Dash:APrivacyCentricCryptoCurrency

EvanDuffield
evan@dashpay.io
DanielDiaz
daniel@dashpay.io

Abstract. A cryptocurrency based on Bitcoin, the work of Satoshi

Nakamoto, with various improvements such as a twotier incentivized
network, known as the Masternode network. Included are other
improvements such as Darksend, for increasing fungibility and InstantX
whichallowsinstanttransactionconfirmationwithoutacentralizedauthority.

1 Introduction

Bitcoin[1]isacryptocurrencythathasemergedasapopularmediumofexchangeandisthe
firstdigitalcurrencythathasattractedasubstantialnumberofusers[2].Sinceitsinceptionin
2009,Bitcoinhasbeenrapidlygrowinginmainstreamadoptionandmerchantusage[3].A
mainissuewiththeacceptanceofBitcoininpointofsalesituationsisthetimerequiredtowait
forthenetworktoconfirmthetransactionmadeisvalid,alternativelypaymentcompanies
havecreatedmethodstoallowvendorstotakezeroconfirmationtransactions,butthese
solutionsutilizeatrustedcounterpartytomediatethetransactionoutsideoftheprotocol.

Bitcoinprovidespseudonymoustransactionsinapublicledger,withaonetoonerelationship
betweensenderandreceiver.Thisprovidesapermanentrecordofalltransactionsthathave
evertakenplaceonthenetwork[5].Bitcoiniswidelyknowninacademiccirclestoprovidea
lowlevelofprivacy,althoughwiththislimitationmanypeoplestillentrusttheirfinancialhistory
toitsblockchain.

DashisthefirstprivacycentriccryptographiccurrencybasedontheworkofSatoshi
Nakamoto.InthispaperweproposeaseriesofimprovementstoBitcoinresultingina
decentralized,stronglyanonymouscryptocurrency,withtamperproofinstanttransactions
andasecondarypeertopeernetworkincentivizedtoprovideservicestotheDashNetwork.

2 Masternode Network

Fullnodesareserversrunningonap2pnetwork,thatallowpeerstousethemtoreceive
updatesabouttheeventsonthenetwork.Thesenodesrequiresignificantamountsoftraffic
andotherresourcesthatcarrysubstantialcost.Asaresult,ontheBitcoinnetworkasteady
decreaseintheamountofthesenodeshasbeenobservedforsometime[7]andasaresult
blockpropagationhavebeenupwardsof40seconds[14].Manysolutionshavebeen

proposedsuchasanewrewardschemebyMicrosoftResearch[4]andtheBitnodesincentive
program[6].

Figure1:Fullnodesinthespringof2014

Thesenodesareveryimportanttothehealthofthenetwork.Theyprovideclientswiththe
abilitytosynchronizeandquickpropagationofmessagesthroughoutthenetwork.We
proposeaddingasecondarynetwork,knownastheDashMasternodenetwork.Thesenodes
willhavehighavailabilityandprovidearequiredlevelofservicetothenetworkinordertotake
partintheMasternodeRewardProgram.

coin
2.1 Masternode Reward Program - Cost and Payments
Much of the reason for the decrease of full nodes on the Bitcoin network, is the lack of
incentive to run one. Over time the cost of running a full node increases as the network
gets used more, creating more bandwidth and costing the operator more money. As the cost
rises, operators consolidate their services to be cheaper to run or run a light client, which
doesnt help the network at all.
Masternodes are full nodes, just like in the Bitcoin network, except they must provide a
level of service to the network and have a bond of collateral to participate. Collateral is
never forfeit and is safe while the Masternode is operating. This allows investors to provide
a service to the network, earn interest on their investment and reduce the volatility of the
currency.
TorunaMasternode,thenodemuststore1000DASH.Whenactive,nodesprovideservices
toclientsonthenetworkandinreturnarepaidintheformofadividend.Thisallowstheusers
topayfortheservicesandearnareturnoninvestment.Masternodesareallpaidfromthe
samepoolofmoney,approximately45%[footnote]ofthetotalblockrewardisdedicatedto
thisprogram.


