Solving Cryptocurrency’s Usability Crisis
By: Joel Valenzuela
Tags: Dash Cryptocurrency, Payments, Bitcoin, Cryptocurrency, Dash

Solving Cryptocurrency’s Usability Crisis

The cryptocurrency and blockchain industry has captured the world by storm, reaching a $2 trillion valuation to date and still growing. Almost no one uses it as money, however, which was the first application in the space when Bitcoin came on to the scene in 2009.

In the previous article I went over the biggest barriers to the mass adoption of cryptocurrencies today. In this one I’ll go over how the Dash digital currency is seeking to fix these problems and become one of the very first cryptocurrencies that regular users will leverage for daily transactions.

How Dash Is Addressing These Issues

Founded in 2014, Dash initially focused on solving the confidentiality issue for transactions by creating a built-in coin mixing service. It then expanded to tackle additional pressing issues such as decentralized governance and funding, advanced security, and, most important of all, usability. In late 2015 at Bitcoin Wednesday, Dash’s founder Evan Duffield unveiled the Dash Evolution idea to build a smooth and simple user experience into the protocol itself. Over five years in the making, this grand vision is starting to become reality with the release of Dash Platform, and solve the issues I had described previously. Here’s how.

Mass on-chain scaling for fixed and low fees

In early 2016, as the Bitcoin scaling wars began to heat up, Dash held a vote to determine if the network would pursue off-chain or on-chain scaling. The on-chain approach won by a significant margin, and since then, supported by a research partnership with Arizona State University, Dash has paved the way to scale to mass adoption levels easily while maintaining low transaction fees. Meanwhile, networks such as Bitcoin which have pursued an off-chain scaling approach have experienced years without an optimal scaling solution, while solutions such as the Lightning network have developed. While off-chain scaling solutions may in time prove to run as smoothly as on-chain transactions, this is not yet the case, and may possibly never be. In the meantime, Dash has run consistently and reliably for the past six years, and won’t have to go through a period of usability issues while scaling is solved.

Additionally, since Dash transactions are secure instantly regardless of time elapsed and on-chain confirmations, even brief moments of congestion would not cause the user experience to be degraded or a fee spike. More on that next.

InstantSend and ChainLocks for instant and secure transaction finality

Thanks to the masternode network of collateralized incentivized nodes, Dash employs a feature called InstantSend which instantly locks all transactions as soon as they are broadcast, preventing them from being reversed until they are set in stone when confirmed in a block. This means that in under two seconds, a Dash transaction can be considered final and secure. As an added layer of security, thanks to a similar yet separate feature called ChainLocks, every single block in the blockchain is made permanent as soon as it is confirmed by miners. This means that even companies and services mistrustful of the extra security provided by InstantSend in under two seconds can simply wait a little over two minutes and the payment is immune even to network-wide attacks by the powerful such as 51% attacks. In either case, the time an end user must wait before knowing their payment is secure is almost nothing at all, and doesn’t suffer from the variability of not knowing how many confirmations to wait for.

Decentralized digital identities for human-readable usernames

The centerpiece of the new Dash Platform, released on testnet at the end of 2020, is decentralized digital identities. These allow a user to create an identity, including a human-readable username, associated with their funds. This means that a user can simply bypass those long and ugly cryptographic hashes and instead send to a username they can remember and recognize. Notably, these aren’t a simple prettier label on top of a single static address with all the privacy compromises that go along with it, but instead generate a new address with every transaction, while still leveraging the same easy-to-remember username every time. And more than just a way to transact more easily, Dash identities can contain all kinds of supplemental data, including contact lists.

Decentralized contact lists and apps for social payments

What sets Dash’s approach to usability apart is the inclusion of contact lists in the decentralized digital identities. This means that not only will users have a much easier format for transacting with each other by leveraging usernames, but they won’t even have to remember said usernames. They can connect with friends and family once, and never have to remember a specific username again, since they can just look them up on their list of contacts the next time they want to send money. And, selecting a contact brings up all your past transaction history with that contact, even though each payment was sent or received to a new address. This may sound a little silly to get excited about such simplistic functionality that we’ve come to expect out of most modern apps, but this experience isn’t widely available in cryptocurrency today, at least not in non-custodial services.

