 You're watching the Daily Decrypt where we may not know much, but we do know currency competition when we see it I'm your host Amanda B. Johnson and today's episode is brought to you by black halo bit. Halo They have spoken with Daniel Diaz business developer at Dash about a Reprioritization of resources within the Dash network after going to different conferences Talking to a lot of people from the crypto community in general. We came to the conclusion that there's an important need for Fiat gateways for projects like ours Like that which is an alternative network to Bitcoin First defined for us with the Fiat gateway. What does that mean? Well, it's just it's just a way for people to transition from Fiat currencies like the dollar Into cryptocurrencies like Dash and there are many exchanges For Bitcoin that are well known like cracking bits them and so on and so forth That support this sort of Transactions and then there's also other sort of services like brokers Good examples are shape-shift. For example, it's a broker although they don't deal with dollars but a broker would just broker a transaction for you, but they're not an exchange per se and You know, so you have you also have like payment gateways like bid pay that are going to facilitate merchants take in cryptocurrency and so those are I think different sorts of Fiat gateways that allows for people to Interact let's say interact with the traditional traditional Fiat economy and You know at the same time work with cryptocurrency or moving and out of cryptocurrency are into Fiat Right that I think yeah There really are only a bevy of Fiat gateways for Bitcoin only because just the other day Someone came up and asked me like hey Amanda like how do I buy such and such a coin that I just heard of by the way? I guess they thought that I was a go-to for that ha ha. Yeah, maybe I am But that's happened before that's happened multiple times and every time I found myself saying like you just really just have to buy Bitcoin first like Bitcoin is the only way really to Access any of these other cryptos in any sort of easy way. So you're saying you were getting that at conferences as well Well, not only at conferences But yes, it's a reality of the market. It's a need we've been feeling it's a feedback we've been getting from users to people trying to buy a dash and And also it's a necessary layer. We see this exchange Infrastructure this Fiat gateways as part of public infrastructure is a basic part of the cryptocurrency project Not being included in this major Bitcoin exchanges is a it's a form of a sanction is like a it's like an economic sanction because you're cut out from the Economy so even if people wanted or needed that they couldn't get it because we have no bridges, right? The bridges are controlled by specific companies that may or may not be willing to Help younger projects like that through their growth phase because you know, we're caught in a sort of catch-22 situation this businesses are for profit At the time, maybe our volumes or market cap are not as attractive to the large Exchanges or to institutional investors, okay, but we're already Included in most or all major all coin exchanges currently, right? So there's a gap so any Cryptocurrency network that wants to be independent from Bitcoin and wants to have a very useful network a different choice an alternative Needs to be able to build its own infrastructure. That's independent from Bitcoin. That's gonna that's gonna help it actually build Access to the network that do not go through Bitcoin and grow on its own independently from Bitcoin so You're not going to go begging at the door of Kraken or bit stamp or whatever and be like Hey, you should totally add Dash as like a fiat thing You're saying that dash is just gonna build its own versions of Kraken and bit stamp and just just do its own thing No, no, no asking or around. I think it's more like both We have definitely been asking around and what we've found is that like I said, there is this gap as to the market cap or Volumes in which some of these bigger companies are interested or willing to collaborate and help Help a younger cryptocurrency through their growth phase, right? You've been in the catch-22 phase where you want to be attractive enough to big exchanges to be listed But the only way to be attracted the only way to be big enough to be attractive is to have been listed on an exchange in the first place Right, so So we believe we're doing both and this is the interesting aspect of this project If you wanted to build some sort of Dash service tomorrow what you're going to need is you're going to need tools You're going to need back-end tools To build your business on basically you're gonna need a wallet Depending on what it is that you're building you may need bots that do brokerage or you may need and Matching engine that helps for exchanges. These are all like software tools, right? And typically this software tools are proprietary our closed source and belong to the businesses that are offering this services So as part of this project that we're doing now We're we're creating all these tools or we're funding development for all these tools And they're going to be fully open source, right? So they have they have a double purpose They're gonna help create Specific, you know services or integrations with partners that have already been negotiated meaning we're going to have concrete immediate results From the project but also all of these tools the multi-seq wallet with client side key storage The broker service the exchange matching engine all these tools are going to be