DuetothefactthattheMasternoderewardsprogramisafixedpercentageandthe
Masternodenetworknodesarefluctuating,expectedMasternoderewardswillvaryaccording
tothecurrenttotalcountofactiveMasternodes.Paymentsforastandarddayforrunninga
Masternodecanbecalculatedbyusingthefollowingformula:
(n/t) * r * b * a

Where:
nisthenumberofMasternodesanoperatorcontrols
tisthetotalnumberofMasternodes
risthecurrentblockreward(presentlyaveragingabout5DASH)
bisblocksinanaverageday.FortheDashnetworkthisusuallyis576.
aistheaverageMasternodepayment(45%oftheaverageblockamount)

ReturnoninvestmentforrunningaMasternodecanbecalculatedas

((n/t) * r * b * a * 365)/1000

Wherevariablesarethesameasabove.

ThecostassociatedwithrunningaMasternodecreatesahardandsoftlimitofactivenodes
onthenetwork.Currentlywith5.3millionDASHincirculation,only5300nodescouldpossibly
berunningonthenetwork.Thesoftlimitisimposedbythepriceitcoststoacquireanode
andthelimitedliquidityonexchangesduetousageofDashasacurrencyandnotmerelyan
investment.

2.2 Deterministic Ordering

Aspecialdeterministicalgorithmisusedtocreateapseudorandomorderingofthe
Masternodes.Byusingthehashfromtheproofofworkforeachblock,
securityofthis
functionalitywillbeprovidedbytheminingnetwork.

PseudoCode,forselectingaMasternode:

For(mastenodeinmasternodes){
n=masternode.CalculateScore()

if(n>best_score){
best_score=n
winning_node=masternode
}

CMasterNode::CalculateScore(){
n1=GetProofOfWorkHash(nBlockHeight)//getthehashofthisblock
n2=Hash(n1)//hashthePOWhashtoincreasetheentropy
n3=abs(n2masternode_vin)

returnn3
}

TheexamplecodecanbeextendedfurthertoproviderankingsofMasternodesalso,a
second,third,fourthMasternodeinthelisttobeselected.

2.3 Trustless Quorums

CurrentlytheDashnetworkhas~2400activeMasternodes[8].Byrequiring1000DASH
collateraltobecomeanactiveMasternode,wecreateasysteminwhichnoonecancontrol
theentirenetworkofMasternodes.Forexample,ifsomeonewantstocontrol50%ofthe
Masternodenetwork,theywouldhavetobuy2,300,000DASHfromtheopenmarket.This
wouldraisethepricesubstantiallyanditwouldbecomeimpossibletoacquiretheneeded
DASH.

WiththeadditionoftheMasternodenetworkandthecollateralrequirements,wecanusethis
secondarynetworktodohighlysensitivetasksinatrustlessway,wherenosingleentitycan
controltheoutcome.ByselectingNpseudorandomMasternodesfromthetotalpoolto
performthesametask,thesenodescanactasanoracle,withouthavingthewholenetwork
dothetask.

ForanexampleimplementationofatrustlessquorumseeInstantX[9],whichusesquorumsto
approvetransactionsandlocktheinputsortheproofofserviceimplementation[10].

Anotherexampleusefortrustlessquorumscanincludeutilizingthemasternodenetworkasa
decentralizedoracleforfinancialmarkets,makingsecuredecentralizedcontractsapossibility.
Asanexamplecontract,ifAAPLisover$300onDec31,2016paypublickeyA,otherwise
paypublickeyB.

2.4 Roles and Proof-Of-Service

Masternodescanprovideanynumberofextraservicestothenetwork.Asaproofofconcept,
ourfirstimplementationincludedDarksendandInstantX.Byutilizingwhatwecall

proofofservice,wecanrequirethatthesenodesareonline,respondingandevenatthe
correctblockheight.

BadactorscouldalsorunMasternodes,butnotprovideanyofthequalityservicethatis
requiredoftherestofthenetwork.Toreducethepossibilityofpeopleusingthesystemto
theiradvantagenodesmustpingtherestofthenetworktoensuretheyremainactive.This
workisdonebytheMasternodenetworkbyselecting2quorumsperblock.QuorumAchecks
theserviceofQuorumBeachblock.QuorumAaretheclosestnodestothecurrentblock
hash,whileQuorumBarethefurthestnodesfromsaidhash.

