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THIS IS A DRAFT VERSION OF THE DOCUMENT - PLEASE DO NOT DISTRIBUTE

 

As there are multiple concerns and questions about so called Dash instamine issue, the purpose of this document is to provide an official statement of the Dash team about this matter. Our intention is to provide Dash investors and users with a comprehensive information in order to help them understand the currency history and technical issues at the beginning of the project.

Facts about the instamine problem

  1. During the first 24 hours there was about 1.99 Million coins issued,
  2. That represents approximately 10-15% of the total money supply that will ever be issued.


Explanation

Dash started as an experiment project for a talented developer that was looking to see what he could do with a crypto-currency. There was no expectation that it will become what it is today, it has really grown organically. Adversaries of the project try to present the instamine launch issues in a negative light, the reality is different: 

  1. There was a problem with the difficulty adjustment algorithm and the block reward at the time which produced a very large amount of coins at the beginning and these coins went to whoever was mining and not to the developer in particular. There were many people mining at the time who got these tokens. 
  2. The creator of the coin proposed to fix the initial distribution issue by airdroping new coins in order to address criticism and resolve the issue once and for all. The community disagreed and voted down this proposal with most arguing that the distribution is acceptable by that time (April 2014) and that the airdrop would create more problems than it would solve.
  3. The only two members of the team at the time were Evan Duffield and InternetApe, InternetApe sold all his coins early on, all other members of the current team joined later. InternetApe was able to accumulate 160K DASH over the first weeks of the project so that should give you an idea of the range a founding member was able to accumulate. He sold all his coins early on and is no longer involved with the project.  So the launch issues and high rewards happened to everyone equally and there was no bad intention, just part of a young hobby project that later became much more serious.
  4. These early mined tokens had no value at the time and many people just traded them OTC, sold them in exchanges very early on. There was no benchmark and no way to know Dash was going to grow and become a bigger project so most first day miners just sold their coins. 
  5. Dash is a two year old project, that has already gone through 2 big rallies that helped with distribution and those first day miners and early investors had opportunities to exit and be compensated for their early support of the project all the way up to 15 USD/DASH. Coins have been redistributed and thanks to that early liquidity many people that are not miners were able to buy on exchanges and get involved. Right now Dash enjoys a very healthy distribution.
  6. The lead developer, is not the largest holder of Dash, the largest investors have all bought their coins from exchanges. We are happy that Evan does hold a good amount of Dash so that he is motivated to continue working on the project as the development team has done over the last two years.

 

Conclusion

It was a difficult launch but the project has acquired value because of 2 years of development and hard work and this will continue into the future. Dash is earning its place with no VC funding or ICO just truly growing organically as a community and pushing forward in spite of competition and a difficult market environment. Based on the presented facts, each investor can make now a conscious decision and buy Dash having all necessary information about the project history.

Reference materials:

  1. The birth of Darkcoin by Evan Duffield (Unlicensed): https://dashtalk.org/threads/the-birth-of-darkcoin.162/
  2. Was Dash Instamined? From Legacy Dash FAQ: /wiki/spaces/DOC/pages/1867875?
  3. Was The Instamine A Positive Thing For Dash?: https://dashdot.io/alpha/?page_id=118
  4. Dash: Full interview with The Daily Decrypt at labitconf: https://youtu.be/rNZcO2vm7Jc?t=13m10s
  5. BCT threads
    1. https://bitcointalk.org/index.php?topic=999886.0
    2. Darkcoin reward schedule vote: https://bitcointalk.org/index.php?topic=525093.0
    3. https://bitcointalk.org/index.php?topic=560138.0

 

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