What is Dash?

. The unit of account is the DASH coin of the same name. The goal of Dash is to become as fast, anonymous, and easy-to-use a currency as the cash we know.

Dash has two unique features that set it apart from other blockchains:

1. InstantSend, which allows transactions to be completed in seconds.
2. PrivateSend, which gives the user the ability to send confidential payments.

Dash blocks are added to the chain every 2,5 minutes on average. This high block generation rate, combined with a maximum size of 2 MB, allows Dash to process (theoretically) up to 59 transactions per second.

Like many other cryptocurrencies, Dash has a well-defined monetary policy: the issue of new coins is reduced by 7,14% annually to tend to a maximum total of 18,9 million Dash in circulation. As of March 2021, this issue is 2,89 DASH per block, which corresponds to a creation rate of 6,4% per year.

Taking into account transaction costs, the issuance of new Dash coins allows you to reward validators responsible for the proper functioning of the system (miners and masternodes), as well as to finance external projects such as software development, research, or project marketing. The selection of these projects is voted on by the decentralized autonomous organization, DAO.

How did the Dash project come about?

Dash was created by Evan Duffield, an American IT developer and financial investment consultant. In 2012, he initially wanted to add methods of anonymity to the Bitcoin protocol, but the developers of Bitcoin Core were not going to do that, and he began working on his own cryptocurrency project.

The first version was released on January 18, 2014, and announced on the BitcoinTalk forum. At that time, the cryptocurrency was called XCoin (XCO). The name was not very commercial, so it was changed to Darkcoin on February 28, 2014. That name didn't last long either, because it could lead to erroneous and negative interpretations. Eventually, on March 25, 2014, it was named Dash, an interesting and flexible blending of “Digital Cash.”

Immediately after launching the network, the creator and main developer of the cryptocurrency, Evan Duffield, discovered a serious error in the code. This error made it possible to mine 1.9 million coins in the first 24 hours because of an incorrect complexity conversion, and further erroneous calculation of the issue size. Duffield called this phenomenon “Instamine.”

The code error was quickly fixed, and Duffield offered the community several scenarios to make the situation fairer. The first was a complete restart of the blockchain with the corrected program code, but the community rejected it. The second option was to conduct an airdrop (free distribution of coins). This was an attempt to expand the initial distribution, which was again opposed by the community. Given the two rejections, he decided to leave things as they were and just continued development.

How does the Dash work?

The Dash consensus protocol is a hybrid model that relies on both proof-of-work - PoW (electrical energy spent by miners) and proof-of-ownership - PoS (for masternodes). In addition, Dash has a budget system allocated to finance projects that may be useful. Projects are selected by a vote of the masternodes. Thus, the newly mined coins are distributed among three types of recipients:

• 45% goes to the miners;
• 45% goes to the masternodes;
• 10% is reserved for the budget system.

Mining

The first pillar of the Dash infrastructure is the pack of miners. As in Bitcoin, blocks are tied to each other by proof-of-work: miners spend electricity on it. The hashing algorithm used for this is called X11.

X11 is a hashing algorithm developed by Evan Duffield, specifically for mining Dash coins. It uses eleven consecutive rounds of hashing consisting of various SHA-3 hashes (the secure hashing algorithm standard released by NIST in 2015). These are blake, BMW, cubehash, eco, groestl, jh, keccak, luffa, shavite, simd, and skein.

The increased level of complexity of X11 makes it one of the most secure hashing algorithms used and gives the network an additional level of security compared to other PoW algorithms based on a single hash. In the event of a breakthrough in computing technology for hacking hashes, a digital currency implementing X11 PoW will not be in danger unless all 11 hashes are hacked at the same time.

In addition, Dash implemented a chain of algorithms to postpone the use of specialized ASIC mining equipment, thereby limiting the threat of mining centralization. Currently, CPU/GPU mining is no longer cost-effective for Dash mining, and the official website lists five ASIC miners available on the market with various hashing capabilities, power, weight, and size.

Miners are rewarded 45% of the coins created and 50% of the transaction fees for effective transaction validation.

Like many other proof-of-work cryptocurrencies, Dash is mined using specialized integrated circuits (ASICs). Thus, the processing power of the network today reaches more than 5,5 PH/ s.

Masternodes

The second pillar of Dash is formed by masternodes. However, they must own 1 000 DASH and block them, on a special wallet. This makes the Dash consensus protocol a hybrid model that also includes proof-of-ownership.

More than 4 600 Dash masternodes have already been launched worldwide. For their services, they receive a reward in the amount of 45% of the block reward. And they solve several special problems:

Blocking InstantSend transactions.

• InstantSend is a unique feature offered by Dash, made possible by a two-tier network setup. In fact, with most digital currencies, if a transaction is broadcast to the network, the sender and recipient must wait for a certain number of confirmations to avoid double costs and ensure the irreversibility of the transaction.

However, the process of waiting for the accumulation of blocks to ensure that the sent transaction is valid takes a long time, from a few minutes to more than an hour. This makes most cryptocurrencies unsuitable for the payments industry and prevents sellers from using digital currencies as a means of paying for products and services, since waiting a few minutes for the buyer to confirm the purchase is hardly in the interest of the business.

