Evan Duffield Explains Dash Technology and Announces Evolution

In this video Evan Duffield Explains Dash Technology and Announces Evolution of Dash 

And in this video Evan Duffield Takes Questions from the Audience about Dash

DASH – The First Decentralized Autonomous Organization?

DASH has released a decentralized voting and fund allocation mechanism that could bypass the internal tensions of Bitcoin and its dramatic block size debate.

Who will decide?

A great deal of attention has been going to Bitcoin's blocksize debate, which includes fundamental aspects of how Core Development is funded, distributed, and by whom. While Bitcoin is going through the computer science equivalent of group therapy, DASH, the fifth largest cryptocurrency by market cap, has released a Decentralized Governance by Blockchain System while taking notes from Bitcoin's internal turmoil, in an attempt to completely bypass it.

A few of the problems with decentralized and open source projects are development planning, funding and fund management. Mike Hearn and Gavin Andresen have argued that Bitcoin needs a benevolent dictator, a notion that enough people have recoiled from as evidenced by the low popularity of Bitcoin XT.

The notion nevertheless highlights the need for a swift and reliable decision making process. Consensus is great for many things, but fast decision making is not usually one of them.

The most common approach to this problem is the creation of not-for-profit foundations tasked with maintaining the core protocol and promoting the project at hand. However, as demonstrated by the controversies involving the Bitcoin Foundation, these are not connected to the users and community in any meaningful way.

For example, three of Bitcoin's core developers are now funded by the MIT's Media Lab, Digital Currency Initiative, an arm of MIT Labs, lead by White House advisor, Brian Forde. His proud connections with the executive branch are bound to set off some people's alarm bells – to put it nicely.

Granted, funding of Bitcoin Core is already decentralized, according to Jeff Garzik, who claims that it is “spread across several companies/entities.” However, this still relies on human organizations and processes that are susceptible to censorship, human error, and back room deals, which is far from ideal. But what must be noted is that this is now avoidable.

DASH: the game & the players

DASH's new Decentralized Governance by Blockchain (DGB) was clearly designed with this problem in mind. But to get an idea of how it works, let’s take a quick look at DASH's network set up, since it does has some notable differences compared to Bitcoin.

DGB could be thought of as a mathematically enforceable and fully transparent democratic process. It is a blockchain hosted voting system with decentralized fund management built in.

DASH is comprised of three types of 'nodes' - software clients with specific roles and responsibilities to the network.

The first are miners, who provide proof-of-work security to the cryptocurrency in a similar fashion to Bitcoin, though instead using X11, an algorithm designed and believed to be ASIC resistant. Miners provide computing power in exchange for a regular payment from the network to the tune of 40% of the block rewards.

The second are full node wallets, which host the accounting ledger (blockchain) allowing users to access the network and use the currency.

And the third and most innovative element of DASH are its “Masternodes.” These are regular full nodes that anyone can run, but with the difference that they host a 1,000 DASH collateral, equivalent to roughly US$2,500 at current rates (works with cold storage). The collateral earns hosts the right to provide services to DASH users at a profit – 45% of block rewards. Services such as DarkSend — the feature that brought DASH to fame — as well as Instant Transactions, the controversial 4 second transaction locking feature.

The 1,000 DASH collateral is intended as a security mechanism, making it prohibitively expensive to cheat the system by attempting a 51% attack.

There are currently over 3,000 Masternodes live, roughly half of the amount of active full nodes of the much older Bitcoin network.

Decentralized Governance by Blockchain

DGB is built on top of this network of Masternodes. It allows anyone to propose changes or upgrades to the currency. Initiatives the community deems necessary, be it legal, marketing or otherwise, can also be submitted to the network directly through the blockchain, while 15% of the block rewards go towards funding elected proposals.

Proposals are then voted on by the community on a monthly basis. Masternode hosts are the only parties with a right to vote on these. Their choices are Yea, Nay, or Abstain.

Proposals must have at-least 10% more Yea votes then Nay and must also compete with other submissions for a grand prize of roughly 8,000 DASH a month, or today's US$19,000.00 dollar equivalent.

If MN Hosts take back their collateral, i.e. disconnect from the network, their vote is disabled until they return.

