Interview: DASH Cryptocurrency - Current and Future

Original author: Juan S. Galt
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Below is the full text of the interview (December 2015), Mexico. I hope that for many visitors of Habrahabr my translation will be useful for one reason or another - a lot of urgent issues and problems in the field of cryptocurrency development have been raised (not only about DASH, but also about Bitcoin and a number of other promising projects).



(X) Juan, a journalist.
(E) Evan Duffield, founder and lead developer of DASH.

_________________________

(X) Hello, we are at the LABitConf 2015 conference in Mexico. And I was joined by Evan Duffield, lead developer of Dash. According to market capitalization, Dash is now 5th among cryptocurrencies. How are you doing?


(E) Everything is great. The conference itself is very impressive.

(X) Great. There is a lot going on at the conference and ... a big announcement is also expected from Dash. But before we move on to discuss the Dash announcement of Evolution, I would like to ask you about one of the latest innovations that appeared in Dash. Namely, the Decentralized Management model. Could you explain how it functions, how the voting process is going on, how the reward system itself works?

(E) Yes, of course. In fact, the management model is built on the basis of the second level of our network and ... I think it’s worth starting from afar and telling a little about these network levels, the Dash infrastructure and how it all works. So, in our Dash network we have full nodes with cash backing. These are ordinary full network nodes, but they are associated with the address where a thousand DASH is placed as collateral. And this address actually acts as their identifier on the network. Based on this feature, we can implement interesting things. We can check the identifiers of all these nodes through the blockchain - which pledges are assigned to specific network nodes. So, it becomes possible to create, for example, a secure communication network. And you can implement a secure vote on the network. You bring community members together, a large group of all owners of thousands of nodes, and you can ask them questions on various topics, for example: “Should we do this or is it better?” This is the essence of our decentralized governance model.

(X) And it is also important that this also acts as a defense against the Sybil attack. If you want to try to attack the network in any way, you will have to buy 1000 Dash in order to have a say. And this is a fairly significant amount of money. As for the management model ... I think I can explain, but as a last resort you will correct me.
Speaking about the issue - Dash's predetermined inflation - part of it goes to finance projects that received approval during the community vote. If the required number of votes is gained, if people support an idea, then the money goes into it. This may be the cost of marketing, legal support, special areas of development that will allow the development of technology and the network. All this happens decentralized within the Dash network itself, so as not to need funding from organizations that are associated with the government or with any large companies. Right? This is a very significant improvement. How does the voting process work now?

(E) Essentially, we secure for ourselves what I call Decentralized Sovereignty. As the project grows, we want to remain a decentralized organization. And as a cryptocurrency - Dash wants to maintain its independence and not fall under the control of any of the existing forces. Therefore, independence should be constantly protected so that the project does not go astray under external influence. You understand? And therefore, we carefully think through this system so that it can adapt to the current situation and to changes in the balance of power. Our management system does not cause inflation in Dash. In particular, this concerns the financing system, since a fixed part of the reward for new blocks is allocated to it and this part, the decentralized budget, cannot be exceeded in any way. Every month we have only 10% of the reward for blocks that you can spend. If these funds are not used fully, the remainder “burns out”. That is, these coins will simply never be created. So this is actually a deflationary aspect of the currency.

(X) To allocate funds for development, a limited number of votes is required? For example, 20% of all network participants must vote, or something like that, and if the project does not gain support, then does not receive funding?

(E) In fact, everything works like this - there are many different offers on the network. Suppose there are ten of them. And the network ranks them all by the number of support votes they received. Therefore, the first is a proposal, say, with support of 80% of the vote. This means that this proposal will definitely receive funding. Then comes the offer with 70%. Next, 65% and so on. And all of them are included in the general budget until we reach a state where all budget money will be distributed. At this moment, we stop financing subsequent projects. This is how it works.

(X) It is clear, that is, it is a predictable type of inflation, and depreciation does not occur, since everything works according to clear rules. Let's talk about some of the ideas that you are going to
highlight at this conference. This interview will not be published ahead of time ... So, the first is the decentralized API (DAPI). And I don’t quite understand what it is. I suppose this is an interface through which clients can communicate with the network and use the technology ... Maybe you will tell a little more about this?

