Evan’s and Dash’s scam story
Dash or formerly known as Xcoin and Darkcoin, was created during a crypto era, where coins with anonimity/privacy features were the hottest crypto. Dash launched without having any special features, but with a few basic tweaks like new algorithm that was created within a few days, by Dash’s creator Evan Duffield. To date, there have been no papers on the algorithm which might turn out to be problematic, bringing the entire network down. The launch of the coin was ‘problematic’ as during the first day way more coins were mined than it was planned. That might had been a mistake or just perfectly planned by Evan. It seems very odd to me that people would trust someone on creating a new hashing algorithm, when he didn’t even manage to launch his coin properly.
During the first day 2M coins were mined, and as of today, less than 3k are mined daily. Even if there were no features/community at the time, he didn’t relaunch and decided to keep his instamine, claiming that the community told him to do so. Having a fair launch is very trivial for the future of a coin, because a premined coin has only one future : to make the creator rich. The fact that Evan got to have that many coins, have made him implement things that would only increase the value of his coins. Dash has some special nodes call masternodes, for which you have to ‘lock’ 1000 coins in order to be a masternode operator. Masternodes do some ‘special stuff’, like Instant Transactions, Coin mixing and voting proposals that will get funding. That means that Evan potentially has a massive control over the network due to the fact that he could be operating many masternodes. Below there are some articles that will help you understand why dash’s instamine is bad.
When it comes to privacy, there is nothing Dash can offer. There is no such thing as little privacy. There is privacy and no privacy, and Dash has no privacy. Little privacy is like being in a room were someone can’t see what you are doing, but can hear everything you are doing. Just by hearing your movements and actions, he can imagine what you are doing, or in the case of LE, with the right tools, he can visualise exactly what you are doing. Coinjoin is a flawed and unreliable protocol. Dash’s implementation especially, where you have to trust random masternodes with your ‘secrets’ in order to ‘ensure’ your transactions are private, and there is no way you can tell if a masternode is spying on you or not. Again, there are many articles on why coinjoin and dash’s implementation offer no privacy. The worst part is that their community is promoting Dash as a way to transact privately, something that could put people’s money and lives at risk. Another good article on why dash’s privacy is non existent. https://steemit.com/bitcoin/@dnaleor/warning-dash-privacy-is-worse-than-bitcoin
Here come instant transactions. It is hard for me to believe that a group of some unknown developers managed to find a way to have instant transactions in just a few months, when all other cryptocurrencies have had this problem for years. There are many attacks someone could perform, that could potentially damage the chain beyond repair. As Dash is building on top of Bitcoin, there might be a Bitcoin upgrade that might be incompatible with InstantX. Sybil attacks, Finney attacks, Transaction lock race attack, Multiple consensus messages, Incomplete Locks are some attacks that are mentioned in the InstantX whitepaper which are meant to be solved, but that might not be the case. As if those are not enough, we don’t know what happens in the case of Malleability. Dash is still very small for someone to attack it, however as it is growing, its attack surface is growing. The recent attacks on Ethereum are just an example of what can happen to Dash in the future.
Here come the high masternode yields! At the time this article is being written, the ROI for each masternode is above 8% per year. Getting such high returns, for doing so little, is a massive red flag. Your dash isn’t collateralised and there is no risk of losing it. All that you are doing is lock your money and you can unlock it whenever you want! Initially the block reward was 80% for the miners and 20% for the masternodes. Then it was 45% for the miners, 45% for the masternodes and 10% for development. There was a time where the ROI was higher than 15%. That’s a classic way to get people to buy your scam. Offer high returns in order to lure your victim. If the network was mature, this move would have made more sense. But this was done at a point were Dash was a lot smaller, so masternode operators were being paid, for… doing nothing! At this moment there are 4000 masternodes and there are actually about 7 millions coins in existance. That means that more than half of the current supply is locked! http://188.8.131.52/~pub/masternode_count.png
In a scenario where the price of Dash was static and didn’t increase/decrease over time, the network would be less secure, as you are taking money away from the security of the chain and you are introducing a Proof of Work / Proof of Stake hybrid in the equation. Proof of Stake functions like an undercover ponzi and a ‘permissioned’ blockchain, hence I can’t see why a hybrid of this type is any better than pure PoW. Having many nodes is a good thing, but the main concern in a PoW system is the amount and distribution of the hashrate among the pool operators. At the moment Dash’s security is way lower than that of Bitcoin and there are very few pools operating.
Masternodes’ operators also get to vote proposals that will get part of the reward of a ‘superblock’ (it includes 10% of the block reward for one month and then distributes it to the proposals that got approved). This is the best way to keep the scam going or to keep earning more dash by having many masternodes. For example, let’s say that Evan doesn’t want to cash out his coins, as that would raise some red flags and it would be very obvious. What if instead, he gets paid by the network, by using his status and his masternodes, in order to earn more Dash and gain more time to increase value and the quantity of his coins. Another example, is Amanda, the host of Dash:Detailed. When someone gets invested in a scam or profits from a scam, it becomes increasingly hard for them to face reality. Amanda started the dailydecrypt show, on which she was talking about various developments on various altcoins. At some point she made a proposal to the dash network and got paid in order to make videos about dash. Then she ended up making another proposal in order to become the host of Dash’s ‘unique’ show. In an interview, at Bitcoin Uncensored, she was completely unable to answer basic, but trivial questions about Dash. Why and how could someone preach about a new technology, when she doesn’t even understand it? Why would the network pay a person like this, in order to promote it? The answer is clear. The less you know and the more that you are invested emotionally and financially in a scam, the more qualified you are in order to promote it.
To wrap this all up, I’d like to let people know that the Dash community claims that Dash is a DAO too. The DAO, Nubits and Bitshares are 3 so called DAOs that have failed. Therefore Dash fans should already know what Dash’s future is. A DAO can’t fix human stupidity, conflict of interest and flaws in the code and/or design. By getting people, who are not experts on coding/networking/finance etc to vote for things they are unrelated to, you’ll definitely end up with a clusterfuck…
Disclaimer : I don’t own any Monero, I am not a Monero/Zcash community member and I have profited by trading Dash before. Taking advantage of all the hype created by its community can be very profitable in the short term, as Evan is focusing on promoting and developing things that will increase the value of his coins.