Introduction
It's an honor to be back here at the moment for intense learning about cryptocurrency in the academy, I've attended some lectures earlier which are awesome work done by our professors. This time, I attended the lecture presented by professor
@levycore which is based on the topic
Privacy Coin and I will be solving the task associated with the lecture.
Introduction to Privacy Coin
The invention of Bitcoin opened the way for cryptocurrencies, being the first cryptocurrency that was built on the Blockchain. Transactions on the blockchain as employed in the Bitcoin makes all actions to be transparent showing the sender and receiving addresses in a transaction, amount time of the transaction and so on. A few other cryptocurrencies came into existence shortly after Bitcoin which are referred to Altcoins coined from the phrase " Alternative Coin" that is, Alternative coin to Bitcoin.
Some of these Altcoins are developed to take care of some setbacks in Bitcoin and Privacy Coins is not an exception. Privacy Coins are the type of Cryptocurrencies that are invented to bring privacy to the blockchain, such that transactions can be done anonymously on the blockchain which gives users the choice to hide the sender and receiver addresses, amount, and so on. In privacy coin transaction, the users wallet balance and addresses are hidden and as such create a form of privacy where users can conclude to keep their transactions completely private. I will be talking about the privacy coin DASH for this task.
1. Choose a Privacy Coin and perform a fundamental analysis of the coin in detail.
What is DASH Cryptocurrency
I stated earlier that most Altcoins were created because of the setback of Bitcoins and in the same way, birthed the Privacy coin DASH. DASH has been existence since the year 2014 with the former name Xcoin before it became DASH under the founder Evan Duffield and it's creation was necessitated by the shortcomings of Bitcoin; Low speed of transaction and privacy issues.
DASH is aimed to process transaction faster than Bitcoin and include some privacy in the process of transacting on the blockchain. Knowing that the Litecoin is forked from Bitcoin , likewise, DASH is a hard fork of Litecoin thereby tracing its origination to being a fork of Bitcoin. DASH is an alternative coin to Bitcoin that serves as a privacy coin, a digital asset that can be transacted anonymously between users hiding the transaction details thereby keeping it to be eluded in chain analysis.
How DASH differs from BTC
It's a privacy coin that enables users to hide transaction details unlike Bitcoin transaction that is public.
The speed of transaction is higher as compared to Bitcoin.
Block production is done in 2.5 mins unlike Bitcoin having 10 mins of block production. DASH block production is seen to be 4 times faster than Bitcoin's. E.g 10/2.5 = 4.
Users are involved in the governance of DASH
Overview of DASH- Data and others
DASH is currently trading at 212.48 USD and is sitting the 50th ranking by market capitalization with 2,168,640,905 USD. DASH has a circulating supply of 10,164,583 DASH with the maximum supply set to be 18,900,000 DASH. Looking at the trading volume of DASH, it's realized to be 628,024,674 USD.
Screenshot from coinmarketcap.com
DASH Liquidity
Knowing that liquidity in crypto ecosystem is a very important context to look into before making a choice of any crypto, which means the ability to trade a crypto asset for other assets, in other words, the ease of exchanging a crypto asset for other cryptocurrencies or Fiat currenecies for effective money movement. DASH liquidity is high with several top exchanges listed it for trading on their platforms and this makes DASH easy for exchanging to other crypto assets or fiat currencies. Some of the top crypto exchanges are Binance, Huobi Global, Coinbase exchange and so on, paired with other cryptocurrencies, stablecoins and fiat currencies. Let's take a look at the DASH market below.
Screenshot from coinmarketcap.com
DASH's Consensus Algorithm
Just like Bitcoin, DASH employs the consensus algorithm Proof of Work (PoW) where the validation of transactions on the network is carried out by the miners by solving mathematical complexes to create new blocks. In the quest to make transactions faster, DASH network employs X11 hashing algorithm which does not only allow miners to provide solutions to complexes but secure the network and to take care of any future vulnerability detected in any of the hash functions.
