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Dash (DigitalCash) cryptocurrency review

 July 18, 2022

By  Elle Gellrich

All coins during the periods of active growth attracted a lot of attention, and Dash was no exception. Let’s take a closer look at this cryptocurrency: what are its unique features, how profitable mining is and what are the prospects in the future.

Dash cryptocurrency is positioned as the most anonymous, and its team pays particular attention to the safety of operations, for which the network technology called DarkSend is responsible, the priority is also given to their speed. As a result, Dash is a more secure and anonymous cryptocurrency than Bitcoin, and the transfers are much faster, and if this speed is not enough, there is a system of instant transfers.

In addition, there are significant differences in the system of organization of Dash: in fact, it is a decentralized autonomous organization, where decisions are made by the owners of the so-called master nodes – the narrowing of the circle of users, who can influence, leads to greater organization and clarity in the development of the entire system; in addition, there is a specified set of mechanisms for ordinary users to apply for improvements and their funding in case of approval.

This group of differences creates a big head start for the future of Dash – already now this cryptocurrency provides an advanced service and is a really reliable and convenient payment tool, and it has good prospects for further development.

Who’s behind Dash

Evan Duffield – the main idea man of Dash, who developed the concept of this cryptocurrency, suggested the idea of it back in 2010. In his opinion, Bitcoin was not anonymous enough, and he suggested changing Bitcoin’s blockchain to increase the level of anonymity. However, Duffield was misunderstood by the team developing Bitcoin, and by 2013 he prepared the concept of the cryptocurrency XCoin, and it was launched in early 2014. Under that name, the coin only lasted a month, after which it was changed to Darkcoin, finally, in March 2015, it received its current name – Dash. It was decided to change the name Darkcoin because it was associated with something illegal, and the developers wanted to get away from that.

Initially, even under its old name, the coin was not too well-known – many users suspected that the developers have pre-mining, as it usually reduces the popularity of the coin. The fact is that in the first few days 10% of all coins in the system were generated – the developers assured that this was the result of a bug in the code. Despite the problems and renaming, by 2017 Dash was among the leading cryptocurrencies, balancing on the edge of the top ten. Evan Duffield himself has already retreated into the shadows, now listed only as a consultant, with Ryan Taylor as CEO. There is a serious team working on Dash, which has made a lot of progress and has solid plans for the future.

Making changes to the network

Dash upgrading system is interesting in terms of that any participant can propose a change, after which there is a vote among the operators of the master nodes (meaning will be described in detail later) – they decide whether the idea will be implemented in the blockchain and whether the developer will get the money to its application. 10 % of miners’ monthly income – the so-called “superblock” – is allocated for the network development. The system is really well-thought-out and fine-tuned.

Where to store

Cryptocurrency is stored in a specified wallet. Let’s make a brief review of the means of storage in relation to Dash. Although you can save coins on your exchange account, still, with a large amount it is more convenient to have a wallet. Some wallets, where you can store Dash: Dash Web Wallet, Jaxx, Exodus, Coinomi, Cryptonator. Of the local wallets, Electrum and Dash Core – the official client from the developers.

The most reliable way to store funds – a hardware wallet, such as KeepKey or Trezor, although its purchase will cost 80-160 dollars.

How to purchase

Everything here is the same as with other cryptocurrencies starting with Bitcoin. You can get Dash coins by:

  • mining them;
  • using exchanger;
  • purchasing directly from the seller of the cryptocurrency by contacting him through the thematic forum;
  • buying on the exchange;
  • receiving them as payment for goods or services.

Transactions

The main idea of the Dash creation was complete anonymity, and transactions are based on that.

Each user of the Dash network is protected from disclosure of personal data because details of both senders and recipients of transactions remain unknown, and the coins have such a characteristic as fungibility.

At first glance, the term “fungibility” is confusing – don’t other cryptocurrencies or even fiat money have it, can’t a coin of the same denomination successfully replace another? Not always: every banknote or unit of cryptocurrency has its own history – it used to be owned by certain people, and depending on who those people were, its value can change. The famous term “money laundering” appeared not for nothing – it is much harder to use “dirty” ones. Dash, thanks to its shuffling technology (discussed in detail in the Private Send section), provides full fungibility of coins, simply erasing their history.

The second major advantage of the Dash network is the speed with which transactions are confirmed. Payments are usually made and confirmed within minutes, which makes this cryptocurrency incomparably more convenient than Bitcoin as a payment instrument.