(E) Of course. The concept of a two-level Dash network is that there is a second level, which is based on pledges. It accounts for about 40% of all money, so the system is protected from a Sybil attack. And relying on this second level, you can vote, you can manage the system, you can finance projects. And then all the new ideas that we create come into play. We can do so many new things that it’s hard to imagine yet. And one of the ideas is a decentralized API (DAPI). In simple terms, we want to create a mobile interface through which you can communicate with the network. It works similarly to the centralized API, but in the absence of centralization. There are processes in the network that are group activities. And when you submit a request to the decentralized API, it actually runs simultaneously on 7 servers. Which are deterministically assigned based on the “proof-of-work” hash, so it’s impossible to somehow fool the system. They all perform the same task. They get the same result and sign it with their private keys. We are returned the result and 7 signatures. Therefore, it immediately becomes known if something went wrong. Based on this, we can implement really cool things. Since we have a second level, you can create storage on the server of each individual node, on the second level of the Dash network. And now we already have about 40 terabytes of distributed disk space right away. And there we can store data like friend lists, transaction histories and similar things that will be encrypted. You can log into your account simply with a username and password, request information from the network like “Hello, who is on my friends list?”, Get your personal data, decrypt them and immediately be in the know. And now you can send money to friends simply by their name. After all, if you and I were friends on the Dash network, we could exchange encryption keys: you would know my next 5 public keys, I would know your 5 keys, and you could send money to each other by name. I would use one of the keys, and you would send me another new one, and all in the same spirit. Thus, the next generation of our network will work. And now you can send money to friends simply by their name. After all, if you and I were friends on the Dash network, we could exchange encryption keys: you would know my next 5 public keys, I would know your 5 keys, and you could send money to each other by name. I would use one of the keys, and you would send me another new one, and all in the same spirit. Thus, the next generation of our network will work. And now you can send money to friends simply by their name. After all, if you and I were friends on the Dash network, we could exchange encryption keys: you would know my next 5 public keys, I would know your 5 keys, and you could send money to each other by name. I would use one of the keys, and you would send me another new one, and all in the same spirit. Thus, the next generation of our network will work.

(X) Personally, I think this is a significant simplification in the process of using cryptocurrency. I worked, or rather, received payment by Bitcoins for two years, and was constantly forced to update the private key or public address and the like ... And when someone finds out your public key, then in order to maintain privacy, it needs to be updated to a new one. But there is no automated way to share a list of your public keys. And so your identification system is amazing - great. You are talking about Friends Lists, and there seems to be some kind of trend that Dash is following. There are many companies that are eyeing a kind of commercial use of social connections. And here we see essentially a social network with implemented financial technology, which seems to be specially created for using Bitcoin and blockchain technologies, such as Dash. Tell us about your vision of this.

(E) So, when you have a built-in list of friends, you have the same opportunities that you are used to in Paypal. For example, you have contacts, and you can send money by email and the like. All this can be done in our network after the implementation of the plan. And then, let's say, I will invite ten of my closest friends, and then they will similarly invite ten of their friends, and as a result, all this will turn into a monetary social network. And everyone will be just connected with their friends. It seems to me that at first the network will be used for tasks such as repaying debt, selling a sofa, and similar things. In a similar system, it will be really easy to do.

(X) This is a kind of social network. Are you considering the integration of this technology into existing social networks, or maybe you want to create your own? How are you going to implement your plan?

(E) We have no plans to implement this in the way donation services such as ChangeTip and the like work, where you can thank people on the Internet in cash. There, they suggest disclosing the identity of the recipient so that money can be sent to him - this is a different social model. But our idea is to simplify the use of the system, allowing you to find friends by nickname or email, if they want it. If they want to remain incognito, then it will be so. Therefore, we provide
desired privacy level. But the simplification also lies in the fact that you will not need to remember and store all these encryption keys. And I think that the system will be so easy to use that it will attract ordinary people who generally had no experience in using cryptocurrencies. This is our main idea.

(X) Yes, I think that the transition to an identification system is a significant step towards simplification. Although identification is not a trivial task. It’s like with domain names. That is, identifiers can be compared with domain names. It is important to maintain the right balance. Namecoin recently had problems with this. It seems that even in the press there was a negative. I did not particularly follow this, but it seems like one of the problems was that when you bought the Namecoin domain, it was fixed to you forever. And I suppose people have reserved most of the beautiful domains. What do you think of the identifier deficit they encountered? That is, if I borrow the name Evan Duffield, will it become inaccessible to others? Or will it be possible to get another same identifier? Well, similar related questions ...

