Dash (cryptocurrency)

Dash (formerly known as Darkcoin and XCoin) is an open source peer-to-peer cryptocurrency that uses a system called Darksend to add privacy to transactions.^[1] It was rebranded from "Darkcoin" to "Dash" on March 25, 2015, a portmanteau of "Digital Cash".^[2]

Dash uses a chained hashing algorithm approach called X11 for the proof-of-work. Instead of using the SHA-256 (from well-known Secure Hash Algorithm family) or scrypt it uses 11 rounds of different hashing functions.^[3]

Overview

Darksend

Masternode count by country (as of September 2014)

Darksend is a coin-mixing service originally based on CoinJoin. Later iterations used a more advanced method of pre-mixing denominations built into the user's wallet.

In its current implementation it adds privacy to transactions by combining identical inputs from multiple users into a single transaction with several outputs. Due to the identical inputs, transactions usually cannot be directly traced, obfuscating the flow of funds. A heuristic (based on inputs/outputs order) was suggested for partial tracing the transactions, but neither formal proof nor counter-proof was presented.^[4]

Masternodes

Darksend's mixing is performed by Masternodes, servers operating on a decentralized volunteer network which have the responsibility of signing the transactions. For each round of Darksend, the user selects two to eight (or even more) rounds of mixing which vary the degree of anonymity achieved. Random Masternodes are then elected to perform the coin mixing. Masternodes are trust-less, in the sense that they cannot steal user coins, and the combination of multiple Masternodes ensures that no single node has full knowledge of both inputs and outputs in the transaction process.

To avoid a "bad actor" scenario, in which many Masternodes are operated by an adversary who wants to de-anonymize transactions, a deterrent has been put in place in which 1000 Dash are required to own and operate a Masternode.^[5] As an incentive for operating a Masternode, chosen nodes currently earn 50% of the mining rewards.^[6]

InstantX

InstantX is a service that allows for near-instant transactions. Through this system, inputs can be locked to only specific transactions and verified by consensus of the Masternode network. Conflicting transactions and blocks are rejected. If a consensus cannot be reached, validation of the transaction occurs through standard block confirmation. InstantX purportedly solves the double-spending problem without the longer confirmation times of other cryptocurriencies such as Bitcoin.^[7]

X11

X11 is a hashing algorithm created by Dash core developer Evan Duffield. X11’s chained hashing algorithm approach utilizes a sequence of eleven cryptographic hashing algorithms for the proof-of-work. This is so that the processing distribution is fair and coins will be distributed in much the same way Bitcoin’s were originally.

With chained hashing, high end CPUs give an average return similar to that of GPUs. Another side effect of the algorithm is that GPUs run at about 30% less electrical power than scrypt and 30% to 50% cooler, putting less stress on the computing setup and ensuring lower energy bills for miners.^[8]

Dark Gravity Wave (DGW)

Dark Gravity Wave (DGW) is a mining difficulty adjustment algorithm created by Dash core developer Evan Duffield to address flaws in Kimoto’s Gravity Well. It uses multiple exponential moving averages and a simple moving average to smoothly adjust the difficulty, which is re-targeted every block. The block reward is not adjusted strictly by block number, but instead uses a formula controlled by Moore's law: 2222222/((Difficulty+2600)/9)2.^[9][10]

History

Dash was originally released as XCoin (XCO) on January 18, 2014. On February 28, the name was changed to "Darkcoin". On March 25, 2015, Darkcoin was rebranded as "Dash".^[2]

Launch

Within the first hour of launch, approximately 500,000 coins were mined, followed by another 1,000,000 coins in the next 7 hours and finally another 400,000 in 36 hours. All told 1.9 million coins were mined in 48 hours, or approximately 32% of a current supply (as of October 2015) of approximately 5.9 million,^[12][13] generating controversy regarding the initial distribution of coins. According to Duffield, this was the result of an error in the code "which incorrectly converted the difficulty, then tried using a corrupt value to calculate the subsidy, causing the instamine".^[14] At the time, Duffield was working a full-time job and coding for Dash on the side, so it's not surprising that there were errors in the initial code.^[14]

At the time Dash (then called Xcoin) was launched, the cryptocurrency space was riddled with scams. People were creating new currencies, hyping their value, then dumping them and abandoning the project. Many likely feared the same for Dash. However, since Dash's launch, there has been over two years of development, leading to a cryptocurrency that has over 50 volunteers and has solved such vexing issues as slow confirmation times, block size increases, decentralized governance, and a self-funding development budget.

References

External links

Wikimedia Commons has media related to Dash (cryptocurrency).

• Official website