Features of Dash

The creators tried to make Dash greatly different from the existing cryptocurrencies, first of all from Bitcoin, and despite the fact that around the same time or after the development of Dash there appeared several other currencies, which also made a bet on increased anonymity, still Dash stands out among them. Three main terms defining the differences of this coin from the others:

  • Master nodes and the two-tier architecture built around them (Bitcoin has a one-tier architecture);
  • PrivateSend – a technology that provides truly anonymous payments;
  • InstantX – an almost instantaneous sending technology where you don’t have to wait not just hours, but even minutes for a transfer.

We will explain what all this means in more detail further on, but now let us highlight the main features of Dash:

1. Limited issue – here is the same path between Dash and Bitcoin, but all coins will be mined much later – their number is limited to 18.9 million, with the last one to be mined in 2050.

2.Two-tier architecture – thanks to it, complete anonymity of transfers is provided, the division into two tiers also allows to streamline the whole system.

3.The reward for mining is not given entirely to a miner, but is divided in the following way: 45% to a miner, 45% to a master node, 10% – for the development of the system.

4. A new block is created every 157 seconds.

Principles of operation and basic terms of the network

Dash blockchain has a two-tier structure: the first tier – miners, the second – the master nodes, which confirmation is necessary for the transaction. And here it is important to disclose the shuffle mechanism, which ensures the anonymity of transfers as well as master node and InstantX.

PrivateSend

A technology that allows for complete anonymity, there is an optional mechanism in Dash. If it is used, the previous history of the coins is erased before the payment is sent and they become completely “clean”. To do this, they are shuffled – consider how exactly this is done.

Transactions are first divided into categories based on the amount to be transferred – so there is a series of categories with approximately equal amounts.

Then the master nodes shuffle all these items – and at this point, the shuffling of senders and receivers is happening. Shuffling is performed several times – and each time, the probability increases that no one will be able to extract useful information later. There can be 2, 4, or 8 rounds – at the user’s choice, and the mixing lasts quite a long time – at least 2-3 hours, and sometimes it can take several days. The good news is that since the mixing is done beforehand, it will not affect the speed of the subsequent transfer in any way.

There is one more important point – trace the sender’s wallet to the address of the transfer. To avoid this, you can activate the option of private sending, in which the payment will be rounded to 0.1 Dash, and then it will be sent to the recipient in the standard denominations of 10, 1 and 0.1 coins – as a result it will be impossible to distinguish this payment from others by transfer address or denomination. No additional fees are added when using PrivateSend, only the standard transaction fee is taken, however, due to rounding, the loss can be quite significant. It will depend on how much rounding is required. For example, you need to send 0.4 Dash. To this is added the usual commission, about 0.00002, the result is 0.40002, which is rounded to 0.5. The result is an overpayment of almost 25% of the amount to be sent. In that case, using PrivateSend is unlikely to be wise. But if you want to send 0.399 Dash, then the amount to send is 0.39902, which is rounded up to 0.4 – the overpayment is minimal.

Master nodes

A master node is a computer, on which shuffling is made, a second-tier network member with privileged status. Anyone can become it – all that has to be done is apply and deposit 1000 coins as a pledge. It is this limitation that cuts off most who wish for it – because at the current rate it is about $ 49000, not a small fee for a membership card! This amount guarantees that each master node owner will be interested in development of the network, because, in addition to technical functions, they determine the vector of further policies of the system. In addition, this fee should be a guarantee that no one can get control over 51% of the master nodes, although so far this guarantee is more theoretical. There are about 4,200 master nodes in the system right now, which means that in order to get this kind of control you have to add another 4,200 master nodes, which means you have to shell out a lot of money. Some can afford it, of course, but the entire capitalization of the Dash as of mid-July 2022 is $0.53 billion – so the profitability of such a purchase, which will undoubtedly kill the Dash blockchain, is highly questionable.

And even at such a high price, the number of master nodes is growing, while the first participants did not buy themselves a place, but mined it, now it is quite difficult to do this, and often new master nodes appear as a result of the purchase.

Being a master node owner is profitable: it is not only a voice in Dash network, indeed being a force, in addition 45% of profit from mining is distributed among those 4,200 who own the master nodes.

InstantX

Finally, the shuffling is done and the payment is sent. What happens next with the funds is as follows. The processing of the transaction will depend on whether it is a standard transaction or an InstantX transaction. A standard transaction is accepted with zero block confirmation, after a few minutes the block is decrypted and it is committed to the blockchain. After that, it takes six confirmations for it to be accepted – they happen within about a quarter of an hour. On the other hand, if InstantX is used, master nodes are used for instant confirmation. They report the transaction to the rest of the network and confirm it in a short period of time – no more than 4 seconds, resulting in the highest level of operational responsiveness. However, there is a 0.1 Dash fee for this.

Elle Gellrich


BayCitizen.org

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