The Privacycoins Battles and Why Dash Is Not Really That Private
Based on blockchain technology, most cryptocurrencies have an open and public ledger. While this is required for these systems to work, it comes with a significant downside: Privacy is often quite limited. Government agencies, analytics companies and other interested parties — let’s call them “spies” — have ways to analyze the public blockchains and peer-to-peer networks of cryptocurrencies like Bitcoin, to cluster addresses and tie them to IP addresses or other identifying information.
Unsatisfied with Bitcoin’s privacy features, several cryptocurrency projects have, over the years, launched with the specific goal to improve on them. And not without success. Several of these privacycoins are among the most popular cryptocurrencies on the market today.
However, as detailed in this month’s cover story, Bitcoin’s privacy features have recently seen significant improvements as well and are set to further improve over the next months and years. This miniseries will compare different privacycoins to the privacy offered by Bitcoin.
In part one: Dash.
Background
Dash (DASH) is among the most popular but also the more controversial cryptocurrencies in the space today.
Originally a codebase fork from Litecoin (which is in turn a codebase fork of Bitcoin), Dash was launched by its founder Evan Duffield in January 2014 as Xcoin. The project was quickly rebranded to Darkcoin, seemingly in reference to Dark Wallet, a now-defunct, privacy-focused bitcoin wallet project. Darkcoin rebranded a second time in early 2015, to the current name Dash, which stands for "digital cash.” At the time of writing, Dash claims a 12th spot on the cryptocurrency market cap lists, down from a top five spot for some time in early 2017.
Much of the controversy surrounding Dash stems from the early days of the project. While the coin was not premined, it was instamined. As the cryptocurrency went live, miners created 2 million coins in a matter of days. Quite a significant amount, with a projected supply currently scheduled for a total of 22 million, and some 8 million coins in circulation today. According to Duffield, himself one of the early miners, the instamine was an accident. But instead of fixing the problem — for example, by changing the protocol rules or relaunching — it was decided that the coin would continue despite the instamine.
Since then, Dash has turned into (what it calls) a decentralized autonomous organization, or DAO, and prides itself on being the first successful example of such an organization. The DAO centers around Dash “masternodes” — DASH nodes that stake (proof of ownership) at least 1000 DASH — and should help the network in certain ways, for instance by confirming “instant transactions.” In return, these masternodes receive 45 percent of newly generated DASH.
Another 10 percent of every block reward is reserved for the Dash treasury. What happens with these funds is decided by the masternodes by vote. In practice, this money funds the Dash Core Group, effectively the company behind Dash, today headed...
Trying on (Virtual) Shoes and Clothes
One of the key advantages that the old-fashioned brick-and-mortar stores still have over internet shopping is: the shopper wants to be able to try stuff on for size. Shoes and clothes especially. You can’t do that from home. Can you?
Imigize LLC, a Berkeley, California based company may break down that barrier to the final triumph of the online world, with “personal anthropometric 3D” modeling, that will drastically reduce the number of returns on non-fitting goods. The shoes are the relatively easy task they’ve taken on first: mastering the 3D modeling of a shopper’s feet will be easier than mastering that of the rest of the body.
The business plan requires privacy: shoppers will have to know that their foot/body details are not going to be available to any clever hacker, as they likely would be, given a centralized cloud-based system. Thus: blockchain is critical. And in connection with blockchain, there will be a token (imgz). The imgz is now in its private pre-sale phase. An ICO is planned for September 20, with an initial value of 1 imgz at 0.00010147 ETH.
Zcash Hard Fork Scheduled Before Halloween
Zcash is an open, permissionless cryptocurrency designed to protect privacy. It is the creation of Zooko Wilcox-O’Hearn, who is also known for “Zooko’s triangle” and the Majo Nation P2P system.
The news is that the founders have just released their version 2.0.0. They are encouraging all users and miners to upgrade to the new version as quickly as possible.
The great thing about 2.0.0? It is “Sapling compatible.” Sapling is the term used in the Zcash orbit to refer to an upcoming hard fork, expected on October 28, that will amount to a major protocol upgrade, allowing shielded/private addresses to be supported by mobile and hardware wallets, exchanges, and payment processors.
October 28th will also be the second anniversary of the official launch of Zcash.
MADANA Data Privacy Management: Token Sake
MADANA stands for an open platform for data analysis, preserving privacy by design. The blockchain-based ecosystem allows anyone to stay in control of their data while monetizing it in an anonymous way. MADANA aims to provide a GDPR compliant way for data processing, enabling new business models for future Apps and Services. German ICO with approval from the Federal Financial Supervisory Authority. MADANA proposes a new data market ecosystem run on multiple smart contracts based on blockchain technology that allows data producers,...
Are Privacy Coins ‘One of the Greatest Emerging Threats to U.S. National Security?'
What will the future hold for the crypto worlds privacy coins with Congress looking at possibly regulating them. Is it even possible?
The U.S. Secret Service is taking a good look at privacy-focused cryptocurrencies like Monero and Zcash while urging Congress to “consider additional legislative or regulatory actions.”
Fear of Privacy Coins
Last week, a top official from the federal law enforcement agency reportedly requested help from Congress in combating the use of privacy coins for illicit purposes. Robert Novy, Deputy Assistant Director of the Secret Service’s Office of Investigations, wrote:
We should … consider additional legislative or regulatory actions to address potential challenges related to anonymity-enhanced cryptocurrencies.
He added, as reported by Forbes:
[C]ontinued Congressional attention is warranted to ensure law enforcement agencies maintain lawful access to critical sources of evidence, regardless of where, or in what form, that information is stored.
Greg Nevano, an official in the investigations division of the Immigration and Customs Enforcement, backed up Novy’s opinion, stating:
Some newer cryptocurrencies have features that make the tracing of them quite complicated. These new anonymity-enhanced cryptocurrencies are clearly ripe for illicit use in an effort to subvert...