Ryan Taylor, CEO of Dash Core Group, the main group of Dash developers, has released a new statement and detailed explanation of why Dash’s PrivateSend transactions are identical to Bitcoin’s transactions using CoinJoin and should thus be treated the same by regulators and exchanges.
[tweet https://twitter.com/RTaylor05/status/1159360609940414464 align=’left’] Ryan Taylor mentioned how Dash Core Group has supported exchanges in their interactions with regulars to educate and explain that “Dash poses no incremental risk compared to Bitcoin” and that “[t]he required processes and compliance tools for Dash are identical to those required to support Bitcoin”.
“One common reaction of legislative bodies and enforcement agencies is to attempt to ban exchanges and other market participants from integrating so-called “privacy-centric” cryptocurrencies, based on the assumption that these cryptocurrencies would be preferred by criminals. However, thus far the sophistication of the proposed bans appears to be on the basis of brand reputation, rather than on the basis of technical facts.”
Dash Core Group’s education document details how “Dash transactions are all completely transparent and auditable, identical to Bitcoin (upon which Dash is based), including the amounts and addresses party to each transaction”. The educational document also provides proof by conducting transactions on both chains and “[t]hey both feature 19 inputs and 19 outputs of 0.0100001 units each”, which showed that “the Bitcoin transaction is not similar… it is completely identical.” The only exception was for features like special transactions and segregated witness, which do not contain financial data points that regulators are typically concerned with. Additionally, in the Q2 2019 conference call, Dash Core Group said they are now “aggressively pursuing” PrivateSend education for regulators and exchanges in an attempt to make integrations more likely.
Privacy features do not mean illegal activities and are necessary for future growth
Dash started out in 2014 as “Xcoin” and later as “Darkcoin”, but rebranded to Dash in 2015 and began focusing on improving other aspects of the coin than just privacy, but its association with other “privacy-centric” coins managed to stick. However, “[t]he main improvements compared to Bitcoin (e.g., ease-of-use, speed, security, and cost) are attributes shared by all Dash transactions compared to Bitcoin, and are in no way attributable to Dash’s implementation of CoinJoin”. Nevertheless, the ability to offer privacy features does not automatically associate any coin with illegal activities.
“CoinJoin transactions currently constitute less than 1% of all transactions on both Bitcoin and Dash, and LN adoption has been slow to develop. Even if usage rates were different, drawing a legal distinction between Bitcoin and Dash is increasingly unjustified given the multitude of similar implementations that now exist in the market. PrivateSend is simply a brand name for the specific CoinJoin implementation found in Dash’s desktop wallet.”
Additionally, privacy option will eventually become an important aspect of cryptocurrency since it is already crucial in current financial transactions.
“If cryptocurrencies are going to be adopted by mainstream users and businesses, privacy tools are needed to protect confidential information (e.g., how much you pay employees, what you charge others for services, what political parties you support). There are many legitimate reasons for users to require privacy, especially given that public blockchains are much less anonymous than physical cash or even bank accounts, which are only visible by a reduced number of parties.”
Finally, there are security concerns surrounding individuals discovering another individual’s wallet addresses and thus their wealth and potentially inflicting harm, which has already happened with large holders of Bitcoin and other cryptocurrencies. Governments are even enacting their own regulations that mandate the protection of privacy, such as the General Data Protection Regulation (GDPR) in the European Union or the The California Consumer Privacy Act.
Dash forging partnerships to help others stay in compliance
Dash has been integrated into BlockchainIntel and Coinfirm, which are both KYC/AML service providers the help exchanges and other cryptocurrency companies stay in compliance. BlockchainIntel even detailed to Dash News how their program only assigns a risk ranking and does not inquire about personally identifying individuals and their financial activity. Additionally, there are services such as Node40 that help ensure that companies can stay tax compliant while using Dash. In addition to the work of Dash Core Group, these integrations further help educate consumers, exchanges, merchants, and other potential partners on how Dash’s blockchain with PrivateSend has no compliance difference from Bitcoin with coin mixing and can thus just as easily be integrated into platforms.