What you need to know about Dash cryptocurrency

A few years after the emergence of Bitcoin in 2008, other cryptocurrencies began to appear. These were mostly coins that in one way or another offered Bitcoin improvements. This is how Dash (DASH) appeared.

Unlike cryptocurrencies such as Ethereum or Stratis, which were primarily designed as platforms for creating DApps (decentralized applications), Dash is a decentralized digital currency, like Bitcoin. The main goal is to become the same liquid currency as fiat money - the dollar, the euro, the ruble, etc.

Dash is the first cryptocurrency based on the properties of anonymity and confidentiality. The Bitcoin code was taken as the base, but the founders transformed it using a unique encryption algorithm, which ensures the non-traceability of transactions.

History of creation

Cryptocurrency Dash (DASH) was born on January 18 2014, under the original name XCoin (XCO). Unlike most modern cryptocurrencies, which pass the ICO stage before creation, Dash was created by independent developer Evan Duffield without conducting the initial distribution of coins.

Back in 2010, he became interested in Bitcoin, and, like many enthusiasts then, began to think about improving his code. He considered the main drawback of Bitcoin to be a lack of anonymity and interchangeability, so he proposed to make changes to the Bitcoin protocol, which made the cryptocurrency confidential and interchangeable. However, the community did not listen to him, and Evan had no choice but to create a new cryptocurrency.

Here is what the developer says about his attempts to improve the Bitcoin protocol:

“I discovered Bitcoin in the middle of 2010 and since then it has captured my mind. After a couple of years, at 2012, I began to really think about how to add anonymity to Bitcoin. I found about 10 ways to do this, but after the release, my code did not want to be included in Bitcoin. The developers wanted the basic protocol to remain largely unchanged, and this also applies to everything else that is based on it. This was the birth of the Darkcoin concept. I implemented the X11 algorithm over the weekend and found that it works surprisingly well and solves the problem of equitable distribution of rewards, that it can become a good basis for launching cryptocurrency. I actually laid out in X11 a similar growth curve, in which miners must fight to create even a slight advantage for themselves, just as it was in the early stages of Bitcoin development. I think it is necessary to create a living ecosystem. ”

Ten days after creation, 28 January 2014, XCoin was renamed Darkcoin, and 25 March 2015, the coin got its current name - Dash (DASH). There are two versions of decrypting the name of this cryptocurrency:

  1. Dash in English means “jerk” - maybe by this the creator hinted at the bright future of cryptocurrency.
  2. Dash is an acronym for Digital cASH.

It is noteworthy that, unlike most other cryptocurrencies, Dash does not have the word coin in its name.

Unlike bitcoin, DASH coins were mined by instmine (the initial number of coins was originally incorporated in the genesis block). During the first hour of the existence of the coin, 500 thousands of DASH were mined, over the next seven hours - another 1 million coin and, finally, another 400 thousand over the next 36 hours. Thus, during the 44 hours, the initial amount of DASH in the number of 1,9 million coins was mined. Such a big instmain has led the community to criticize developers. According to Duffield, this was caused by a critical error in the code, and the creator even suggested that the network be rolled back, but the crypto entity rejected this idea. This huge amount of coins was sold on the stock exchanges at low prices, and the situation stabilized.

The total number of coins is 18,9 million, at the moment of which 8,3 million is mined. It is assumed that the last coin will be mined in 2300 year.

In the Dash system, the remuneration for each mined block decreases by 7,1% every year. The average block creation time is 2,5 minutes, which makes the blockchain of this cryptocurrency four times faster than the Bitcoin network.

Structure

Core Team Dash consists of 50 specialists who work on improving the protocol and ensure stable operation of cryptocurrency. Some of the team members are in Phoenix, Arizona, and most work from different parts of the world.

The creator - Evan Duffield - is still involved in the project life. Even as a teenager, Evan became interested in programming, and later worked as a programmer in IT companies before he became interested in distributed registry technologies. In 2013, he decided to fully switch to programming in the blockchain and cryptocurrency areas.

With a bitcoin Evan met by accident. While preparing for the Series 65 exam (investment counseling exam in the USA), the programmer first met the word “bitcoin”, but did not pay attention to it. Bitcoin captured his mind in 2010, when Evan read about him a second time.

