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Exclusive Interview: Is Dash More Compliant Than Bitcoin Regulation-Wise?

Exclusive Interview: Is Dash More Compliant Than Bitcoin Regulation-Wise?

DASH is a fork of Bitcoin that utilizes a two-tier masternode network that creates a scalable, on-chain, low fee P2P cryptocurrency payments network with the objective to compete with rival legacy payment and remittance services. At its core, DASH is not a privacy-oriented cryptocurrency, however it is frequently labeled as one of the main privacy coins by the media and regulators.  Unlike Monero (XMR) or other privacy-oriented cryptocurrencies, DASH’s PrivateSend function does not obscure addresses or amounts. Instead, it uses CoinJoin for it’s optional privacy feature-set.

From a regulatory standpoint, DASH is identical to Bitcoin. CoinJoin is already used by Bitcoin since 2013 to make transactions more private.  So, the reality is that this is nothing new and makes for no legally-definable difference. If there was one, it would equally apply to Bitcoin as it would to Dash.That is at least what Dash Core Group and several external reports have concluded. So one has to ask why there is regulatory confusion around DASH’s PrivateSend? Well, it turns out it’s not how the technology actually works, it’s because the name DASH has chosen for the technology ‘PrivateSend’ sounds scary and nefarious to regulators and that is what is causing problems and misunderstanding. It’s an educational issue not a technical one.

This is an exclusive interview with Dash Core Group’s CFO Glenn Austin to discuss the current regulation and compliance outlook for Dash. We discuss IRS, DOJ, SEC, FATF, Japan FSA, JVCEA and more.

 

Why is Dash persistently characterized as a privacy coin?

I believe it is a legacy issue.  Dash’s founder announced an initial focus on enhancing the pseudonymity of Bitcoin shortly after the project’s launch in 2014 and rebranded the coin (then called Xcoin) to Darkcoin.  This early decision branded Dash in a negative light and encouraged sensational press coverage.  This history, combined with the PrivateSend brand name for Dash’s implementation of CoinJoin, set the stage for regulators to erroneously assume that Dash is a “privacy coin”, however one defines the term. Although we have changed the coin’s name to Dash to mean Digital Cash, far more aligned to our payments-focus, it has been difficult to shake this general misconception from the media. If you take the time to evaluate how our privacy function works, you will see it is no different than Bitcoin. 

 

How is Dash different in terms of regulations and compliance to Bitcoin?

In terms of regulation and compliance, Dash is identical to Bitcoin.  This statement is supported not only by our own analysis which can be found here, but also by leading industry experts.  

For example, Chainalysis stated (link here) that “This means from a technical standpoint Dash’s privacy functionality is no greater than Bitcoin’s, making the label of “privacy coin” a misnomer for Dash.  In fact, independent software wallets provide more advanced forms of CoinJoin that are being used with major cryptocurrencies not labeled as privacy coins, such as Bitcoin, Bitcoin Cash, and Litecoin”.  

Additionally, Perkins Coie recently released a white paper (Perkins Coie) wherein they state “Dash is technically no more of a “privacy coin” than Bitcoin.”

Since mid-2018, we have been working hard with regulators and partners to raise awareness and make this point clear to everyone.  Whenever we present to regulators and partners they immediately understand that Dash is not a privacy coin and the same mechanisms and services that are used to comply with Bitcoin, can be used for Dash.  

 

What about the SEC, could Dash be considered a security?

Dash went through a rigorous process of developing a set of legal arguments and then presenting those to the SEC in 2018 and subsequent to that Dash was awarded a Crypto Rating Council rating of 1.0 which is the same as Bitcoin and actually a better score than Ethereum’s. It is the lowest and best score you can achieve on the Crypto Rating Council scale. It's very clear at this point that Dash is not a security. Dash never held an ICO. There is no centralized issuer. There really are no reasons one could point to that would argue that Dash is a security.

 

Should Dash’s PrivateSend function be treated differently to Bitcoin classification in relation to FATF’s Travel Rule? 

There's been a lot of noise about the FATF Travel Rule and whether or not so called privacy coins can be compliant with that. The technology that Dash utilizes in our PrivateSend function is CoinJoin.  We conducted exact duplicates of PrivateSend transactions on Bitcoins blockchain just to show that there is no functional difference between Dash and Bitcoin. There is no legally definable difference between the transactions; they are identical.  If exchanges can be compliant with FATF Travel Rule for Bitcoin, they can use those exact same sets of tools for Dash.  Dash can fully comply with the Financial Action Task Force (FATF) guidelines including the ‘Travel Rule’ as can be seen here.

 

Should Dash still be considered a privacy coin then?

Well, now that’s an interesting question.  When someone refers to a privacy coin I typically ask for what the definition of a “privacy coin” is?  Without a clear definition, how can one categorize properly categorize a coin?  I contend that there is no such thing as a privacy coin.  

