hyphen (CRYPTO: DASH) is a digital currency that enables quick and cheap payments anywhere in the world. It aims to provide a user-friendly experience and privacy comparable to cash.
Software developer Evan Duffield started Dash on January 18, 2014 under its original name XCoin, which was later changed to Darkcoin. On March 25, 2015, another name was changed to Dash, which comes from the goal of being “digital cash”.
Many cryptocurrencies are rarely, if ever, used for transactions, but Dash has built a scalable digital payments system. This guide will tell you what makes it unique, how it works, and whether you should buy Dash.
Image source: Getty Images.
What makes Dash unique
The most unique aspect of Dash is its masternodes system. A masternode is a special server with a full copy of the Dash blockchain. Users with at least 1,000 Dash can operate masternodes that support several of Dash’s features.
These features include InstantSend, which enables fully confirmed transactions within two seconds, and CoinJoin, a method of executing a sequence of transactions and tracking them. In exchange for running masternodes, users receive a portion of the block rewards from dash mining.
While most traders don’t accept any types of cryptocurrency, Dash has had some success in this area. DashDirect, a savings app for retailers, was launched on July 27, 2021. The app enables you to shop at more than 155,000 stores and 125 websites using Dash. It also includes discounts, the amount of the discount depending on the merchant.
One final thing worth mentioning is Dash’s ease of use. The website clearly explains how Dash works and where you can buy it. This may seem minor, but it sets it apart from all cryptocurrencies with overly complicated websites.
This is how Dash works
Dash is based on Bitcoin (CRYPTO: BTC), however, uses a two-tier network structure for improved efficiency. The first stage is a proof-of-work system in which mining equipment solves complex math problems. If a miner finds the right solution, they can add a new block of transactions to Dash’s blockchain.
The second stage is the Dash masternodes. Anyone who can prove possession of 1,000 Dash can operate a masternode. These masternodes are responsible for Dash’s InstantSend and CoinJoin functions and are also allowed to vote on governance and funding proposals.
Rewards are generated every time a transaction block is added to the Dash blockchain. The rewards are divided into three types:
- 45% to miners
- 45% on masternodes
- 10% of Dash’s governance budget
There are currently more than 10 million Dash in circulation and the maximum number is 18.9 million. Dash can be used to make purchases from retailers through the DashDirect app. It can be traded on cryptocurrency exchanges that list it, including:
What are the Risks of Dash?
Here are the top risks of investing in Dash:
- It is extremely volatile and its price can change 10% or more in a single day. This is a problem with any cryptocurrency investment as they are high risk and high return.
- Dash faces a common problem with cryptocurrencies – be it a currency or an investment. Its goal is to be a global payments system, but that requires a more stable price. Otherwise, consumers will prefer to hold onto Dash in hopes of increasing value.
- Dash has been labeled a scam due to launch issues. Most importantly, the difficulty of mining did not adjust quickly enough, which resulted in nearly 2 million DASH being issued in the first 24 hours. While creator Evan Duffield says this was a bug, some in the crypto community claim that it was designed so that a small group of people could mine a large amount of Dash.
When you do decide to buy Dash, you are only entering what you can afford to lose. And if you prefer lower risk crypto exposure, consider cryptocurrency stocks.
Dash vs. Bitcoin: What’s the Difference?
Here is a breakdown of the main differences between Dash and Bitcoin:
|
Cryptocurrency |
hyphen |
Bitcoin |
|---|---|---|
|
Release date of the coin |
January 18, 2014 |
January 9, 2009 |
|
Maximum coin supply |
18.9 million |
21 million |
|
Average transaction time |
1.85 seconds |
10 mins |
|
Mining algorithm |
X11 |
SHA-256 |
Data source: Dash.org.
One big difference is that Dash is much more efficient. With its InstantSend function, Dash offers transactions that are processed in seconds. Since the release of Dash 0.14, all transactions are effectively InstantSend transactions. Bitcoin transactions, on the other hand, take significantly longer.
Transaction fees are also much lower with Dash. While fee amounts can vary, they typically cost $ 0.01-0.02. Bitcoin transaction fees can range from $ 1 to more than $ 30.
They also have different mining algorithms that are the rules for doing arithmetic when mining a cryptocurrency. Dash uses X11, a newer mining algorithm that uses less processing power. This allows it to use less energy and keep the mining hardware cooler.
It’s hard to say if Dash will be successful as a long-term investment since its utility is based on being a payment system. But Dash has potential as a way to send money and make purchases.
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