Dash Cryptocurrency — Explained
When we hear about cryptocurrency most of us think about Bitcoin and reasons are crystal clear. It is the first-ever cryptocurrency with an extremely volatile price. Despite Bitcoin dominating the crypto sphere, there have been few flaws in bitcoin’s protocol, which gave birth to new cryptocurrencies like Ethereum, Dash, Litecoin, etc. Today we are going to discuss Dash Coin.
Introducing Dash Coin
In early 2010, Evan Duffield (developer of Dash) came across Bitcoin, he was amazed by its lucrative technology and architecture but soon he found few flaws in bitcoin’s protocol. Bitcoin records transactions on the publicly distributed ledger which he found lack of privacy, also if we pay the lowest possible fee for bitcoin transaction we have to wait at least 20 minutes. Evan had solutions to fix these flaws, but it would result in modifying the bitcoin’s core code which bitcoin’s core member would never allow him to do so, he decided to develop his own cryptocurrency using bitcoin’s core code. Dash was launched on January 18, 2014 with new features i.e. Privacy and nearly-zero transaction fees. Earlier dash was known as XCoin (XCO) which later renamed as “Darkcoin”. On March 25, 2015 it was rebranded as Dash i.e. Digital Cash.
Features of Dash Coin
Let’s check some features of Dash coin that make it stand out different from other cryptocurrencies:
- PrivateSend: PrivateSend uses “CoinJoin” to make transaction fungible. CoinJoin is a technique which combines multiple inputs and outputs from different transactions into a single transaction. In this way, nobody can determine which coin went where? As the above image demonstrates, Bob and Alice want to send funds to Ted and Carol respectively. In order to ensure privacy, they use the CoinJoin technique to combine their transactions. This feature is optional in Dash which user may use.
- InstantSend: Along with privacy, with Dash coin, you can even experience the fastest speed of the transaction. With instant send, you can send Dash to anyone, anywhere in less than 2 seconds but this service charges higher fees. During instant send MasterNode temporarily locks the input of transaction to prevent double spending. Since the inputs are already locked, if someone tries to use the same input again MasterNode will reject the new transaction.
- MasterNode: Comparing bitcoin, where all nodes are treated equally, Dash has privileged nodes called MasterNode. To host MasterNode it requires you to stake 1000 Dash as collateral. Hosting a MasterNode can be beneficial as they are privileged to perform PrivateSend and InstantSend. You can also earn 45% block reward. If you want to know more about MasterNode, you may also want to check out our previous blog.
Better Incentive Model
In order to keep blockchain decentralized and transparent, it needs miners who act as workers to validate transactions. Mining is a time consuming and costlier process which needs special hardware and software to do the math. Miners get the reward for solving a block of transactions in the blockchain.
From the above image, we can understand that in bitcoin’s blockchain only miners get paid for keeping the system up and running but those who host the full node (same as MasterNode) and those who are improvising bitcoin’s protocol i.e. developers won’t get any benefits, in contrast to bitcoin’s block reward model Dash consider everyone and split the block reward in 45–45–10 ratio. This incentive model helps developers to improve Dash as they get paid for it, also those who host MasterNode get 45% of the block reward.
How Dash handle price volatility?
As we know in order to host MasterNode you must stake your 1000 Dash and you must continually be holding at least 1000 Dash. This collateral value helps the Dash network to reduce its price volatility, it also helps to fight with Sybil Attack. Wait! What exactly is the Sybil Attack? According to Wikipedia:
In a Sybil attack, the attacker subverts the reputation system of a peer-to-peer network by creating a large number of pseudonymous identities and uses them to gain a disproportionately large influence.
In simple words, if you try to subvert the network by showing multiple MasterNode it would take you to hold N x 1000 Dash where N is the number of MasterNodes.
Finally, stats about Dash
There will be only 22 Million Dash can be generated, currently, ~9 Million Dash coins are in circulation. Each coin cost ~$108 and total market cap is ~$963 Million. It takes ~2.5 minutes to mine a block which 4 times faster than bitcoin. Dash has a variable block reward which decreases 7.1% every year.
In the end, every cryptocurrency carries its own uniqueness, keep supporting cryptocurrency and stay tuned on CoinsCapture for latest price updates, news and crazy facts about cryptocurrencies.
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