What is Dash?
For the past several years Dash has consistently occupied a top 20 spot in the cryptocurrency market cap charts. One of the reasons that Dash is so popular is because of it’s unique two-tier network architecture, consisting of a public network layer — similar to Bitcoin — and an exclusive layer of Masternodes — unique to Dash. This architecture facilitates anonymous transactions through a feature called PrivateSend, and instantaneous transactions through a feature called InstantSend.
PrivateSend and InstantSend are two flagship features of the Dash network. They are both are built on the pillars of privacy, governance, and speed — elements of blockchain networks that Dash founder Evan Duffield had in mind when he forked Dash from Bitcoin.
The road to Dash coin
When Dash initially launched in January 2014, it went by the name Xcoin. Soon after, the name of the project was changed to DarkCoin — but received flack due to the fact that it was promoted as having top-class security, but had a name that alluded to the Darknet markets.
The following year, in March 2015, DarkCoin was rebranded into Dash — a mashup of the words “digital” and “cash.”
How does Dash work?
Dash was created as a hard fork of Bitcoin in order to enhance privacy — an element that the Dash dev team found lacking in Bitcoin’s system — and for the most part, has similar functionalities and use cases as Bitcoin’s peer-to-peer electronic cash.
Dash is a proof-of-work blockchain with block generation times averaging about 2.5 minutes. On the Dash network, individuals can mine Dash coin via the X11 mining algorithm.
What makes Dash unique is the second-tier in its system composed of Masternodes. A Masternode is an individual who holds enough Dash (1000 Dash) to have a “stake” in the ecosystem. Masternodes also enable Dash-specific functions like InstantSend and PrivateSend.
Think of these Masternodes as something like voting shareholders. They vote on things such as what should happen with new projects, who should get funding from the treasury, and which direction development should go.
And thanks to Masternodes, Dash doesn’t need to reach unanimous community consensus to make significant changes to its codebase, so it’s not at risk of hard forking due to changes in the core code. Instead of the forking model, Masternodes vote on community proposals, and if the number of nodes who vote ‘yes’ outweighs the number of nodes who vote ‘no’ by at least 10 percent, then the proposal is approved.
For supporting the network, Masternodes receive 45 percent of the block reward — miners receive the other 45 percent of the block reward, and 10 percent of the block reward is withheld and goes to a fund that distributes wealth for approved community-proposals and initiatives.
What did Dash improve
Governance, privacy, and speed are cornerstones of the Dash network. Each of these elements is crucial to any decentralized community.
Unlike most blockchain networks, Dash has a governing body — the Masternodes — responsible for voting on network proposals, as well as facilitating the operations. For facilitating transactions, Dash Masternodes are rewarded with 45 percent of the block reward. To become a Masternode, an individual must own at least 1,000 Dash.
To achieve the level of privacy that decentralized network advocates are comfortable with, Dash mixes the coins within their network together to conceal transaction details. The coins are then redistributed back to wallet addresses.
In the Dash network, this feature is called PrivateSend. When a user PrivateSends a transaction, all of the input history is cleared, making it impossible to distinguish one Dash coin from another. This lack of history makes Dash relatively fungible.
Fungibility is a significant characteristic of money and makes Dash a good peer-t0-peer payment option.
When a Dash transaction is sent using InstantSend, the network of Masternodes is able to lock the transaction funds, and only unlocks them for a specifically designated purpose. In other words, the Masternodes act as escrow agents, which effectively allows a transaction to be instantly sent and finalized over the Dash network since the nodes lock those funds and only allow them to be used in a particular, pre-specified way.
In terms of speed, Dash’s InstantSend feature is a major improvement over Bitcoin’s lengthy 6-confirmation-before finality-rule — the difference is a transaction that is finalized in about 1.3 seconds (Dash) opposed to a transaction that is finalized in about an hour (Bitcoin).
Dash price history
On February 14, 2014 — back when Dash coin was still Darkcoin — the Dash price was around $.20. And as the cryptocurrency markets rose and fell — so did the Dash price; Dash reached an all-time high of $1493.59 on December 20, 2017, before the cryptocurrency market entered a bear market.