David Murphy Dash talk at 2019 BlockFiesta!

David Murphy Dash talk at 2019 BlockFiesta!


And I’d like to introduce now David
Murphy. We’ve kind of started down the
track we started out more about talking
about blockchain, I have a feeling we’re
gonna start we’re gonna have an
additional talk about a digital currency
because his talk is all about Dash,
so I’m interested to hear if he’s
gonna evangelize a little bit about Dash
and what his thoughts are. And if he
has anything interesting he wants to
share you know with us about himself I’d
like to hear that too. Yeah you wonder if I’m going to
evangelize cuz I got the long hair. All
right people! I’m here to tell you about
Dash digital cash! All right. This is a
magazine ad from 1972 and it’s got the
very clever tagline there, ‘think of it as
money’. And you know why they’re telling
you to think of it as money? Because
nobody would think of it as money it’s a
piece of plastic! Now this is technology
right, this is a technology ad from 1972
but this is the interesting fact about
this; the credit card, in this case the
bank Americard credit card from Bank of
America which started in California it
went across the states went across the
globe and on to become Visa, the
technology had already been around since
1958 when the BankAmericard hit the
market. 14 years later the advertisers
are still trying to get you to think of
it as money because nobody was thinking
of it like that how does plastic equal
money? And that’s the same with
cryptocurrency right? But we’re not even
barely a decade in on this from when
Satoshi Nakamoto whoever he, they, she is
introduced Bitcoin. And it’s had a very
storied history so far I’ll go through
some of these funny articles this is I
like this one the rise and fall of
Bitcoin and this was published in 2011.
That year bitcoin went from about $2 to
somewhere north of $30 and it crashed
back down to about $2 by the time this
article was written; the rise and fall of
Bitcoin. A couple years later it was the
year of the Bitcoin. It’s back. This was
at the end of 2013; within just two
months we’d have the most massive of all
you know mount GOx debacles which just
all that crypto was stolen
somebody brought that up earlier. And then my
favorite; I was wrong about Bitcoin
here’s why. This article that the author
had been kind of poo-pooing Bitcoin
Oh, what’s Bitcoin I was wrong. It’s an
amazing thing the technology a peer-to-peer
decentralized cash yeah this was
December 2017. If you know anything about
the market this was a bad time to read
that article and decide to get on board
because he would have gotten rekt. But
what was Bitcoin supposed to be?
Peer-to-peer digital cash. Cash is
freedom in a sense. Yes sure you can do
nefarious things, you know the
dirtiest money of all of it is? It’s the US
dollar. That is the dirtiest currency.
That’s where the most money laundering
drug-dealing bribery and stuff goes on
it’s not Bitcoin. Bitcoin the market cap
on this is barely what, you know 200
billion? It’s nothing. This is what you
hear it now, this has been the the
co-opting of Bitcoin by the market
forces and by the media. Now it’s not
digital cash anymore it’s not a
peer-to-peer money it’s gold 2.0 it’s a
store of value and that may very well be
what it ends up functioning as and that
would be fine,
kind of makes me think of this meme
that’s sort of a perfect descriptor of
it. Did you ever see that movie you know
he’s like Anakin’s on the lake of fire
you were supposed to destroy the Sith
not join them! And that’s kind of what
bitcoin is doing right now. But I’m not
here to talk about Bitcoin, I’m here to talk
about Dash and the best way to do that is
to make a direct comparison with Dash
against Bitcoin because they’re both
cryptocurrencies. I’ll begin with the
limited supply; so with Bitcoin you have
a limit of 21 million bitcoin that can
ever be created. That’s “around” 21 million
because some Bitcoin will have been lost
on somebody’s hard drive and dumped in
the landfill or you know they sent the
the money to a wrong address and it got
burned or whatever so but the idea is you
can never have more than 21 million. Dash is
similar, Dash has a limited supply of around
18 and a half million for similar
reasons but also because the Treasury
function we’ll talk about that in a
little bit but it’s a little different.
