Against Critics, Dash Furthers its Model for Decentralization
Despite being one of the world’s largest digital currencies in terms of market cap, Dash is particularly polarizing. While proponents have strong praise for Dash’s system of governance, many within the digital currency community question if the platform is as decentralized as currencies like Bitcoin.
In an interview with Coinsquare Discover, elected Dash representative Amanda B. Johnson provided insight into how Dash’s system of governance operates and addressed common criticisms surrounding the digital currency.
How voting works in the Dash network
Johnson began her career as a Dash spokesman in the same way as many of the currency’s developers; through a proposal made to Dash’s treasury network.
For advocates of Dash, the treasury network is seen as a working example of decentralization. Through this model, individuals and teams pitch proposals and indicate the amount of funding they require. Masternode holders can then vote to decide which projects are funded.
Proposals and currently funded projects can be viewed online, and the total available budget is purportedly over $5 million CAD (at the time of writing).
Votes are handed out exclusively to holders of masternodes. Currently, running a masternode is reliant on having a stake of 1,000 Dash (currently valued at a total around $925,000 CAD).
Letting the network run the team
As Johnson explained, the current team of developers most often associated with the platform is paid directly from the treasury. This means Dash’s core group of developers could be voted out by the masternode network at some point in the future, should the network favour a different team’s proposal.
For now, the team behind many of Dash’s major developments call themselves Dash Core, a team appointed and funded by the community on a monthly basis to develop Dash’s core technology.
Led by CEO Ryan Taylor, the Core team aim to further decentralize Dash’s system of governance. According to Johnson, the team plans to create a trust that owns 100% of the shares of Dash Core Inc., and has its beneficiary listed as Dash’s masternodes.
Theoretically, this would allow masternodes to further control the Dash Core team, and ensure that assets are legally owned by the masternode network, not just the current developers.
Challenging the idea of being ‘decentralized’
There are several factors that challenge the idea that Dash is a truly decentralized system. Disclosing masternode holdership is entirely optional, and members of the Core team could operate several masternodes, potentially giving people the power to vote in the interest of keeping their jobs, even if the network votes against them.
According to Johnson, this potential conflict of interest is an issue that she has also considered. Her conclusion is that masternode holders having a large monetary stake in Dash means that they are incentivized to act in the best interest of their holdings, not just their employment status. She said that this should prevent conflicts of interest, as someone stepping down from their position in favour of someone better suited for the role could increase the value of their holdings in the long-term.
Currently, digital currencies like Ethereum and Bitcoin observe a Proof of Work model. Here, each computer in the network is considered equal and has the same amount of authority. While this is often considered a highly decentralized model, issues with scalability question its ability to sustain itself in the future.
Dash’s polarizing governance
Straying from its contemporaries, Dash operates through a hybrid system of governance, which Johnson cited as allowing for the existence of the “killer feature of Dash,” Instant-Send. Instant-Send uses a quorum of 10 random masternodes to lock and verify transactions, allowing for fast processing times that she says are “just as fast, or in some cases faster, than a credit card.”
“We live in this kind of, sort of, strange undefined territory where our blocks are generated 100% by miners,” she explained. “But the masternodes play so many essential functions and they get paid by providing a stake. Really we’re kind of like a hybrid Proof of Work, Proof of Stake, almost kind of like a ‘Proof of Service’ coin.”
However, in exchange for features like Instant-Send, some question if Dash is more centralized than other digital currencies due to its heavy reliance on masternodes. These claims are polarizing and innately difficult to verify, and many point to the fact that there are 4693 active masternodes, and no real way of knowing how many are controlled per person.
In 2018, the Dash Core team aims to use its system of governance to create a decentralized API known as Evolution. Evolution will purportedly allow website owners to paste a snippet of code onto their checkout page, allowing them to accept Dash directly without the need for any middleman payment processor.
“If it works as it’s intended, this is going to be what really sets Dash apart and brings something entirely new to the cryptocurrency sphere,” she said. “They can just put this API on their website, and that API will talk directly back and forth to the Dash network using masternode quorum technology.”
Image credit: DASH logo
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