASH)

History and Development

  • Creator and lead Developer Evan Duffield created XCoin (XCO) in Jan. 2014.
  • He is now an advisor, and the development team is lead by Ryan Taylor.
  • This was created from Litecoin's code, which was essentially a slight variation of Bitcoin's code.
https://www.dashforcenews.com/ryan-taylor-new-dash-core-ceo-founder-evan-duffield-moves-advisory-role/

https://www.dashforcenews.com/ryan-taylor-new-dash-core-ceo-founder-evan-duffield-moves-advisory-role/

  • The initial launch was shaky because of faulty programming, but eventually resolved.
  • The name was changed to Darkcoin later in Jan. 2014. 
  • On March 25, 2015, Darkcoin was again rebranded, this time to Digital Cash (DASH).
  • Continuing development on and promotion of DASH is done by the DASH DAO (Decentralized Autonomous Organization), although it is just known as the Dash Core Team now - probably a good re-branding so as to not be confused with the DAO fiasco.

Features and Specifications:

  • While the code is similar to bitcoin's, there is a main distinction:
  • In BTC, miners run all the key processes to run and maintain the network i.e. validating transactions, creating new blocks, voting. Full nodes simply contribute to governance i.e. reject block if miners created more BTCs on a block than they were supposed to (It its 12.5 BTC per block as of 3/7/2018).  
  • In DASH, there are 2 layers to handle all the work. There are miners who create new blocks. There is a second tier of masternodes that process PrivateSend, InstantSend, as well as  governance issues (https://en.wikipedia.org/wiki/Dash_(cryptocurrency))
  • Scroll down the link I provide here to see the "Treasury" and get an idea of how the voting process works for the DASH community: https://www.dash.org/network/#section-network
  • While the bitcoin network also has nodes, the DASH masternodes are each also staked with 1000 DASH coins. (Keep this in mind when considering the distribution profile of DASH).
  • The 1000 DASH requirement is a monetary incentive for masternodes to behave properly.
  • InstantSend allows transactions to be processed after 1 confirmation.
  • PrivateSend achieves privacy through a mechanism call "CoinJoin". Sender can only send in denominations such as 1 DASH, 0.1 DASH, 0.01 DASH. This allows more transactions to match in amount so that the network can "tumble" them together.
  • PrivateSend takes longer because CoinJoin is a "heavy" process.
  • Masternodes also vote on budget distribution for the DASH DAO.
    DASH masternode: http://dashmasternode.org/
  • Finally, DASH doesn't have a fixed blocksize. It is currently around 2MBs (2/22/2018), but has believes it will achieve the scale to implement 400MB blocks and beyond in the future. (https://cointelegraph.com/news/as-bitcoin-rejects-2mb-blocks-dash-prepares-to-implement-them).
  • It should be noted that the team does continually work on improving the protocol, as should any legit crypto projects. Here is a Ryan Taylor, head of the Dash Core Group, talking about new developments and strategies during the North America Bitcoin Conference 2018:

Supply and Distribution

  • Maximum Supply: 18,900,000
  • Circulation as of 3/27/2018: 7,970,000
  • Here's the issue many have with DASH and most PoS protocols: You need to hold a certain number of units to be a masternode. 
  • Because of this "rule", there is a high concentration of Dash held by those running masternodes. 
  • This means, a significant portion of the circulation is "locked". 
  • Currently there is 4843 masternodes. (https://www.dash.org/network/#section-network)

Using DASH

  • DASH is on most of the crypto exchanges. (Binance, Bittrex, Poloniex etc.)
  • If you do not want to keep DASH on the exchange, you would likely have to use its native wallet, Electrum, Exodus, or Jaxx: https://www.dash.org/wallets/
  • Finally, I would not recommend treating DASH or any other coins for that matter as 100% private, although it can be more so than bitcoin.

Final Thoughts

  • I believe Dash can be a sound privacy coin from a technical perspective. 
  • It does have a strong community and continuously provide updates without going overboard with marketing. 
  • Still, the ecosystem has a long way to go because the network is still dominated by nodes and not enough users. (This is a common issue so it is not a disadvantage competitively).
  • However, there is a lot of competition for privacy coins. From this perspective, I think DASH actually has an advantage in that it is one of the older coins from 2014. 

Resources

Crypto Trade Board 3/28/2018 - Flat Market Calls for Balanced Approach

Crypto Trade Board (3/27/2018) - Expecting Some Relief after Spanking