(E) Our current plan is to implement a system that you can log into with a regular login and create your account. Then you replenish it with money, and the process is completed. Now your identifier is assigned to you. And then options are possible. For example, you can make it so that if you withdraw all the money from the Dash network and do not use this account, after a certain time it will again be available for registration. After all, we store these identifiers simply in a distributed database, this is not a blockchain in the classical sense ... which means that data can be deleted if necessary. The system may recognize outdated accounts that no one uses.

(X) Great. So, we are talking about decentralized storage. This is an extensive topic. Many people like projects like StorageJ, Maidsafe and other big names in this area ... Will Dash also become a decentralized storage?

(E) I would say no. The idea here is more about storing only the metadata of Dash users and some personal information that they want to keep encrypted on our network. And the bottom line is that I can log in through my Android device, and then come home and log in through my browser using the same username and password. And my Dash account on both devices will be synced. As if I added a friend on the phone, and it would automatically appear on my computer as well. Therefore, we are getting rid of unnecessary difficulties here - there is no need to transfer the wallet from here to the like. Everything works automatically. It is like a centralized system, but it is not.

(X) Files are fragmented, encrypted, and the necessary redundancy is created. Then they end up in storage at Masternode. That is, everything is stored on the Masternode servers, which provide the system with disk space. In my understanding, StorageJ or Maidsafe are trying to implement something similar. They strive to create a decentralized repository. Do you see any obstacles that hinder the development of Dash in the direction of creating a decentralized Internet, decentralized hosting, decentralized storage? All these things are of interest to people ...

(E) Technology could be used in this way. I predict that someone will fork their Dash project and go in that direction, competing with StorageJ and similar solutions ... But I don’t think that this is the right way for Dash as a currency - we already have many options for using this technology for finance , with friends lists, APIs and so on. Dash Drive is a different story. And I don’t think we should store random data on our network. There is data that is especially important for people. This is like personal data on phones - they are very important for specific people. This, for example, is such information that they store about their payment transactions and similar personal items. That is, we are not talking about a regular file that you want to save on the network.

(X) So, accessing these features involves interacting with your technology through a decentralized API. Let’s talk about the resource management of this API. You mentioned the possibilities of preventing fraudulent activities on the network, while anyone can interact with the API without even having a masternode or a full node ... What are the requirements for sending requests to the API and for transmitting information to the network?

(E) This is a very interesting question. A full-fledged security model works here. It all comes down to the fact that you have an identifier on the network - this is your username, which corresponds to a 64-bit number, which is your real identifier. And you can use what we call “blinded keys” that hide the real identifier. When you conduct any activity on the network, this causes delayed responses to network requests. And since it is Masternodes that actually process all these commands, we can determine the average amount of time spent and then correlate them with the account of the corresponding user. Therefore, all Dash accounts can be used without commissions, but only to a certain limit. We assume that 90% of users are in this commission-free zone, and then only those 10% who create them will have to reimburse the costs of mass payments. That is, if you make a lot of transactions, then you will pay a commission, compensating the network for their processing. And everyone else will use Dash without any fees. This works because a two-tier Dash network is encouraged. Thus, we shift the costs of maintaining the system to those users who actually load the network.

(X) This is impressive. Providing 90% of users with free access is one of those strategies that work very well for many companies. For example, WhatsApp is one of the largest instant messengers and IP-telephony service. They just made the service free for everyone and only after a year they begin to take a small fee. It worked - popularity goes off scale. Let's talk a little about anonymity, as Dash is best known for this. Protecting user privacy is one of the key elements of Dash, and it is very popular. How do the identification system and the procedure for interacting with it correspond to privacy issues and the expectations of human rights activists and ordinary Bitcoin users?

(E) Yes, privacy is provided in our network, and we value it highly. A powerful argument for privacy: monetary units should be used interchangeably. We do not want to spy on our users. Therefore, when developing the currency, we resorted to differentiation. We have separated user IDs from payments they make on our network. Therefore, when payments are recorded on the blockchain, there is no connection between them and users. And the network itself cannot follow you. When you connect to a network, you actually only connect to a few servers. Only 7 to 15 nodes participate in your connection. And every time you connect to the Dash network, you find yourself in random network quorums. Thus, your “footprints” are blurred throughout the Dash network, the nodes of which are scattered all over the planet, and no one can find out what did you do. So users get privacy, but at the same time the network remains protected from possible manipulations, because all your operations ultimately go through a single identifier that you use during all communication sessions.

(X) You mentioned the concept of “Quorum”. As I understand it, this is a randomly selected group of servers that will serve API requests and other processes. Let's talk about quorums ...