MasternodeA(1)checksMasternodeB(rank2300)
MasternodeA(2)checksMasternodeB(rank2299)
MasternodeA(3)checksMasternodeB(rank2298)

AllworkdonetocheckthenetworktoprovethatnodesareactiveisdonebytheMasternode
networkitself.Approximately1%ofthenetworkwillbecheckedeachblock.Thisresultsinthe
entirenetworkbeingcheckedaboutsixtimesperday.Inordertokeepthissystemtrustless,
weselectnodesrandomlyviatheQuorumsystem,thenwealsorequireaminimumofsix
violationsinordertodeactivateanode.

Inordertotrickthissystem,anattackerwillneedtobeselectedsixtimesinarow.Otherwise,
violationswillbecancelledoutbythesystemasothernodesareselectedbythequorum
system.

AttackerControlled
Masternodes/Total
Masternodes

RequiredPicked
TimesInARow

Probabilityof
success (n/t)r

DASHRequired

1/2300

6.75e21

1000DASH

10/2300

6.75e15

10,000DASH

100/2300

6.75e09

100,000DASH

500/2300

0.01055%

500,000DASH

1000/2300

0.6755%

1,000,000DASH

Table1.TheprobabilityoftrickingthesystemrepresentingoneindividualMasternodeas
failingproofofservice

Where:
n
isthetotalnumberofnodescontrolledbytheattacker
t
isthetotalnumberofMasternodesinthenetwork

risthedepthofthechain
TheselectionofMasternodesispseudorandombasedontheQuorumsystem

2.5 Masternode Protocol

TheMasternodesarepropagatedaroundthenetworkusingaseriesofprotocolextensions
includingaMasternodeannouncemessageandMasternodepingmessage.Thesetwo
messagesareallthatsneededtomakeanodeactiveonthenetwork,beyondthesethereare
othermessagesforexecutingaproofofservicerequest,DarksendandInstantX.

Masternodesareoriginallyformedbysending1000DASHtoaspecificaddressinawallet
thatwillactivatethenodemakingitcapableofbeingpropagatedacrossthenetwork.A
secondaryprivatekeyiscreatedthatisusedforsigningallfurthermessages.Thelatterkey
allowsthewallettobecompletelylockedwhenrunninginastandalonemode.

Acoldmodeismadepossiblebyutilizingthesecondaryprivatekeyontwoseparate
machines.Theprimaryhotclientsignsthe1000DASHinputincludingthesecondary
signingprivatekeyinthemessage.Soonafterthecoldclientseesamessageincludingits
secondarykeyandactivatesasaMasternode.Thisallowsthehotclienttobedeactivated
(clientturnedoff)andleavesnopossibilityofanattackergainingaccesstothe1000DASHby
gainingaccesstotheMasternodeafteractivation.

UponstartingaMasternodesendsaMasternodeAnnouncemessagetothenetwork,
containing:

Message:(1KDASHInput,ReachableIPAddress,Signature,SignatureTime,1K
DashPublicKey,SecondaryPublicKey,DonationPublicKey,DonationPercentage)

Every15minutesthereafter,apingmessageissentprovingthenodeisstillalive.

Message:(1KDASHInput,Signature(usingsecondarykey),SignatureTime,Stop?)

Afteratimetolivehasexpiredthenetworkwillremoveaninactivenodefromthenetwork,
causingthenodetonotbeusedbyclientsorpaid.Nodescanalsopingthenetwork
constantly,butiftheydonothavetheirportsopen,theywilleventuallybeflaggedasinactive
andnotbepaid.

2.6 Propagation of the Masternode List

NewclientsenteringtheDashnetworkmustbemadeawareofthecurrentlyactive
Masternodesonthenetworktobeabletoutilizetheirservices.Assoonastheyjointhemesh

network,acommandissenttotheirpeersaskingfortheknownlistofMasternodes.Acache
objectisusedforclientstorecordMasternodesandtheircurrentstatus,sowhenclients
restarttheywillsimplyloadthisfileratherthanaskingforthefulllistofMasternodes.

