Dero is the first cryptocurrency to combine proof of work blockchain with a directed acyclic graph (DAG) block structure that offers anonymous transactions.

While traditional blockchains like that of Bitcoin and Ethereum process blocks (with a list of transactions within) one by one and need to reach consensus on each of them gradually, Dero processes transactions one by one, rejecting only those that represent duplicate or double-spend transactions.

In July 2018, Dero deployed its current network architecture, entitled Atlantis, which has a 12 second block time with a 2 minute block confirmation time. Due to its DAG structure, Dero’s network cannot undergo a soft-fork and is resistant to 51% hashrate attacks. Whenever the network finds two blocks at the same height, it will include both of them, solely excluding illicit transactions, like double-spends.

Dero has, by default, privacy features built into its network thanks to the CryptoNote protocol. The open-source protocol enables untraceable transactions with ring signatures, and as a result, it hinders blockchain analysis software in undertaking any forensics. At the same time, Dero’s supply remains fully auditable, according to the developer team. The network has an indefinite total supply, with an emission rate of 157,000 Dero per year after year 8 when the supply will reach 18.4 million.

To augment its privacy features, the developer team introduced an improved variant of Bulletproofs – the Rocket Bulletproofs. The zero-knowledge range proofs implemented by Dero allow for much smaller proof sizes, reducing the blockchain size and have a processing speed ten times higher than regular Bulletproofs.

Taking it a step further, Dero also aims to provide smart contracts on its native chain without the need for any extra layers or secondary blockchains. This is achieved by deploying the Dero Virtual Machine (DVM), which is a Turing complete 256-bit virtual machine runtime environment, similar to the Ethereum Virtual Machine.

DVM supports a new language DVM-BASIC, which is a contract-oriented, high-level language for implementing smart contracts. It is influenced by GW-BASIC, Visual Basic, and C.

Dero Virtual Machine

Dero Virtual Machine is capable of running both public and private smart contracts. Anyone can generally call public smart contracts. To attract businesses, the Dero Virtual Machine is being designed to support private smart contracts as well, where data, contract details, and information pertaining to parties involved stay private. At the same time, participants will be able to share information with authorities, e.g. for tax purposes, by sharing a view key at their discretion.

As the DVM is Turing complete, it provides a runtime environment for developers to create flexible contracts for any use case, from games to markets, voting systems, or registry databases.

Privacy

Dero is inherently privacy-focused as it uses the CryptoNote protocol, providing privacy features for all network participants, and keeping coins fungible. On top of that, Dero utilizes Rocket Bulletproofs, which enables privacy features for its smart-contracts.

Dero is also the first blockchain to have complete SSL/TSL encryption at the peer-to-peer layer. This encrypts all of the network traffic, which reduces the attack surface and prevents ISPs or other third parties from tracking traffic on the network.

Scalability & Security

With the unique combination of a proof of work consensus algorithm and a DAG, Dero boasts a more scalable and secure network than other traditional proof-of-work based networks.

The DAG implementation guarantees no orphan blocks and is resilient to 51% attacks. As the main chain is being validated, any side blocks are also accounted for, including all transactions except for duplicate or double spends. Because Dero processes transactions and not blocks, its side blocks henceforth contribute to the chain’s security, and traditional 51% attacks are not possible.

With the Dero Virtual Machine, the network is capable of moving value across the globe and can represent ownership rights of assets without divulging sensitive information.

One of the use cases targeted by the Dero development team is voting systems, wherein the voting process is transparent while the identities of voters remain anonymous. A primitive architecture of a voting smart contract would contain a list of voters, whose wallets are certified by the organizing authority. With this, the voter will be able to cast their votes and verify it. Thanks to the privacy-centered features of the network, it will not be possible to match voters with their votes.

Another use case highlighted by Dero is asset management on its blockchain. Assets can be recorded, stored, and transacted on the network. This can be done without revealing the identity and details of the parties. However, it will still be possible to conduct audits and verify ownership rights. Traditional registry domains for land, property, or car registration can be implemented on the Dero blockchain.

The network’s currency is DERO, which is used to power all of the transactions and features of the network.