public, right? so that anyone that wants to build a Dash service or Anyone that already has some sort of crypto business and wants to look at a working Implementation of Dash to add to his exchange or to fork. They can do it, right? so this public infrastructure is going to be available for everyone and and that's I think one of the most Interesting things about Dash is that it is Self-government and self-funded. I would say that that's probably our biggest advantage and we can bootstrap the project by Investing and creating these things instead of sitting and waiting that some company is going to come save us as They may never come So so we're we're gonna do we're gonna do both we're building all the tools and actually at the same time we're approaching people and Looking for partnerships and you know, so it's just about creating a dual strategy Is the creation of fiat gateways simply on Dash's wish list or is this machine already in motion? We're working with the Ginnar for development. This is Ira Miller's company They've already worked with us in the past. They've recently Launched on the first dash Bitcoin dual ATM and I actually machine. That's right, right? Yeah, and it's working and a prototype is working already. So we have a first dash ATM. That's already Working in the wild is the first of many we hope and so we've have a good track record and they build they've been building Crypto tools and services since 2011. So we've felt very comfortable with with the relationship and what we've done so far. So So we're partnering with them and they're gonna be building the actual Software tools, which is like multi-stake wallet co-signing service Bit ask exchange Broker service Etc. So all these tools there in in the announcement and you can You can read it and see the details But all these tools are going to like I said be available for anyone that wants to build a dash service But they're also going to be used to integrate immediately with the partners that we're working with so that's the the first Let's say partner that's important to the project and then For Fiat, we're going to initially be working with a company called crypto capital Their website is crypto capital co Crypto capital is a fully licensed money transmitter, you know financial institution out of Panama Okay, and the cool thing about them is that it allows for a greater level of independence for the users Because traditionally when you're going to fund an exchange, you're gonna wire money to the exchange Right, you're gonna send them a wire from your bank account to the exchange and they're gonna receive your money So your money is out of the out of your control immediately in the case of critical crypto capital Users go through their KYC process as very straightforward And then they're gonna create their own segregated private account with crypto capital Which is a fully licensed Financial institution meaning if I were to fund an exchange transaction, right? I will send the money to myself So I will send money to my account in crypto capital So I will be wiring money to Daniel, right? And when the money gets there is still in my control It's not in the control of a third party and then from there I can instantly fund the exchanges and I can instantly You know do or trade and that get my money back to my account and then wire it out or Create or take a debit card or anything like that Okay, so explain to me Okay, so I'm think when I'm thinking like wiring money to an exchange I'm thinking something like a lot coinbase where as you said I do the I submit state papers to coinbase And then I send a bank transfer to them my money sits there until I buy in the case of coinbase bitcoins now So it sounds like a similar process with crypto capital But you say that the crypto capital would not have control over say like the dollars or like the pesos or whatever That I deposited there before I bought dash No in the fiat in the fiat world, okay in the fiat world There is there is not the same sort of trustless relationship that exists in the crypto world in the fiat world You're always depositing with some institution, right with some bank in this in this case the bank Let's call them the bank. It's a crypto capital the difference is that crypto capital is a crypto friendly bank and The difference with banks is that they're regulated and you have certain assurances Because they're a fully compliant financial institution. The only difference is that there are crypto friendly bank So they they they were specifically created to service different crypto businesses around the world and handle the fiat and the KYC and compliance part of things so that we can abstract ourselves from the KYC and compliance stuff and Not have to deal directly with with that sort of thing. So that's sort of service they provide I'm saying the benefit here because as a as a as an outwardly crypto friendly bank Crypto capital I can see how that would solve the problems I've heard that some people have where say some people who use like Bank of America or Wells Fargo or Whatever accounts obviously I'm saying only American banks. It's because I don't I'm not familiar with non-American banks But like I've seen so many reports online where people say something like oh like Bank of America Just shut down my account because they said I'm buying bitcoins with it. Yeah Oh, okay, so I can see like where people would okay. Got it The thing about it is that this crypto banking institution they service many crypto services around the world, right? many crypto services use Backend processing or B2B tools like this where they're just the