What Is Dash?
Dash is a linguistic blend of the words “digital” and “cash.” It’s an instant-transaction, privacy-centric, digital currency based on the Bitcoin software. In its short lifespan, Dash has gone through a series of name changes. It launched as XCoin, later changed to Darkcoin, and finally settled on Dash.
Talking of names, when you type “What is Dash?” in your search engine, you might come across another entirely different cryptocurrency called Dashcoin.
Don’t get misled.
A big Dash cryptocurrency advantage is that Dash transactions can remain anonymous (like cash transactions). Dash is able to achieve this via a mixing protocol using a unique network of servers called masternodes. As masternodes are a crucial aspect of Dash, we’ll devote a full section to the “What is Dash Masternode?” question.
How Dash Cryptocurrency Works
Unlike Bitcoin, where all jobs are performed by miners on a single-tier network, Dash uses a two-tier network. The first tier is composed of nodes that are nothing but computers that communicate with another within the network. These nodes are handled by miners and they do certain basic network functions, such as verifying Dash transactions.
The second tier of the Dash network is what sets Dash apart. It consists of specialized masternodes. These are full nodes—computers that contain the full blockchain of the cryptocurrency and enforce rules of the network. Masternodes facilitate specialized transactions for “PrivateSend” and “InstantSend” (we’ll talk more about this below). They also control the development of the Dash network. (Source: “What is Dash?,” Finder, November 27, 2017.)
To get a deeper understanding of how Dash works, let’s take a close look at Masternodes.
What Is a Dash Masternode and How to Get It?
Masternodes are computers on the second tier of a Dash network. These Masternodes remove the need for a trusted third party that could compromise the anonymity of the transaction.
Masternodes cost money and effort to host so they are paid a share of the block reward to incentivize them. They get paid 45% of the block reward on every block. Typically, every three to four days, each Masternode gets paid 1 Dash. In addition, Masternodes also earn fees whenever someone uses their services.
- InstantSend: As the name implies transactions get carried out instantly.
- PrivateSend: Once again, this is self-explanatory. Transactions can be completely anonymous, just as in the case of cash transactions.
- Decentralized Governance: Masternodes govern the decentralized network. Each Masternode also gets 1 vote that can be used on budget proposals or important Dash decisions.
- Dash Evolution: A decentralized payment processor
(Source: “What is a Dash Masternode,” DashMasternode, last accessed December 6, 2017.)
The unique Dash features above are the reason why people like to get masternodes. But it’s not for everyone. To qualify as a masternode, there are certain prerequisites that need to be fulfilled.
Initial investment: First and foremost, masternodes are required to have collateral of 1000 Dash. Given the the USD value of a single Dash right now, this is a big stumbling block. But those who don’t mind shelling out that much can easily get Dash from ShapeShift, Bitfinex, Poloniex, and Bittrex.
Basic Infrastructure: Next, you’ll need a virtual private server (VPS) installed with “Linux” and a dedicated IP address. The computer must be able to run round the clock. At no point should there be more than a 60-minute connection loss.
Time: Once you have the basic requisites listed above, you’ll need a little time to figure out the best ways to do everything. But once you get the hang of it, you’ll be spending much less time on the services.
Dash vs Bitcoin: How Is Dash Different from Bitcoin?
Having started the cryptocurrency revolution in 2009, Bitcoin developed a huge network thanks to the lack of competition. However, as the network grew, every improvement required overwhelming consensus from all network participants, which, I’m not surprised, created numerous roadblocks.
Bitcoin’s shortcomings led to the development of other cryptocurrencies like Dash. While launching Dash, its developers wanted to make sure their new blockchain would be free of Bitcoin’s weaknesses. So the Dash blockchain became the world’s first self-governed, self-funded, blockchain protocol.
Unlike Bitcoin, where contributions are not incentivized and are voluntary, Dash developers receive payments for contributions like securing the network or adding cool transactional features like InstantSend.
Bitcoin takes an average of 10 minutes and six typical confirmations to propagate a block. For large purchases, the transaction time could run up to an hour or even more. Whereas, thanks to InstantSend, Dash sends and confirms transactions in just a few seconds.