How the transaction experience looks in Dash’s upcoming DashPay username-leveraging wallet

What’s notable in contrast with competing services such as HandCash is that in Dash, digital identities are both trustless and universal. First, this means that you don’t actually have to trust anyone to provide this functionality for you. There’s no company or group of people who can either go out of business or decide to exclude you. Using usernames and contact lists is as trust-minimized as using the rest of the decentralized network. And second, this means that this experience isn’t limited to just one wallet or service. Use any service that integrates into Dash Platform and your identity and contacts will all be there. And this only gets more useful the more service use this technology.

Private username connections and coin mixing for confidential finances

A big problem with the way cryptocurrency payments work today is that they necessitate exposure to public addresses in order to receive payments, and these addresses can easily be looked up to see how much money they have received, and correlated with other addresses to compromise confidentiality. When users are connected via username, however, this is much harder to do since payment addresses aren’t displayed publicly at all. A user would have to make a payment to someone they’re already connected with, then explicitly look up the transaction in a block explorer. This both necessitates some technical knowledge and bad intent towards a contact, which makes exposure much less likely.

Additionally, virtually since its inception Dash has included a built-in coin mixing feature, which essentially mixes together the funds of a few different users to make it difficult to tell whose money is whose by looking at it from the outside, essentially making transactions difficult to trace. Using coin mixing in conjunction with usernames can give users an unprecedented level of financial confidentiality and solve one of cryptocurrency’s biggest drawbacks as a payment system.

You may notice how I left out secure, easy, and non-custodial backups for wallets. That’s because right now there is no concrete solution in the works that I know of to decrease the risk of users misplacing access to their funds while maintaining a good enough user experience. Dash developers have mentioned a potential solution, which I’ll go into detail about below, but it won’t be included in any currently-planned upcoming releases that I know of.

Next Steps

While these first steps go a long way towards solving usability, there are a few next steps we can take to solve this issue completely.

Make InstantSend recognition universal

Arguably Dash’s best advantage over its competitors is its fast and universal transaction finality, known as InstantSend, yet in practice this feature is only as good as the number of services that actually recognize that it exists. While a Dash transaction can be considered secure and final within seconds of being broadcast, the end user won’t know this unless the recipient service tells them that it’s secure and final.

The FastPass initiative is a project by Dash Core Group to onboard as many partners as possible to recognizing Dash’s special features such as InstantSend, and giving them special recognition, as well as identifying them publicly. That way a user can be sure that they experience Dash as it should be experienced. This program is still in its relative infancy, however with greater inroads this fast and seamless experience can become universal.

Release Dash Platform and DashPay

As mentioned above, Dash Platform, the data and decentralized application layer on top of the Dash network, as well as DashPay, the username-leveraging wallet, were released on testnet at the end of 2020. This means that they exist, they work so far, but aren’t yet deployed on mainnet, meaning you can’t yet use them to send real money. Releasing them on to the main Dash network once all the bugs have been ironed out will make these improvements a reality for users. When that happens, some of the biggest pain points of the cryptocurrency user experience will be a thing of the past.

Combine mixing functionality with a username wallet

I pointed out above how both username connections and mixing funds can help improve the confidentiality of payments on Dash. Even better is to combine them both in the same wallet with a great user experience. That way not only are most users not directly exposed to addresses that can then be investigated to reduce privacy, but even in the case that a payment is looked up on the blockchain, its origin will be difficult to tell.

The first, mainstream Dash username wallet, DashPay, won’t have mixing functionality, at least not yet. Fully solving the confidentiality problem would involve including this functionality into that wallet, including username functionality in wallets that leverage usernames, or developing an entirely new wallet that combines both these features.

Create an elegant yet trustless social backup system

While there aren’t yet many good solutions for average users to maintain control over their own funds while minimizing risk of losing access to them, it’s easy enough to imagine what a solution to this problem might look like. Imagine a user being able to designate two (or more) “backup contacts”, levering Dash’s decentralized digital identities, which can then work in conjunction to restore lost access to a wallet. Such a thing just has to be implemented correctly, which I’m sure comes with all manner of complications and pitfalls. But the basic idea of what we’d be trying to achieve is there, and getting it done can do wonders for people’s confidence in trusting their money to this new technology without compromising its decentralization principles.

Cryptocurrency is a competitive and rapidly growing industry, and the technology is still rough and in the process of evolving to a state where the average person won’t mind using it directly. Dash has a real shot at solving the most critical issues facing mass adoption, and paving the way for the industry to go from speculative experimental tech to the digital cash of the future.