Welcome back to your second to last episode
of Dash School. Congratulations.
I'm your teacher, Amanda B. Johnson
And as promised, yes, I will now tell you everything
you need to know about the Masternode.
You'll likely recall that yesterday I mentioned that the
Dash DAO, Decentralized, Autonomous, Organization,
was created for two reasons.
First; to have a way to fund ourselves that would
keep us independent and able to cover
all of our own expenses.
And second; was a way to make decisions.
We were able to check off the funding box with the treasury,
Yes!
But the question now remains, how do we make
network wide decisions?
And who decides where all of those funds from the
treasury go anyway.
That's this one (points to Masternode)
See, in the perennial question that decentralized
networks all face;
which is; Who's in charge when
no one in particular is in charge?
There's no CEO, there's no president.
A sort of method has to be invented that would cause us
to make the best decisions most of the time.
Dash's decision makers then are called Masternodes.
And the reason they are bestowed with the authority
to make network wide decisions...
is primarily because they each must prove an ownership
of a thousand Dash. (1000 DASH)
With that kind of wealth at stake, we believe the Masternodes
to be the most incentivized to make good decisions
from which they will profit, and the least likely to make poor
decisions from which they will lose.
And how do the Masternodes make decisions? How do they come
to consensus about what will be done on the network?
Well, in a way that you're probably pretty familiar with.
They vote.They cast votes that are recorded directly onto the
Dash blockchain, and that's how network wide
decisions are made.
By a majority vote.
Wild, huh?
And in exchange for voting rights, Masternodes must perform
three basic tasks.
They must keep an updated copy of the blockchain at all times,
Yup, seems like a good idea,
They must provide the network with instant send functionality
What?
And they also must provide the network with
private send functionality.
Oh, what are these crazy new terms?
Well, I'll tell ya.
Instant Send and Private Send are two functionalities
which set Dash apart from every other blockchain.
And to understand what they do, and why they are
vitally important to the ability to offer "Money as a Service" -
"Digital Cash"
We've got to go back to the basics you now know about
how blockchains work.
Remember how a blockchain can be visualized by something like this?
Time stamped updates to a ledger, right?
Well, those updates, as you'll recall, only come through every
so often. Every number of minutes.
Remember from the prior lesson, how when I send digital
currency from my wallet. My private keys sign a message
that broadcasts that transaction to the rest of the network?
Well, that "broadcasted" transaction is not considered
"confirmed" or irreversible until it's been included in the
next block.
That's why each block that is found after your wallet has broadcast
your transaction is called a confirmation.
So if this was the most recent block found (points)
And you sent me 1/2 a Dash, say 20-30 minutes ago,
When it was recorded in that block (points)
We would say that your transaction of 1/2 Dash from
you to me, now has 1, 2, 3, 4, 5 confirmations.
And that's cool, and that's fine, but guess what?
In a real world, person to person retail environment,
Waiting for a confirmation that takes minutes
is way too long.
Hell, even 15 seconds is too long.
(example) I'm a customer, and my hot latte is in my hand
and I'm ready to get out the door, not wait for confirmations.
And that is why Dash's Masternodes enable Instant Send.
So that even though our blockchain's confirmations
come about every couple or few minutes,
a smaller quorum of Masternodes can provide you with
an irreversible confirmation in about 1.3 seconds.
Now that's more the speed of paying for coffee
and getting out the door.
And what is that other fancy new fandangled term
I referenced before, Private Send?
Again, going back to our concept of how a blockchain works,
you may have deduced by now that every Dash
which exists within the ledger
can be traced back to every account that's ever held it.
And on, and on... back to the very first block in which it appeared,
when it was a part of the newly created "block reward", remember?
And this can create some major problems for we fickle humans.
For example, remember a few episodes back, when I referenced that
perhaps I hate the hypothetical Alice?Well,
what if I know what her public address is?
Because, maybe she posted it on her twitter?
Or, in an email to me once.
Or hey, maybe I even did business with her once?
Well, if you chose to pay me some Dash,
to say, pay me back for lunch one day,
I would be able to trace those Dash on the blockchain,
back to everywhere they've ever been.
And if the Dash you sent me ever once belonged to Alice,
Oh, may the fates have mercy on your soul.
See, with the fickleness of human nature,
plus many people's desire for privacy,
It really makes no sense to have digital units of money
that have human histories tied to them.
This is already the case with everyone's favorite form of money,
Cash.
When someone gives you cash for a good or service,
you don't know who owned it before them.
And what's more, you don't care.
Because paper cash has a highly desirable property of money,
Which is this fancy word called Fungibility.
Which means that every unit of money is worth the same as
every other equal unit of money.
Which practically translate into me never being able to insist:
I don't want coins from Alice! Send me other coins!
They're WORTH more to me!
Masternode enabled Private Send, then
maintains fungibility by swapping coins among users
which breaks the traceable history of coins on the blockchain.
And now, dear viewer, I almost hate to say it, but you
actually now know basically everything you need to know
about how Dash uses the blockchain to offer money as a service.
You know that Dash formed a DAO, Decentralized Autonomous
Organization, to be able to fund it's own Miners, Masternodes
and have money left over in a Treasury.
You know that decisions are made in Dash by votes recorded
on a blockchain, cast by Masternodes who each own 1000 Dash
And finally you know that those Masternodes also perform
the oh so important functions for digital cash, Instant Send
and Private Send.
Well, good golly Brothers and Sisters, what could possibly be left?
Well, any honest user of blockchain based networks will tell you,
that they are not yet easy to use.
For example, those alpha numeric addresses, you know,
the X175cb... whatever, are kinda gross.
Oh, and did I mention that if you forget your wallet's password,
or forget to make a backup, you lose
the entire content of your wallet?
Oh, and did I mention that payments are kind of hard
to make, like if I want to send you some Dash, I have to
ask you to copy and paste over your numeric address to me.
and then every time I want to pay you thereafter, I have to go
digging through our emails or chat history just to find
the damn thing.
Dash realizes that for the average person to want to use
a blockchain based digital currency, all of this has got to go.
Oh, and how do we plan on doing that?
What do we think we are? Innovative?
Well, it will all be wrapped up in a little software release
we like to call Evolution.
And to find out what Evolution will bring to the table,
and why you might care to know about it at this time,
tune in to our next and final episode of Dash School.