Dash is expanding the incentive structure of a cryptocurrency system to include all the elements that are necessary to ensure the long term viability of a crypto project. Specially learning from the gaps found on the Bitcoin project.For a decentralized system to work optimally, the interests of individual actors on the network must be aligned with the interests of the network as a whole. Meaning, everyone should be acting out of their own self-interest and the system must be designed so that those selfish actions actually benefit the network.That is the whole principle behind crypto mining, the problem in first generation currencies like Bitcoin, is that other elements of the network that could benefit greatly from an incentive program were not taken into account, like full nodes and core maintenance, just because there was no way they could have identified those areas with absolutely no previous benchmarks.A very important element is incentivized full node operation, Dash is a first mover on this, and it has created a very interesting dynamic. Running full nodes to support the network while earning coins and using a collateral to create a bond of trust with full node operators.Recently (March 2015) an independent Bitcoin project (Bitnodes) is trying to introduce an incentive system, but it is not done at the protocol level. Their mechanism seems to mimic our Proof of Service model to some extent but it can’t really have the same effect as it is only one entity with a limited outreach and they don’t use a collateral.Quote“The Bitnodes project issued its first incentive last week and will continue to do so until the end of 2015 or until 10,000 nodes are running.The program uses an incentive program started as an experimental process to reward those who run a node. Rewards for running full nodes are being paid in bitcoin.A Bitcoin node is a part of the network that allows Bitcoin to operate the way it does. It increases security and improves reliability by validating transactions and blocks and then relaying that information to other full nodes.Any individual can run a full node by using the Core client (Bitcoin Core).Miners, the ledger clerks of the Bitcoin sector, are incentivized by rewarding them for solving blocks. These blocks contain information about recent transactions and the reward (at the moment) is 25 bitcoin, which can be spread among those contributing toward the mining.But there are no similar incentives for individuals or businesses running full nodes. They have only the gratification that they are supporting the network. And if they are not mining, others are being rewarded for it. This is a problem, as nodes are arguably as important as mining.Another problem: Keeping a full node running for an extensive period entails cost. The hardware being used may be out of play for anything else, or the cost of electricity is significant after an extended time.The Bitnodes project introduces the Peer Index (PIX) as a way to measure nodes in the network. It is based on 11 properties that can be found in greater detail here. Then nodes are listed on the leader board for all to view.“If your node is not already up on the leader board, make sure that it is reachable by other peers in the network and activate its node status fromhttps://getaddr.bitnodes.io/nodes/,” said Addy Yeow of Bitnodes.There are currently 4,006 active nodes. IP, ISP, client, country and more information is available via Bitnodes.Yeow accedes that the incentives program is not an ideal solution to completely remedy the growth, or lack, of Bitcoin nodes. Further discussion is needed from the community for problem-solving and figuring out a more long-term solution to encourage individuals and businesses to run long-term nodes.”You can read this full article here: https://bitcoinmagazine.com/19620/bitnodes-project-issues-first-incentives-node-operators/ To me this speaks volumes to the fact that Dash’s strategy hit the nail on the head, their peer index is a form of Proof of Service. People within the Bitcoin ecosystem are trying to do exactly what we already did. The difference is that we implemented this at the protocol level and is ready for growth, while they can only patch the problem with efforts that have limited effect. Also, there is no collateral so this does not solve the Sybil attack issue and the fact that some Bitcoin nodes are spoofing transactions. This is a good example:Quote“Chainalysis got caught running 250 fake Bitcoin nodes. Maybe they would have gotten away with it if they hadn’t been slowing down transactions that involved Breadwallet clients. Now that they have been exposed, they deny that they’ve been deliberately running a kind of attack called a “Sybil attack.” They claim that what they call a “partial Sybil attack” was an unintended side effect of tests of a product that would have helped Bitcoin companies stay compliant with local regulations.”Incentive, has turned Dash’s full-nodes into a developed area of the ecosystem, with people offering their services to run them, monitoring websites, shared full-nodes (masternode pooling), etc. All of this has contribute to develop the economy in a positive way. Just go and ask other projects how many full nodes their network has? Or how they are addressing these issues? It is clear that Bitcoiners identify lack of incentive for running full nodes and absence of collateral as an issue and are trying to mitigate it, Dash has already implemented a full solution for this.With its Proof of Service strategy the dev team has been able to leverage all that infrastructure to bring added value services that are in the best interests of end users. Stronger privacy for the end users while preserving a visible blockchain, this approach makes it easy to verify and conduct business while protecting user’s privacy, is just digital cash.Also instant transaction confirmations, help settle crypto transactions faster than using a credit card (around 4s), this technology is great because it allows the receiving party to have certainty of ownership in just a few seconds, and this makes it ideal for face to face transactions making crypto more suitable for real world adoption.Those are just two examples of things the additional service network strategy is bringing to the table. The point is it is built in a way where many other trust-less, decentralized added value services can be added.One of the things that could be built is a decentralized web-wallet, think about the average Joe that will probably not download their own wallets and keep up with updates in online crypto forums. These are the people we are trying to serve. People like this that have discovered Bitcoin just use services like Coinbase or Circle. Imagine Dash could create things like a decentralized web wallet that runs over the whole network of full nodes, this means it would run on thousands of servers around the world that are run independently by different people, no single point of failure, no central authority. Dash’s decentralized web wallet could have access to services like preemptive mixing and InstantX. Other things that are being studied are 2FA at the protocol level and transaction abbreviation, the possibilities are endless with this new architecture and Dash is a first mover.Decentralized GovernanceThe other thing that first generation projects are missing is a way for the network to support itself and a decentralized system of governance. It recently became apparent that the Bitcoin Foundation is broke and dysfunctional. It is not clear how they are going to pay their core developers for the next year and it seems that they will be depending on the donations of some early adopters, but it is not clear where the responsibility of supporting the core protocol lies. It means the core protocol does not have any mechanism to support and manage itself and it depends on donations for life, it seems that strategy is not working at all, which is ironic for a multibillion crypto project.From a recent article on this issue:Quote“It will be a very interesting year for a professional organization with almost no money to function[Bitcoin Foudation]. In the meantime, core development will have to find a way to sustain itself. Janssens personally offered to help fund as much, saying:A special trust fund is being created and I will donate several 100k to pre-pay Gavin’s, Wladimirs and some other core devs wage for the next year (if they choose to accept). The control of this trust fund will be handed over to the core devs, who can decide who can join it.” https://www.cryptocoinsnews.com/boa...ssens-leaks-damning-facts-bitcoin-foundation/