Crypto Academy Week 16 - Homework Post for @levycore

INTRODUCTION

Cryptocurrencies have always been known for their transparency. Basically, you cannot do something on the blockchain and keep it hidden. Everyone knows your business just as you know theirs. However, this characteristic opposes the human need for basic privacy.

Every single person has a right to their own personal space. Although human beings are regarded as social animals, there are always times when we need some privacy. Agitations on privacy rights have been going on for years and have found their way into the crypto and blockchain world through the creation of Privacy Coins.

Privacy coins have started to make waves in the general crypto markets. These special coins retain the blockchain feature of anonymity but offer privacy to its users. In this post, I am going to talk about a privacy coin with a catchy name which is Dash.

Let’s begin.

Fundamental Analysis on Dash

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A brief history

Bitcoin has always been criticized for its scalability issues. On the quest for a better way, on January 2014, Evan Duffield created “Xcoin” as a fork of bitcoin. The coin was not very much accepted at the time. Its privacy feature enabled it to be used in dark net markets for selling illegal arms, drugs and so on. For effect of this, it was renamed Darkcoin after just 2 weeks of its creation.

In 2015 however, Darkcoin started fading away from the dark net and was renamed Dash. Dash stands for “Digital cash”.

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Overview

Dash coin was created to tackled some bitcoin problems. Similar to bitcoin, dash uses a proof-of-work consensus algorithm. This consensus is not entirely the same as bitcoin as it uses a hash function called X11 unlike bitcoin’s SHA-256. This hash function has 11 rounds of hashing with an average block time of 2.5 minutes. This is massive compared to bitcoin’s 10 minutes block time.

Dash also has a 2mb block size just like bitcoin but considering the block time, it would be way more. Let’s do a calculation:

Dash block time = 2.5 minutes
Block size is 2mb
In 10 minutes, we would have; (2/2.5) x 10 = 8mb

Bitcoin on the other hand has 2mb in 10 minutes. This shows that dash is way faster than bitcoin which is a coincidence to its name.

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What makes Dash so special

Dash consists of miners and a special groups of nodes called masternodes

Masternodes: Masternodes are perform important functions on the blockchain. They are responsible for governance and security and make sure transactions are fast and private. To become a Masternodes, a user has to have a minimum of 1000 Dash deposited. The functions of Masternodes cost money so the Masternodes are compensated with 45% of every transaction they authenticate. Masternodes are responsible for two very critical transactions that make the dash blockchain different. These are termed InstantSend and PrivateSend.

InstantSend: Unlike Normal transactions on the dash blockchain that take 2.5 minutes to be confirmed, InstantSend transactions take just a few seconds at a little extra fee. Users who don’t want to wait long for their transactions can always ask MasterNodes to clear the transactions almost as quickly as they are made. This feature is a major scalability boost for dash.

PrivateSend: The privacy feature of Dash is seen in this PrivateSend feature. This extra feature protects that fundamental human right of privacy and is carried out by the Masternodes.

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Dash Self-Governing and Self-Funding protocol

The dash blockchain distributes rewards in a manner that some of the funds goes back to the dash blockchain in order to sustain it. Normally, 10% of every mining reward goes back for the advancement of the cryptocurrency. The blockchain is self-sustainable.
Also the allocation of the funds are determined unanimously by the participants on the blockchain.

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Fundamental analysis of dash

Fundamental analysis is a type of analysis that is done on an asset by looking at the different economic and financial factors that surround it. Basically anything that can affect the asset is considered from management plans to current policies.

Let’s start with Management:
Dash has a strong team of 33 key members that are dedicated to seeing that the project reaches its glory.

• Ryan Taylor is the current CEO
• Glenn Austin is the current CFO
• Robert Wiecko is the current COO
• Bob Carrol is the current CTO
  Other members can be found on the official website.

Project plan
Dash was started with a clear cut plan of solving some bitcoin problems. The introduction of the features of privacy and InstantSend of Masternodes makes it a seeming success. With a clear plan, the project has become a force to be reckoned with. The roadmap shows that the project was really detailed for success. The functionality of the project is included in the whitepaper.

Social media presence
Any company that wants to survive these days has to leverage the power of social media.

• Twitter page with 395k followers
• Facebook page of over 35k likes.
• Instagram page with 11.5k followers.
• An active Medium account.
• A very active reddit community of 41k members.
  Other social media links are Discord, Telegram and GitHub.