When I look at the Bitcoin network I would say it falls somewhere in the middle of the privacy spectrum.  While it’s true that it has certain elements that mitigate the privacy available to a user due to the fact that it’s a fully transparent blockchain where you can trace every single transaction that took place from the genesis block.  It also has transparent input and output amounts and addresses which services like BlockChaInintel or Chainalysis can use to deanonymize users but running analysis on the chain.  But Bitcoin also has certain privacy enhancing features such as coinjoin wallets, third party tumbling services and even lightning network which actually processes bitcoin transactions off-chain.  

So that’s with Bitcoin in particular.  Beyond that there are a number of cryptocurrencies that use even more privacy enhancing features.  They achieve enhanced privacy by implementing techniques such as making a single blockchain block one large transaction instead of a combination of many transactions (such as mimblewimble) or by introducing stealth addresses or concealing transaction amounts.  To oversimplify - anything that conceals or hides certain transaction parameters that are transparent on the Bitcoin network would tend to have more privacy.  

What this means on a practical level is that when looking at individual blockchains you can’t just assign one to be a privacy coin.  What I’m saying is you can’t set and forget this type of categorization.  You really need to periodically look at the network and see what privacy enhancing techniques have been enabled on it and adjust your overall assessment of the network based on the updated features.  As an example a couple of cryptocurrency networks are now looking at enabling mimblewimble on their networks which would definitely move them to the privacy-centric side of the spectrum.

Now circling back to your original question.  Between various privacy features like off chain-transaction, shielding address/amounts, mimblewimble, tumbling/mixers and coinjoin - Dash only has Coinjoin enabled on its network.  CoinJoin can literally be performed on any public blockchain.  

So the evidence is conclusive that Dash is definitely not a privacy coin.  Dash is a payments cryptocurrency, with a strong focus on usability, which includes speed, cost, ease of use, and user protection through the optional CoinJoin privacy feature.

 

Is Dash in any way more compliant than Bitcoin in terms of regulations? 

As I mentioned, Bitcoin supports off-chain transactions via the Lightning Network. That is something Dash doesn't support as we plan to continue to scale on-chain. Additionally, Bitcoin supports Chaumian CoinJoin, a stronger privacy feature than the traditional CoinJoin process, which also doesn’t exist on the Dash network.  Finally, the Dash network does not have third-party tumbling services - while Bitcoin does.  So from a regulatory point of view that should place Dash in a more preferential position than Bitcoin. As mentioned, the Dash blockchain is public and completely transparent. Below compares Dash with Bitcoin and other “privacy” coins, you will see there is quite a spectrum with regards to privacy, and Dash is on the more transparent end of that spectrum in comparison. 

Privacy features comparing Dash, Bitcoin, Zcash and Monero

Dash has been categorized as an “anonymity enhanced cryptocurrency” in a recent US DOJ report. What are the implications for this? 

The US Department of Justice published a cryptocurrency framework over a month ago. I've read the report and I can confirm it completely miscategorizes Dash as both a private blockchain, as well as as an anonymity enhanced cryptocurrency. These statements are just simply factually inaccurate. 

It's our top priority to get in front of the DOJ and to explain to them the fact that Dash's risk profile is actually lower than Bitcoin's, and that we're not a private blockchain. So far every single interaction we've had with regulators, where we were able to sit down with them and educate them on Dash, we've been able to successfully explain why they have gotten Dash wrong. I believe the regulators have come to the table with preset notions about Dash. I think part of it could be the legacy of being named DarkCoin in the past, and the name PrivateSend for our CoinJoin implementation does not help either. The other side is that there is quite a bit of misinformation online around Dash due to the sensationalism early in Dash’s history that I mentioned earlier. 

We have reached out to the DOJ repeatedly but have yet to hear back from them.

 

What about Dash in Japan? Why was Dash removed from exchanges if there are no issues?

At some point the cryptocurrency exchanges in the Japanese market actually all delisted Dash due to the perceived fact that we were a privacy coin.  People had not done primary research in looking at our privacy features and how Dash is no different from Bitcoin when it comes to blockchain transparency or transaction rule-set.  It became clear that the decision to ban Dash was not based on any actual primary research into Dash but based on hear-say and the opinions of a couple of journalists who sensationalize news. 

We have spent the last year and half educating the regulators on Dash.  I believe that we are getting to the point where members of both the JFSA and the JVCEA now understand Dash and that it isn’t a “privacy coin”.  We have also worked to partner with and educate exchanges and I foresee Dash getting relisted on Japanese exchanges next year. 

 

The Financial Services Commission of South Korea (FSC) will reportedly prohibit all digital asset service providers from serving anonymous cryptocurrencies from March 2021. Will Dash be affected by this? 

