Part one of this two-part series was an introduction to and an overview of DASH.
On March 29, 2014, Evan Duffield published “The Story of How Darkcoin Was Made” in the hope of clarifying some controversy about Darkcoin’s initial “Instamine” …
Taken from Dash forums
An error occurred after the first start, so a relaunch was announced. It is safe to assume that Duffield started mining without any problems as it was able to offer a sizable amount of 5000 coins (with a maximum block reward of 500) for a Windows wallet within a few hours of launch. It is also hard to believe that one would not have been aware of the high emissions from active mining. If the emissions weren’t high, where did all the coins come from?
Taken from bitcointalk.org
The IP analysis shows that among the first 124 “miners” for Darkcoin:
– 106 were Amazon AWS and Microsoft Azure cloud instances
– 9 were other cloud hosting and dedicated servers
– 9 were private users
IP analysis by the user
It is important to note that it is very easy for one person to set up multiple Amazon AWS and Microsoft Azure cloud instances. Perhaps one to five people were responsible for all 106 Amazon and Microsoft instances.
Shortly after the relaunch, people realized that the emission for Darkcoin was significantly higher than originally stated. Based on Duffield’s belief that a completely fair start is a “prerequisite for creating a healthy ecosystem,” it would be reasonable to view this as a mistake big enough to start over.
However, there was no relaunch despite the obvious problems that arose from the massive Instamin that spawned nearly 2 million Darkcoin on day one. The only potential benefit of having an Instamin is to enrich whoever managed to get into it. Although he states they “didn’t even have a block explorer”, it is possible to get information about the coin supply without a block explorer.
Taken from the Bitcoin developer. reference
Duffield wrote, “Right after block 4500, I started working on DarkSend. I tried to make a proof-of-concept and eventually managed to post about it and the coin became more popular every day. At that point, the coin became a serious project of mine. “
Although Duffield claims that he started working on DarkSend after Block 4500 and that Darkcoin only became a serious project after it continued to grow, this email appears from December 29, 2013, before Darkcoin was ever started (January 2014) to indicate something else:
Taken from the mail archive
Notice the phrase “Help with a for-profit startup”.
Given the nature of digital currency, you can usually only benefit from owning the coin (unless you are an ICO, crowdfund, etc.). This would mean that the only way Duffield and his team could potentially benefit from Darkcoin would have been to own it. This is suggestive and motivational enough to continually accumulate and be in control of what is on offer.
Duffield also wrote: “[T]The project will be a merged altcoin that will provide a very useful service for the entire crypto coin ecosystem. “And” We have detailed implementation plans. “
These sentences from the email also suggest that this project was planned and had a clear sense of direction before the coin hit the market.
Why is that a problem?
Given that DASH is supposed to be a decentralized digital currency, there are obvious concerns about centralization:
– All services provided by master nodes (MNs) can be at risk if the ownership of master nodes is centralized, especially data protection / anonymity functions.
– Is a governance process even necessary when the majority of the votes may be under the control of a company?
– The success of DASH is heavily geared towards a very small group of developers.
– Is DASH really a decentralized digital currency?
I did an analysis using the DASH coin emission plan as a reference to show the increasing rate of master node and utility centralization.
While the potential centralization concerns are not an immediate threat, as the DASH rating continues to rise, those concerns will serve as an Achilles’ heel for DASH.
For more information and discussion on DASH, it’s recommended to watch this video from @ToneVays and @FluffyPonyza
Many thanks to user dnale0r for putting much of this information together in a very accessible way, as well as Tone Vays and Riccardo Spagni for their discussions and help in raising awareness of the origins of DASH.
This guest post originally published here is from Ace. The opinions are his own and do not necessarily reflect those of Bitcoin Magazine.