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Some stats of dash as of writing

Price	$187.25
All Time High	$1,642.22
Rank	#53
Market cap	$1,879,517,947.20
Trading volume	$486,197,515.98
Curculating supply	10,167,522 DASH
Total Supply	10,167,522 DASH
Maximum supply	18,900,000

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Steps in creating a wallet for Dash

For this task, I would create a native Dash coin wallet on my IOS device.

Step 1: Visit https://www.dash.org/

Step 2: Click on View All Apps.

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Step 3: Click on Download For IOS and then click on App Store Download. Download from AppStore by clicking on Get.

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Step 4: After the App is downloaded, launch it and click on Get Started.

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Step 5: Click on Create a New Wallet.

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Step 6: Choose a pin and confirm it.

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Step 7: Enable Touch ID for IOS.

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Step 8: A recovery phrase notice comes up. I chose to Skip because for some reason the phrase wouldn’t show up on IOS.

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Step 9: The wallet is ready! To secure the phrase click on the corresponding options button below.

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Step 10: Select Security.

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Step 11: Click on View Recovery phrase and Insert Pin.

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Step 12:The seed phrase comes up. I didn’t take a screenshot because the instruction clearly said not to. Rest assured that I saved it well.

Reasons for choosing Dash

At the beginning of my research of my research for this homework, I was immediately hooked when I came across the Dash coin. The fact that it is a privacy coin that was built to solve the problem of Bitcoin itself was very interesting. Despite all the criticism of privacy coins being like conventional banks, dash has been able to successfully combine privacy, speed and autonomy for high scalability.

Speaking of autonomy, dash’s self-governance and self-funding protocol is a very smart way of sustaining the system without putting in too much funds.

Dash blockchain has been able to utilize the proof of work consensus and made it faster than it was on bitcoin. A user can either opt for immediate transactions or wait 2-3 minutes which isn’t all bad compared to bitcoin’s 10minutes wait. The best part is that the fees are small.

The fact that Dash has two different ways of confirming transactions is a game changer. Miners are involved and then we have Masternodes. Basically, the introduction for Masternodes is the main game changer.

I was also interested when I discovered how far the coin had come. This coin had not been accepted and had been criticized by a lot of people because of the dark net activities but it still came up to number 2 privacy coin rank according to coinmarketcap. The coin traded below $10 for years until 2016. Then in December 2017 it got to its All time high of over $1,600.

The dash X11 hash function is another thing that attracted me to the project. This hash function has been thought to be more efficient than the SHA-256 algorithm.

I also have to admit, the Roadmap is really impressive. I’ll just leave another link to it here. You have to check it out.

Now let’s talk about some advantages and disadvantages;

Advantages

• The first clear advantage of dash is the fact that it provides users the very much transaction privacy they need thanks to the PrivateSend option.

• The next big advantage is that users can opt for a faster transaction time.

• Dash has low transaction fees when compared to the outrageous fees of the bitcoin blockchain. The fees are even lower than visa.

• Another very important advantage is the fact that rewards are shared. Unlike bitcoin where miners get 100% of rewards, rewards on dash are distributed among miners, Masternodes and to a fund pool.

• Decentralized governance is also a major advantage. Users have a say on how activities on the blockchain are ran.

• Dash also features very high security.

• Scarcity is also a major feature of dash as it has just 18 million coins ever.

Disadvantages

• The major con of Dash for me is that it can be used for illegal activities as it was used in the past. The fact that it’s decentralized and private is a good mixture for crime.

• There are speculations that Dash may not be fully decentralized. A lot of people believe that most of the Masternodes are being handled by members of the development team.

• The general controversy over privacy coins affects the acceptance of dash in the crypto community. Transparency has always been one of the major features of crypto transactions.

• There is also some belief that Dash’s privacy might be a huge hoax with some loopholes. It is believed that Masternodes an track transactions.

• The Dash coin also has wide competition with top privacy coins like Monero and ZCash and other top coins like Bitcoin and Litecoin.

Conclusion

It’s clear that Dash has brought in some new technology into the crypto world. Its privacy feature coupled with the fast transactions and decentralization is something really interesting. The fact that the coin is going against major coins like bitcoin and litecoin is commendable. It shows that the team behind it are determined and optimistic.

The effects of hard work and determination in this project are clear. The fact that the Dash was cleared from being a major coin for criminal activities shows how much the team believes in it.

My research on Dash has led me to believe that the project looks promising. For it to survive however there would have to be some community encouragement. This encouragement might not come so easily because of all the cons and rumors surrounding the project.

I have learnt a lot from this lecture from the dash hash function to its other different features. I have completed this assignment to demonstrate my knowledge on the subject.

Special thanks to @levycore