Decentralized Autonomous Organization

One possible problem this system might run into might be voter apathy. What is the incentive for Masternodes to vote? It could be argued that since DASH is effectively at the mercy of other voters now, then that will be enough for them to be alert and willing to participate. However, this remains to be seen.

The cost of submitting a proposal is 5 DASH, but these units are destroyed, instead of serving as an incentive to do something else, like votes, which is similar to how Augur's wisdom of the crowd system works.

So just how well this system will work remains to be seen. If successful, it could potentially make decisions like the block size debate much more efficient and provide a unified means of communication on the blockchain itself.

The fact that DASH is officially funded by the blockchain itself — the value of its units supported by a democratic process of investment election — may mean that DASH is a kind of self-propagating and living organism. Or at the very least, a clear cut example of the mythical and up until now imaginary, Decentralized Autonomous Organization.

How does the decentralized masternode payment system work?

By Evan Duffield

Each time a block is generated on the network, there is a voting process that begins which all masternodes take part in. All masternodes begin the process by deterministically figuring out if they're part of the sub-quorum for the next block that needs to be voted on. Sub-quorums within the network are 10 masternodes and randomly pick masternodes for each block (in a deterministic, tamper proof way). 

Next if a masternode is selected it goes through the  following very complex process to pick the winner. First it will look at every masternode on the network and get the last paid time, according to the masternode list. "LastPaid" according to this process means a node has at least 2 votes for a given block. Notice there are ten votes total, so it's actually possible for up to 5 nodes to be flagged as "Paid" from a given block. This allows the network to quickly solve disagreements about the order in which nodes should get paid, then establish a permanent payment cycle. However, the downside is, it's possible to have a payment skipped when the cycle is getting established. 

Second, the masternodes are then added to a list by last paid, then 10% of that list that was paid the furthest in the past is eligible for payment each block. At this point, the masternode with the highest score (deterministically again) is the one that nodes will vote for. This means there's really no order of payment each block, each masternode will simply remain in this winning queue until it randomly gets picked. Currently on average it would take 4.68 days to get into the eligible queue, then you have a 1 in 300 chance of being selected each block. This means on average the nodes should stay eligible for 3/4 a day before finally getting paid, but that could actually take longer if unlucky. 

To determine if you were skipped you can do a "masternode winners 2000 | grep XAddr" from a linux console to find every time you were seen in the list. If you see >=2 votes and are not the winner, then you were super unlucky. Otherwise if you're in the list and it's going past 6 days, it would be the later situation, where you're eligible and just temporarily unlucky. There's also a third option, if you issue a "masternode start" from the cold node, you will reset your queue position.

When a miner pays a masternode, it will select the entry with the highest votes from the network. That's also the node that will get enforced for payment. This was quite difficult to write, but has worked great (although is somewhat resource intensive).

Source: Bitcointalk

Dash Delivers Decentralized Governance System as “Superblocks” Pass Through Blockchain

The project team behind Dash, the privacy-centric cryptocurrency, has successfully passed three “superblocks” of data through its blockchain.

Evan Duffield, Dash’s leader developer, explain the significance of superblocks to AllCoinsNews:

Every month a few superblocks are created to reflect the current budget that has been determined by the Masternode network. These blocks have much larger coinbase payouts then normal blocks, thus we call them “superblocks”. This is quite significant because this is the first ever decentralized governance and budget method ever implemented.

The superblocks were created to work on the payment side of Dash’s decentralised voting proposals. If a proposal is voted in and confirmed by the “Masternodes” – the network constituents, a superblock will appear at certain block counts and take care of all payouts automatically as confirmed by the code. This secures the decentralized payment voting process.

Dash started implementing its voting system, known as “Self-sustainable Decentralized Governance by Blockchain”, in June to provide a decentralized governance system for the project’s funding proposals.

Duffield noted:

One of the greatest challenges for a decentralized project like Dash is getting enough funding to do the things we need to do to protect and expand the ecosystem. When it comes to other projects such as Bitcoin, they’ve relied on centralized funding and generous donations, but neither of those is robust enough to actually finance what needs to be done on a project like this. To address this issue, we’ve added a decentralized proposal system where anyone can submit a proposal to the network for a specific amount and purpose, then the masternode network votes on the proposals and decides which to fund for a given period of time.

