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If you are already familiar with the Dash cryptocurrency, you probably already know that its main purpose is to allow transactions to be made securely and above all anonymously. But why am I telling you about Dash if the topic of this article is ‘PrivateSend’? If you want to find out, read on.
What is PrivateSend?
As Dash explains on its official website, PrivateSend is a trustless, non-custodial method based on a decentralized coin mixer in the Dash protocol that is designed to enhance the user’s financial privacy and hide the origin of funds.
It does this by executing a sequence of transactions (known as a “CoinJoin“) that makes it virtually impossible to trace the history of transactions.
The purpose of PrivateSend is to maintain the fungibility of Dash cryptocurrencies by eliminating their history on the network and completely hiding the origin of users’ funds.
This functionality is available in both Dash Core and Dash Electrum wallets and allows processing any amount of Dash.
How does PrivateSend work?
PrivateSend’s performance is due to the innovative two-tier network that characterizes the Dash protocol.
Like Bitcoin and many other cryptos, Dash works through the Proof of Work consensus protocol and, when mining DASH tokens, users are rewarded not only for validating transactions but also for running and maintaining their special servers called Master Nodes.
Among the most innovative services guaranteed by Dash master nodes are the following:
- PrivateSend ensures financial privacy by hiding transaction history and achieves this by implementing CoinJoin.
- InstantSend allows near-instantaneous transactions (confirmed in two seconds).
The PrivateSend process works like this:
- PrivateSend divides your transaction inputs into standard denominations (e.g. 0.01 DASH, 0.1 DASH, 1 DASH and 10 DASH).
- Your wallet sends requests to the master nodes and informs them that you want to create a certain denomination using CoinJoin. When it sends such a request, your identity cannot be identified.
- When your request joins that of other users who wish to merge their coins to the same denomination, a session begins. The master node instructs the wallets of the three users to return the now mixed input to each other. During this process, a number of cryptocurrencies are mixed with others, so that the funds coming from each direction and the directions themselves are hidden. The more cryptos that are mixed, the more secure the transactions.
A user’s wallet must repeat this mixing session (round) several times to ensure that the origins of the funds are completely anonymous.
It is very important to note that all PrivateSend transactions will be rounded up so that all transaction entries are spent.
Finally, it is important to know that the funds involved in the commingling process never leave a user’s wallet, which ensures that the entire process can remain secure and reliable.
Advantages and disadvantages of PrivateSend
Like any functionality, PrivateSend also has its advantages and disadvantages. Let’s quickly see what they are.
Advantages of PrivateSend
- SECURITY AND ANONYMITY: As we have already seen, one of the main advantages of Dash’s PrivateSend is that it provides its users with a high level of security and anonymity.
- INTEGRATED FUNCTION: Being an integrated function in Dash, no external or special wallet is needed to access other services.
- EASE OF USE: The coin mixing process is very simple and fast, allowing any user to use it.
- USE CASES: Another positive aspect of PrivateSend is its use cases as it is often used to make anonymous donations to organizations or individuals.
Disadvantages of PrivateSend
Although the advantages of PrivateSend are many and make this tool an almost unique technology, there is also a disadvantage because this process is deficient in comparison to other processes such as Monero or Zcash as they offer a much greater level of anonymity than PrivateSend.