The study claimed that hardforks create an erosion of trust and decrease consumer confidence in cryptocurrency’s use as a medium of exchange. The study predicted as many as 50 hardforks could still happen this year and studied over 800 hard forks, source code forks and soft forks.
The paper focused on the need for better governance within the cryptocurrency community, but still recognized that traditional governance methods would not mesh with the decentralized nature of cryptocurrency. The study said there is a need to “have a more proactive approach for goal-setting, problem identification, and compromise between those who resist software updates with those who favor more regular updates”.
Dash is structured to achieve consensus
The study continued by saying there is an “urgent need for miners and other stakeholders within the Bitcoin network to generate more predictability and stability with its governance by setting clear guidelines regarding when software updates are beneficial and should be adopted”. The paper proposed the development of “elements of anticipatory governance by identifying potential software challenges early on” to make forks less necessary and/or contentious. Interestingly, the study cited Vertcoin, Dogecoin and Litecoin as examples of Bitcoin forks that are able to achieve significant communities and last for years rather than many forks that die off not too long after the fork. However, Dash was not mentioned as one of these coins.
Dash was originally a fork of Litecoin a few years ago, but since Litecoin soon became a dead coin with little development updates, Dash was re-forked from Bitcoin. Dash quickly initiated a series of improvements that created an enhanced Decentralize Autonomous Organization (DAO) governance protocol that now includes Masternodes and a Treasury in addition to traditional miners. Masternodes are required to stake 1000 Dash, a significant financial investment, which incentivizes Masternodes to act in the best interests of the network when voting on which proposals to fund via the Treasury. This has allowed for the Treasury to use its 10% monthly allotment of Dash block rewards to fund proposals that advance the best interests of improving the Dash community and network. Through this system, Dash is able to achieve consensus much easier than other coins.
Dash Core Group, the DAO Treasury funded development team, has been responsible for developing Dash upgrades, including the 12.2 upgrade that doubled Dash’s block size. The upgrade was seamlessly integrated by Masternodes and miners, which is in stark contrast to the proposed upgrade to double Bitcoin’s blocksize that resulted in the very contentious fork of Bitcoin and Bitcoin Cash. Since the actors within Dash are incentivized to maintain a coherent and productive network, Dash achieves consensus easier and more reliably than other coins.
Dash strengthens community trust to increase adoption
The study draws important attention to the fact that currency requires trust, whether that trust is in government (fiat), mineral deposits (commodity money), or code (cryptocurrency). Dash aims to create further trust in its code by creating a better incentivized structure that helps support its ability to achieve consensus and develop the currency. In addition to the features mentioned above, Dash also invented sporks, which further helps ensure smooth operations, consensus building, and prevents accidental forks during upgrades. Dash’s ability to achieve both decentralization and consensus can be seen in the most recent logo upgrade where the logo picked by the DAO funded Dash Core Group was overruled in favor of a logo put forth by the community in a DAO Treasury proposal. The community proposed logo won out by receiving the majority of votes and the rest of the network adopted this logo because of the incentives to act in the best interests of the network and quickly reach consensus on decisions.
This ability to achieve consensus enables Dash to strengthen community trust in Dash to achieve wider adoption. In Venezuela, where the national fiat currency, the Bolivar, is worthless, consumers are turning to Dash as an everyday currency alternative. Consumers have developed trust in Dash by witnessing its the organized community outreach funded by the DAO Treasury and Dash’s ability to maintain its extremely fast speed, low fees, and security through upgrades and increasing usage. Dash has demonstrated its ability to create greater trust through its decentralized governance by allowing consumers to witness the smooth development maintenance, upgrades, and consensus building of Dash.