Today, probably, there is no one left who knows something about bitcoins and cryptocurrencies. But despite the fact that Bitcoin is a perfect example of a decentralized, peer-to-peer cash when it comes to privacy, he has little to offer. In addition to the openness of the transaction, the time and cost of validation is so high that bitcoins, like gold, it is impractical to use for everyday needs.
If you look at this graph, it turns out that if you pay the lowest possible commissions will have to wait at least 13 minutes, until the check clears. Evan Duffield realized this problem and came up with a solution.
What is a Dash and what is the advantage of this cryptocurrency?
Evan Duffield came across Bitcoin in 2010 and was very impressed with the technology. However, the slow speed of transactions and lack of privacy is not particularly impressed him. He offered a lot of ideas the Bitcoin community about how to improve the core of the system, but no one even batted an eye, because to change the source code of Bitcoin nobody wants.
So he decided to take the core Bitcoin Core as a basis and to make their cryptocurrency. 18 Jan 2014 born on the Dash. First it was called Xcoin, DarkCoin later. Finally, it was renamed to Dash, short for Digital Cash (“digital cash”).
It’s a command Dash:
Controversial instant mining
In the first two days of the launch was nominee 1.9 million coins (about 10% of the common stock that will ever be). Evan Duffield said it was due to a bug that appeared when the code Litecoin was forgot when you create a Dash. Duffield has proposed a solution:
To restart the coin. To carry out airdrop (distribution) to the original distribution was wider.
The community, however, equally poorly responded to both proposals. Most kamineni coins were distributed later on the stock exchanges at very low prices.
Before we dive into the Dash study and learn the beauty of cryptocurrency, let’s learn the basics.
Hard cap (hard plank) Dash 18 million coins. That is, a total of 18 million Dash. At the time of this writing, the appeal of the order of 7.85 million coins.
Each coin costs about $ 700, and total capitalization is $ 5.4 billion. Average time hashing of a block is 2.5 minutes, which is 4 times faster than Bitcoin (10 minutes into the search block when mining).
Have Dash also varies the award for the block, which decreases to 7.1% per year.
Now let’s look at the unique features of the Dash.
Feature Dash #1: masternode
Full of nodes, or node, is a server running in a P2P network which allows peer nodes to obtain each other’s updates on events in the network. It is easy to guess that the nodes require maintenance and care. For this reason, the number of nodes does not grow as fast as one would assume. Because of this, the propagation time of the block increases significantly.
Ideally, miners would want to found them the blocks spread across the network as quickly as possible. Every second of delay increases the chances that another miner wins the race to block and add their blocks to the network before the others.
And to increase the number of full nodes, you need something to attract their owners. Therefore, the technical document (whitepaper) Dash offers the following:
“These nodes is extremely important for the health of the network. They provide customers the ability to synchronize and quickly communicate messages to the network. We propose to add a secondary network — Dash Masternode. These nodes will always be available and will provide the necessary level of service for the network in exchange for participation in the program rewards mastered”.
What is masternode?
Masternode is as full nodes in the Bitcoin network (that is, a fully loaded and synchronized separately stored root Bitcoin Core wallet, with a full history of all transactions), only masternode must provide certain network services and must have a serious investment in the system. To start masternode, you need to invest 1000 DASH.
Question: why do we need so much to invest in masternode?
In exchange for services rendered, masternode will pay dividends from the investment. It is, in fact, is attracting people to masternode in the best interests of the ecosystem. Dash was the first cryptocurrency, which introduced a model of mastered in the Protocol.
Masternode create a network of the second level, following the algorithm proof-of-service (“proof of service”) and are available on top of the normal network of miners. Such a two-level system creates a synergy between proof-of-service and proof-of-work in Dash.
As soon as masternode is activated, it starts to perform a variety of functions, like InstantSend and PrivateSend. It can also participate in the voting. Since the work of masternode requires certain costs in order to encourage operators nodes, they need to reward. The award usually amounts to 45% of the Commission fee for the unit. But there are nuances.
The system of remuneration of mastered
As the number of active mastered in the Dash system changes, the remuneration also varies in accordance with this formula:
- where n is the number of mastered under the control of the operator;
- t — total number of mastered;
- r — the current reward per block (now 3,6 DASH);
- b — number of blocks in an average day (usually 576);
- a is the average payout masternode (45% block)
ROI, or return on investment, masternode can be calculated as:
((n/t)*r * b*a*365) / 1000
Appeal to masternode
Masternode can be used for quick and safe solutions to important problems. To increase the speed, you can select N pseudo-random masternode from the network to complete the task. These masternode, in fact, can perform the task without the need for the participation of the entire network. This is a significant difference from Bitcoin, the network where every node participates in the creation of consensus.
The pseudorandom selection is performed using the following algorithm.
How does the proof-of-service
As you know, masternode have a huge impact on the system. Therefore, they need to make the most Byzantine fault-tolerant (read more about the problem of Byzantine generals). This means that the system should work smoothly, even if some masternode drop out of the scheme.