Great question.  Again, it would be interesting to understand what feature set they consider to be “anonymous”.  We have reached out to the Financial Services Commission of South Korea (FSC) as well in order to schedule a meeting with them.  We would like to proactively speak to the FSC to ensure that they understand that Dash is not an “anonymous” cryptocurrency so that Dash can continue to be listed in South Korea. 

However, this case is a great illustration of my point regarding sensationalization of Dash’s privacy. The morning that the FSC announced the new policy, we began receiving emails from concerned network members about Dash’s de-listing from the country. Every article we could find on the topic, gave the examples of Monero, ZCash, and Dash. It took us some time to translate the announcement on the FSC website and analyze it ourselves to realize that Dash is nowhere mentioned in the proposed policy or the announcement. One can only make the conclusion based on this information, that Dash’s mention in those articles is an erroneous assumption made by sensationalist press. Not to say that Dash will not be impacted by this law or that the Korean regulators do not view Dash as a privacy coin, because we currently don’t know that. This is to say that journalists made that leap in conclusion, not based on the facts of Dash, its optional CoinJoin feature or on anything stated by the South Korean FSC.

 

The IRS has recently put out a bounty to break Monero's privacy? Does that apply to or threaten Dash?

Dash Core Group has no position on the IRS’s offer. It doesn’t apply or threaten Dash in any way. Dash’s blockchain is public. Dash’s approach to privacy is probabilistic, not based on encryption. 

 

Conclusion

If it’s not abundantly clear by now, Dash’s biggest pain point is having to time and again educate regulators about PrivateSend’s technology CoinJoin. Dash has the legal opinions, analysis and investigative reports from credible external sources that all conclude Dash’s position as posing no regulatory risk beyond Bitcoin. It really makes one wonder if Dash should consider taking a proactive approach instead of a reactive one by renaming PrivateSend functionality in Desktop wallet to just CoinJoin to prevent this from happening in the future as evidently from this interview it would resolve a lot of issues, saving both time and resources that is being spent on educating regulators all based on misunderstanding. Renaming the feature would be a marketing solution to a marketing problem, keeping everything else the same. 

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Blockchain implementation is only possible through B2B partnerships

Blockchain implementation is only possible through B2B partnerships

Blockchain is one of the most vital technologies in the 21st century and is one thing that most countries have in common. Its emergence has led many experts to believe that it is possible for technology to change the world in a few decades, just as the internet came and changed the world. Although it is still at its early development stages, many companies and countries are employing its use for their processes. The blockchain application seems limitless, as it is used in many processes by varying individuals and institutions. Although the most obvious use of blockchain is in the financial sector - international payments, complex financial products, remittances, and cryptocurrency, it is also used to resolve issues and create new opportunities in defense, supply chain, healthcare, government voting, luxury goods, and management. 

Blockchain advantages for B2B

The role that blockchain plays worldwide is often downplayed. While this statement is true for both companies and users, the technology is a very effective tool in providing business solutions. In addition to the many advantages that come with blockchain, the ones that stand out are security, transparency, accountability, and profitability of B2B ventures.

Unlike B2B, B2C is pretty hard because the customer needs to be educated about the product and the value they may receive from the blockchain. While a business partner would either already know or would be more understanding towards it. A good example is blockchain companies partnering with banks to implement their technology. Online casinos are not left out. They are adopting this technology through their partners as they continue to churn out blockchain-based games. For example, when people find the best Playtech bonuses, it's usually provided through BTC or ETH. Why? Because the games are usually designed to do so.

Blockchain acts as a bank for companies that are involved in the production of goods and services for different companies. Companies use it to send and receive money, accept deposits, sign contracts, and a whole lot more. Many people often either confuse block change to mean just cryptocurrencies or online banks. However, this is not the case. Blockchain is broader than just cryptos and involves many processes that are used differently. The reason why blockchain cannot be considered as an online bank is that even online banks are still powered by central authorities, while blockchain is decentralized.

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Ideaology's IEO Ushers the Launch of Blockchain Platform for Innovators

Ideaology's IEO Ushers the Launch of Blockchain Platform for Innovators

DUBAI, UAE - Ideaology is proud to announce its IDEA token pre-sale on December 1, 2020. The pre-sale event is an initial exchange offering (IEO) on P2PB2B exchange. Users will have a chance to purchase IDEA tokens with a 22% discount before the IDEA token public sale.

Ideaology aims to be the “Biggest Blockchain Ecosystem in 2021 and beyond''. Along with the pre-sale launch, Ideaology’s Active IDEA platform will have its beta launch on December 1, 2020 as well. The very existence of Ideaology is a testament to how the model it’s promoting works. With its upcoming IEO and subsequent launch on crypto exchanges, Ideaology’s Active IDEA aims to become the first blockchain-powered platform to pave the way for users to collaborate on promising blockchain projects while investing in these ventures as well. 