2.7 Payments via Mining and Enforcement

ToensurethateachMasternodeispaiditsfairshareoftheblockreward,thenetworkmust
enforcethatblockspaythecorrectMasternode.Ifaminerisnoncomplianttheirblocksmust
berejectedbythenetwork,otherwisecheatingwillbeincentivized.

WeproposeastrategywhereMasternodesformquorums,selectawinningMasternodeand
broadcasttheirmessage.AfterNmessageshavebeenbroadcasttoselectthesametarget
payee,aconsensuswillbeformedandthatblockinquestionwillberequiredtopaythat
Masternode.

Whenminingonthenetwork,poolsoftware(websitesthatmergetheeffortsofindividual
miners)usetheRPCAPIinterfacetogetinformationabouthowtomakeablock.Topaythe
Masternodesthisinterfacemustbeextendedbyaddingasecondarypayeeto
GetBlockTemplate.Poolsthenpropagatetheirsuccessfullyminedblocks,withasplit
paymentbetweenthemselvesandaMasternode.

3 Darksend

Webelieveitsimportanttohaveastandardtrustlessimplementationforimprovingthe
privacyofitsusersinthereferenceclientthatprovidesahighdegreeofprivacy.Otherclients
suchaselectrum,AndroidandiPhonewillalsohavethesameanonymitylayerimplemented
directlyandutilizetheprotocolextensions.Thisallowsusersacommonexperience
anonymizingfundsusingawellunderstoodsystem.

DarksendisanimprovedandextendedversionoftheCoinJoin.Inadditiontothecore
conceptofCoinJoin,weemployaseriesofimprovementssuchasdecentralization,strong
anonymitybyusingachainingapproach,denominationsandpassiveaheadoftimemixing.

Thegreatestchallengewhenimprovingprivacyandfungibilityofacryptocurrencyisdoingit
inawaythatdoesnotobscuretheentireblockchain.InBitcoinbasedcryptocurrencies,one
cantellwhichoutputsareunspentandwhicharenot,commonlycalledUTXO,whichstands
forunspenttransactionoutput.Thisresultsinapublicledgerthatallowsanyusertoactas
guarantoroftheintegrityoftransactions.TheBitcoinprotocolisdesignedtofunctionwithout
theparticipationoftrustedcounterparties,intheirabsence,itiscriticalthatauditing
capabilitiesremainreadilyaccessibletotheusersthroughthepublicblockchain.Ourgoalis
toimproveprivacyandfungibilitywithoutlosingthesekeyelementsthatwebelievemakea
successfulcurrency.

Byhavingadecentralizedmixingservicewithinthecurrencywegaintheabilitytokeepthe
currencyitselfperfectlyfungible.Fungibilityisanattributeofmoney,thatdictatesthatallunits
ofacurrencyshouldremainequal.Whenyoureceivemoneywithinacurrency,itshouldnt
comewithanyhistoryfromtheprevioususersofthecurrencyortheusersshouldhavean
easywaytodisassociatethemselvesfromthathistory,thuskeepingallcoinsequal.Atthe
sametime,anyusershouldbeabletoactasanauditortoguaranteethefinancialintegrityof
thepublicledgerwithoutcompromisingothersprivacy.

Toimprovethefungibilityandkeeptheintegrityofthepublicblockchain,weproposeusingan
aheadoftimedecentralizedtrustlessmixingstrategy.Tobeeffectiveatkeepingthecurrency
fungible,thisserviceisdirectlybuiltintothecurrency,easytouseandsafefortheaverage
user.

3.1 Tracing Coinjoin By Amounts

AcommonstrategyinexistingBitcoinimplementationsofCoinjoinissimplymerging
transactionstogether.Thisexposestheuserstovariousmethodsoffollowingthetheusers
coinsthroughthesejoinedtransaction.

