What is Dash Cryptocurrency? A beginner’s guide. | ChangeHero Blog
Early P2P payment systems powered by blockchain, like Bitcoin, have all the potential to be the revolutionary invention of this century. In spite of that, when confronted with reality, crypto payments are still struggling to see adoption in daily life, albeit it’s probably much better now than it was a few years ago. Countless proposals and projects emerge to help overcome the hurdles that hinder the adoption, and Dash is one of them that has garnered the most attention thanks to its unique qualities. This time we at ChangeHero are going to investigate what makes Dash unique and does it deliver on the bold claims behind the project.
What is Dash?
Dash was launched in 2014 under the name “X-coin”. Its founder, Evan Duffield, has been a Bitcoin enthusiast since 2011, but after a few years he finally came up with a project of his own cryptocurrency that would improve on the Bitcoin model. Dash has also been known as “Darkcoin” until early 2015.
Evan Duffield was behind most of the original signature features of Dash and served as the project’s CEO from the launch until in 2017. For the time as CEO, and still, he is the Dash’s spokesperson, often going public with educational insights about the coin he developed.
Dash, like the original, uses the consensus algorithm of the same principle, Proof-of-Work, and is mineable. Its value is attributed to it by the market and users, just like with other cryptocurrencies that are not pegged to anything. And finally, like Bitcoin, its ultimate goal is to become a digital replacement of fiat money for peer-to-peer instant payments.
However, this is pretty much where the similarities end, and unique features of Dash come into play. Most of the original features were developed to circumvent Bitcoin’s shortcomings: the speed of transactions, privacy, governance, miner rewards to name a few. Let’s have a look how it is achieved:
Masternodes:
A technology unique to the Dash network and one of its most defining features is the masternodes. They serve as a second layer of the network, making some advanced features possible. The masternodes are elected based on their contribution to the network, since they store an entire copy of the blockchain and provide advanced services. Therefore, significant computing power is required to run a masternode. In addition to that, it also has to be backed by a collateral of 1000 DASH (or $69,230 at the time of writing). In return, the masternode owner gets voting rights and rewards for running it.
Faster transactions:
Dash’s blockchain consists of two layers, the second being masternodes that enable a feature called InstantSend. When a transaction is performed, a masternode can check and confirm it prior to the inclusion of it in a new block. On the Bitcoin blockchain, a transaction can be deemed soundly confirmed only after six blocks, mined once every 10 minutes.
Privacy:
PrivateSend is a feature that can break down a transferred sum into decimal amounts and mix it with other inputs with the help of a masternode, making a transfer essentially untraceable.
Block rewards:
To prevent inflation due to excessive mining, the incentives for miners have to reduce over time. Despite the fact that Dash blockchain is based largely on Bitcoin, instead of halving the miner reward every few thousand blocks, they use a different model, the reward is cut by 7% every year. This is supposed to help with transition to a fee-based economy, as well as incentivize hobbyist mining by making it difficult to invent industrial-level equipment as soon as it happened with Bitcoin and ASICs.
Funding:
The mining reward for discovering a new block in the Dash blockchain is distributed between the masternode, the miner and a decentralized governance budget in a 45%/45%/10% ratio. The 10 percent that goes into budget is not stored anywhere, but rather held back on the blockchain. When there are proposals to improve the Dash network that are approved by the masternode owners, a superblock is created that releases up to 10% of the value accumulated in the budget to fund this proposal.
Chain security:
The Bitcoin blockchain is vulnerable to potential consensus, or 51% attack, and hashing algorithm hacks. To prevent this in their own chain, Dash developers use a unique hashing algorithm X11, called like this because it combines multiple rounds of 11 hashes, so if one is compromised, there won’t be a need for an urgent network upgrade. ChainLock is a feature that is supposed to safeguard the network against the 51% attacks. A randomly selected and constantly changing quorum of masternodes votes on the block inclusion first, then verifies it to the rest of the masternodes, which in turn notify the rest of the network. This makes the network instantly immutable. Finally, forking in the Dash blockchain is impossible because the updates do not take place until a consensus is reached.
Dash Core
The Dash community definitely has a say in the development of the currency, with the masternode owners even getting to play a major part in network governance. There is also the core team of developers, who are on equal terms with the rest of the ecosystem participants: they claim to only support the network, and the funding of their work is subject to the community vote.
Dash’s current CEO, Ryan Taylor, comes from a financial background, in contrast to Duffield’s developer beginnings. He has worked for more than 15 years in financial services and technology, and prior to his appointment as CEO, he used to be Director of Finance at Dash.
Uses and prospects
Dash’s core use case is to provide an accessible and reliable digital alternative to cash. For that purpose, they are constantly working on payment processing technologies for Point-of-Sale and eCommerce by integrating partner providers into their ecosystem.
Discoverdash.com is a service that aggregates businesses that accept Dash, so if you live in a large city, give it a try — there’s a good chance there are a few of them where you live!
Dash can serve as a fast and reliable intermediary for international remittances as well. Another selling point for Dash is the low network fees — at the time of writing a median transaction fee was only 0.0000037 DASH ($0.00025 USD).
Another quite unexpected real-life use case of Dash is an alternative to hyperinflated currencies.
Even though there are so many features in the network already, the Core team is not going to stop. Right now, DashPay is in development, which will make Dash network even more accessible by introducing usernames, contact lists and human-readable addresses. In the meantime, the team will continue to work on the network support and QoL improvement.
Our Conclusion
At the moment of writing the article, Dash ranks 20th by market capitalization of $652,116,649, traded at $69.23 in the volume of $643,325,085 and 9,419,690 DASH in circulation. You can exchange to and from DASH at ChangeHero at competitive rates and as fast as it would take you to make a purchase with it!
As we can see, Dash is another solid contender to seize the crown of digital cash replacement. It is already seeing use as a means of payment and remittance and not showing any signs of stopping its development and expansion. Sure, it has seen better days on the market, but as far as its intended uses go, Dash delivers on its promise just fine.
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Originally published at https://changehero.io on April 6, 2020.