Masternode may be flawed for several reasons. Either it is driven by a bad operator, or by an attacker. In any case, it can be dangerous to the ecosystem if masternode will not be online or will work on the incorrect height of the block. To ensure that masternode work as they should, the Dash uses the Protocol as a proof-of-service or “proof of service”.
To negate the impact that can have masternode intruders on the system, nodes have to ping (test) the rest of the network to ensure they remain active. Network masternet provides it, choosing two of the quorum in each block.
And checks the quorum service quorum B block by block.
Quorum A is the closest node to the current hash block, and quorum B — the farthest nodes from the hash.
- Masternode And (1) check masternode B (rank 2300)
- Masternode And (2) check masternode B (rank 2299)
- Masternode And (3) check masternode B (rank 2298)
Approximately 1% of the network is checked for each block, which means that the entire network is checked 6 times a day. Nodes are selected randomly by a system of quorum, so the system could be trusted. Each node is allowed six violations, after which it is deactivated.
So, imagine Alice in the role of attacker who wants to pollute the ecosystem of the Dash. She needs to be selected six times to successfully break the system. If not, the system will cancel all previous violations. The only way to be selected six times in a row run more mastered. But, as we have seen, for this it will have to gamble their money (1000 Dash on masternode).
For example, she managed to accumulate some money. What’s next?
In the table above:
- n is the total number of nodes controlled by the attacker
- t — total number of masternode network
- r — depth of circuit
The table shows that if Alice invests 1 million Dash in and create 1000 mastered, it will have a chance to succeed in 0,6755%. The chances are pretty low. From attack of the Sybil network DASH can be considered protected.
How else is she going to cheat the system.
To answer this question, you need to conduct a thought experiment.
At the time of writing, 1 Dash costs about $ 700. 1500 mastered in Dash costs about 1 000 000 000 dollars. Suppose someone really decided to invest a billion dollars of his own money to the system. What he can now hope for? To act against the interests of the system and guarantee that you will lose a part of his fortune. In the event of a successful attack crypto currency will depreciate, that’s sure.
Alternatively, you can do everything possible to value of your share has increased. High probability that the last option would be most preferred.
Feature #2: PrivateSend
In short, PrivateSend supports interchangeability (fungibility), exchanging coins among users to break the track the history of coins.
Now, let’s look in more detail.
Before we start to make out, how it works PrivateSend, we need to understand the concept of CoinJoin.
What is CoinJoin?
CoinJoin is a technique anonymization proposed for bilinovich transactions Gregory Maxwell. It is based on this idea: “When you want to make a payment, find someone else who wants to make a payment and make a joint payment”.
It looks like the schematic diagram CoinJoin:
As you can see, in the joint payment you can’t bind input to output in a single transaction. This ensures that after the payment, third parties never find out. CoinJoin was to solve one of the most fundamental problems bilinovich transactions: the lack of interchangeability. That is, the substitutability of the asset or asset or the goods of the same type.
Suppose that you have borrowed from a friend 20 bucks. If you will write him ANOTHER bill for $ 20, it’s perfect. You can also write out one account for $ 10 and 2 account for $ 5. Also good. Dollars are interchangeable (but not always).
However, if you borrow someone’s car for the weekend and will return him to another car on Monday, that someone will break your face. Even if you take his red “Lada” is back with another red “Ghulam”, it would still be dissatisfied. Cars are not interchangeable. As is the case with cryptocurrencies?
Let’s look at the example of Bitcoin. Bitcoin is proud to have hosted the open register and book transactions to which anyone can look at any time. I mean, anyone can see all transactions that occur at any time. With bitcoin which has ever been used to buy drugs, for example, you will bear with him his illegal cargo. Your bitcoin will has been compromised.
Some providers bitcoin exchanges and these “tainted” coins will never be worth as much as “clean”. It kills interchangeability and becomes a reason for criticism of Bitcoin. In the end, why should you suffer if one of the previous owners of your bitcoin used it for making illegal purchases?
Although CoinJoin — a brilliant solution to the issue of interchangeability, it has many weaknesses.
Weakness #1: the merger transaction
One of the most common ways of implementing CoinJoin — the usual merger transaction:
But this approach leads to many possibilities to keep track of coins for the user in the course of these combined transactions.
In this example, using the merger was sent 0.5 BTC.
To define a transaction source, you just need to sum values, to the right, until they match the values on the left.
The more users added to the mixer, the more difficult it becomes to track them. But the risk remains deanonimizatsii.
Weakness #2: the ultimate bondage
In other CoinJoin implementations, the user can depersonalize your transaction, and then send the change to the exchange or anywhere else, who is familiar with the identity of the user. Then the recipient can just take the retrieved data, to link them with the user who is waiting for receipt of their transaction. This weakness is called “ultimate bondage”.
Let’s look at what is happening in the diagram above.
- Alice uses CoinJoin input of 1.2 BTC, which leads to the separation of 1 and 0.2 BTC.