(E) If we consider Bitcoin and its “proof of work”, you can create a random number generator and bind its work to “proof of work”, that is, to the blocks found. Then, if each participant in the network acts according to the standard algorithm, they will all receive the same number from this random number generator, since the numbers are actually predefined. But their consistency provides powerful protection. Then you need to take a list of all Masternodes and sort them by the hash of “proof of completed work” using this randomization method. And then we take from the sorted list Masternodes with numbers from 1 to 10 - and we get the first quorum. Then from 11 to 20 - the next quorum. And so on ... We get protected Masternode groups, the composition of which no one can predict and fake.

(X) Let's talk a little about scalability. Right now, when we are talking, a conference is being held in Hong Kong, and it discusses the scalability of Bitcoin, and how to overcome the fundamental limitations in blockchain technology, which, I think, still have to face. There are organizations that claim that they probably have a solution to the problem. How do you look at it from the position of Dash?

(E) I think that the reward structure we use is perfect for a system that needs to scale to a very large number of users. The fact is that when you give part of the encouragement of new units to support infrastructure, this creates a market. And this market provides balance at the second level of the network. The market itself determines how many servers it can contain in the current state of the currency. And it turns out that as the currency grows, this market also increases. New users bring extra money to the ecosystem. And part of them goes to the infrastructure market. As a result, the number of servers increases or their parameters increase. This is a self-regulatory solution for scalability, and we have proven that it works. I think the Dash project is worth taking as a model, as an example of a two-tier strategy for solving the scalability problem of Bitcoin. And I believe that if they implemented a variant of this technology, they could remove the block size limit and scale the system - and it would work really well.

(X) As far as I understand, there are three main adversary camps on the issue of block size, right? Some advocate for small blocks, in order to leave Bitcoin as a global level for major transactions. Others defend large blocks and believe that all transactions should be recorded. And there is still a group of people in the middle who are rarely mentioned and discussed. It seems to me that the idea was first voiced by Justus Ranvier. He's talking about creating ... a kind of free market within blockchains. That is, both the block size and the range of commissions - all this should be determined by the free market, and not by some kind of top-down regulation, where someone dictates what the block size should be. The market itself must resolve these issues. Which side would you take in these disputes?

(E) I think that the debate about the size of the block is really interesting, and I would lean towards the camp that opposes the increase right now, since the problem with the number of full nodes has not been resolved. Today I'm sure ... I watched the issue for several months and looked to see if there is an inverse relationship between the average transaction volumes and the number of full Bitcoin nodes. And what I found out ... I did a statistical simulation that showed the presence of correlation. That is, when you change one of these numbers, you inevitably affect the other. Therefore, if you increase the block size, this leads to a corresponding increase in traffic in the network, and the increase in traffic leads to a decrease in the number of full nodes. Therefore, I think that we definitely need to look for a solution to this problem, and the solution could be something similar to what we implemented in Dash.

(X) Great. Let's now touch on the questions sent to us via Facebook. Patrick Wade asks: “Compare the Bitcoin sidechains with Dash. How do you feel about the sidechains and potential cloning of Dash with their help, similar to the upcoming possible cloning of Ethereum?

(E) Yes, the situation with sidechains is really quite interesting. Clone of Ethereum is a well-developed idea, in my opinion. And Rootstock is also interesting in that it is supported by one of the leading Bitcoin developers, which is also a big plus. Therefore, it will be interesting for me to look at what they will get as a result, because the result may differ from Ethereum itself. As for sidechains and Dash, it is difficult to reproduce Dash, because you need a full blockchain, separated from Bitcoin itself, and having its own monetary value. After all, you need to encourage people to maintain the work of nodes - you need to compensate for their costs, right? Therefore, I have no idea how to implement Dash on the basis of sidechains, which are part of the Bitcoin network and do not carry their own value, but simply act as a side token.

(X) Interesting opinion. I wrote an article about the principles of Dash and about your control system for Koyne Telegraph, and also talked to people from Ethereum and Rootstock. It seems that we have discussed this topic with you ... It's about the fact that people from Rootstock are starting to think about the possibility of introducing something similar to the Dash management system. What do you think about the possibility of doing this? What are your thoughts on this?

(E) They have a very interesting approach, and they are considering different solutions. Over the past few days, we talked with them about the implementation of something similar to our solution, but in a completely different way. And it will be interesting to see what they come to in the end.

(X) Kristov Atlas asks: “Does Evan monitor the privacy situation on the Bitcoin network, and what does he think about the development of this topic over the past couple of years.”