front they they're the store front But in the end their banking institution is going to be someone like crypto capital or Their actual back-end tools are going to be managed by someone like coin a pool and things like that So so basically as we are integrated into crypto capital All of these other businesses that also use them for their fiat needs Would eventually be able to also integrate dash if they wanted to right like we we we get into the ecosystem And then from there it's easier for other people that are using the same services if they wish to at a later date to integrate dash So that part is important going back to your question the other resultant integration that will happen from this is that we are going to be integrated into coin a fold and Coin a fold is a broker fixed price broker service And they also offer like directly convertible USD to to crypto accounts for Bitcoin and now in the You know in the short term to medium term They'll be offering dash too, which means that people that want to Have dash and lock it. That's their most famous service kind of like lucky in the price of a Bitcoin Yeah, they could lock it into a USD account and then unlock it So basically move back and forth. Yeah, and with coin a pole locks If I lock in the price of my Bitcoin or in the future my dash to its dollar value at any given moment It's not that I can then withdraw that value in dollars, correct I can simply lock the price because coin a pole themselves will convert my crypto into fiat And hold it themselves, and then they'll convert it back to me into crypto at any time Should I choose to but I can't actually like withdraw fiat from coin a pole to correct? Well that that probably wouldn't be their role, but you can definitely withdraw a fiat from crypto capital, right? so you would have your crypto capital account and you would Be able to Sell some dash and and have it fund your your crypto capital bank account and potentially also your debit card If you've got one so the idea all of this layer of services are Eventually going to be integrated to our evolution wallet, which is more of our user-facing product, right? so The idea is that eventually we have several partners. We're starting from somewhere It doesn't mean that these initial partners that are starting with the project will be the only partners That would be part in the future. We're actively looking for more people to join of course and as this develops Will continue to actively look for more fiat integrations on and so forth How will a user interact with the evolution wallet once it's released? And what does this wallet have to do with these fiat gateways? It is going to allow Regular people to keep an account. Let's say you want to use that as your bank Which is my intention for example, I want to use dash as my bank the dash network as your bank the dash network Yes, that's an asset as a form of decentralized bank in the sense that I save money in that I Run masternodes with the money. I'm saving right those masternodes pay me Interest or a form of interest for providing this service to the network Whereas in the fiat work currently we're seeing negative interest rates zero interest rates So so basically it costs you money to hold your funds with traditional fiat banking So the way I see it I want to store value with dash earn interest at the same time provide services through the network Actively participate in decisions for this decentralized bank, right? You know, what are we investing on? What direction we're taking you can actively participate through your votes from the nodes and then and then I can have My dash savings, you know integrated to fiat gateways like the ones we've been discussing and From my evolution wallet, I could potentially have a fiat balance You know that that fiat balance obviously is not stored on the dash network It is stored with a particular partner Let's say that by that time we have several fiat partners and you choose who you want to store your fiat With and then you can kind of manage your day-to-day financials from from this sort of tool So you're saying that from within the dash wallet like there will potentially be like like a crypto capital like button or Like a coin a pulled button From which I can go in and out of dash and fiat provided. I'm say like a registered crypto capital account holder Exactly, but we're talking from the evolution wallet which is web web base It's not it's not the core client that we currently You know download and install in our computers It's it's more of our user-facing product, which is think about the unbanked for example You know I'm unbanked person. What do they need? They need an easy way to manage their finances. They could have a banked Daniel Okay, great. So you could have a Dash evolution kind of online Banking which is you know, it's not really but you know you get the idea Wallet and then you could have it integrated with this sort of fiat services And you could have potentially like a debit card and then hopefully there will be a couple of dash ATMs in your Surroundings and with that I mean I'm I'm looking forward to implementing that for myself, you know, eventually I have an ATM close by You know You could get this sort of accounts that we're talking or your evolution wallet and and kind of manage yourself that way In evolution it will be a web wallet It would be definitely yes A decentralized web wallet, which is different Yeah The way I mean it's still in development, but the way it would work is that it's based on forms So basically when your wallet makes a call to the network A quorum is form that's gonna