Figure2:AnexampleCoinjointransactionwith2users[11][12]

Inthistransaction,0.05BTCwassentthroughthemixer.Toidentifythesourceofthemoney,
onesimplyhastoaddupthevaluesontherightuntiltheymatchoneofthevaluesontheleft.

Breakingapartthetransaction:

0.05+0.0499+0.0001(fee)=0.10BTC.
0.0499+0.05940182+0.0001(fee)=0.10940182BTC.

Thisgetsexponentiallymoredifficultasmoreusersareaddedtothemixer.However,these
sessionscanberetroactivelydeanonymizedatanypointinthefuture.

3.2 Through linking and Forward Linking

InotherproposedimplementationsofCoinjoin,itspossiblethatauseranonymizesmoney
theneventuallysendschangefromthattransactiontoanexchangeorotherentitythatknows
theusersidentity.Thisbreakstheanonymityandallowstheentitytowalkbackwardsthrough
thatuserstransactions.WecallthistypeofattackForwardLinking

Figure3:ForwardChangeLinking

Inthisexample,Aliceanonymizes1.2BTC,whichgoesto2outputs,1BTCand0.2BTC.She
thenspends.7BTCfromthe1BTCoutput,receivingchangeof0.3BTC.That0.3BTCthen
goestoanidentifiablesource,confirmingAlicealsospentthe.7BTCinthepriortransaction.

Toidentifythesenderoftheanonymoustransaction,startattheexchangetransactionand
gobackwardsintheblockchaintillyougettotheAlicesends0.7BTCanonymously.Asthe
exchange,youknowitwasyouruserwhojustrecentlyboughtsomethinganonymously,thus
breakingtheanonymitycompletely.WecallthistypeofattackThroughChangeLinking.


Figure4:ThroughChangeLinking

Inthesecondexample,Alicebuys1.2BTCfromcoinbase,thenanonymizesthisamountinto
a1BTCoutput.Shethenspendsthe1BTC,receiveschangeintheamountof0.3BTCand
thencombinesthatwithher0.2BTCearlierchange.

Bycombiningthechangefromtheanonymoustransaction(0.3BTC)andthechangeshe
receivedfromtheCoinJointransaction,youcanlinktheentirehistorybeforeandafter,
completelybreakingtheanonymity.

3.3 Improved Privacy and DOS resistance

Darksendusesthefactthatatransactioncanbeformedbymultiplepartiesandmadeoutto
multiplepartiestomergefundstogetherinawaywheretheycantbeuncoupledthereafter.
GiventhatallDarksendtransactionsaresetupforuserstopaythemselves,thesystemis
highlysecureagainsttheftanduserscoinsalwaysremainsafe.Currentlytomixusing
DarkSendrequiresatleast3participants.


Figure5:Threeuserssubmitdenominatedfundsintoacommontransaction.Userspay
themselvesbackintheformofnewoutputs,whicharerandomlyordered.

Toimprovetheprivacyofthesystemasawholeweproposeusingcommondenominationsof
0.1DASH,1DASH,10DASHAND100DASH.Ineachmixingsession,allusersshouldsubmit
thesamedenominationsasinputsandoutputs.Inadditiontodenominations,feesshouldbe
removedfromthetransactionsandchargedinbulkinseparate,sporadicunlinkable
transactions.

ToaddressthepossibleDOSattacks,weproposealluserssubmitatransactionascollateral
tothepoolwhenjoining.Thistransactionwillbemadeouttothemselvesandwillpayahigh
feetominers.Inthecasewhenausersubmitsarequesttothemixingpool,theymust
providecollateralatthebeginningofthisexchange.Ifatanypointanyuserfailstocooperate,
byrefusingtosignforexample,thecollateraltransactionwillautomaticallybebroadcasted.
Thiswillmakeitexpensivetodoasustainedattackontheprivacynetwork.

3.4 Passive Anonymization of funds and chaining

Darksendislimitedto1000DASHpersessionandrequiresmultiplesessionstothoroughly
anonymizesignificantamountsofmoney.Tomaketheuserexperienceeasyandmaketiming
attacksverydifficult,Darksendrunsinapassivemode.Atsetintervals,ausersclientwill
requesttojoinwithotherclientsviaaMasternode.UponentryintotheMasternode,aqueue

objectispropagatedthroughoutthenetworkdetailingthedenominationstheuserislookingto
anonymize,butnoinformationthatcanbeusedtoidentifytheuser.

