101 Guide to Dash

Bitcoin isn’t perfect. Dash improves the inherent problems in Bitcoin from privacy to transaction speed, governance, funding and overall incentive structure while retaining and expanding Bitcoin’s technology.

What Is Dash?

Dash was launched in 2014 by Evan Duffield to solve the inherent problems in Bitcoin: speed of transactions and anonymity.

Dash was formerly called Xcoin (Xco) and later became known as Dark Coin. It was eventually rebranded to Dash which is a portmanteau of “Digital Cash” in March 2015.

Dash is a fork of Bitcoin which means Dash is built upon Bitcoin’s core code with the addition of new features such as enhanced privacy and faster transaction speed.

Facts About Dash

As at 8 Nov 2018, the circulating supply of Dash is 8.4 million based on Coin Market Cap, and it will reach 18 million in the year 2300.

Main Features of Dash

  • Masternodes and Two-Tier Network

Masternodes are a series of servers that underpin a blockchain’s network. They are responsible for enabling specific services that miners under proof of work cannot accomplish. Masternodes perform some special functions such as increasing the privacy of transactions, doing instant transactions, participating in governance and voting and enable budgeting and treasury system in cryptos.

Dash was the first cryptocurrency to implement the masternodes model into its protocol. Under Dash’s Proof-of-Service algorithm, a second tier network of masternodes exists alongside a first tier network of miners to achieve distributed consensus on the blockchain. This two-tiered system ensures that proof of service and proof of work preform symbiotic maintenance of Dash’s network.

While Bitcoin operates only a single-tier network of miners, Dash uses these Masternodes as an additional layer for its network, removing the need for trusted third-parties to authorise transactions that could compromise the anonymity of any payment. The first tier works in the same way as Bitcoin: miners find blocks and post transactions to the blockchain. The second tier, comprised of special servers called Masternodes, enables additional features such as instant transactions (InstantX)private transactions (Darksend), and decentralized governance and budgeting.

  • Incentive Model (3-Way Split Block Reward)

Anyone who want to run a Masternode needs to prove that they own 1000 DASH. This is to prevent so-called “Sybil attacks” on the network. The 1000 DASH is not locked or consumed — a Masternode owner can spend that 1000 DASH anytime he/she wants, but doing so will result in the Masternode turning itself off. Masternodes are typically hosted on virtual private servers (VPS) run by companies such as Amazon Web Services, Microsoft Azure, Vultr, and others.

Dash splits mining reward between its mining community, participants that hold a specified amount of Dash and a long-term development fund for the Dash community.

People are incentivized to run Masternodes because they receive a portion of the reward when miners find new blocks (45% of the block reward goes to miners, 45% goes to Masternodes, and 10% is used to fund Dash-related projects via the decentralized budget system). The return on investment is currently about 15% (over the course of a year, you will earn approximately 150 DASH from running a Masternode).

Difference between Dash and Bitcoin in mining reward system. Source: Coinsutra

Benefits of Dash

1. Enhanced Privacy (Private Send)

Dash allows you to send your funds privately by mixing it in between several other transactions, thus making it hard to identify any specific transaction. It uses a coin mixing service based on CoinJoin. This is an optional privacy feature which the user may want to use. But there is a limited cap of 1000 Dash for which you can send using this feature. With a 1000 Dash requirement per Masternode, it becomes a cost suicide to attack the privacy of Dash network.

2. Instant Payment (Instant Send)

Dash harnesses the power of its Masternode network to power an innovative technology called InstantX. When sending money, users can select the “Use InstantX” box in their wallet, and transactions will be fully sent and irreversible within four seconds.

3. Lower Transaction Fees

It is considerably cheaper than banks or payment services such as Western Union, Paypal and Moneygram when transacting using Dash.

How to Buy Dash?

Now, Tokenize will be listing Dash on its exchange platform in the mid of November 2018. You can buy via fiat or crypto.

References:

  1. https://www.investopedia.com/tech/what-dash-cryptocurrency/
  2. https://coinsutra.com/dash-cryptocurrency/

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