Dash cryptocurrency review
A few years after the emergence of Bitcoin in 2008, other cryptocurrencies began to appear. Basically, they were coins that in one way or another offered improvements to bitcoin. So there was Dash (DASH).
Unlike coins like 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 – dollar, euro, ruble, etc.
Dash is the first coin based on the properties of anonymity and privacy. Bitcoin code was taken as a base, however, the founders transformed it using a unique encryption algorithm, which ensures transaction non-tracking.
History of creation
Cryptocurrency Dash (DASH) was born on January 18, 2014 under the original name XCoin (XCO). Unlike most modern cryptocurrencies that go through the ICO stage before creation, the Dash cryptocurrency was created by an independent developer Evan Duffield without conducting an initial distribution of coins.
Back in 2010, he became interested in bitcoin, and, like many enthusiasts then, began to think about improving his code. The main drawback of Bitcoin, he considered the lack of anonymity and interchangeability, therefore, proposed to amend 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 tells about his attempts to improve the Bitcoin protocol:
“I discovered Bitcoin in mid-2010 and since then it has taken hold of my mind. After a couple of years, in 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, they didn’t want to include my code in Bitcoin. The developers wanted the basic protocol to remain basically unchanged, and this also applies to everything else that is based on it. This was the birth of the concept of Darkcoin. I implemented the X11 algorithm over the weekend and found that it works surprisingly well and solves the problem of fair distribution of rewards, that it can be a good basis for launching cryptocurrency. I actually laid down a similar growth curve in X11, in which miners must fight to create even a slight advantage, just as they did in the early stages of Bitcoin development. I think this is necessary to create a living ecosystem. ”
Ten days after its creation, on January 28, 2014, XCoin was renamed Darkcoin, and on March 25, 2015, the coin received its current name – Dash (DASH).
Unlike Bitcoin, DASH coins were mined through instmayn (the initial number of coins was originally laid in the genesis block). During the first hour of the coin’s existence, 500 thousand DASH were mined, over the next seven hours – another 1 million coins and, finally, another 400 thousand over the next 36 hours. Thus, within 44 hours, the initial amount of DASH was extracted in the amount of 1.9 million coins.
Such a large instine caused criticism of the community towards the developers. According to Duffield, the reason for this was a critical error in the code, and the creator even suggested rolling the network back, but the crypto community rejected this idea. This huge amount of coins was sold on exchanges at low prices, and the situation stabilized.
The total number of coins is 18.9 million, at the moment of which 9.09 million has been mined. It is assumed that the last coin will be mined in 2300.
In the Dash system, the reward for each block mined is reduced 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.
Core Team Dash consists of 50 specialists who work to improve the protocol and ensure the stable operation of the cryptocurrency. Some of the team members are located in Phoenix, Arizona, while most work from different parts of the world.
The creator – Evan Duffield – is involved in the life of the project so far. 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 completely switch to programming in the field of blockchain and cryptocurrencies.
Evan met Bitcoin quite by accident. In preparation for the Series 65 exam (the investment advisory exam in the USA), the programmer first encountered the word bitcoin, but did not pay attention to it. Bitcoin captured his mind in 2010, when Evan read about him a second time.
Speaking at the Bitcointalk forum, the future creator of Dash realized that the main problem with bitcoin is the lack of coin interchangeability. He began to look for ways to fix this and found several options, one of which suggested introducing bitcoin into the protocol. However, the community refused, which became 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 various initiatives. At the beginning of his career at Dash in 2016, Ryan served as CFO. She became CEO after the post was vacated by founder Evan Duffield in April 2017.
In the past, Ryan worked as a financial analyst. His main specialization was the payment industry and investment. This is not least allowed Dash to become a leader in electronic currencies.
The Dash team is one of the largest in the crypto world, and it continues to grow. Cryptocurrency has centers in several countries, each of which has its own local team.
This is a unique Dash technology (formerly called DarkSend), which provides the ability to send confidential transactions. CoinJoin’s special mixing protocol, which was proposed by Gregory Maxwell (gmaxwell), is responsible for this.
Shuffling denominations to create anonymous transactions must be done 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 abuse of the service, a fee is charged for mixing – on average, for one out of ten rounds you need to pay 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, it is possible to send a normal transaction, which can be tracked to the address where the ‘change’ will come. The amount of an anonymous transaction must be a multiple of the minimum face value – 0.01 DASH. This was laid down in the system in order to avoid the process of sending “change”, which allows you to track the transaction.
Until 2016, this Dash cryptocurrency technology was called InstantX. It is an instant transaction sending service (confirmation takes about 1.5 seconds). These transactions are verified by masternodes in an accelerated mode (without creating a block), however, for this service, the latter require higher fees. Also, checking such ‘fast’ transactions with masternodes avoids the problem of double-spending (double spending of coins).