According to Duffield, the Dash community now has an established method of financing public awareness, website design, core development, legal work and any other core requirements. The budget is 10% of the total amount of DASH coins created, which works out to about $21,600 or $2.50 per DASH per month.

Duffield added:

If we use the money successfully to educate and draw investment, we should see price appreciation, which would allow us to create a “budget snowball” effect. For example, if the price hits $5.00 per coin, we would have an expanded by of $43,200 per month. You can see how powerful this type of system can be for a decentralized project like Dash. We are quite excited at the prospects.

The superblocks created and passed through the blockchain can be viewed in Dash’s block explorer:

*http://explorer.dashpay.io/block/000000000014702a849cddf3145c495086ef5235b8e1a08fbea8e9c17c7d149b
*http://explorer.dashpay.io/block/000000000008ad3b2d5419b8206c02b3ec1abf10bd3039de15ce2e5ce0e13680
*http://explorer.dashpay.io/block/000000000010ac0d276f4c44274274022b82769386f26926d6890903763721a5

One of Dash’s first “Superblocks”

More detail on Dash’s decentralized governance system is available in the project team’s original announcement in April 2015 regarding its proposal to the Dash community.

Funding Proposals for Voting

Formerly known as Xcoin and then Darkcoin, Dash is attempting to improve on Bitcoin by fully anonymizing transactions and making them instantaneous. Dash theoretically accomplishes more privacy through a mixing protocol utilizing a decentralized network of servers called “Masternodes” to avoid the need for trusted third parties that could compromise the integrity of the system.

Source: allcoinsnews.com

Evan Duffield revealed about his solution for 51% attack

He said: "The goal is to make a confirmationless wallet, where all transactions are protected by IX. 51% attacks become much less powerful in that case, they can't really touch IX. That would protect our millions of users we're currently shooting for (valid / non-illegal users btw), which leaves an attacker one option... to buy masternodes to attack Dash. We know how that will go.

We really do have an end-to-end solution to all problems within crypto now. I'm working on a 50+ page whitepaper that details the rest of the solution, I'm quite excited about it   

Here's another one for good measure. We have sub-quorums for super secure tasks, but we could implement full-quorum based actions the masternode network can take as a whole. For example, banning attacking pools from the network, people, countries, etc."

What to Conclude from the XT Fork Proposition

The XT "debate" on bitcoin forums is becoming deafening. On other forums, I have tried to argue a monetary perspective as opposed to a technical one.

Unfortunately, most of the protagonists in the various strands of argument seem to be unaware of what economic objective cryptocurrencies have (creating money). They have all re-invented an objective according to their own particular agenda, and most of those objectives are technical, not economic.

For example:

 • the cryptonote people think hiding the blockchain is the most important priority

 • the monopolist lobby think that consolidation of a one-world crypto is the priority

 • the hardcore miners think that observance of published supply profile is the priority

 • the XT/20Mb block people think that large blocks are the priority

 • the security maniacs think that small blocks are the priority

What do you notice about all these priorities ? - they are all in conflict with one another.

Hiding the blockchain to support privacy is in conflict with keeping the blockchain public to support transparency. Diversifying bitcoin's appeal using sidechains is in conflict with the requirement of optimising monetary fungibility. Increasing blocksize to facilitate network capacity is in conflict with a myriad of things including security, efficiency and client accessibility.

Why are all these priorities in conflict and why is cryptocurrency encountering these problems ?

Because they all have to be reconciled within a logically mono-tiered network. The network functions according to the principles of unity (multiple units of cloned logic that don't help each other in any way other than providing redundancy) as opposed to harmony (multiple units of diverse logic that are complimentary in function).

In the 1950's and 60's, computing science determined unambiguously that functional diversity amongst network peers was far more powerful than "unity" (redundant, mono-tiered logic) and client-server computing was born. This then found its way onto desktops in the eighties in the form of client-server database computing and client-server web computing. 

The problem with that paradigm for decentralised cryptocurrencies is that a 'server' (as in web server or database server) represented a single point of failure and also conflicted with the objective of creating a 'trustless' monetary media.

What Dash has done is migrate the old client-server physical model to a logical one so that the server element can be reproduced redundantly just as the client can, thereby creating a decentralised network exhibiting a logical diversity that no other cryptocurrency has.

