Cryptocurrencies

What is Dash? The Beginner’s Guide

What is Dash? It is one of the oldest cryptocurrencies in the market. It offers intriguing features and a unique DAO model for project development. This article is a Dash beginner’s guide. We’ll go through, history and all the key features of Dash.

What is Dash? It’s digital money

Dash is a cryptocurrency with the full meaning of the word. It is built to be digital cash, peer-to-peer money. We, therefore, can place Dash to the same category as Bitcoin, Litecoin, and Bitcoin Cash.

Two other clear crypto categories are platforms and tokens. Platforms are frameworks for Dapps and smart contracts and they include ecosystems like Ethereum, EOS and Tezos. Tokens are created inside such platforms and they usually have utility inside a specific application.

The currency category, where Dash is included, can be also divided into a couple of sub-categories. One is called stablecoins and one is called privacy coins. You might have heard of both through Tether (stablecoin) and Monero (privacy coin).

Some people argue that Dash should be placed into the privacy coins sub-category. This is because Dash has a PrivateSend function, which allows you to make hidden transactions. You can decide after reading this article.

Below is a short video introduction of Dash.

It’s sometimes difficult to place a cryptocurrency into a certain category. One thing is certain: Dash functions as digital money and it is mainly competing with Litecoin and Bitcoin Cash. All these three coins have been born in 2011-2017 as an alternative to Bitcoin.

Now, it’s time to go through the history of Dash.

Dash was born as XCoin

As mentioned earlier, Dash is one of the oldest cryptocurrencies in the market. You might know that Bitcoin was born in 2008-2009 and Litecoin was born in 2011. The history of Dash goes all the way to 2014.

The man behind Dash was Evan Duffield, who was introduced to Bitcoin as early as 2010. He started to work with Bitcoin’s privacy options in 2012. As you might know, the Bitcoin blockchain is public, so anyone can see the transaction history and amounts of any address. AI has also enabled tools to link addresses into actual persons.

Duffield noticed quite early, that the development of Bitcoin would not go to the direction he wanted. At least not anytime soon. Hence, he founded his own coin, called XCoin. Just ten days later, it was re-branded to DarkCoin. You can read a Wired magazine story of Darkcoin from here titled ”Bitcoin’s nefarious cousin Darkcoin is booming”

Below is a video of Evan Duffield.

The development team decided to ditch the name DarkCoin in March of 2015 because it had too much of an underground and negative vibe to it. This is when the name Dash was born, which comes from the words digital cash.

Dash is not a hard fork of Bitcoin or Litecoin, but it is based on Litecoin’s code, which is almost entirely based on Bitcoin. Hence, Dash and Bitcoin had lots of similarities.

Duffield is no longer with Dash because he joined a company called Dash Labs a couple of years ago. This means Duffield hasn’t been the leader of Dash for some time. The Dash Labs project is now closed if we believe this Reddit message from 2019.

Dash took a massive hit during the long and dark “crypto winter” of 2018. The value of Dash has not only crashed in dollars, but it has also lost ground compared to other altcoins.

Dash was 7th (when measuring the market cap) in January 2017, 9th in January 2018, 15th in January 2019, and 25th in January 2020. Dash price has crashed from 1500+ dollars all the way to 18 dollars. When this article is being written, the Dash price is 80 dollars.

When we compare Dash to its rivals, it is clearly behind in social media popularity. Litecoin founder Charlie Lee has 820K Twitter followers and Bitcoin Cash founder Roger Ver has 600K followers. Dashpay has 317K followers and there is no clear head figure of the project. Dash suffers from the fact that there isn’t anyone like Charlie Lee, Roger Ver or Vitalik Buterin talking about the project and interacting with people.

Let’s dive into the Dash technology, then.

Dash Beginner’s Guide – Dash vs Bitcoin

Dash is best-known from its two-tier architecture model, which means in this instance miners (1) and masternodes (2).

Miners do the same work in the Dash architecture as they do in Bitcoin. They are responsible for maintaining the blockchain, which means in practice building the new blocks. The difference to Bitcoin is that Dash can be mined with GPU miners too. Bitcoin mining is done nowadays entirely with ASIC miners.

Dash and Bitcoin have different hashing (mining) algorithms. Bitcoin is using the famous SHA-256, while Dash is using X11. This hashing algorithm was developed by the Dash founder Evan Duffield. He created it to prevent ASIC mining.

Having physical miners means that Dash is using the Proof of Work consensus algorithm, which we know from Bitcoin, Litecoin, and Ethereum, for example. The Dash blockchain is faster than Bitcoin since new blocks are created every 2,5 minutes. Bitcoin has a 10-minute block time.

There are also nodes in the Dash network, which verify transactions like in the Bitcoin network. Dash has also “super nodes” called masternodes. Anyone can run a masternode, but you must be able to lock 1000 Dash coins in order to do that. This would cost over 80,000$ with current prices.

See the video below, which explains masternodes quickly.

Masternodes have additional tasks compared to regular nodes. They are also rewarded, unlike nodes in the Bitcoin network. Block rewards are given 45% to miners, 45% to masternodes, and 10% to Dash Treasury (= development). In Bitcoin, it is miners who get 100% of the block rewards and fees.

Many Dash fanatics claim that this is a big error in the Bitcoin network. It means that nodes are run by volunteers, who don’t benefit anything from doing it. Critics say that this is not a viable solution in the long run. So far it has worked fine since many node operators have an incentive to keep the network running & healthy due to their own Bitcoin investments.

Dash masternodes have also an impact when it comes to Dash development. They can vote proposals done by the community and influence the direction the project is taking. There are currently about 5000 Dash masternodes online.

