#5 - Masternode Services - Decentralized Oracles / DS / IX

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Hello, My name is Evan Duffield

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and this is a video series about Dash

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And, in this video we are talking about

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Masternode services

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Such as our decentralized oracle implimentation

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instant transactions and our DarkSend implimentation

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So how do you add value to the network

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through a two tiered architecture?

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On the first tier, we have just the

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regular clients that are on the network

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That can be any full node that's connected

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any full node that's sending transactions around the

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network or anything else like that.

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And then we have a second tier network

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which is the Masternode network

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and by utilizing the second tier, we can actually

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form decentralized oracles.

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These are also known as sub-quorums

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which allows us to do things like

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instant transactions and decentralized masternode

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payments on the network.

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Besides that, you can also connect to the

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second tier to do DarkSend mixing

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for privacy and by utilizing the

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second tier all at the same time

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we can actually do full quorums

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which basically lets everyone that

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owns a masternode vote on something

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to either fund a given project

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or make a decision on behalf of the network.

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The sub-quorum system or the decentralized

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oracle implementation utilizes statistic

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and probabilities to secure the network.

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and this is done by using the 1000 dash

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requirement. So there can only be a certain

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amount of Masternodes on the network

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at a given time because of this requirement.

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And that means that to control a majority of the network,

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you have to control millions of dollars of

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infrastructure. And if you were in control of that much

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infrastructure, you probably wouldn't want to attack the network.

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And even if you wanted to attack the network,

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the statistics say that it's nearly impossible

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even if you control a majority of the network.

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The decentralized oracle implementation

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essentially just is the network asking

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specific masternodes a question.

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and to do this, you propagate a message around

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the network and as the message propagates

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it finds the Masternodes that the question

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was intended for using a deterministic secure

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algorithm and then those Masternodes

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answer the message by signing another

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message and then propagating that.

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Once the network has significant messages

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from the targeted Masternode. It can then

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answer the question in such a way that is

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completely secure

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For example, lets say we have an Apple stock,

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and we want to know what the answer is

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for how much is Apple currently trading?

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and so, someone on the network asks the network

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"How much is Apple trading for right now?"

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and then that network message propogates

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and then the 10 masternodes that are intended

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to find out the price of Apple

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all reach out to external APIs, pull

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down the price, and then they compare the

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price that they got to the price that other people got.

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If the price is close enough, then the network

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would select a median price and then go with that

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And so now we have a secure price for Apple.

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And you can also do this for things like

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instant transactions, where you ask

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is this transaction valid, and can I lock it.

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and if you can lock the transaction

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then now we have a double spend proof

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implementation of instant transactions.

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At a lower level, the sub-quorum system

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works by taking the mining proof of work from

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a block, and the mining proof of work hash

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is a very very large number that can not

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be forged and it takes the entire network

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a period of time to generate that

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and they're generated continuously

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and so using that secure number we then

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select 10 Masternodes based off of their numbers.

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And, Masternodes have a number which is the

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thousandth dash input that created them originally.

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And so by taking the distance between the two numbers

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we can order them into a ranking

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and then we could take the top 10 closest

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numbers to the proof of work hash.

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The process of instant transactions is

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relatively simple. The network will select

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Masternodes based off of the input of the

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transaction in question and then

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the transaction propagates around the network

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finds it's target Masternodes, those Masternodes

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look at their own memory pool to see if those inputs are valid

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if the inputs are valid then they send a message

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send it out back to the network again

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signatures are collected, a threshold is met

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and then rules are enforced on the

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entire network after that.

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After the enforcement is engaged

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No peer on the network will accept a conflicting

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transaction or any type of conflicting message

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for whatever the given quorum was.

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In this case, they would even reject blocks that were mined

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with the conflicting transaction.

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The DarkSend implementation, on the other hand

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doesn't use quorum technology at all.

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Masternodes just simply host mixing sessions

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for users. And all this means is a user will

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reach out to a Masternode, they will wait in que

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once enough users have entered the que,

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mixing starts and then the users send money

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to themselves through that Masternode.

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And this is why it remains trustless because

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the user's money actually never leaves their own wallet.

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The reason it's secure is because we use

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denominations in all the transactions

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So you would only pay yourself in 10s or

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you would pay yourself in 50s or you'd

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would only pay yourself in 100s.

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And all other users in that mixing session

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are required to do the same thing.

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And this is called "anonymity through ambiguity"

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meaning that you can't tell anything apart

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in the transaction because there is no other

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information other than the denominations

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fees for utilizing the DarkSend service are actually charged

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separately from the mixing transactions to increase the anonymity

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that is on the network. This is something that would be

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incredibly difficult and we have special rules in the client

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to allow it. When using DarkSend, after you have

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successfully anonymized coins, you'll end up with

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a private and a public balance within your wallet.

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And all this means is that you can spend your

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private balance at any time in the future

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And this is so that you can't execute

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timing attacks on our system.

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A timing attack is where you would

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look at all the mixing sessions

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and then you would try to correlate them

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with users spending their money later on.

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And if they happen too close because

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one is required just before the other one happens

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then you can break user's anonymity.

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Here you see a Bitcoin example transaction

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On the left, is where money came from

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and on the right is where it went to.

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One of those is the target person or

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company that it was spent to and the other one is

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the change address where the user is receiving

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back change to their own wallet.

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And so this is very easy to understand

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and if any of these addresses are

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deanonymized in the future, then it means that

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everything after that in the blockchain is not anonymous as well.

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So here you can see an example transaction for Dash.

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And everything is denominated up until the point where

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it's actually spent. and this is where the security comes

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from. So how do you use DarkSend?

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Well, it's as simple as clicking that button.

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"Start Darksend Mixing".

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And then when you actually want to spend

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your DarkSend private balance, you can use

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these check boxes in the send tab of the client,

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and depending on which one you want,

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you click the checkbox, fill out the form as

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you normally would, and then click send.

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So that's it for the Masternode Services Video.

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In our next video, we're going to be exploring

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our Decentralized Governance and Budgeting System

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how it works, and how it benefits Dash.

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Thanks for watching!