Unlike the Bitcoin architecture, in which there is only one type of nodes, in Dash, nodes (nodes) are divided into two types – ordinary mining nodes and masternodes. Any network member can create a masternode by downloading the full blockchain history and storing at least 1000 DASH on the account. The latter allows you to protect the network from the ‘introduction’ of intruders and conduct an attack of 51%, since a violation of the correct operation of the system will also bring losses to the attacker himself.
Thanks to masternodes in the Dash system, features such as Private Send and Instant Send are available. Masternodes receive a reward of 45% from each block mined for the performance of their functions in network maintenance. In addition, they have the right to propose their projects, as well as vote for the proposed projects regarding the further development of cryptocurrency. According to data on the official cryptocurrency website, 4,100 masternodes are currently active.
Dash Encryption Algorithm
Unlike Bitcoin, which uses the SHA-256 encryption algorithm, the Dash cryptocurrency 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 into the network you will need to bypass all 11 algorithms. X11 also allowed to reduce energy costs for mining. Compared with the Scrypt algorithm, when using the latest generation of central processors, X11 mining requires 30% less electricity and 30-50% less resources for heat removal.
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:
- As on the Bitcoin network, miners solve a cryptographic puzzle to find nonce and create the correct block hash.
- The found hash is sent to the network, and a “blank” is created to form the future block (however, a full block is not created at the same time).
- The holders confirm the transactions, as well as the correctness of the hash, after which the correct block is formed, which is written to the blockchain.
At the same time, the award is distributed among all participants: 45% to miners, 45% to holders, 10% goes to DGBB (for network development).
Using the Proof-of-Activity algorithm allows you to make the Dash network more decentralized, since miners do not have a monopoly in the network, unlike typical blockchains like Bitcoin or Ethereum, which operate on the basis of Proof-of-Work.
In addition, Proof-of-Activity protects the network from malicious attacks, since none of the nodes has full control over changes to the blockchain, even if it has 51% power. In this case, the second side simply does not confirm its action.
DGBB (Decentralized Governance by Blockchain)
Today, cryptocurrencies that have a DAO (a mode in which blockchain participants can influence the development of the network) are not something special. However, the Dash cryptocurrency was the first to offer DGBB – decentralized blockchain management, an analog of modern DAO.
The bottom line is that anyone can offer a project aimed at developing the Dash network. For this you need to make a commission fee of 5 DASH. The decision on the implementation or non-implementation of the proposed ideas is made by voting, in which only masternodes participate (that is, nodes that have at least 1000 DASH on their 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 of Dash
Dash cryptocurrency is a coin with its own advantages and disadvantages – in this it is similar to 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 compared to fees set by banks or paid when using credit cards. Even when sending instant transactions, the commission remains minimal;
- Instant transactions – this feature is made possible thanks to 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 transaction confirmation takes a longer time;
- Transaction Anonymity and Confidentiality – Dash is the first potentially anonymous cryptocurrency. “Potentially” because the privacy function is optional, i.e. The user can select it using a technology called Private Send. It guarantees that neither the wallet from which the transaction was sent, nor the amount can be tracked;
- Two-level network – Dash cryptocurrency uses the Proof-of-Activity consensus algorithm, which implies 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 propose their projects that can make the Dash network better. This function is available to every user who has an account in the official wallet and owns at least 5 DASH;
- Enhanced security – thanks to the use of the X11 encryption algorithm, as well as the two-level block creation system, Dash becomes more resistant to hacker attacks, as well as to 51% attack than other cryptocurrencies. In addition, this coin is open source, so the changes made will immediately be visible to community members.
Among the disadvantages are:
- An error in the code that led to instajmine – at the very beginning of its journey, Dash suffered a heavy blow to the reputation, which was associated with a huge instmaynom. As a result, 25% of the 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 a coin before investing in it can push this unpleasant fact out of the biography of the Dash cryptocurrency;
- The lack of open statistics on the use of funds used to develop the network – during mining, 10% of the coins go to the DGBB fund, in addition, a commission of 5 DASH is charged from the user for the proposal of each project. Unfortunately, at the moment there is no open statistics on the distribution of these funds;
- Mining monopolization – initially, the formation of Dash blocks occurred using central or video processors, now most miners use ASIC devices. Unfortunately, the team does not fight this trend in any way (for example, the Monero cryptocurrency team regularly makes changes to the protocol in order to prevent monopolization of mining).