EachDarksendsessioncanbethoughtofasanindependenteventincreasingtheanonymity
ofusersfunds.Howevereachsessionislimitedtothreeclients,soanobserverhasaonein
threechanceofbeingabletofollowatransaction.Toincreasethequalityofanonymity
provided,achainingapproachisemployed,whichfundsaresentthroughmultiple
Masternodes,oneafteranother.

DepthOfTheChain

PossibleUsers (n)r

81

6561

Table2.HowmanyuserscouldpossiblybeinvolvedinNmixingsessions.

3.5 Security Considerations

Astransactionsaremerged,Masternodescanpossiblysnooponusersfundsastheypass
through.ThisisnotconsideredaseriouslimitationduetotherequirementforMasternodesto
hold1000DASHandthefactthatusersutilizerandomMasternodesthattheyselecttohost
theirjoins.Theprobabilityoffollowingatransactionthroughoutachainingeventcanbe
calculatedasfollows

AttackerControlled
Masternodes/Total
Masternodes

DepthOfTheChain

Probabilityof
success (n/t)r

DASHRequired

10/1010

9.80e05

10,000DASH

10/1010

9.60e09

10,000DASH

10/1010

9.51e11

10,000DASH

100/1100

8.26e03

100,000DASH

100/1100

6.83e05

100,000DASH

100/1100

4.66e09

100,000DASH

1000/2000

25%

1,000,000DASH

1000/2000

6.25%

1,000,000DASH

1000/2000

0.39%

1,000,000DASH

2000/3000

44.4%

2,000,000DASH

2000/3000

19.75%

2,000,000DASH

2000/3000

3.90%

2,000,000DASH

Table3.TheprobabilityoffollowaDarksendtransactiononthenetworkgiventheattacker
controlsNNodes.

Where:
n
isthetotalnumberofnodescontrolledbytheattacker
t
isthetotalnumberofMasternodesinthenetwork
risthedepthofthechain
TheselectionofMasternodesisrandom

ConsideringthelimitedsupplyofDASH(5.3millionatthetimeofwriting)andthelowliquidity
availableonthemarket,itbecomesanimpossibilitytoattainalargeenoughnumberof
Masternodestosucceedatsuchanattack.

ExtendingthesystembyblindingMasternodestothetransactionstakingplaceontheirnode
willalsogreatlyenhancethesecurityofthesystem.

3.6 Masternode Blinding via Relay System

Insection3.4wedescribetheprobabilitiesoffollowingasingletransactionthroughmultiple
sessionsofDarksendmixing.ThiscanfurtherbeaddressedbyblindingMasternodes,sothey
cantseewhichinputs/outputsbelongtowhichusers.Todothisweproposeasimplerelay
systemthatuserscanusetoprotecttheiridentity.

Insteadofausersubmittingtheinputsandoutputsdirectlyintothepool,theywillpicka
randomMasternodefromthenetworkandrequestthatitrelaystheinputs/outputs/signatures
tothetargetMasternode.ThismeansthattheMasternodewillreceiveNsetsof
inputs/outputsandNsetsofsignatures.Eachsetbelongstooneoftheusers,butthe
Masternodecantknowwhichbelongstowhich.

4 Instant Transactions via InstantX

ByutilizingMasternodequorums,usersareabletosendandreceiveinstantirreversible
transactions.Onceaquorumhasbeenformed,theinputsofthetransactionarelockedtoonly

bespendableinaspecifictransaction,atransactionlocktakesabout4secondstobeset
currentlyonthenetwork.IfconsensusisreachedonalockbytheMasternodenetwork,all
conflictingtransactionsorconflictingblockswouldberejectedthereafter,unlesstheymatched
theexacttransactionIDofthelockinplace.

