Privacy, instant payments and hashing algorithm
Bitcoin is an anonymous payment system. You only need the wallet number (public key) to make a transaction. Ones, who do not participate in the transaction do not know anything about the owners of the wallets. But this anonymity is conditional. Bitcoin creator Satoshi Nakamoto pointed this out in his programmatic article. On the one hand, no one knows who owns the wallet from which the transaction was made. But by comparing transactions, you can build a chain of payments and reach the owner by analyzing payment transactions and the movement of coins through the wallets. Furthermore, all payment transactions are stored in the blockchain database forever. Some of the wallets aren’t anonymous because users share their numbers with others to make payments for services or goods. By comparing transactions from the desired wallet to known ones, anybody can understand and ultimately find the real owner of the wallet. Or at least get to know who the owner is by analyzing his activity and payments.
Therefore, as bitcoin develops, the problem of the privacy (anonymity) of payments has arisen, which eventually led to a change in blockchain technology to implement this task. One such technology is the Dash cryptocurrency.
Evan Duffield is the founder and ideologist of the Dash currency. He set out to make Bitcoin payments anonymous and devised ten ways to do this. But the bitcoin community rejected the change. Therefore, he had to make an alternative solution to Bitcoin. On January 18, 2014, the XCoin (XCO) coin appeared, which a month later became known as Darkcoin, and, finally, on March 25, 2015, it received it’s current name Dash (short for Digital cash – digital cash).
Dash’s feature is not only privacy, but also decentralized management of the development of the coin through decentralized autonomous organizations subsidized by miners. Dash organizations have their own offices and employees. This makes it possible to solve technical problems and everything that is associated with the development of the Dash technology itself quickly. The organization has it’s headquarters in Scottdaley, Arizona, USA.
Ryan Taylor was named CEO of Dash Core in April 2017. Evan Duffield remained in the position of project consultant.
Key features of Dash cryptocurrency:
- Maximum number of coins: 18,900,000.
- Number of coins in circulation: about 8,600,000.
- The last coin should appear in the internet around 2300.
- Dash capitalization : $ 620 million. 6th place among cryptocurrencies.
- The method of confirming transactions by calculating the key (hash) – PoW (confirmation by work).
Dash privacy mechanism
Anonymity (privacy) is achieved by using the PrivateSend technology. The purpose of this technology is to hide the chain of payment transactions. This is achieved by mixing payments based on the CoinJoin protocol, i.e. mixing the contents of two or more wallets into one. Using PrivateSend consists in pre-mixing several wallets into one and performing the final transaction from this wallet. It is believed that this technology allows you to hide the chain of payment transactions due to the complexity of their analysis. The transaction amount is split into equal parts, and it is no longer possible to determine where the money goes from the wallet, where other wallets were merged. Moreover, it is possible to do such a split in advance, transferring the amounts to your other wallets. Several such mixes can be made when performing a payment transaction. Ultimately, all this leads to the privacy of payments.
With the help of this technology, digital money acquires the properties of cash – it is impossible to determine by the banknote in whose hands it was before and in what payments it took part.
That is where ‘’Dash” comes from – digital cash.
A feature of Dash is the ability to make instant payments within one second using the InstantSend technology. These payments are convenient for paying for purchases in a retail network (shops, kiosks, portable trade). The only drawback is that such payments require an increased commission.
Another difference between the Dash currency and Bitcoin is a two-tier network, where there are nodes that store the blockchain’s payment transaction base and nodes that confirm transactions. That is, in Dash, the network is divided into simply nodes of miners, used to calculate keys and confirm transactions by miners, and masternodes, which are directly accessed by the nodes. The masternode stores a database of transactions. It is the masternode that provides the technology for mixing payments. A payment can go through multiple masternodes, which ultimately increases its anonymity.
To become a masternode, you need to deposit a thousand coins. This protects the network from intruders – the deposit is a guarantee against illegal actions by the owner of the masternode.
The transaction confirmation reward is distributed according to the following scheme: 45% for miners, 45% for masternodes and 10% for network development. Decisions on the development of the network are made by voting of the owners of the coins.
Dash uses a combination of 11 key algorithms to calculate the hash (key) of a payment transaction in a block. This combination makes it difficult to use specialized hardware for mining Dash cryptocurrency.
Dash is a direct clone of bitcoin, implemented initially as a private (anonymous) payment system. Compared to Bitcoin, it has the ability to make private and fast payments. Dash has less commission, and the management of the system is built on the principle of a decentralized autonomous organization. Overall, Dash is more advanced technology than Bitcoin itself in terms of the combination of factors.