respond to the to the request, right? So let's say a quorum of 10 masternodes are going to handle your your Request and things like that. So it's the randomly selected based on the proof of work caches on the network So you can never know exactly what quorum is going to be form ahead of time So that's that's kind of how instant x works Yeah, but the web hosting itself there would have to be like central web servers just to like host the wallet, right? Or can masternodes host websites? Well, no, there were all it would be similar to I know you're familiar with our Voting site dash whale that's managed by a member of the community Something similar to that in which definitely kind of like the front Is is centralized, but anyone could create actually there's a few of these sites now Anyone can create the user UI front, but all this information the votes everything you're seeing listed there It's actually fully decentralized and at the protocol level. They're just reading information from the network and making it More digestible for people. So something like that so with the with the Lomasu ATM integration using DeGener and the other sort of exchange software that you say DeGener is coding plus the crypto capital sort of bank accounts plus the The coin a bolt integration for the point of lock's and all of that How is all of this being funded from from Dash itself? Are you paying for this Daniel? No, actually in Dash we have What we call it's a decentralized self funding system where basically people vote on different projects to fund and This is something we do every month From there we have two running budgets that are for the core team meaning We've been working with this system for about six months now and it's been a great experience But we've also had a lot of challenges, right? One of the challenges we face is that oftentimes in Basic standard business practices you can be public about a negotiation until you've reached Some sort of agreement with the other party, right cannot be public about the About the negotiation process Exactly. Yep. One good example of that is for example, we were able to acquire the dash dot org domain Dash dot org was not available. It's a very old valuable domain from 2000, right? It was registered on year 2000 and We we we got it, but the problem is that it's such a precious unique asset that if you go public ahead of time that you're in the process of trying to negotiate and it was very complicated then you are Basically exposing yourselves to your adversaries competition different things like that someone can start a bidding war just to drive the price up it's just not Standard business practice that you will tell your competition on the world Hey, I'm very very interested in owning this domain that is going to be a great improvement for a product So we discovered that So in some of those cases we've had to make upfront payments From people that are part of the team or sponsors and things like that and then look for refunds Reimbursements to yourselves interesting, right? That's been challenging Another another thing that has been challenging is where you're working when you're working with third parties like in this case Where we're trying to come to an agreement with different Partners and things like that and their private businesses and you are a decentralized network So how to do business with third parties and private businesses when you're a decentralized network has been extremely Challenging too and we've had to definitely find like middle ground in that sense so one thing we've done for those kind of things is that We we're looking into potentially We have like two running budgets right now for the core team One is to compensate the core team. The other one is a little bit more open is public awareness It was originally created for advertising promotion and things like that, but it's a running budget so those budgets are like the the only core team budgets that pay every month currently and Starting in March, we decided that PR and advertising was no longer a priority for the courting So we're dedicating this funds that we had for that towards creating all this Infrastructure and all these fiat gateway tools, right Daniel Daniel You have yet to tell me where do the funds come from? Where do the funds? Where do these budgets come from? They come from the blockchain. They come from the blockchain more specifically block reward right When you said where they're coming from I was trying to answer like when in our system where in our system Or the different budget proposals that we have approved So I was being maybe too specific as to where the funds are coming from for the different things Because we have different budgets all the time that are in the system at any given point in time But yeah, if we're trying to give a more general Explanation to users that may not be as familiar with with the dash network and the internals of the community Yeah, so we have a system where the funds come from the block rewards and this is one of the most important aspects of that We believe that we've created a superior incentive model in which the block rewards are distributed for different purposes One of them is definitely mining the other one is full node operations So it's kind of like infrastructure and the third one is more dynamic and it's for governance and funding so basically all the nodes vote and Decide on different projects to fund whether they're gonna fund a specific project or whether they're gonna fund a team like the core team Right, for example, we have a core team payment budget that helps Pay all the volunteers