While Bitcoin transactions can be traced back to their users, Dash users can opt for full privacy in their transactions and remain completely anonymous (Source: “Dash Vs Bitcoin,” Coin Central, September 24, 2017.)
For more factors on how Dash is different from Bitcoin, see the chart below. These figures were last updated on December 5, 2017.
|Market Cap||$5.56 billion||$216.15 billion|
|Volume (24H)||$232.4 million||$9.74 billion|
|Launch Date||January 18, 2014||January 3, 2009|
|Creator||Evan Duffield||Satoshi Nakamoto|
|Average Block Time||Approx. 2.5 minutes||Approx. 10 minutes|
|Max Total Coins||18.9 million (est.)||21 million|
|Other innovations||Masternodes, Self-funded||First cryptocurrency|
Dash Features – Reasons to Buy Dash
As Dash set out with the sole aim of resolving the shortcomings of Bitcoin, right from the very start, investors wondering about why to choose Dash were immediately rewarded with enough reasons to buy Dash.
Privacy: Keep all your transactions anonymous so nobody can track you or your funds. With Dash’s futuristic anonymization, only you can access your financial information.
Speed: Masternode network has an innovative technology called “InstantX.” By using InstantX, users can complete transactions within four seconds.
Safety: Again, thanks to masternodes, there is a trustless protocol for complete security of transaction.
Reach: Send money to anybody across the globe without paying more than what you’d pay for sending it down your street.
Low Fees: Unlike the currently prevailing services like Moneygram, Western Union, or PayPal, most transactions cost only a few cents. And the fees do not depend on distance.
Dash Cryptocurrency Supply: Is There a Supply Limit to Dash?
People who have been following the cryptocurrency market closely might have heard about controlled supply. This is a cap or limit on the amount of cryptocurrency that can be mined. For example, only 21 million bitcoins can ever be mined.
Similarly, the Dash cryptocurrency supply has a limit. While some put the cap at 18 million, according to reliable sources, the Dash cryptocurrency cap is set at approximately 19 million Dash. In the three years since its inception, 7.7 million Dash have materialized and are circulation.
The remaining Dash will come into circulation in the next 10-12 years with the last Dash expected to be mined in 2030. (Source: Finder, op cit.)
Dash Pros and Cons
As with every digital currency, there are Dash cryptocurrency pros and cons too. The thing to note is that the Dash advantages far outweigh the Dash drawbacks.
Every feature described above to convince investors to invest in Dash are its advantages. Since we’ve already discussed them, I’ll just list them here:
- Low Fees
- Global Reach
To that, one can add the exponential growth in 2017 where the Dash coin price has surged in recent months.
If Dash is really private, how come there is a public record of the top 100 most wealthy addresses in the Dash network?
One answer could be that the privacy is optional. Another is that it a single person or a group of closely related persons control all the masternodes that a transaction passes through, that transaction is no longer private.
Some critics say PrivateSend is nothing but a cryptocurrency mixing, a procedure adopted by other cryptocurrencies. So there is nothing unique. It’s just the rebranding of an existing service.
Dash’s “instamine controversy” is a big red flag. Within the first two days after Dash (XCoin, at that time) was released, 11% of the 19-million currency limit was released. Such a move is highly sketchy and cast a doubt on Dash’s legitimacy. But it’s water under the bridge now. (Source: Finder, op cit.)
Dash Potential Value: What’s in Store for Dash Coin Future?
Since its creation, the Dash masternode network has been adding new features like InstantX, self-budgeting, and self-governance. This shows that the developers are aggressive and do not want to rest on past laurels and achievements.
Thanks to the masternode network, almost any feature can be decentralized and included at the protocol level. In fact, the next phase of the Dash project, called “Evolution,” will allow e-commerce to be with minimum risk and maximum reputation, thanks to a decentralized arbitration system that can outdate centralized escrow services.
The fact that such new advancements can easily be incorporated at the protocol level bodes well for the Dash potential value and ensures that Dash’s future will remain on an upward curve.