Communicating on the Bitcointalk forum, the future creator of Dash realized that the main problem of Bitcoin is the lack of interchangeability of coins. He began to look for ways to fix it and found several options, one of which suggested incorporating bitcoin into the protocol. However, the community refused, which was a prerequisite for the creation of a new cryptocurrency, which today we know as Dash.

Ryan Raylor is the current CEO of the Dash Core Group. Dash Core Group is an organization that supports the network through the implementation of various initiatives. At the beginning of his career at Dash in 2016, Ryan served as CFO. She became CEO after this position was released by founder Evan Duffield in April 2017.

In the past, Ryan worked as a financial analyst. His main specialization was the payment industry and investments. This not least allowed Dash to become the leader of electronic currencies.

The Dash team is one of the biggest in the cryptomere, and it continues to grow. Cryptocurrency has centers in several countries, each of which has its own local team.

Technology

Private send

This is a unique technology Dash (formerly called DarkSend), which provides the ability to send confidential transactions. The special mixing protocol CoinJoin, which was proposed by Gregory Maxwell (gmaxwell), is responsible for this.

Shuffling of denominations to create anonymous transactions must be carried out manually in the cryptocurrency wallet. The user can select the number of rounds of mixing - from one to eight (the more rounds, the greater the level of anonymity). In order to avoid misuse of the mixing service, a fee is charged - on average, one out of ten rounds must be paid for 0,001 DASH. The mixing process takes some time, so you need to wait until anonymous transactions are formed.

When sending a transaction, you need to be very careful, because along with a private transaction there is the possibility of sending a normal transaction that can be tracked to the address where the change will come. The amount of an anonymous transaction must be a multiple of the minimum nominal value - 0,01 DASH. This was laid down in the system in order to avoid the process of sending a “surrender”, which allows you to track the transaction.

However, Private Send is an optional function that the user can use at will.

Instant send

Until 2016, this Dash cryptocurrency technology was called InstantX. It is a service of sending instant transactions (confirmation takes about 1,5 seconds). These transactions are checked by masternods in an accelerated mode (without creating a block), however, the latter require higher commission payments for this service. Also, checking such “fast” transactions with masternods avoids the problem of double-spending (double spending of coins).

The use of the Instant Send technology is available both to users who have installed a full-fledged wallet and to those who use thin clients, including mobile ones.

Masternody

Unlike Bitcoin architecture, in which there is only one type of nodes, in Dash nodes (nodes) are divided into two types - ordinary mining nodes and master codes (masternodes). Any member of the network can create a masternod by downloading the full history of the blockchain and storing at least 1000 DASH on the account. The latter allows you to protect the network from the "deployment" of the attackers and the 51% attack, since a violation of the correct operation of the system, including damage to the attacker himself.

It is thanks to masternods in the Dash system that such functions as Private Send and Instant Send are available. For the performance of their functions in the maintenance of the network, the masternodes are rewarded in the amount of 45% from each mined block. In addition, they have the right to propose their projects, as well as vote for the proposed projects concerning the further development of cryptocurrency. According to the official website, the cryptocurrency 4100 Masternod is currently active.

X11 encryption algorithm

Unlike Bitcoin, which uses the SHA-256 encryption algorithm, Dash is based on the X11 algorithm, which was invented by Evan Duffield. X11 is an algorithm that consists of a "mix" of 11 different cryptographic algorithms (Blake, Bmw, Groestl, JH, Keccak, Skein, Luffa, Cubehash, Shavite, Simd, Echo). This approach is more reliable, because to break the network you need to bypass all 11 algorithms. X11 also allowed to reduce energy costs by Mining. Compared to the Scrypt algorithm, when using the latest generation of central processors, X11 mining requires 30% less electricity and 30-50% less resources for heat dissipation.

Consensus

Dash cryptocurrency uses a special consensus algorithm - Proof-of-Activity. It is a combination of the individual features of Proof-of-Work and Proof-of-Stake. Due to the coexistence of two consensus algorithms in the Dash system, there are two types of network service participants: miners (issue coins) and holders (confirm transactions).

This "hybrid" works as follows:

  1. As in the Bitcoin network, miners solve a cryptographic puzzle to find nonce and create the correct hash of the block;
  2. The found hash is sent to the network, and a “stock” is created to form the future block (however, a full block is not created at the same time);
  3. Holders confirm the transaction, as well as the correctness of the hash, after which the correct block is formed, which is recorded in the blockchain.

In this case, the reward is distributed among all participants: 45% miners, 45% holders, 10% goes to DGBB (for network development).