And so this idea of, first of all I want
to just touch on the price people see
Bitcoin, Bitcoin today what is it like
eighty two hundred and they think
can I afford a Bitcoin I don’t have
$8,200? Well then buy a hundredth of a
Bitcoin and pay eighty-two. Buy a
thousandth and pay eight twenty eight
dollars and twenty cents. We’re so used
to the dollar the dollar is divisible
down to the penny right, the 1/100th. You
can divide Bitcoin and Dash both down to
the one 100 millionth. You can buy very,
you can make micro payments and that’s what’s
interesting about these and that’s why
they’re scalable too, and this whole issue
about having a limited supply is key
because this is the central bank that
we’re used to it’s been around for 106
years, it issues all of our currency
and there is no limit. There is no
ceiling. This is a graph from the Federal
Reserve itself it’s a timeline starts at
about the year 2000 goes to the modern
day these gray vertical bars you see
here, oh yeah I got a laser pointer, these are
recessions these are periods of
recession in the economy. This blue line
is the creation of money it’s Federal
Reserve balances maintained by Federal
Reserve Banks.
See this little blip right here? This was
unprecedented at the time. That was
September 11th 2001. The terrorist
attacks and there was like a huge
multi-billion dollar infusion to go to
war in Afghanistan and that was the
highest that had ever been on this graph.
We get right here (mid-2008) and look what happens.
There’s no limit to how many dollars you
can create. It’s probably no irony that
bitcoin is, the first mine, block is mined
right about there.
And part of this goes back to this man
who, this President temporarily suspended
the convertibility of the dollar into
gold in 1971. This is a screenshot and
think about that, the temporary
suspension of the dollar into gold you
can see there was a time you could trade
your paper money and get precious metals
but it’s been temporarily halted for 48
years or as Erik Voorhees so eloquently
put it in his debate with Peter Schiff
that’s almost as long as William
Shatner’s film career.
So back to this limited supply nature so
you have a cap on how many coins you can
create but how do they get created and
how often? So with Bitcoin the supply is
created to go down by half every four
years. And so this is how that works; the
first block is mined in 2009. 50 Bitcoin
are created. Every transaction block that
happens about every 10 minutes creates
another 50 Bitcoin. And you do that for 4
years. And then in 2012 there was a
halvening event which dropped it down to
25 Bitcoin, so now you have 25 Bitcoin
being generated with every block for the
next 4 years and then in 2016 it goes
down again and we’re still in that mode
which is 12 and a half Bitcoin every 10
minutes more or less.
Next year there’s another halvening it
goes to 6.25. Four years
after that it’s 3.125,
and four years after that my math’s not good
enough to know, but you get the idea. Dash is
different; Dash has a supply that drops off
more gradually so rather than these big
drops which create you know
opportunities for speculation and
thinking, oh the supply is going down the
price is going to go up. Dash isn’t about
speculation. Dash is about utility, Dash is
about function, it’s about digital cash
and so the supply goes down gradually
it’s about 7% every year more or less.
Both use a proof-of-work
for consensus so there’s there’s mining
in both but with Dash you have another
second tier which are the masternodes,
and these are very cool the masternodes
anybody can have a masternode; to have
masternode you just have to have a
thousand Dash. At today’s price that’s about
70 grand that you’d have to put up to
have a masternode. It has to all be in
one single encrypted address and if you
can prove that to the network you can
run a masternode and then you can
become part of the network and get some
incentive to do that which we’ll talk
about. The mining times like I mentioned
Bitcoin every 10 minutes you’ve got a
block that gets mined every 10 minutes. Dash
it’s about two and a half, so about four
times faster on the on the mining time.
