I’ve been a Dash supporter, investor and off and on masternode owner for over a year and consider it to be one of the primary focuses in my current cryptocurrency portfolio. A lot of my time has been spent explaining Dash to friends and acquaintances usually as my “tier 2” conversation after already attempting to explain some of the core concepts of bitcoin and cryptocurrencies themselves. I think the best thing I can say about this experience is that the conversation regarding Dash has never stayed the same. It’s one that has always been evolving and progressing over time with new feature and benefit after new feature and benefit. To be honest I’ve been having the same conversation about Bitcoin since I got involved mid 2013. Not much has changed and in fact some of the previous benefits don’t necessarily apply anymore (i.e. fee-less transactions, or decentralized governance).While bitcoin has been absolutely revolutionary and truly has changed our lives completely, it’s also been the best stress test and “open beta” we could have ever imagined. We’ve been able to beat away at the network and expose most of its flaws. Unfortunately finding the flaws hasn’t been the battle. The battle has been a broken example of decentralized governance. We have constant bottleneck not only in transaction/block limits but ever-changing debates and no way to reach a true consensus for solutions to problems. Then even with consensus the opinion of the minority could still prevail since the ability to actually make changes are privileged to a select few. I won’t lie in ways it’s been embarrassing to see the developer egos collide and watch what was supposed to be a ground breaking decentralized technology start to move at snail speeds and be overcome with bureaucracy.
Have a problem? Here’s the solution…
This is where DASH comes in, and honestly makes bitcoin look a bit old and dusty. Dash has been able to quickly and in most cases quite cunningly solve the majority of existing cryptocurrency problems or “points of pain.” To get started the Dash protocol features a truly decentralized network that operates on a “2-tier node” system (more on that later.) Within this system we have a decentralized voting mechanism that lives on the blockchain and only parties vested with at least 1000 DASH or more can participate in. One of the main purposes of this voting system is oversight of the decentralized monthly funding system that’s built into the protocol. That’s right a funding system, decentralized, coming out of no person or company’s pocket and it is overseen by the majority and only the majority. This monthly pool of Dash can be used to fund literally anything someone thinks would benefit the Dash ecosystem! All you have to do is convince enough participating voters and the Dash protocol will automatically send the amount of coins to your desired address. Obviously the more transparency you provide and the more beneficial the idea, the higher chances of being funded (or re-funded).There are no user submitted donations and no relying on any middle man/third party involved in the funding or payouts of this budget. These funds come directly from newly created blocks in the same way miners receive newly created Bitcoin. These funds in most cases will go to core development, software development for wallets or point of sale solutions and things alike. However, in theory could be used for anything at all and the best part is only people who have something to gain or lose get to decide where the funds go. There is nothing that even slightly resembles this system in the current bitcoin community or ecosystem.
True Incentives
Even better, if Dash increases in demand and the value goes up: The value of that monthly budget grows with it allowing even more opportunities to be funded and in turn gives us a perfect example of an “Exponential Growth” model. If the network as a consensus is able to tune in on the best ways to use this budget and grow Dash adoption it could literally self-fund itself beyond the size or capabilities of Visa & MasterCard and never even think about a profit & loss statement because remember these funds come from the blockchain and protocol itself not out of any person or entities pocket. It is a no overhead resource, and the existing system already greatly deters and reduces the benefit of exploiting these funds.
Imagine if every time the job market had 10k new jobs our decision makers (politicians) saw their net value increase? We would have a vastly different world today, and much different motivations in terms of government funding!
The parties making funding decisions would only be hurting their own vested interests by doing anything that doesn’t help Dash (and their minimum 1000 coin holding) grow. Imagine if every time the job market had 10k new jobs our decision makers (politicians) saw their net value increase? We would have a vastly different world today, and much different motivations in terms of government funding! The problem is most decision makers in politics profit the most from decisions that hurt the majority. Corporations do not need to spend huge sums on lobbying or campaign contributions if the decision they’re hoping for is in the best interest of all parties and already make the politician more wealthy on top of it.With the current Dash system we are a community, protocol and complete payments solution ran by the people and only the people.