I don’t think most people realise the huge significance of this. By definition, there is no server and no client anymore so the network is simply flat and diverse. Despite that, it is still able to operate in an articulated mode with 2 tiers of complimentary logic.

As far as doing an investment appraisal of this characteristic, 2 questions spring to mind:

 • what are the technical implications of a cryptocurrency network with logical diversity over one with no logical diversity?

 • what are the monetary implications of a cryptocurrency network with logical diversity over one with no logical diversity?

These are the 2 questions I've asked myself over the last year, however, never did I get more relevant answers than during the current XT vs Core debate in the Bitcoin forums:

The technical implications are that a logically diversified network can independently optimise technical properties that would otherwise be in conflict with each other. *

The monetary implications are that the electronic monetary token known as 'Dash' can exist as a totally fungible unit which is not dependent (nor derives any of its value from) financial superstructures. **

Cryptocurrencies have arrived at another transition phase right now because the predicted 2015 revaluation hasn’t happened. Bitcoin may well continue to be the “crypto reserve” but it isn’t capable of diversified protocol logic and Dash is. It doesn’t support native coin mixing and Dash does. Its technical priorities are now dictated by the personal egos of 5 developers while Dash’s will be determined by its holders to whom developers will be accountable.

Native coin mixing in a public context is a basic premise of what defines ‘cash’, not just digital cash - any cash. Dash adds all these subtle monetary enhancements without compromising the one thing that made bitcoin work without a trusted counterparty - the public blockchain.

I keep investigating other cryptos and I keep concluding that while they are all creating very interesting solutions, they are not creating money. Bitcoin is (in a confused way) and Dash is (in an organised way).

------------------------------------------------

* - Capacity can be addressed without recourse to blocksize. Confirmation time can be addressed without recourse to blocktime. Governance can be addressed without recourse to developer politics.

** - PORTABILITY and FUNGIBILITY are monetary properties which the Dash network is optimising far and away more than any other electronic monetary token. For PORTABILITY read [bitcoin-protocol compliance and InstantX]. For FUNGIBILITY read [Darksend] which supports anonymity in a public blockchain. Something that no other cryptocurrency does anywhere near to the same extent.

Written by Toknormal

Source: Bitcointalk.org

ICO vs Decentralized Budget system

I think the introduction of projects like Ethereum, Blockstream and many crypto start ups with VC funding makes clear that in order to develop a project long term you need funding.  I think an adaptive system like Dash's decentralized budget system, where funding is voted by an assembly of people on an ongoing basis, without the existence of a central budget under the control of a central authority is far superior than the ICO model for a crypto start-up. 

From experience, investing too much too soon is a very common mistake when building a new project/company. At the beginning you know less about your own business and it takes time to build a vision that you are ready to follow for several years.  That means you normally have to try a few different things before you find your way and are at risk of investing too much on those first 3 years of operation and then having funding issues later on.  

On the other hand,  having no funds at all is a far worse situation to be in as it does not allow you to hire the services of companies and individuals a project needs to reach its development goals and to communicate to the public about the solution.  So is clear that either an ICO or Dash's system is far superior than no funds or relying solely on altruism. 

The advantage I see in Dash's approach is that getting funds on a as needed basis and through a public approval process prevents unnecessary spending, is more transparent and most importantly it allows the project to invest organically and adapt to a changing market environment.  So as the priorities of the market shift you are able to invest in different directions. For example, the market right now is very interested in scalability solutions, Evan is already working on a very cool model for Dash that will be presented when he is ready.  Other important hidden needs may come up in the future that are not visible right now but with an adaptive funding system we will be ready to approach those when they come up.

I think during the fist few years an adaptive decentralized funding system, like Dash's, is superior to getting a large amount of money up-front.  After you reach critical mass and a project has found its niche and is more stable; having a larger centralized budget could be better. But having controls and voted spending at the beginning will give a community driven project like Dash a far greater chance of success. It is not the only factor, you also need true talent and innovation, a hard working community, good timing to market  and good karma, but a sustainable funding model is definitely a very important factor and quite challenging to implement.  So I think after September 5th a whole new paradigm begins for Dash.

By Minotaur26
Source: Bitcointalk.org