Using the algorithm Proof-of-Activity allows you to make the Dash network more decentralized, since miners do not have a monopoly on the network, unlike typical blockchains like Bitcoin or Ethereum, which work on the basis of Proof-of-Work. In addition, Proof-of-Activity protects the network from attacks by hackers, since none of the nodes has complete power over making changes to the blockchain, even if it has 51% power. In this case, the second party simply does not confirm his actions.

DGBB (Decentralized Governance by Blockchain)

Today, cryptocurrencies that have DAO (a mode in which blockchain participants can influence the development of the network) are not something special. However, Dash was the first cryptocurrency that offered DGBB — a decentralized control of the blockchain, analogous to the modern DAO.

The bottom line is that anyone can propose a project aimed at the development of the Dash network. For this you need to make a commission payment in the amount of 5 DASH. The decision on the implementation or non-implementation of the proposed ideas is made by voting, in which only masternods participate (i.e., nodes that have at least 1000 DASH on the account). For example, it was decided to increase the block from 1 MB to 2 MB. The voting process lasted about a day.

Advantages and disadvantages

Dash is a cryptocurrency with its strengths and weaknesses - in this it resembles any other crypto project.

The advantages include the following:

  • Low fees - sending transactions on the Dash network requires a fee, but it is much lower than fees charged by banks or paid when using credit cards. Even when sending instant transactions commission remains minimal.
  • Instant transactions - this feature is made possible by the unique Instant Send technology, in which transaction confirmation takes about 1,5 seconds. This gives Dash an advantage even over other cryptocurrencies, in the system of which the confirmation of transactions takes a longer time.
  • Anonymity and confidentiality of transactions - Dash is the first potentially anonymous cryptocurrency. “Potentially” because the privacy feature is optional, i.e. the user can select it using the technology called Private Send. It ensures that neither the wallet from which the transaction was sent, nor the amount can be tracked.
  • Two-tier network - Dash uses the Proof-of-Activity consensus algorithm, which involves the coexistence of miners (working with the PoW algorithm) and holders (working with the PoS algorithm). This allows you to create two levels of transaction verification, which is an indicator of a more decentralized system.
  • Users can participate in the development of the network - thanks to the presence of DGBB users can offer their projects that can make the Dash network better. This feature is available to every user who has an account in the official wallet and owns at least 5 DASH.
  • Enhanced security - due to the use of the X11 encryption algorithm, as well as the two-tier system for creating blocks, Dash becomes more resistant to hacker attacks, as well as to the 51% attack, than other cryptocurrencies. In addition, this coin has an open source code, so the changes made will immediately be visible to community members.

Among the shortcomings are:

  • An error in the code that led to the instmine - at the very beginning of its journey, Dash suffered a heavy blow to the reputation that was associated with a huge instmain. As a result, 25% coins were distributed among a very small number of holders. As the founder said, this was due to a critical error in the code. Investors who study the history of the coin, before investing in it, can push this unpleasant fact from the biography of Dash.
  • The lack of open statistics on the use of funds for the development of the network - in the process of mining 10% of the coins go to the DGBB fund, in addition, for the proposal of each project the user is charged a fee of 5 DASH. Unfortunately, at the moment there is no open statistics on the distribution of these funds.
  • The monopolization of mining - initially the formation of Dash blocks took place with the help of central or video processors, now most miners use ASIC devices. Unfortunately, the team does not struggle with this tendency in any way (for example, the Monero team regularly makes changes to the protocol in order to prevent the mining monopolization of cryptocurrency).

Interesting

Cooperation

Dash is a popular and promising cryptocurrency, so it arouses the interest of many companies. Currently, the project cooperates with the following projects:

