Dash bypasses Bitcoin's problems to become the first distributed autonomous organization?

Dash has unveiled a decentralized voting and funding mechanism that it claims can bypass tensions within bitcoin and its dramatic block size debate.

Who decides?

Much attention has been focused on the Bitcoin block size issue, including how core development is funded, distributed, and owned by whom. Dash, the fifth-largest cryptocurrency by market cap, has learned from Bitcoin’s internal chaos and released a decentralized blockchain management system that attempts to bypass Bitcoin’s problems entirely.

There are several issues regarding the development planning, fundraising, and fund management of decentralized and open source protocol projects. Mike Hearn and Gavin Andresen believe that Bitcoin needs a benevolent dictator, but the concept of Bitcoin XT has few supporters.

This concept emphasizes the need for a fast and reliable decision-making process. Consensus is great for many things, but fast decisions are usually made without consensus.

The most common approach to this problem is to create a not-for-profit foundation to maintain the core protocol. However, the controversial performance of the Bitcoin Foundation has greatly disappointed Bitcoin users and the community.

For example, three Bitcoin Core developers are now funded by the Digital Currency Initiative at the MIT Media Lab.

Jeff Garzik said that the funds for the development of Bitcoin Core are decentralized, and the funding sources have been dispersed among several companies and entities. However, this still relies on human organizations and processes, which are vulnerable to censorship, human error and other factors, which is not ideal.

It is important to point out that all of this will now be avoidable.

DASH: Games and Players

Dash’s new decentralized blockchain management system (DGB) was designed with this problem in mind. To understand how it works, we can take a quick look at the Dash network setup, as it does have some significant differences compared to Bitcoin.

DGB, which can be seen as a mathematically enforceable and fully transparent democratic process, is a blockchain voting system with built-in decentralized fund management.

DASH is made up of three types of "nodes" (there are three different DASH software clients available, each with specific roles and responsibilities in the network.)

The first type is miners , similar to Bitcoin, they provide security for Dash’s proof-of-work, but the difference is that Dash uses the X11 algorithm, which is considered to be ASIC-resistant. Miners provide computing power in exchange for 45% of the block reward.

The second category is full node wallets , which are responsible for the accounting books (blockchain), allowing users to access the network, etc.

The third category is Dash’s most innovative element, called “Masternodes.” These are regular full nodes that anyone can run, but the cost is to stake 1000个达世币, which is equivalent to $2,500 in Dash at current market prices (using cold storage). After staking, the node holder will have the right to provide services to Dash users and get paid (45% of the block reward). Services such as DarkSend (the feature that made DASH famous), as well as instant transactions and the controversial 4-second transaction lock feature.

The purpose of these 1,000 collateralized Dash is to serve as a security mechanism, making the cost of cheating in a 51% attack very expensive.

Currently, there are more than 3000 masternodes, which is about half of the full nodes in the Bitcoin network.

Decentralized blockchain management

DGB is built on the masternode network. It allows anyone to propose changes or upgrades to Dash. Whatever the community deems necessary, whether it is legal, marketing or something else, can be submitted directly to the network through the blockchain, and 10% of the block reward will be given to the selected proposal.

The community votes on proposals every month, and the holders of control nodes are the only parties with voting rights, and they can choose to agree, disagree, or abstain.

A qualified proposal must have at least 10% more votes in favor than against, and it must also compete with other proposals. The monthly bonus is approximately 8,000 Dash, equivalent to $19,000.

If the owner of a masternode withdraws their staked coins, meaning they are disconnected from the network, their vote will be invalid.

Distributed Self-Regulatory Organization

One possible question about this system is what is the incentive for Masternodes to vote? We can assume that once Dash is effectively manipulated by other voting systems, this will be enough to keep voters alert and willing to participate in such a vote. Of course, this remains to be seen.

Additionally, each proposal costs 5达世币, but these units are changeable, rather than being an incentive to do something, such as voting. This is similar to the principle of Augur’s collective wisdom system.

It remains to be seen what this system actually looks like, but if it works, it could be a more effective communication solution for issues like the block size debate.

The fact that Dash is officially funded by its blockchain could mean that Dash is an evolving and adaptive organism, or at least the first clearly defined distributed self-regulatory organization.

－－－－