“Freelancers don’t necessarily work on online freelance platforms, and clients or companies don’t necessarily look for talents on those websites. Many of them are running their independent business from their websites or agencies, and looking for clients via advertisements, email marketing, leads generation, and other techniques. This is why we need to ask the question: why would a freelancer choose a website like Upwork, Fiverr, or Freelancer to sell his services when they can be part of a platform where they can offer their expertise and services on a platform specifically created for their exposure and convenience?” ,said Khaled Alkalbani, Founder and CEO at Ideaology. 

Whether you are an investor looking for the right project to pour your resources on, a business developer that needs funding to start his empire, or a digital nomad looking for a platform where you can provide meaningful services and earn, Active IDEA strives to be the go-to platform for all online professionals. 

Within the Active IDEA platform, members can collaborate as they invest and find projects that they have passion for. Members of the Ideaology community will be enabled to launch a startup through crowdfunding, but at the same time, will also have the opportunity to work with startups.The Ideaology team calls this whole process “collabvesting” - where Active IDEA users can invest in startups while also giving startups and freelancers to collaborate on projects.

“We believe that our IEO launch with P2PB2B enables Ideaology supporters and P2PB2B users to have a smooth and convenient experience in participating in our pre-sale for the IDEA token. We trust that P2PB2B will also offer a great IDEA token pre-sale experience for everyone interested to purchase IDEA tokens at an early stage.”, said Amar Kovacevic, Co-Founder and CTO at Ideaology.

By establishing a platform where online professionals can start collabvesting, and jumpstarting it with a pre-sale of their IDEA token, Ideaology just became one of the most promising blockchain companies in 2021 and beyond.

Click here to join the IDEA token pre-sale event.

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Blockchain prepared to be integrated into the Ministry of education for Vietnam graduates in 2021

Blockchain prepared to be integrated into the Ministry of education for Vietnam graduates in 2021

Quick take

1 minute read

  • Vietnam is getting ready to integrate blockchain technology for issuing diplomas in 2021.
  • An announcement was made that highlighted that the ministry has teamed up with TomoChain in order to put a national student certification on the proprietary blockchain platform from TomoChain.

The Ministry of education and training in Vietnam is getting ready to integrate blockchain technology for issuing diplomas in 2021.

An announcement was made last week on the 18th of November that highlighted that the ministry has teamed up with TomoChain, a Singapore-based start-up, in order to put a national student certification on the proprietary blockchain platform from TomoChain.

As a part of this project, the Vietnam ministry is getting ready to issue all kinds of diplomas granted by its training units and the high school of higher education through this new system. Furthermore, this new system is going to come into effect at the end of the school year next year.

Interestingly, the announcement specifically highlighted the new blockchain-based certification system which has been designed to enable for transparent and immutable verification of the qualifications for all of its students. The deputy minister at the Vietnam Ministry of education, Nguyen Van Phuc has said the following:

“Diploma and certificate management is an issue that needs to be resolved by technology, which is significant for the whole of society and also cost-efficient for the diploma management system in particular, and education in general.”

This is an exciting development and could prove to be successful if integrated prep properly. Could this pave the way for other countries to follow in Vietnam's footsteps?

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Nigeria could be looking into blockchain technology to help boost its economy by $10 billion

Nigeria could be looking into blockchain technology to help boost its economy by $10 billion

Quick take

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  • How blockchain technology could help grow the Nigerian digital economy.
  • The director-general of the NITDA says up to $10 billion could be benefited from blockchain

Director-general Kashifu Inuwa of the national information technology development agency in Nigeria (otherwise known as NITDA) has recently said that the country could potentially expect a revenue stream of up to $10 billion from the use of blockchain technology over the next decade.

Speaking at a stakeholder meeting in Abuja, the director-general explained how blockchain could benefit the Nigerian digital economy and that it would facilitate the development of such if needed.

Saying at the meeting, he said:

“We want Nigeria to be strategically placed to capture value from this economic potential of blockchain… Looking at our youthful population, which is mainly digitally native and with our position in Africa, we are looking at how we can get at least around six to 10 billion dollars by the year 2030.”

He further added:

“Blockchain is going to play a key role in terms of creating, tracing products and services.”

The director-general further went on to highlight a study from PricewaterhouseCoopers published back in October which found that blockchain technology could potentially add almost $2 trillion to the global gross domestic product over the next 10 years. As a result of this, it would make it 1.4% of the global GDP in 2030.

Furthermore, he added that Nigeria could incorporate such technology through its payment services, digital identity, customer engagement and more to boost this higher.

“We see the need for us to position our country well so we can capture value from the blockchain."

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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