(E) Interesting question. Progress in Bitcoin, so to speak, is always slow. And especially when it comes to privacy, this is a sensitive topic for the Bitcoin community. But I think that now the main thing for them is the problem of scalability. This is the main problem of Bitcoin at the moment, because they have already reached the limit, that is, too often the blocks are filled completely. And it is already very running out. Interchangeability can be dealt with when the
issue of scalability is resolved. However, the problem of privacy also exists, and it has not been resolved.

(X) In continuation of the previous question: there are a number of companies that are involved in the analysis of the Bitcoin blockchain. Do you know anything about the techniques they use? Do you have any fears that they will be able to use them for surveillance and Dash?

(E) I am more concerned about the fact that they are following the Bitcoin ecosystem, because its blockchain is much more vulnerable than ours. In Dash, coins are randomly anonymized, and observers will not be able to overcome this milestone. Therefore, deep surveillance will not work. If you identify someone, you can only track a small portion of their transaction history. On the Bitcoin network, if you tracked down several key points, then you can recreate the actions of a person that he committed even a few months ago. And that can be a problem. Some of these companies use statistical methods, while others use truly advanced algorithms. And I believe that they will be able to collect a fairly detailed database, trying to identify and track the identities of Bitcoin users. And then they will start selling it. It is from this that we want to protect our users. I do not believe that such information should be a product and sold or transmitted to anyone.

(X) I have to say that I agree with this. But ... I am a journalist, and I should not have an opinion. Continuing, Ruben asks: "Name 3 of your favorite cryptocurrencies, and explain your choice."

(E) I would say that these are Primecoin, Quark and Litecoin. And there are reasons for this. I got the idea of ​​complexity adjustment algorithm from Primecoin. My algorithm worked well too, but they were slightly better. I took at least one idea from them. I chose Quark because of his idea of ​​linking several algorithms for hashing - I borrowed this idea from them. And Litecoin, because it's the fork that started the Dash project. These three currencies helped me launch the Dash project.

(X) Great. Is the specific release date for Dash Evolution already known, and at what stage of development are you currently at?

(E) This time we are going to try out a completely new approach to development, which hardly anyone used before. We do not have a clear plan. There is a very structured idea about how everything should work in the end. And now we want to join our efforts with the community - we are going to open the source with all the documents and realize, together with the active members of the community, what we really want to get. It will in essence be a huge conference with the participation of thousands of people, with the goal of finding a way - the best way that most of us will suit. After all, we do not want to create something that people will not use, right? Therefore, we want most users to be satisfied. This is the primary goal. As for the expected launch date, we plan to prepare a prototype for about 2 months, and something more specific will appear in the next 12-18 months. This will definitely take a lot of time, since the project itself is very, very large-scale.

(X) How do you feel to be in the center or pretty close to the center of what might be called a kind of cybernetic organism? It differs from ordinary projects that have external funding and management is centralized. It seems to me that Dash is the best example of the so-called Decentralized Autonomous Organization. It has an internal
financing mechanism based on the value of its own coins. What is it like to be part of such a decentralized community and such a fast-paced project?

(E) It's quite interesting - you don't have to be bored here. I mean, the things we do are really exciting! The implementation of the decentralized system alone
voting, financing and management, and watching how all this is used by the community - is an absolute delight. And then the community begins to accumulate a lot of interesting new ideas. In my opinion, in general, it resembles a giant organism. And I definitely agree that we are the first Decentralized Autonomous Organization, because Dash fully finances itself on its own. This means that Dash will survive, even if we all leave the project. We eliminated the problem of the "founders", which is very critical. Crypto projects have “founders” who get cheap coins at the start. They work motivated by this. But the second wave of followers, the third and so on - this incentive does not. Who for example will do really laborious and complex work on developing the Bitcoin core in the future? You essentially give the project to people and announce: “If you fail, you will ruin billions of dollars of infrastructure. Go ahead, good luck. ” And who will pay them for this? This problem is difficult to solve, and I think that we at Dash found a good solution. All this is very inspiring, and I am inspired by how it all develops.

(X) Would you like to add anything else, or share something with the audience?

(E) Yes. We open the source for Dash “Evolution” - they become available for discussing our development directions, priorities and so on. Therefore, I invite everyone to participate and express their thoughts, opinions, suggest improvements, and so on - so that we can do everything in the best possible way. And I invite everyone to visit dashevolution.com and see the documentation - what we are working on, and take part, join our work.

(X) Great, thank you very much.

www.dash.org/en

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