What is DASH Coin and How does it Work | A Complete summary Guide
What is DASH?
Dash, a decentralized protocol, built on the bitcoin core code, has unique features that enable it to process anonymous transactions. Apart from privacy, its transactions are faster, with negligible fees. This is possible because of its key features which include masternodes, InstantSend and PrivateSend.
Interestingly, Dash is an open protocol, meaning that no single entity or individual controls it. Besides, it has its own blockchain, infrastructure and wallet.
Dash is a bitcoin fork with an amusing history. In fact, Evan Duffield, a software developer and an enthusiast of the bitcoin, developed the Dash coin. This is after he studied the bitcoin for a long time and observed its weaknesses which include lack of privacy, high transaction costs and scalability problem.
As a result, the Dash team launched the Coin on 18 January 2014. Originally, they used the name XCoin (XCO). However, in February 2014 they changed the name to Darkcoin before they rebranded it to Dash (Digital Cash) on 25 March 2015.
The Dash coin
Dash is a popular digital currency which is easy to use. Accordingly, the developer hoped that the Dash coin would achieve the original vision of Satoshi Nakamoto, of being an alternative to fiat currency.
The major reason for this is its fungibility. This means that two dash coins can replace each other, the way a $1 note can replace another $1 note with no hassles. Thus, Dash is a safe and convenient payment method. Above this, it is portable and divisible, with low transaction cost. With these qualities, Dash is a basic alternative to fiat money as people can easily use it when carrying out their everyday transactions. It is usable both online and in shops.
Since its inception in 2014, Dash experiences price volatility like many cryptocurrencies. When the crypto market is bullish, the coin responds in a related manner. If the market turns bearish, its prices go into a downtrend. Surprisingly, from its launch in 2014 until the end of 2016, its price was less than $10.
After 2016, it entered a bullish trajectory. According to Primexbt, it peaked at $1 540 on 20 December 2017. In contrast, during the bearish market of 2018, its price fell to $40 before it picked up at the end of 2019. In 2020, at some point, its price rose to $120. At the time of writing this article, the price of Dash is US$103.70, as per CoinDesk rate.
Dash has unique features which differentiate it from bitcoin in particular and other cryptocurrencies in general. The main features are InstantSend, PrivateSend and Masternodes.
Masternodes: The Dash network mining system operates at two levels, masternodes and miners. The masternodes act as special servers that perform the most important functions on the Dash network. In particular, the masternodes handle PrivateSend, InstantSend and governance and treasury functionalities.
InstantSend: Using the masternodes technology, Dash offers instant and secure transactions. The protocol completes a transaction within two seconds. This is because masternodes validate transactions immediately. It is not possible for a user to make two different payments using the same funds because there is immediate transaction finality.
PrivateSend: Users carry out anonymous transactions on the Dash network. Notably, Dash improved the Coinjoin feature responsible for enabling breaking up of denominations. In the end, the masternodes mix up these denomination components, obscuring the origin of the funds. Therefore, all transactions are 100% private.
Chainlocks: This feature enables the Dash Network to have certainty and finality of transactions. Because payments are immediate, transaction risks are very low.
Self-governing and funding: This is another unique feature of Dash. In the Bitcoin network, miners get 100% of the reward. However, this is different with Dash network, where 10% of the rewards goes back to Dash. Thus, the platform uses these funds to institute further development and growth of the Dash coin.
Furthermore, the Dash network uses a democratic means of allocating its funds. Community members vote on all developmental projects and allocation of funds. This is in line with the decentralization trend that exists in the crypto world.
By design, the total Dash coin supply is 18 million.
According to Primexbt, its current market cap is $655 million.
Advantages of Dash
The discussion has already touched on some advantages of the Dash coin. These include:
- The user is in total control of his/her Dash coin and can transact with anyone around the world at any time.
- All transactions are anonymous and instant, with no possibility of double spend.
- Also, the transactions are irreversible, avoiding any potential fraudulent activities.
- Above all, the Dash network offers security and speed transactions.
The major disadvantages of Dash Coin include:
- The Dash coin is not yet universally acceptable. Some people and entities do not accept it as medium of exchange.
- The coin is vulnerable to currency volatility, like most cryptocurrencies.
- The focus is limited in nature, that of being a medium of exchange.
Because of the popularity of the Dash coin, Dash has got a large community. In order to cater for their informational needs, it has several social platforms, including:https://reddit.com/r/dashpay/