Other Features of DASH- Masternodes, PrivateSend and InstandSend
Masternodes
Masternodes in DASH is a technology used to form a second tier network which facilitates other advanced functions like PrivateSend and InstantSend. In addition, and it forms on the top of the first tier on the DASH mining network whereby the masternode operators are eligible in the governance system of DASH as they can vote monthly on block rewards (up to 10%) to contribute to the development of DASH. As an operator of masternodes on DASH network, the masternodes must be backed with collateral that is DASH dominated and as such, earn rewards steadily as an operator of masternodes.
PrivateSend
PrivateSend is one of the functions facilitated by the masternodes such that a user can make transactions anonymously without any of the transaction details exposed to third parties. Using the Coin Mix feature, the transaction is received and mixes it with others such that, the transaction is completed anonymously hiding the sending address, amount and the destination address. This function render transactions untraceable.
InstantSend
This is another feature facilitated by the masternodes such that users can make instant transactions on the DASH network at relatively low charges. According to research, this is the default transaction option on the DASH network that involves reaching a consensus as regards the validity of a transaction.
2. Describe the steps in creating a wallet for the Privacy Coin of your choice. (Screenshot required)
I will be showing the steps involved in creating DASH wallet on mobile phone. The steps are listed below with screenshots;
Navigated my Android phone to the Google Play Store. And searched for the DASH Wallet App.
Clicked install to have it downloaded to my phone.
After successful installation, I opened the Wallet to start the wallet creation process then clicked Get Started.
On the next interface, I selected Create new wallet because I am creating a new DASH wallet.
I created a four digits PIN and confirmed it by repeating the four digits.
Wallet requires certain level of security such that, I clicked Secure Now on the interface after pin setup, this is a process to get my wallet recovery phrase.
On the next interface, Clicked Show Recovery Phrase.
The Recovery phrase was revealed for Backup, I wrote it down and I ticked the I wrote it down box and Clicked Continue.
On the next interface, I supplied the recovery phrase in order it was revealed earlier to Verify.
- DASH Wallet Created Successfully.
Created DASH Wallet
3. Explain the reason you chose the Privacy Coin. (State the advantages and disadvantages)
A few of the features of DASH privacy coin is the fact that the InstantSend is the default transaction option of the network which facilitates faster transactions on the network, reducing the waiting time between the sender and the destination wallet. Another one is the PrivateSend, where I can complete transactions anonymously. Going further with things that interests me, users can participate in DASH governance as they can vote to effect a change in the network and the network is very secure for transacting. Let's look at the Merits and Demits of DASH privacy coin below.
Advantages of DASH privacy coin
Transactions are very swift on the DASH network with the function InstantSend which has transactions to be almost instantaneous.
The Dash is very secure and that facilitates smooth use of the coin.
Dash coin is associated with low commission fees such that users are not scared away with exorbitant transaction fees.
Users can choose to make anonymous transactions using DASH coin utilizing the PrivateSend function.
Users can participate in DASH governance through voting for any purpose of change in the network.
Disadvantages of DASH privacy coin
The concept of the rich get richer exists here, where users with more monetary power to act as a masternode operator earns more and gets involved actively in governance while users with less power are left behind.
Untraceable transactions offered by DASH can be used to transact illegally.
It's not fully decentralized.
DASH is still not widely accepted yet as it has not been able to get many users to utilize the coin.
Conclusion
In conclusion, privacy coin has changed the crypto ecosystem from what we used to know, with privacy coin, users can have their transactions done anonymously which strengthens privacy of individual users. DASH is one kind of the privacy coin that involves its users in the network's governance and as well offers
InstantSend for instantaneous transactions done securely and
PrivateSend that enable users to send assets with full privacy, which render such transaction untraceable. Thanks to professor
@levycore for this great lecture. Thank you, all.
Written by;
@fredquantum
Hi @fredquantum, Thank you for taking my class in the 8th week.
This is the detailed assessment that you get from the results of writing the homework that you have created:
Review dan Feedback:
The fundamental analysis and steps to create a wallet that you created are very good.
The explanation of the reasons for choosing the privacy coin of choice and the conclusions you made are good.
You followed the rules and guidelines well, good job!
Thank you!