Privacy coin are coins that are in a section or class of their own,they are different from the regular coins and differ in operation from the regular coin. These cryptocurrency coins are notable for their anonymous and obsure kind of transaction on the blockchain in that the origin and destination of a transaction is hidden. This is unlike other coins like bitcoin, etherium and other that allows you access into their network to view public addresses of people. It is important to sate here that Privacy coin has two main features it is noted for, they are;
This simply makes it difficult to identify whoever carries out a trasaction,in other words,the identity of the person is hidden and therefore difficult to tell whomis behind a transaction at a particular time on a blockhain.
This makes it very difficult to monitor transaction or to trail it from start to finish especially by a third party even when he employs the helps of blockchain a analysis. When you mix multiple transactions on a blockcahin, it makes it difficult for blockchain analysis to detect the transaction.
Privacy coin uses **Stealth Addresses, coinjoin, Zk-SNARKs** to preserve the identity and obscurity of the transaction performed with them
However I will liketo mention some of the prominent Privacy coin we have. These coins includes;
- Dash
- Monero
- Zcash
- Beam
- Grin
Dash Privacy coin
Image Source
I will be using dash as my case study for privacy coin. Dash is one of the prominent privacy coin founded by Evan Duffield. It is an obsure or anonymous cryptocurrency that came into existence in year 2014, it was formerly reffered to as Xcoin and then later evolved to be Darkcoin before it finally took the name Dash. Das is notable for a feature called PrivateSend.This feature uses the CoinJoin strategy to hide transaction and make is anonymous and untraceable. One of the main aim of Dash is to protect users according to the **Dash Core Group (DCG)**.
Accordin to research, Dash has risen to the top 50 most valuable,recognized and acceptable cryptocurrnecy in the world with a market cap of $2.7billion.
The partnership entered into by Dash has made it more prominent over time. Some of the partner of dash are;
- CRAYPAY
- STAKEHOUND
- SECURE DIGITAL MARKET
- COINBENE
| Features | Outcome/Result |
|---|
| Time stamping scheme | proof of work Hash function X11 |
| Issuance schedule | Decentralized block reward |
| Block reward | 3.11 DASH |
| Block Time | 2 min.37Sec. |
| Block explorer | insight.dash.org |
How Dash is mined
The cryptography method used on the dash network is called the proof of work (PoW). This is the mining method adopted. Sophisticated computers are used in the process to achieve the minning process and this is done by solving complex mathematical problems which is as a result of the X11 hashing algorithm.
The hashrate of your mining device will determine the profitability of your mining. It is however important to not that in the dash mining network,ther is what we call mining pool where an investor team up to optimize his mining activities with a token.
Why I prefer Dash privacy coin.
The reason why I decided to use dash as my case study and why I prefer it is outlined under the following subheading;
MASTERNODES OPERATIONS
These masternodes is one of the main feature in the dash network that distinguishes it operations form every other . it powers other activities like
Coinjoin: this is the brain behind the secured privacy given to transactions on the network. It make it difficult for the identity of whoever carries out a transaction to be seen neither can the transaction be easily traceable by a third party. This is unlike the operation of other coin like bitcoin,etherium and the likes.
Chain lock: this feature ensure block are given protection to the degree of 51% against attacks and this is done marking and approving block as they are mined
Governance and trwasury: this is the system that shows how investors and stakeholders can benefit from the network. Usually 10% of the of block reward miners is given to enhance the development of the project,you can alos call it maintenance.
Dash evolution: this can be said to be one of the goal that dash is driving and aiming to achieve that the use of crytocurrency will be as easy as using paypal for transactions.
Voting right: voting right can be gotten on this network by the means of proposal, each masternode has one vote.
INSTANT SEND
It is common for decentralized cryptocurrencies to wait for a particular period of time for a transaction to complete due to verification and authorization. Dash has been able to bypass this limitation by ensuring a very swift level of transaction via the instantSend.it ensure that the time taken fro transaction to be confirmed is shortened and time saving.