  • Alt36 is a digital payment platform widely used by enterprises operating in the medical marijuana market. The use of cannabis cryptocurrency is becoming more and more popular, and Dash is no exception.
  • KuvaCash is a project created with the support of Dash funding and aimed at solving inflation problems in Zimbabwe. To use this platform and make calculations in Dash, you just need to have a smartphone. The service is available not only to companies, but also to individuals.
  • Saifu is a Czech bank project that represents a platform that allows you to exchange Fiat for cryptocurrency and vice versa, so there is no need to use exchangers or exchanges. The use is very simple and intuitive.
  • Kripto Mobile is a Venezuelan project, the cooperation of which Dash will consist in joint work on the release of “crypto telephones”. The main target audience is South America. Such phone models will simplify the use of cryptocurrency, in particular Dash (DASH), in everyday life. And against the backdrop of a crazy crisis in Venezuela, Dash has great prospects in this country, and cooperation with Kripto Mobile is only part of a global strategy.
  • CoinFlip - the conclusion of this partnership agreement expanded the base of cryptomattes, on which Dash cryptocurrency is available, by another 80 units, expanding the network of cryptomattes that support this coin, to 418 pieces worldwide.
  • CoinBR is a Brazilian trading platform on which more than 13 thousands of merchants are registered. Buyers can use the cryptocurrency, now including Dash, to pay for goods and services at CoinBR.
  • Rewards - a popular online shopping service will cooperate with Dash in the implementation of cryptocurrency in the loyalty program. The main goal is the massive popularization of cryptocurrencies among the population and the promotion of their use in everyday life. Now users participating in the Rewards loyalty program will be able to return some of the funds for the purchase in Dash tokens.
  • Wirex is a very important collaboration for Dash, which will allow users to pay in more than 40 million online and offline stores that can pay with VISA cards, DASH cryptocurrency. Customers will be able to link their Wirex card with a VISA card, replenish their account with DASH and pay for purchases in stores.
  • Payza is a renowned online payment service in the UK. As part of the cooperation, Dash will be integrated into the Payza system, which will allow users to pay in cryptocurrencies in more than 100000 online stores, as well as exchange DASH for other cryptocurrencies and Fiat.

Differences from Bitcoin

Despite the fact that Dash was originally created as a Bitcoin fork, these cryptocurrencies have significant differences:

  • Unlike Bitcoin, Dash has an instant payment service called InstantSend, as well as a master system that provides enhanced network security. Masterbirds receive an 45% reward for each mined block.
  • While on a Bitcoin network, confirming a transaction takes at least 10 minutes, it takes DN to confirm a transaction sent using InstantSend for Dash 1,5 seconds and 2,5 minutes when sending a standard payment.
  • Bitcoin transactions can be traced — data about the sender's and recipient's addresses, the amount of the transaction is available to anyone, and Dash has the ability to send anonymous transactions using the Private Send function.
  • Community members Dash can offer their projects, thereby participating in the development and improvement of the network. In addition, 10% coins received at the closing of the block, allocated just for the development of the network. Bitcoin does not have this feature.
  • Compared to bitcoin, the dash commission is lower.

Course and capitalization. Where can I buy

At the time of this writing (early September 2018 of the year), the cost of one DASH coin is $ 216,3, and the capitalization is almost $ 1,8 billion. In the Coinmarketcap rating, the cryptocurrency takes 12 rank.

The graph and capitalization of cryptocurrency since the beginning of 2018, looks like this:

The maximum price of Dash for the entire existence of the coin was $ 1500. Now, like all other coins, its value has dropped significantly - almost 7 times compared to the peak in December.

Dash is a very popular cryptocurrency, so you can buy it on almost any exchange or exchanger for BTC, ETH, USDT cryptocurrency, as well as for fiat currency - dollar, euro, ruble.

To store DASH coins, we advise you to use an official Dash Core wallet or hardware clients such as Tezos or Ledger.

Development prospects

Having emerged as one of the forks of Bitcoin, Dash is currently ranked among the most popular and promising cryptocurrencies. In addition, this is the first coin that offered the possibility of sending anonymous untraceable transactions. Also deserves special attention the algorithm of consensus used in the architecture of Dash, which consists not of one, but of two types of participants. This provides an increased level of decentralization and network security.

It is also worth saying that Dash has a very strong community that in every way popularizes the coin and stimulates the use of cryptocurrencies in everyday life. Dash is particularly popular in South American countries - Venezuela, Panama, Colombia, Brazil. This cryptocurrency in Venezuela is in great demand, since at the moment the country is experiencing a serious crisis, and the use of electronic currencies may be the only opportunity to purchase goods and services, especially in overseas stores.

However, even Dash has its own “dark spots”. One of them is the lack of transparency in the use of funds that go to the development of the network (10% of the reward during mining). In addition, on the first day of the coin’s existence, a huge instmain was carried out due to an error in the code, as a result of which about 25% of all coins were distributed among a small group of holders. Theoretically, this may adversely affect the stability of cryptocurrency rates, as well as cause possible manipulations.

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