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What is Dash cryptocurrency?

Dash cryptocurrency is a popular altcoin, but not everyone has heard of it. In this guide, we help you to understand the basics of Dash.

Introduction

The Dash cryptocurrency advocates itself as a peer-to-peer decentralised electronic cash system; much like Bitcoin. It was even built on Bitcoin’s core code with slightly alternative features. Like many other cryptocurrencies, Dash has its own blockchain, wallet infrastructure, and is open source.

Dash has undergone many rebranding exercises since its inception. Initially created by developer Evan Duffield in 2014, the cryptocurrency was released under the name ‘XCoin’ (XCO) before changing to Darkcoin just a month after.  The Dash rebrand occurred in March 2015 and interest in the cryptocurrency has been growing ever since.

Coin supply and market cap

When it was created, Dash was designed to have a sum total of 18 million coins mined over a long duration of time. At the time of writing, its circulating supply is at 8,548,793. Dash differs to Bitcoin in a number of ways.

  • Bitcoin has a block reward of 12.5 Bitcoin that decreases by half every four years. The Dash block reward decreases at a rate of around 7.1% per year
  • The average mining time for Dash is two and a half minutes, making it four times faster than Bitcoin
  • Bitcoin utilises nodes that are equal, whereas Dash uses ‘Masternodes’

Dash is currently valued at roughly $82.59 as well as having a market capitalisation of $706,053,314.

Features

Dash cryptocurrency has many features that make it appealing to a wide range of crypto enthusiasts.

The PrivateSend feature allows users to send funds by mixing them between several transactions. This masks the user’s transactions and enhances user financial privacy. The PrivateSend feature keeps transactional activity trustless and secure.

A key difference between Dash and Bitcoin is that Bitcoin utilises nodes (computers, devices that help run the network) that are equal, whereas Dash uses ‘Masternodes.’ These are considered special privilege nodes and users must front 1000 Dash as collateral before they can form one.

The ‘PrivateSend’ feature is fairly safe through its selected quorum of random Masternodes on the network. Because of this, an attacker would need a hyper majority share of Masternodes to attack the quroum of Masternodes. Attacking the network would be a huge expense and often deters cybercriminals from malicious activity.

Dash cryptocurrency also works by utilising an InstantSend service that enables transactions to be completed within 1.5 seconds. However, Masternodes charge higher fees for processing InstantSend transactions. The choice to implement this feature is to help remedy an issue known as double-spending. This is a flaw in electronic cash systems where the same digital token can be spent more than once.

Three-way split block reward

In Bitcoin, the block reward is allocated to the individual, or group of individuals, who successfully completes the mining. The reason it does not always go to one person is because miners ‘pool’ their resources together and split the rewards.

In Dash, this block reward works differently. To incentivise people to run the nodes, the block reward is split between the miners, Masternodes, and developers. The miners and Masternodes are awarded 45%, whereas the developers are given 10%.

Dash does this so that node costs are not a problem. They become subsidised by the block reward so that running a full node is profitable too. To further solve the issue of node costs, users who do not have 1000 Dash can allocate their Dash towards a Masternode and receive shares in return

Hopefully this guide has helped you understand what Dash is and how it differs from other cryptocurrencies, such as Bitcoin. For more information and guides from Coin Rivet, click here.

 

 

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.