Crypto Academy Week 16 - Homework Post for @levycore

INTRODUCTION

The anonymity of blockchain technology only goes as far as concealing your first and last names, your public address is as visible as sunlight to everyone everywhere in the world. This has led to the creation of a technique used in crypto policing today called 'de-anonymization'.

In a bid to further increase the level of privacy in crypto transactions on a blockchain, a new kind of coins was created. These coins are known as privacy coins. They ensure privacy by concealing some information on the origin and destination of a blockchain transaction.

In this post, I'll expound one of these coins, which is DASH

DASH OVERVIEW

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Dash is a cryptocurrency that was formed as a result of a bitcoin fork in 2014. Just like bitcoin, it was created to serve as a medium of payment and was also decentralized. It however varied from bitcoin in that it used a modified version of Proof of Stake as its consensus, rather than bitcoin's Proof of Work, and it was created to solve the privacy problem.

At its inception, the cryptocurrency was referred to as XCoin, though it was latter changed to DarkCoin, before finally it was named 'Dash'. Dash was created to be a useful medium of transaction, to be a digital cash that can be used via credit cards or paypal.

Dash was also created to protect user information. It has a built-in feature known as PrivateSend. Using this feature, users can go private on their blockchain transactions.

HOW DASH WORKS

Being a fork of bitcoin, Dash took another approach to handling transaction processing. Validation on Dash is done by nodes called masternodes. To be a masternode, a user will have to stake at least 1000 DASH in their system. This will enable them pay fees as well as earn rewards.

This kind of algorithm is a modification of Proof of Stake and it makes transaction validation scalable. This is because, the number of masternodes validating transactions is under check. As of Jun 2, 2021, this number stands at 4,490 masternodes src

As well as verifying and validating transactions, the masternodes also offer privacy services.

HOW DASH MAKES TRANSACTIONS PRIVATE

There are various methods privacy coins ploy to ensure the privacy of their blockchaim transactions. For Dash, it is the CoinJoin strategy.

In the CoinJoin strategy, different transactions from different users are joined together into one transaction, then new addresses are assigned to the different transactions, after which they are sent to their respective destinations. This strategy is also called coin mixing.

With the CoinJoin strategy, it is difficult to trace the sending and receiving addresses of a transaction.

DASH MARKET DATA

As at Jun 2, 2021, DASH was ranked 51 on coinmarketcap with a market cap of $2.06 billion.

The unit price of DASH is about $202.98, a 7.85% increase from the previous day.

More information on Dash can be accessed from Dash's coinmarketcap page

HOW TO SET UP A DASH WALLET

To setup a DASH wallet on an android device, follow the simple steps below

Open Google Play Store and search for 'DASH'

Next, you select the app option created by Dash Core Group Inc.

The installation page opens, then you click on install

After installing, open the app. Once the app os opened, you either swipe left (twice) if you want to read the information provided or you click on skip to get started

Then, you click on 'Get Started'

Next, select 'Create a New Wallet' since we're creating a new wallet

You will be required to set your pin, a 4-digit number

Next, you'll have to confirm the pin you just set

It is better to secure your wallet at the beginning, so on the next page, click on 'Secure Now'

To secure your wallet, you'll need your recovery phrase, this is a very sensitive piece of information, don't just keep it safe, keep it strictly private. Click on 'Show Recovery Phrase'

The recovery phrase will be displayed. Copy it to somewhere safe and private. Next, you check the small circle box to confirm that you wroteit down somewhere, then click on 'Continue'

Next, you have to select the words in the phrase in the exact sequence it was shown to you

Then, you have to input your pin, the one you set and confirmed

You will be presented with the option of enabling biometrics on your account if your mobile phone is supports biometric

After that, your account is set

WHY I CHOSE DASH

Dash is pretty much a very interesting coin. It offers privacy as an option, hence it survived the delisting onslaught carried out against many other privacy coins. Compared to Monero, which is arguably its biggest rival, Dash is cheaper and faster, though Monero offers more privacy.

The modified Proof of Stake consensus Dash employs ensures good level of scalability on its blockchain. This is necessary to achieve the purpose of the creation of the coin in the first place, which was to serve as a medium of digital payments.

Not only is Dash a fork of bitcoin, it also is a currency worth above $200 with a market cap of $2.06 billion. This makes it a formidable project worth investing in, by market cap standards at least.

Here are some advantages and disadvantages of Dash

ADVANTAGES

SPEED

With a block size of 2MB and confirmation time of 2.5 seconds, Dash is a lot faster than Bitcoin and Monero. It also has a feature known as InstantSend and can record up to 56 TPS.

COST EFFECTIVE

Aside from speed, there's another area where Dash comes out on top, Dash is also cheaper than Bitcoin and Monero. It's cost effective for payments and privacy purposes.

OPTIONAL PRIVACY

On Dash, privacy is optional. It's not the best given it only employs the CoinJoin strategy to mask user identities, but it offers users the option to go incognito or stay open. This is perhaps why it still retains its place on several exchanges. It uses a feature called PrivateSend to mask transaction information.

MEDIUM OF PAYMENTS

Dash is accepted by merchants in various parts of the world, including Venezuela and the US. Some of these merchants include Travala.com, Shopinbit, Bitrefill, CheapAir, etc. For more information on merchants accepting Dash, please visit Dash website

DISADVANTAGES

PRIVACY FLAWS

'Not untraceable' is an honest review of Dash privacy. Unlike Monero that employs different strategies in concealing user data, Dash employs only one strategy, the CoinJoin strategy. Getting around this strategy unmasks the hidden data and this can be done by merely accessing the masternodes.

PRIVACY CONCERNS

Privacy in financial transaction is a poisoned chalice. Why you can feel secure that your information is incognito, there are also the crime and terrorism financiers and money launderers feeling the same to. These are the problems with privacy. Terrorism and crime financing alongside money laundering is a manor reason why no jurisdiction is comfortable with the aura of privacy in financial transactions.

LIMITED SCALABILITY

Dash's block size of 2MB is quite okay, until it isn't. When scalability becomes the focus, 2MB and 2.5 seconds block time isn't quite the pay zone, especially when you're talking global payments. Grin and Beam are privacy coins that offer better scalability than Dash.

CONCLUSION

Privacy is becoming more of a concern when the publicity of transactions on blockchains is taken into perspective. With privacy coin, one can carry out a transaction knowing that the are to a great extent, covered. It's not always about crime and money laundering, but about the personal right to privacy.

I prefer Dash because it addresses 3 things, privacy, censorship and payments. In this 3 features, it comes out on top of any other coin I know.

Thanks for reading.

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Cc:
@levycore