TWO-TIER NODE SYSTEM
Most of the features we’ve gone over so far are only possible because of the self created Dash two-tier node system:
First tier (Tier One):
This is a standard full blockchain node similar to bitcoin’s qt or bitcoind software. This tier does not have the ability to vote on the protocol and essentially operates as a normal cryptocurency wallet. The big differences are the built in Dash features like Darksend Mixing a revolutionary way to privatize your cryptocurrency holding which I believe to be vital in today’s modern cyber world. As well as InstantX transactions which are transactions that receive up to 8 confirmations usually within a few seconds. Both of these functions are long standing features that Dash has been quietly flaunting for quite some time now. Again solutions created for problems that we are only now seeing as major issues. (More on both of these features later)
Second tier (Tier Two):
MASTERNODESAlright, now here we are. The part where all of this starts to make sense and you see exactly how this is able to work!The second tier node system clients are called Masternodes. Masternodes are full client wallets that have at least 1000 Dash in a single address and have chosen to collateral and lock their 1000 Dash in order to participate in the Masternode network. The Masternode network can and will be used for a lot of exciting features in the future like decentralized cloud storage but is already being utilized for the Darksend Mixing & InstantX Dash features. Which again are fully functioning decentralized solutions to huge problems we currently see in the cryptocurrency space. Masternodes are also able to actively vote on the Dash monthly budget and decisions regarding the future of the protocol and network. In return for the services your Masternode provides by simply running the client and activating your node you also receive regular distributions of Dash. Which alone gives a 14% annual return at the time of this writing (will fluctuate based on the total number of masternodes). There’s a lot more information regarding MasterNodes on the Dash.org website for those who dare to learn more.
Digging Deeper…
Oh these old dusty absolutely groundbreaking Dash features:So I said I would talk more about Darksend Mixing & InstantX transactions. What I’m not going to do is regurgitate their existing descriptions which can be found here. I’m going to give you the simplest explanation and then an idea of their usages.First off is Darksend Mixing: It’s really unfortunate that privacy features have been so carelessly lumped in with things only desired by criminals. When in fact this is our only protection from criminals. It’s well known that publicly announcing that you have an even semi-large sum of cash is a horridly bad idea. Which is why our convenience store clerks don’t carry more than $35 at a time and banks are still open after scandal upon scandal. We’re scared! No one wants to get hurt or lose their things. So why are we grouping an investor who doesn’t want to get stabbed to death or robbed in with likes of ISIS or Al Qaeda? You may have nothing to hide but do you post your bank account balance on Facebook every day? Having your information publicly on a blockchain with no veil of protection or privacy is a horrible idea for any individual party. DarkSend Mixing solves this by allowing you to take all of the coins you receive on any of your addresses and in my own words splitting them into much smaller amounts to mix them all over the block chain into tiny little pockets of confusion. After mixing your wallet just shows a total Dash amount but on the blockchain your Dash is scattered all over the place making it untraceable. If you use unique addresses to receive your Dash and enough rounds of Darksend mixing it is virtually impossible to identify what coins you own or have owned/spent. For a more technical explanation click here.
Second is InstantX Transactions: InstantX transactions solve bitcoins humongous elephant in the room which is slow block confirmations. Even if we have blocks minting as expected every 10 minutes there has been abundant bloat on the bitcoin blockchain making it impossible to do low fee transactions like we used to be able to and causing long waits. Using InstantX we’re able to leverage the Masternode network to provide instant consensus based confirmations. This is a huge game changer for point of sale solutions especially. Currently if you were to buy a shirt from a brick and mortar store accepting bitcoin, you could be waiting in the store for an hour or more just for your transaction to confirm. This hardly is a demonstration of a next generation payment system. This more closely resembles proxy payments of the 60s or 70s. With InstantX that merchant can confidently accept your transaction instantly. The funds are immediately available to the vendor whom if they choose can convert their Dash to a Fiat currency or a cryptocurrent fiat “peg” (i.e. USD pegged with NBT or USDT) reducing their risk of volatility and costing almost nothing in fees! The instant confirmations were recently showcased with a monthly budget proposal funded project to make a Dash InstantX soda machine that was displayed at the North American Bitcoin Conference in Miami just recently. You can find video on that here.
Dash Evolution…
These are all features that are fully functional and being used right this instant as you read this. However, like I said before Dash has never been the same conversation. On top of all of these advance “crypto 2.0” features that are already living and breathing on the Dash network is the ambitious next chapter called Dash Evolution. Evolution is a protocol built on top of the Dash network at the 2nd tier level that integrates a whole new world of possibilities. Existing in the coming features are things like: encrypted decentralized cloud storage, decentralized social infrastructure including registered usernames, instant messaging, friends lists with automatic address generation and even in client payment requests. The possibilities of what this brings is nearly endless and much of this is already available in the Dash Evolution prototype! Best of all this is all being built on top of the existing infrastructure so it can’t interfere with existing functionality and is essentially optional to the user.I will be doing another write-up on Dash Evolution soon. So this is to be continued… :)
The opinions in this article are not representations of the Dash Foundation or any contributors to the Dash Network, but is the sole opinion of the Author. The Author is in no way attempting to give investment advice or in any way guaranteeing a return on any investments. Please never invest funds you cannot afford to lose in any non-fixed rate investment. To contact the author email pro@proteanx.com. The Author was not paid by an individual organization for this article, please tip to support future writings.