SPORKS
This features ensure that users or investors are feed with up to date information about the dash network. If Dash comes up with new features today, it will be communicated to user, telling them to upgrade or update using the new feature but it wont be activated until a larger percentage of their client subscribes to it or reach a concensus. Usually 80% of the users can reach a consensus.
X11 HASH ALGORITHM
Dash is notable form this algorithm and that distinguishes it from every other type. it's a modified Proof of work consensus (PoW). This is one of the safest and more sophisticated cryptography, it uses multiple hashes in it operation.
These include;
- blake
- bmw
- groestle
- jh
- keccak
- skein
- luffa
- cubehash
- shavite
- simd
- echo.
Comparison between Dash And other open coin like Bitcoin
Image Source
| Features | Dash | Bitcoin |
|---|
| Transaction validation | Fast and time saving | Not very fast and time consuming |
| Operation | uses Masternodes to validate transaction | uses Nodes to validate transaction |
| Transaction Fee | uses an average of $0.010263 per transaction | uses an average of $20.01 per transaction. |
How to create a dash wallet.
Visit Dash.org on your browser
Step 2: Click on the download option
Step 3:install and open
Step 4:Click on the he create wallet option that pops up.
Step 5:Enter your pin and confirm it
Step 6:Ensure you click and go through the secure option
Finally we have our wallet.
Avantages of Dash Privacy Coin.
Dash ensure that users are given maximum privacy when carrying out transaction,the activities of users are hidden from third parties and this is possible with the **PrivateSend**
It also ensure that users enjoy swift transaction with high speed and this is possible with their **InstantSend** feature. This also ensure that verifications and confirmations are done with a speed of light i.e 4 seconds. This is pretty fast compared to some other cryptocurrecy that take more time in confirminf transactions.
It has also been discovered that rewards are shared among the miners,masternodes and the developers. This is just to strengthen and support the system.
There is a democratic style of voting adopted in Dash that make it easy for quick decision making by the masternodes as regard funding and other activity important to the system
Its transaction fee is relatively cheap compared to some otherd like bitcoin, etherium and the like and that is why it is preferred above these other coins.
Disadvantage of Dash Privacy coin.
It is yet to be generally accepted by a significant number of merchant and investors even though dash is trying it best to gain ground in the crypto world
Some experts are of the opinion that there are loopholes in the system ; transactions can still be traced on the dash network in spite of the manipulation carried out by the masternodes and coinjoin, this therefore means it is not obscure or highly anonymous if it can still be traced.
So many users are still in doubt of the legitimacy of the dsh network in that they suspect that the developers own and run a larger amount of the masternode which is not favourable to users.
Conclusion.
Privacy coin as we have learnt is designed to give you maximum security when transacting by making your transactions hidden and untraceable. My case study which is Dash privacy coin has been notable for this and is fast gaining prominence by the day. It is important to mention at this point that having considered the pros and cons of this coin,one has to be discreet in investing in them as it could result in to massive gain /profit or turn out to be the other way round, the reason is not far fetched,cryptocurrecies are known to be risky business but from my observation, I can say that the advantages of using these privacy coin such as dash outweighs it disadvantages.
Thank you for the lectures well taught prof. @levycore, I hope I have been able to answer satisfactorily, I will be waiting for your remark.
Hi @lhorgic, 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:
Your fundamental analysis is good, but it could be improved. You explained Dash coin mining in too much detail. Actually, it is very good, but you should add other things for you to explain as well in order to add to your fundamental analysis data.
There are some things missing in the steps to create your preferred privacy coin wallet, I didn't see you showing how to back up your wallet.
Put the pictures in the center of the page, to make it look more professional.
Re-learn the "Markdown Style Guide" to improve your writing skil.
Thank you!
Thanks for the remark Prof @levycore,I will definitely relearn the markdown styles and get it right.