Dash features: PrivateSend and InstantSend

From the very beginning, Dash founder Evan Duffield wanted to create a cryptocurrency with privacy features. This is enabled in Dash with a feature called PrivateSend. It is an implementation of the CoinJoin technology, which is used by several popular wallets these days. You can read more about CoinJoin from this Dash blog post.

When using the PrivateSend feature, your transaction is split into smaller parts. Then an order is given to one of the masternodes to do a mixing operation. The masternode then finds other Dash transactions from the network and mixes the sending addresses several times. After each mixing round, the tracking of the transaction becomes exponentially more difficult.

This is a significant difference between Dash and Monero if you want to place Dash into the privacy coin category. In Monero, transactions are always 100% private while in Dash, privacy is an option. PrivateSend feature is explained nicely in the following video.

Another key feature of Dash is called InstantSend. This feature requires also help from the masternodes of the network. It enables the user to make instant transactions.

When using an InstantSend, a masternode locks the funds used in the transaction. This means that the transaction will be recorded and confirmed to the Dash network later. It also prevents the sender and receiver from sending the funds again and making double-spends.

It’s critical that this locking is done at the protocol level and not in the wallet software. There are ten masternodes at the time acting as “InstantSend police”. These nodes are randomly selected from the network.

With InstantSend, your Dash transaction gets five confirmations in one second. This makes it possible to buy a cup of coffee or use Dash in any other store, where quick confirmations are needed. In a normal situation you’d have to wait 2,5 mins for each confirmation.

InstantSend makes a real-time transaction possible. Even if the funds are locked about 15 mins after sending them, this isn’t really a problem, since the receiver wouldn’t be usually sending the funds out anyway.

Dash Core Group

Dash is an interesting project with many cool features. Many would argue, that the governance model is the best feature of Dash.

Anyone can propose a new feature or a project and a budget for it. Once it’s done, the community will vote. This is where Dash masternodes step in since each masternode has a vote in this process. As an example, the community approved a 500,000$ sponsorship for Max Keiser’s and Stephen Baldwin’s The Great American Pilgrimage project.

Another interesting detail and comparison to Bitcoin. You might already know that the Bitcoin community has been debating for years whether to increase the Bitcoin block size or not. In Dash, this issue was solved in 24 hrs.

Dash founder Evan Duffield handed over the project leadership to Ryan Taylor years ago. Taylor is currently the CEO of the Dash Core Group. This is an interesting organization because it gets all its funds from the community and the Dash network.

dash core group

You’ll find the Dash Core Group personnel from dash.org/team/. The most important persons are currently CEO Ryan Taylor, CTO Bob Carroll, CFO Glenn Austin, and COO Robert Wecko. Dash Core Group oversees the Dash development at the practical level. They hire the developers and build those features, which the community has voted.

Dash is also called a DAO – Decentralised Autonomous Organization. It is one of the very few projects in the crypto scene, which truly has a decentralized governance model.

Dash Evolution

Dash Evolution is a name for an umbrella, which is covering years of development. One could compare Dash Evolution to Ethereum 2.0 development. For example, there were many hard forks in 2019 alone, which were all part of the Ethereum 2.0 process.

Dash Evolution began about four years ago. Just like Ethereum 2.0, Dash Evolution has also been delayed. In the big picture, Dash Evolution is all about developing the architecture for better mainstream adoption. The idea is to make Dash easier to use for both developers and end-users.

When this article is being written, we are on a phase where Dash Evonet, DashWallet Redesign, and Dash Core v0.15 have been all completed. See the whole roadmap at dash.org/roadmap/.

dash roadmap

Dash Identities will be an important feature in the near future. It’ll help especially mainstream adoption. This will enable Dash addresses like DashOwner@somedomain.com, which you can use for receiving Dash. The system will automatically create new addresses behind this identity to improve privacy.

All in all, Dash is going forward as a project. Check the roadmap page for more information.

Investing in Dash

Dash price was moving up nicely in the opening weeks of 2020 due to the previously mentioned developments. The project has also gained some more ground in South America, where Dash has a special focus on Venezuela.

You’d check this video, where Crypto Lark is interviewing Amanda B. Johnson about the current state of Dash.

In the big picture, Dash is clearly behind Bitcoin, Bitcoin Cash, and Litecoin when it comes to publicity and visibility on social media. This doesn’t make the project any worse technically, though.

When you look at the tweet above, Dash is a highly competitive coin with all the features it has. It reminds you of Digibyte, which is another “forgotten” project with a strong technical foundation. An investor should ask himself if this situation is ever going to change in the future?

Monero and Zcash are dominating the privacy coin sector. When talking about currencies, we can’t forget Bitcoin either with Lightning Network, even if BTC would be eventually used more like digital gold. But one must ask: what role is left for Dash and other alternative currencies when Bitcoin can be sent virtually free through the Lightning Network?

Dash price

If you want to invest in Dash, it’s very easy. Dash is available in all of the major cryptocurrency exchanges. Coinbase is the best place for newbies to buy Dash with fiat currency. You can also choose Kraken, which is an old and reliable exchange.

Binance and KuCoin offer both several currency pairs for Dash. You can buy Dash from Binance with bitcoins, as an example.

There are also good storage options available for Dash. You can choose either a desktop or a mobile wallet from dash.org/wallets. The safest option is to use Ledger Nano X, Ledger Nano S or Trezor products.

Follow @dashpay on Twitter to stay up-to-date with all the current events. The official website is dash.org and the official Reddit page is /r/dashpay. The official Youtube channel has also tons of useful content for those, who want to learn more.

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