that are behind dash that are working on a daily basis and they get a little token of appreciation It was last time I remember like 70 dash or something for those people that are our full time So as you can see Like per month per month. Yeah, okay For the people that are part of the of the core team as you can see that's definitely not like a full-time salary Anywhere in the world But is the token of appreciation to those people that are volunteer with so much already in the works the dash team Didn't possibly have anything else planned. Did they another thing that that we learned this six months another let's say Challenge or problem. We found is that the system was unable to keep contracts, right? because as you can see Budget proposals can be voted in but they can also be voted out So as the decentralized network Wants to do business with third parties and with private companies that are not decentralized networks And when you like come to an agreement with them, let's say for a contract That's gonna run for six months or some service that's gonna run for 12 months We found ourselves that is sometimes unpredictable that denotes may change their mind at the month number seven of a 12 month contract and that's not Acceptable in standard business practices. You cannot tell someone you made a contract with that, you know We we change our mind. We're suddenly we don't want to pay anymore, right? You have to keep your responsibilities. That's a basic aspect of business So in the next version and we faced that challenge You know and and that came up from this initial experience. It's been only six months It feels like a lot more time, but it's been only six months since when we've been experimenting with this with incredible results But now in the next version, we're going to be including like the possibility of having contracts per se meaning The contract is going to be honored and it's not going to be voted out In the process so obviously contracts will probably have a different threshold for approval meaning they may need more support So you're going to see that to reach consensus on a contract Which is going to be different than a proposal that you can vote in and vote out You're gonna need a higher threshold of votes, right? So that we're sure that everyone is completely on agreement and ready to enter into a particular contract Things like that Things like that that come up as you cannot like foresee every detail or every challenge you're going to have and And things like that come up. So in 12.1 when when 12.1 comes out Which is going to include some of these new features. We're gonna restart the budget system meaning This running budgets are no longer going to exist Proposals that are on the system will need to be voted in again, right? So we start from scratch with these new features and I think that's gonna allow for an opportunity For us to revise based on all of our current experience. So we're very much looking forward to that and Now the the portion of the block reward that's allocated to funding these types of projects is up to 10% Is that correct? That's correct. Yes If we do a good job and we raise the utility of the network, then there's a higher Possibility that the price is going to go up as a result and that that price Appreciation is going to be justified in real New utility and value that's being created on the network next I asked what kind of timeframe could be expected for these rollouts to be available to users For this to happen. The first thing that needs to happen is the tool development, right? So As this services as we have ready the wallet integration the multi-stick of the co-signing this different things all these different tools are what this Services need to be able to offer that to the public because it's what they use for Bitcoin, right? So they have to come in order Yeah, the tools need to happen first and then when the tools are ready Then we can go live with the with the with the public services with the integrations And that's kind of like counter-intuitive for a lot of people When you're working on on business development and trying to get more integrations and partnership for that Oftentimes you start In the wrong direction meaning for example at the very beginning We thought that we should go to merchants and tell merchants that they should take that That's you know pretty straightforward. The problem is you cannot go to merchants You have to go to their payment processors because oftentimes they're not managing Their own crypto payment process. They're just using some payment processor integration, right? So if you're not in the payment processor, you're not going it's not going to be as easy for these merchants to take your crypto Same thing with exchanges people may think all you need to do is goes directly to the exchange and tell them would you support dash? But many of these exchanges are white label. I mean they have their own brand They're handling all of the KYC and all that stuff, right? But for the tools for the back-end tools, they use someone else's service either a bit go or coin kite Although they're currently winding down their services at the moment on things like that So so when you want to get to the user facing services you first have to go to all the back-end tool services and get your cryptocurrency integrated to those or Obviously create your own tools that you're going to made available for people that may want to start running services So I think You know, that's what we that's what we're doing But the the positive feedback loop this creates means that you raise utility for the network