Dash – A Simple Overview of the Anonymous Cryptocurrency
The trading volume of Dash, a popular cryptocurrency, surpasses even that of Monero. Instant transactions, low transaction fees, and private transfers make it an excellent choice.
On this page
In January 2014, Dash, a cryptocurrency with the ticker DASH, was introduced. There was a lot of interest in it among traders and investors. Evan Duffield, one of the main developers, wanted to improve Bitcoin by adding anonymity features. However, his ideas didn't gain support, so he started working on another project.
Initially called Darkcoin for two years, and Xcoin for the first ten days, the name “Dash” was chosen to avoid darknet associations.
The “dark” in its name referred to its anonymous transfer capabilities. It wasn't until two years later that it received the name Dash. The development team wanted to list it on as many trading platforms as possible, avoiding any association with darknet transactions.
Like other digital currencies, DASH is a decentralized payment system that relies on mining and a distributed network of nodes. The name DASH comes from “digital cash,” and its creators wanted to make it popular.
Blockchain and Consensus Algorithm
Dash's blockchain uses a hybrid Proof-of-Activity consensus algorithm, which combines Proof-of-Work and Proof-of-Stake. This approach rewards miners and validators with 45% of the resulting reward each, with 10% directed to a special fund for network and project development. This method makes mining monopolies impossible and strengthens decentralization.
Mining
Dash's developers chose to follow Bitcoin‘s commercial path rather than creating a retail investor-friendly asset like Monero. Owners of specialized equipment (ASIC) can use it industrially. Ordinary users can mine using CPU or GPU, but mining in pools is more efficient than solo mining. Despite this, ASIC farm productivity still outperforms them.
Dash cryptocurrency uses a different encryption algorithm for mining than Bitcoin. While Bitcoin uses SHA-256, Dash employs X11, a combination of 11 cryptographic algorithms. X11 is more energy-efficient and reliable, as it requires bypassing all 11 algorithms to break it.
Each Dash block is generated every 2.6 minutes, is 2 MB, and can process up to 56 transactions per second. Mining difficulty increases by 7.14% each year, and the total number of DASH can be issued is 18.9 million, with over 11.182 million already issued.
Masternodes – A Unique Dash Feature
Dash stands out from other cryptocurrencies as it uses masternodes instead of regular nodes. A masternode is a node with advanced authority and capabilities, which offers certain privileges to its owners. Anyone who holds Dash can create a masternode by downloading and storing the current blockchain version and maintaining a wallet balance of 1000 DASH. This requirement is one of the methods used to prevent a “51% attack,” as disrupting the network's proper operation would lead to financial losses for the attacker.
Masternodes enable unique services such as PrivateSend and InstantSend in the Dash network. Masternode owners are entitled to propose changes and new features to the Dash network and vote on initiatives from other community members. In addition, they receive a 45% reward from each mined block.
Key Dash Services
One of Dash's standout features is PrivateSend, which offers completely anonymous and confidential transactions through a special mixing protocol called CoinJoin. To use PrivateSend, users must manually mix denominations in the native cryptocurrency wallet. They can choose the number of mixing rounds to increase anonymity. However, the network charges a small fee for this service. Third-party wallets have limited PrivateSend transaction functionality.
A list of PrivateSend transactions and the associated mixing fees in the Dash Core wallet.
InstantSend is a service that enables users to conduct transactions instantly with a confirmation time of less than 1.5 seconds. These transactions receive high priority and are processed through masternodes, bypassing the need to wait for block formation, meaning they are almost instantaneous. Although this service requires a small fee, it is worth the cost.
Unlike PrivateSend, InstantSend is available on many wallets, not just the native one.
DAO
Dash has a decentralized democratic system in place through its organization known as DGBB (Decentralized Governance by Blockchain), which is similar to a DAO. Anyone who wishes to participate in the project and the network's development is welcome to do so. Any coin holder can propose an idea to the community, which is then voted on by masternode owners. If the proposal is approved, it will be financed through the development fund. Dash was actually the first project to introduce this decentralized decision-making process, making it a pioneer in DAO.
Where is Dash used
Dash (DASH) is available on most exchanges (such as Binance, WhiteBIT, Coinbase, OKX, etc.), platforms, and digital asset exchanges. Additionally, Dash is supported by a large number of wallets of all types, including mobile, desktop, and hardware wallets (such as native wallets of various formats, Edge, Coinomy, Jaxx, Exodus, Bitnovo, Bitfy, Matrixport, Atomic, etc.). For full access to all the features and benefits of Dash's anonymous cryptocurrency, including PrivateSend and InstantSend, it is recommended to use the native desktop wallet, Dash Core, which can be downloaded from the Dash.org website.
Pros and cons
DASH's main advantage is its anonymity and instant payment services. This cryptocurrency has several levels of protection against external attacks, making it secure and reliable. Another advantage of this cryptocurrency is its low withdrawal fees from exchanges (ranging from 1 to 10 cents, depending on the trading platform). An additional advantage is its effort to develop the project as a decentralized democracy through DAO.
Dash disadvantages include the presence of instamine (pre-minted coins, which the creators officially associate with a bug in the code), industrial “anti-people” mining, and the constant change in the asset's concept – from a focus on anonymity to a tool for instant transfers. Dash representatives avoid comparisons or analogies with Darkcoin, focusing on the InstantSend service rather than anonymous transfer functionality. This tactic may allow the asset to continue to be present on most top CEX exchanges, as there have been several instances of delisting the asset – precisely due to anonymity features (Bittrex, Huobi).
The content on The Coinomist is for informational purposes only and should not be interpreted as financial advice. While we strive to provide accurate and up-to-date information, we do not guarantee the accuracy, completeness, or reliability of any content. Neither we accept liability for any errors or omissions in the information provided or for any financial losses incurred as a result of relying on this information. Actions based on this content are at your own risk. Always do your own research and consult a professional. See our Terms, Privacy Policy, and Disclaimers for more details.
Articles by this author