And then this is really key; so with
Bitcoin
all of that new Bitcoin goes to the
miner. 100%. So if you’re in a mining pool
or you’re a miner you get you validate
the block you get all that new Bitcoin
you get all twelve and a half and then
you go for it for another ten minutes
and hopefully you get the next one and
that’s why you see these server farms
and they’re chewing up tons of energy
trying to get that Bitcoin but it’s all
going to the miner there’s no incentive
for development of the network. With Dash
it’s split three ways so with Dash you have
45% of the block reward goes to miners
45% goes to these masternodes and if
you’re a masternode owner there’s about
4,900 of them right now and they’re
anonymous. You could, somebody in this
room could be a masternode owner I
don’t know. They’re generally distributed
around the globe it’s one person they
own more than one, maybe a group of
people own one together, they’re
anonymous
but they get to share in the reward it’s
kind of a round-robin system and then
10% goes to this DAO; decentralized
autonomous organization which
is the Treasury. Which is very cool
because this is what enables development
of the Dash network so today that’s about
four hundred thousand dollars a month at
today’s price of Dash, that just goes to
this Treasury. That money is available
for development of the network. Right now
about half of it goes to Dash Core Group,
Inc. and I have to make a very strong
distinction. Dash is decentralized. There’s
no Dash CEO there’s no Dash building or
anything like that. There are multiple
development teams, the key core
development team is called Dash Core Group,
Inc. It is a corporation, it is a C-
corporation and 100% of the shares
belong to the network, and the CEO can be
fired at any time by the network if they
don’t like what the CEO or anybody else
there is doing. But what’s cool is that
anybody, for 5 Dash can submit a
proposal to the network; so let’s say
I’ve got an idea to do a really cool I
don’t know like a point of sale I’ve got
some hardware device I want to build and
it’s gonna take about 300 Dash
for me to pull this thing off. I can
submit for 5 Dash which is about $350 in
today’s price to the network and say hey
I’ve got this great idea I want to make
this point of sale system to benefit
the network and then the masternodes
get to vote on that proposal they get to
decide hey that’s a great idea we want
to fund that that sounds really cool. Or
they can reject it. If they reject it I
lose my 5 Dash, I put some skin in the
game, I lost, but if I get the funds I can
use it for the development and I don’t
have to pay it back. And again the Dash Core
group of the core developers, they’re on
the hook for this too, they have to submit
proposals for their funding. They don’t
just get it by default, they have to
submit a proposal like everybody else.
And so talking about these masternodes
most recently the last version of the
software that came out had a new
technology called chain locks and this
prevents the 51% attacks or chain
reorganizations from happening and the
way they do that are through these
long-living masternode quorums so you
have masternodes there’s about 4900 and
so what the network does is periodically
it will go in because in Dash what happens
is the miners produce the blocks but the
masternodes validate them. Okay and so
let’s say you have a transaction block
what happens is 400 masternodes are randomly selected and those
400 masternodes 60% of them whichever
ones of them have the first seen of the
first block that locks the chain tip. So
you don’t have like in Bitcoin this
massive network where you take ten
minutes and then you need like six
confirmations so your transactions are
like an hour before you even have
settlement; This happens in about 4 to 6
seconds that these masternodes are able
to lock in and say that’s the that’s the
definite block for this chain tip any
other chain that tries to have a
different block at that block height
we’re gonna reject it. And so then that
broadcasts out to the rest of the
network and allows for this
functionality. And then this is what
enables the default setting for Dash which
is Instant Send if and we’ll do this later
who’s going, is anyone going to the after partyat the Rio
Bravo? So come find me download a Dash
wallet; I’ll send you a penny. And I can
afford to do that because a Dash
transaction I can literally send you one
penny and it’ll cost a fraction of a
penny, try sending a penny with Bitcoin.
You know the fee might be 50 cents just
to send a penny or you’ll
for days. I think my longest Bitcoin
transaction ever was in the height of
that craziness I waited three weeks for
one to confirm. Instant Send is instant.