ThiswillallowvendorstousemobiledevicesinplaceoftraditionalPOSsystemsforreal
worldcommerceanduserstoquicklysettlefacetofacenoncommercialtransactionsaswith
traditionalcash.Thisisdonewithoutacentralauthority.Anextensiveoverviewofthisfeature
canbefoundintheInstantXwhitepaper[10].

5 Additional Improvements
5.1 x11

x11isawidelyusedhashingalgorithm,whichtakesadifferentapproach,knownasalgorithm
chaining.x11consistsofall11SHA3contestants[13],eachhashiscalculatedthensubmitted
tothenextalgorithminthechain.Byutilizingmultiplealgorithms,thelikelihoodthatanASIC
iscreatedforthecurrencyisminimaluntilalaterpartofitslifecycle.

InthelifecycleofBitcoin,miningbeganwithhobbyistswhichusedCPUstominethe
currency,thenshortlyafterGPUsoftwarewascreated,whichquicklyreplacedtheCPUs.
YearsaftertheGPUscycle,ASICsorApplicationSpecificIntegratedCircuitswerecreated,
whichquicklyreplacedtheGPUs.

DuetothecomplexityanddiesizerequiredtocreateanASICforminingx11,weexpectthat
itwilltakeconsiderablylongerthanitdidinBitcoin,allowingforhobbyiststotakepartinthe
miningforalongerperiodoftime.Webelievethisishighlyimportantforgooddistributionand
growthofacryptocurrency.

AnotherbenefitofthechaininghashingapproachishighendCPUsgiveanaveragereturn
similartothatofGPUs.AlsoGPUshavebeenreportedtorun3050%cooler,withless
wattagethantheScryptalgorithmusedbymostcurrentcryptocurrencies.

5.2 Mining Supply

AdifferentapproachtorestrictingtheinflationofminingistakeninDash,usinga7%
reductionofthesupplyperyear.Thisisdoneasopposedtohalvingimplementedbyother
currencies.Inadditionsupplyeachblockisdirectlytiedtotheamountofminersonthe
networkmoreminersresultinlowerminingrewards.

ProductionofDashisscheduledtocarryonthroughoutthiscenturyandontothenext,slowly
grindingdownuntilfinallyneartheyear2150,productionwillcease.


Figure6:MiningRewardSchedule

5 Conclusion

Thispaperintroducesvariousconceptstoimprovethedesignofbitcoinresultinginimproved
privacyandfungibilityfortheaverageuser,lesspricevolatilityandquickermessage
propagationthroughoutthenetwork.Thisisallaccomplishedbyutilizinganincentivized
twotiermodel,ratherthantheexistingsingletiermodelinothercryptocurrenciessuchas
Bitcoin.Byutilizingthisalternativenetworkdesignitbecomespossibletoaddmanytypesof
servicessuchasdecentralizedmixingofcoins,instanttransactionsanddecentralizedoracles
usingmasternodequorums.

References

1. Apeertopeerelectroniccashsystem(2008)
2. http://eprints.qut.edu.au/69169/1/Boyen_accepted_draft.pdf
3. https://www.cryptocoinsnews.com/3solutionsinstantbitcoinconfirmations/

4.
5.
6.
7.

http://research.microsoft.com/pubs/156072/bitcoin.pdf
http://www0.cs.ucl.ac.uk/staff/s.meiklejohn/files/imc13.pdf
https://getaddr.bitnodes.io/nodes/incentive/
https://medium.com/zapchainmagazine/whydontpeoplerunbitcoinnodesanymore
d4da0b45aae5
8. https://dashninja.pl/
9. https://www.dashpay.io/wpcontent/uploads/2014/09/InstantTX.pdf
10. https://github.com/dashpay/dash/blob/master/src/Masternodepos.cpp
11. https://blockchain.info/tx/4eb3b2f9fe597d0aef6e43b58bbaa7b8fb727e645fa89f922952
f3e57ee6d603
12. https://blockchain.info/tx/1694122b34c8543d01ad422ce600d59f8d8fde495ac9ddd894
edc7139aed7617
13. http://en.wikipedia.org/wiki/NIST_hash_function_competition#Finalists
14. http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23fc0/P2P2013_041.pdf