What is Dash?
Formerly known as DarkCoin and XCoin, Dash is an open source peer-to-peer crypto-currency. It operates a self-governing and self-funding model that enables the Dash network pay businesses and individuals to perform tasks that add value to the network. Dash offers instant transactions known as “InstantSend” and private transactions known as “PrivateSend”. Dash is a decentralized autonomous organization because of its self-governing and budgeting system.
Originally released on January 18, 2014, as XCoin then ten days later the name was changed to DarkCoin. 1.9 million coins were mined on its first two days of launch which is approximately 10 percent of all the coins that will ever be issued on the Dash network. This is because according to Evan Duffield, the creator and developer of Dash, a bug which was created when the Litecoin code was forked to create Dash. This bug which was created when the Litecoin code was forked, incorrectly converted the difficulty of Litecoin and tried using a corrupt value to calculate the subsidy. Evans offered to relaunch the coin once the problem was solved but community unanimously disapproved. He even suggested an “Airdrop” of the coin in order to increase its initial distribution but the community once again disapproved. So the initial distribution of 1.9 million coins was left alone while development of the project continued.
On 25 March, 2015 the portmanteau “Digital Cash” was used to rebrand DarkCoin into “Dash”. The Core Team of the Dash network has since grown to 30 full-time employees, 20 part-time employees and a dozen of other volunteer workers who are not being paid. This team is responsible for the development of the currency. Dash has become the most active altcoin community on the BitcoinTalk website with a reach of more than 7.9 million reads, 133,000 replies and 6,400 pages.
Features of Dash
Dash makes use of a two-tier network, unlike Bitcoin’s single tier network where all tasks on the network are performed by miners. Dash’s two-tier network include certain network functions like creating new blocks which are done by miners and the second tier of the Dash network which are called ” Masternodes” which are responsible for InstantSend, PrivateSend and governance functions.
These masternodes require 1000 Dash as collateral to avoid Sybil attack. This collateral once spent removes the masternode associated with the network and once this happens then the network is prone to Sybil attack. This is because masternodes provide vital network functions so the block rewards are split between masternodes and miners with each group earning 45% each, while the remaining 10% of each block reward is used to fund the budget system. This is one of the features which makes the Dash network a self-governing the system. It automatically allocates a percentage of the block reward for the budget or treasury system.
InstantSend is a solution to the double-spending problem of other crypto-currencies like Bitcoin, without the longer confirmation time. InstantSend allows for a near instant transaction where inputs are locked to certain transactions and verified by a consensus of the masternode network. When unanimous agreement cannot be reached by the network, then validity of the transactions happens through standard block confirmation. InstantSend was formerly called InstantX.
PrivateSend allows transactions to be submitted by masternodes using special network codes called DSTX. It gives additional privacy by combining multiple inputs from multiple users into a single transaction with multiple outputs. Transactions usually cannot be traced directly, the flow of funds are obfuscated due to identical inputs. It is a coin-mixing service that is based on “CoinJoin”. PrivateSend was formerly called DarkSend and was rebranded to PrivateSend in June 2016.
Funding and Governance
Being the first decentralized autonomous organization that is at the same time Sybil proof, Dash is a decentralized self-governance and funding system. DGBB which is an acronym for Decentralized Governance by Blockchain which is often referred to as “Treasury System” is a system where there is a consensus on proposed network changes and funding development of the ecosystem of the Dash network. Where 10 percent of the total block reward is allocated to “treasury” which is then used for funding of developmental projects that benefit the Dash network. Funds from this treasury have been used to fund conference attendance, hire additional developers and employees coupled with funding of integration with API providers and major exchanges. This self-governing funding system has seen revenue growth since September 2015, the treasury system has seen $14,000 in funding per month. As of March 2017, the treasury system has seen funding of about $574,000 per month due to the increase in the value of Dash. Due to the positive feedback loop created by the treasury system and additional development has increased Dash’s value and at the same time increase the amount of funding provided by the system.
Difference between Dash and other Cryptocurrencies
Instant transaction which is called InstantSend is a distinguishing factor that differentiates Dash from other cryptocurrencies as it offers almost instant transactions.
Dash uses a two-tier network where the first tier is used for creating new blocks by miners and the second tier which uses masternodes to perform tasks like InstantSend, governance and PrivateSend functions, unlike other cryptocurrencies that use single tier networks.
Dash uses a decentralized autonomous organization which makes it operate a self-governing and funding model.
DASH Pros and Cons
- InstantSend and PrivateSend
- Transactions are verified almost instantly and are private as they cannot be traced directly to the user who made the transaction.
- Dash coins are designed to be used to trade goods and services, unlike many other currencies.
- The general public is Dash’s targeted audience. As it is user-friendly compared to others.
- 9 million coins in first three days is 10% of the entire coin supply mined.
- High InstantSend fees
- Masternodes causes slight centralization in the system.