You're creating real value. The price may go up. Then you have more funds to invest but also it also works the other way if you do a really bad job the price goes down and Then you have less money to spend and that's good because it means that if you're doing a bad job You're going to be spending less money if you're doing a good job You're gonna have a bigger budget. You're gonna be able to do more so it kind of self-corrects and We feel it's a lot better than having like an ICO type budget where you get all the money upfront Because at the beginning it's when you have less experience You know less about what you're doing and you tend to spend too quickly or in the wrong things in our case The blockchain is given funding in trickles, right? It also has a force transparency to it You know, even with the challenges we face with with projects that we can only go for Reimbursments right and things like that like the domain Going for their reimbursement makes you go public. So there's a force transparency Ideally before but in many in many cases it has to be after but immediately after so there's a constant Communication not everyone's going to agree. I think the other thing we've learned is that you have to leave some space for Disagreement people see the world in different ways and in this sort of communities where everyone's You know being very vocal and voting and things like that You're going to have different opinions. Some people are not going to like your decisions and that's just the way it is So we've learned that too Sounds like the the functionings of a real decentralized autonomous organization like a real working machine that Yeah, I would probably I normally disagree with the autonomous part meaning because traditionally Autonomous means like it's going to be fully automated, you know by machines, but in our case people right without people, right? But I think that's that's I think that's less powerful because people are smart and are important and What you want is to have a decentralized network of people that are in different places around the world So there is it's more censorship resistance Right, it's more censorship resistant because you don't know who these people are that are voting They're only, you know, so anonymous and they're online and you don't know who they are where they are for the most part and and that creates this sort of independence and censorship resistance that Really helps the network makes decisions and go in different directions and in the future I think at some point we may even use this sort of network to do like arbitration, you know You could you could create a contract and instead of being a smart contract I mean it's going to be a smart contract because it's going to have humans Behind and you create like you can create like a quorum and people can can you know Arbitrate and make decisions and things like that so you could create like a quorum of ten nodes, right? And then people can vote and decide on a particular issue or then you can create a bigger quorum If you like an appeal, right? You can create in a quorum of 100 nodes and see what 100 nodes decide and Then you can go for a full quorum, which would be like a Supreme Court type thing, right? Which with all the nodes like the budget proposal where all the nodes vote so centralized justice Well decentralized arbitration Decentralized arbitration smart contracts that utilizes the value of humans Well Daniel that is going down a whole new rabbit hole And I hope very much to get a an update on the status of that if and when that becomes well Yeah, that's that's that's just kind of like I'm just trying to to Get get the mind going as to what's possible I'm going Is definitely not something that we're working on on the short term. I think there's a lot to do first There's a lot of groundwork to do You know, we're currently working on the 12.1 Wallet the next version of the core client which comes with with Improvements then there's a separate group working on evolution because that's different, right and then now we're with it Well, we already started This project to build the financial layer of services that should allow to have actual user oriented services So yeah, that's more or less what we're up to well, thanks for that update and Should people care to stay updated on how these blockchain funded things are going Dash has a subreddit. Yes, and like you you have a Twitter account or what's a good Twitter account to follow? No, the best Twitter account to follow would be at dash pay That's the official project Twitter account and it's constantly updated with news and Announcements and things like that. So I think that that would be the best one and you can also visit our forum Which is that stock org and or our website, which is dash org for more information Excellent. All right. Well, thanks for your time Daniel Thank You Amanda Today's episode is brought to you by black halo bit halo Which is a double deposit escrow client that works with either Bitcoin or black coin double deposit escrow creates trading environments Where dishonesty could never be profitable for either party and you can learn more at bit halo org or black halo info And that's all folks tweet me your episode ideas or leave them as a comment either here on YouTube or at the daily Decrypt subreddit talk to you later the next version of the dash reference client will support an increased block size From its current cap at one megabytes to two megabytes But the interesting part of the story is not the block size increase so much as how it was decided upon and how quickly the decision was made