- Alice spends 0,7 BTC from their outgoing 1 BTC, receiving the surrender of 0.3 BTC.
- Delivery of 0.3 BTC then sent is known to the source exchange.
And so using this to 0.3 BTC, the source can easily track transactions and break your anonymity.
Weakness #3: end-to-end linking
Consider the diagram below.
How do we identify the sender of our anonymous transactions?
Just start with “exchange transactions” and will scroll back to the moment when Alice anonymously sends 0,7 BTC. It completely breaks the anonymity. This kind of attack is called cross linking.
Back to the chart:
- Alice buys a 1.2 BTC on Coinbase.
- It then anonymizes them in output 1 BTC and receives the surrender of 0.3 BTC.
- She then connects the surrender of 0.3 BTC with the previous surrender of 0.2 BTC.
- Linking anonymous delivery with the delivery, which she received on Coinbase, Alice compromises your anonymity.
- Anyone can follow the movement of 0.2 BTC via Coinbase and find the full transaction history.
Despite the weakness, the Dash sees the value in having to make the coins interchangeable, and therefore introduces PrivateSend.
PrivateSend is a service mixing coins on the basis of CoinJoin with modifications.
- Use mastered.
- Mixing with multiple mastered.
- Limit mixing at the indicated divisions (for example, 0,01: 0,1 DASH, 1 DASH 10 or DASH). Max — 1000 DASH.
- The use of passive nodes.
How does PrivateSend in the Dash?
PrivateSend adds privacy to transactions by adding multiple identical inputs from multiple users and send them to multiple insights. Since the transaction flow cannot be tracked, privacy of the transaction remains unchanged.
The Dash says:
“PrivateSend uses the fact that the transaction may be formed by multiple parties and transferred to multiple parties, in order to merge the funds together so that subsequently they could not be broken. Given that all transactions PrivateSend set up so that users pay themselves, the system is fully protected from theft and the coins of the users remains safe. Currently mixing using PrivateSend requires at least three participants”.
In the image above, three users have provided their impersonal means of mixing. Then they get their money back with new outputs that are randomly mixed. As you can see, de-identify transactions need for mixing. You can depersonalize the currency in multiples of 0,01, 0,1, 1, 10, 100 and 1000 DASH.
Then similar denominations are mixed, in order to ensure anonymity. PrivateSend DASH is limited to 1000 per session. This means that if you significantly increase the amount you will need several sessions. PrivateSend is running in the passive node to ensure that the time of the attack will be difficult to implement, and the users will not have problems. Each session involved up to three clients, so each user has 1 chance out of 3 to the transaction. To increase anonymity, use a chain approach, in which funds are sent through many mastered, one after another.
Feature #3: InstantSend
One of the most interesting pieces DASH, along with anonymity, is the speed of the transaction.
As we mentioned in the beginning of this review, the transaction rate of Bitcoin is very low. So low that refuse Bitcoin as the means of payments.
InstantSend solves this problem by virtually instantaneous transactions.
Again, how are the transactions in the Bitcoin network?
- Alice wants to send 1 BTC to Bob and creates a transaction.
- A transaction is, in fact, a message to the miners who set her intention to make a transaction.
- The miners then confirm the transaction and provide the details in the blocks that seal the transaction.
- Bob gets 1 BTC.
The reason why the miners it is important to conduct the approval process, is twofold. On the one hand, they need to make sure that Alice initiates a transaction. That is, in order to avoid double spending.
What a double waste?
A double waste, it means spending the same coins in multiple transactions at the same time. This problem is caused by the principles of mining. The blockchain transactions are made only when the miners placed the transactions in the mined blocks.
Now, let’s say Alice sent 1 BTC to Bob, and then the same bitcoin to Charlie. Miners put one transaction in the block, and then, in the process, overwrite the other, prevent double spending.
As Dash solves the double-spend problem using almost instant transactions?
Let’s go through the steps InstantSend:
Every time Dash block is mined, the miner sends the block hash. The block hash used to select the quorum mastered. 10 masternode = 1 a quorum.
At the time preceding the extraction of the next block (2.5 minutes), the quorum becomes the “authority InstantSend” in Dash. So, suppose that Alice wants to send Bob 1 Dash through InstantSend selected by the quorum block input transaction data and translates the data input.
Lock will prevent double-spending. If Alice wants to send the same input to Charlie and to spend the money twice, since the inputs have already been broadcast, the network will reject the new transaction.
The sender and recipient will receive 5 confirmation of the transaction within seconds and it becomes clear that the transaction took place.
Conclusion: what is cryptocurrency Dash?
It seems nothing is forgotten.
These three features make the Dash a unique cryptocurrency.
Here is a growth chart Dash:
Many large service providers have started to accept “Digital Cash” as payment.
Singapore wallet TenX even created a mobile app and debit card that can convert the Dash to Fiat currency. The app has been successfully tested in McDonald’s.
Dash has a strong potential to become popular cryptocurrency.
Subscribe to our channel in the Telegram. Who did not, that was late.