My wife Bonnie, hey sweetheart,
we bought coffee at Prosum Roasters
the other day took less than two seconds
to settle the transaction. Boom, the
merchant had the funds the merchant can
spend the funds right away. In the case
of Instant Send it’s just thirty
randomly selected masternodes and again
sixty percent of those have to agree and
that’s what enables an instant send of
just a couple of seconds with Dash. And
these settlement times are really key so
again with Bitcoin you’re talking maybe
an hour of real settlement real trust
six confirmations on the blockchain with
Dash you really do you got about two and a
half seconds on average you’re right
there with Visa you’re right there with
MasterCard and that’s what enables real
merchant adoption. That’s why right now
it’s taking off especially in Latin
America Dash is huge right now in Venezuela,
Colombia, Brazil, in parts of Asia and
Thailand, in Africa, it’s wherever a
currency is in crisis wherever the the
currency is tanking hard and you’ve got
hyperinflation this is doing fantastic
right now. And I can go to you know I can
get on an airplane and go to Caracas
right now and I can live off Dash. I can
take Uber rides I can eat at restaurants
I can stay in a hotel because there are
over two thousand merchants just in that
one place that will take it. And so don’t
expect this to really take off in the US
right away right we have pretty good
infrastructure for our own money but in
these places where it’s a very different
world that we can’t even really
comprehend unless we’ve been there
this is game-changing. And this is what’s
gonna allow for the mass adoption and so
I just kind of end going back to this ad
where it’s telling you to think of this
as money. It’s more than that I’m telling
you with Dash you got to think of it as
financial freedom. There’s that
freedom gap in the world you know yeah
there’s regulation yeah there’s a need
for all that but there’s also a need for
the freedom to do with my money what I
want to do if I want to give it to
somebody like with cash you know what if
I what if I just what
if I want to go to a place where my
dollars aren’t welcome? Well I can use a
currency like this like Venezuela or if
I just want to travel freely and not
worry about thieves you know I can take
the app off my phone there’s not even
any proof I have currency and then
download it when I get to my destination
and have that flexibility and have that
freedom. That’s what it’s really about
for me that’s why I like cryptocurrency
is is believing in that aspect of our
freedom and I think that’s what this
gives us and that’ll wrap up my
presentation because I think we were
going a little late I don’t know what
time it is right now but do I have time
for questions or do we need a break? Okay
so if you got a question shoot it out
and I’ll try to get to it yes somebody
right there. So you said the settlement time on blocks
is two-and-a-half minutes, but the quicker Dash
was two-and-a-half seconds, so how, how does that coordinate? Right, so you don’t have to
in other words you don’t have to have a
block be mined in order to validate the
transaction for settlement because the
masternode network is what is driving
that part of it so when when the when a
transaction occurs the the there’s a
basically a mechanism where the master
nodes are able to say okay we have a
consensus based on this quorum that
that’s the first block we saw and so
we’re going to validate that block and
does that answer the question? Well, not really
because if they approve it, and then you’re handed your cup of coffee
and then something goes wrong and then it never hits a block, isn’t it not a valid transaction?
That’s a really good question you know what I
don’t have a sword but I got a tire iron
in my trunk that I’ll give you for
stumping me on that one. I’ll look into that
Tom I don’t have the answer to that
that’s a really good question yeah
I’m curious I get like you know why (inaudible)
But I do feel intrigued by the fact that cryptocurrency is not being used more extensively
by the states for the legal marijuana industry. And that you know given all the restrictions
around cash, it’s all cash based as you know, well what’s your thinking about why it is that
in states like California and Colorado and Washington that those merchants haven’t moved to digital cash?
that’s a great question about why the
marijuana industry hasn’t adopted this
already I think that’s coming very
quickly in fact Dash is partnered with
another company called alt36 which is
for this very specific industry for that
very specific reason because this is a
great use case if you’re in the
marijuana business
that’s a federally illegal thing to
trade in so even if you’re in Colorado
you have to do business in cash you
can’t receive payments through plastic
you have to have paper money and to have
paper money there’s a lot of expense
there’s security there’s armored cars
there’s there’s you got to have a guy
with a gun there in the store to keep
people in line and all that so Dash is
partnered again with alt36 for that
very reason to make these transactions
happen on the blockchain and don’t stump
me I only have one tire iron but it’s
the same kind of deal where it’s not
violating federal regulation to do it in
Dash you can do it in Dash on that front end
with the consumer, so I can walk into a
cannabis store and pay with Dash right now
if they accept it and the merchant can
take that and go through a third party
like Uphold who can then convert it back
into fiat on the other end so you don’t
have that whole transaction of dealing
with and handling physical money. Am I done
Bill have I gotta, (yes) all right well
thank you very much I’ll be around later.

8 comments

  1. That was a fast and infotaining 18 minutes! "…I'll send you a penny and I can afford to do that…" πŸ™‚

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