Differences from Bitcoin
Despite the fact that Dash was originally created as a fork of Bitcoin, these cryptocurrencies have significant differences:
- Unlike Bitcoin, the Dash cryptocurrency has an instant payment service called InstantSend, as well as a masternode system that provides enhanced network protection. Masternodes receive 45% of the reward for each block mined;
- While on a Bitcoin network, a transaction confirmation takes at least 10 minutes, on Dash, it takes 1.5 seconds and 2.5 minutes to send a standard payment to confirm a transaction sent using InstantSend;
- Bitcoin transactions can be tracked – anyone can see the data about the address of the sender and recipient, the amount of the transaction, Dash has the ability to send anonymous transactions when using the Private Send function;
- Members of the Dash community can propose their projects, thereby participating in the development and improvement of the network. In addition, 10% of the coins received when the block was closed are allocated just for the development of the network. Bitcoin does not have this feature;
- Compared to Bitcoin, Dash commissions are lower.
How to buy Dash
There are several ways to buy Dash:
- On cryptocurrency exchanges. A complete list of exchanges on which Dash cryptocurrency is traded is presented on the CoinMarketCap website; Here: ;
- Via ATM machines. The easiest, but expensive way with high commissions. On this site you can find ATMs operating in your;
- By bank transfer. For example, in BitPanda and AnyCoinDirect services you can replenish your account through the SEPA system, however, before using them, you must confirm your identity. Another difficulty is that only Europeans can buy Dash with a credit card in these services. However, it is not necessary to go to Europe to purchase Dash for dollars or euros. On the Kraken exchange, it is possible to transfer these currencies to your account through a bank transfer, and then exchange them for Dash.
But the most popular way to buy Dash is with cryptocurrency exchanges. At the moment, Dash is traded on many cryptocurrency exchanges, but we recommend using only proven platforms to buy any coins.
Different wallets are suitable for storing a Dash wallet:
- Desktop wallets. For example, Electrum Dash Wallet is convenient to use, but does not support InstantSend and PrivateSend. Also, the official wallet is Dash Core, it has full functionality and is compatible with Mac, Linux and Windows;
- Hardware Wallets. Suitable for the safe storage of large amounts;
- Mobile Wallets. A universal option for iOS and Android can be the Jaxx application.
In September 2018, Venezuela began testing the beta version of the Dash Text function, in which you can make transactions via SMS even through old push-button phones, being offline. To confirm the transaction, the user must enter a five-digit code. Transactions are carried out instantly and with low fees. Given the financial crisis in Venezuela, against the backdrop of this event, the Dash rate rose to $ 168.
“Venezuela already has the ability to translate bolivars by SMS. So why not implement this idea with cryptocurrencies using the Dash Text service? Now Dash can be used even by those who do not have the Internet. The main thing is the presence of any mobile phone ”
Dash Text Representative Lorenzo Rey
At the beginning of March 2019, the Dash Core Group (DCG) reduced its staff to 49 employees in order to reduce the company’s costs arising from the “cryptozyme”. According to the DCG CEO, many employees refused bonuses and even agreed to lower salaries in order to support the company in difficult times for her. It is worth noting that a couple of months before this situation, the company management stated that there were no risks of closure and reduction of personnel in the near future.
“We were forced to take tough measures to stay afloat in the harsh conditions of a bear market and ensure the financial stability of our company”
Ryan Taylor, DCG Director
On September 16, 2019, the Dash coin appeared on the Coinbase Pro cryptocurrency exchange and began to trade in DASH / BTC and DASH / USD pairs. However, residents of New York and the UK will not be able to trade this coin.
Naturally, the news about Dash listing on the new site had a positive impact on the dynamics of the Dash course. However, there are exchanges that are not at all happy with the high level of coin confidentiality. Among them is the South Korean crypto exchange OKEx, which delisted Dash on the same day, September 16, 2019. The exchange considered that this coin violates the requirements of the Financial Action Task Force on Money Laundering (FATF), as it does not allow the exchange of user data with trading floors.
If we talk about the prospects for Dash, given the high volatility of the market, they are very ambiguous. At the same time, there is reason to believe that a good future awaits the coin in 2020, because its technical capabilities provide for further scaling. Dash has a high degree of anonymity, a two-level security system and almost instantaneous transaction confirmation speed. In addition, Dash is one of the most popular coins for mining with promising income.
For 2020, Dash has ambitious plans. She plans to place the main nodes on separate microcircuits, providing the necessary conditions for greater scaling. All this undoubtedly leaves its mark, inspiring confidence in investors and contributing to the positive dynamics of the Dash rate.
However, despite the productive work of the company and even the possible growth of bitcoin, which can “pull up” all the coins along with it, a sharp jump in the cost of Dash may not occur. Do not forget about the biased attitude of many Asian exchanges, which began to ‘dislike’ anonymous coins. Such unpleasant moments can restrain the growth of Dash, despite its good prerequisites.