Thanks to the network of masternodes, a smaller quorum of special nodes can provide irreversible confirmation of a given transaction in about 1,3 seconds. The InstantSend transaction is handled by having masternodes block inputs for it before broadcasting information to the network, including its subsequent mined blocks, and preventing blocked inputs from being consumed during the confirmation period.

• PrivateSend is an on-demand feature of the Dash network that, for a small fee, hides the source of funds and makes the transaction untraceable. PrivateSend is made possible by the interchangeability of all Dash coins on the network and works by mixing user funds with others, thereby breaking their traceable history in the blockchain.

The PrivateSend process is performed by splitting the incoming transaction into the standard denominations of 0,01, 0,1, 1, and 10 DASH. The masternodes are then informed that a user is interested in mixing a particular denomination and begin looking for two other users willing to swap the same denominations.

Next, the mixing session begins. The inputs are mixed, and the users are asked to return the transformed inputs to themselves. This process is repeated a certain number of times, called “rounds” with each denomination, making it difficult to determine the origin of the funds.

• Maintaining a management system.

The ChainLocks app helps prevent chain reorganization by checking recently mined blocks. This technology, added in 2019, aims to prevent 51% of attacks that can be organized by miners.

• Dash Platform hosting.

This platform, built on the Dash network, allows decentralized applications to run and store data. The latter, in particular, will allow you to manage your wallet on the DashPay social network.

In addition, each masternode has a say in the DAO. Indeed, since they have a significant amount of coins, they are encouraged (at least theoretically) to raise their price and therefore fund projects that benefit the Dash.

Management system

As we said before, the Dash system includes a decentralized autonomous organization (DAO), which is led by masternodes, and which decides on the allocation of a monthly budget of 10% of the coins created, and aimed at the evolution of the system.

Thus, the project allows you to finance:

• Software infrastructure development: The Dash Core Group, the team responsible for modifying the protocol, receives a monthly payment from the DAO.
• Development of lightweight wallets, such as Dash Electrum.
• Education: for example, there are many tutorial videos available on the Youtube channel (some of them are in French).
• Adoption, especially in Latin America with Venezuela, Colombia, and Brazil.
• Communication, marketing. In the past, the organization allowed itself to sponsor a team of racing planes (Dash Force One), MMA fighters, conferences, podcasts, etc.

Dash Usage Examples

After rebranding from Darkcoin to Dash in 2015, the Dash core team and its community shifted the main focus of the project from privacy to a publicly available digital currency. As an electronic payment network, Dash was designed to be used by the general public and focused on fast and cheap transaction settlements.

In Latin America, especially Venezuela, Dash has outperformed most cryptocurrencies over the past couple of years. The devaluation of the national currency of the Bolivar by more than 95% plunged millions of citizens into poverty and despair and caused an unprecedented wave of refugees to neighboring countries. This created fertile ground for alternatives to the national currency to flourish, and local residents turned to cryptocurrencies, especially Dash, as a more stable and reliable means of payment and value preservation.

Dash has been able to enlist the support of more than 2 500 merchants in the country, according to DiscoverDash, with a steady increase in the number of downloads of new wallets and merchant registrations. Many brands and major fast-food chains, including Subway, Church's Chicken, and Calvin Klein, have signed up to accept Dash payments in Venezuela.

In fact, Dash has proven to be a viable option as a hidden form of digital money due to its low fees and short confirmation time. In addition, the Dash treasury has helped fund local initiatives and projects aimed at diversifying the Dash ecosystem in Venezuela and providing the social impact that will positively impact local communities.

Dash has also been used online in darknet markets for anonymous transactions, but not to the same extent as Monero and Zcash, which are generally considered more secure forms of anonymous payments. It is also used in cryptocurrency online casinos and various games, but to a lesser extent than other cryptocurrencies such as ETH and Bitcoin.

Major financial sector players such as Santander, Standard Chartered, SBI Group, Microsoft, CME Ventures, Core Innovation Capital, Accenture, and others have invested strategically in Dash blockchain technology. In addition, DASH is listed on more than 150 cryptocurrency exchanges, including Binance, Poloniex, Bittrex, Bitfinex, Kraken, Bithumb, Huobi, CEX.IO, etc.

Wallets with Dash support

The official Dash Core wallet.

It supports all Dash functions immediately after their release. It supports InstantSend and PrivateSend and has management functions and an RPC console. The Dash Core wallet, also called QT wallet, loads a full blockchain and can operate either as a masternode or as a full node on the network. There are versions for Windows, macOS, Linux, and Raspberry Pi.

Dash Electrum lightweight wallet.

The Dash Electrum Wallet is the second most preferred option among Dash users and is a lightweight PC wallet that supports transaction verification functions in the Dash blockchain using Secure Payment Verification (SPV) technology, which requires only a block title. The wallet launches almost instantly and supports advanced InstantSend and PrivateSend functions.

Multi-currency wallets.

In addition to the QT and Dash Electrum wallets, Dash has enlisted the support of many well-known cryptocurrency wallet developers. The recognition of the project began when it was created in 2014 and has accelerated in recent years. Among the most famous external wallets that already offer support for Dash coins, we can name Jaxx, BitKan, Edge, Exodus.

MyDashWallet

It is a web-based Dash blockchain interface that also supports advanced Dash functions such as InstantSend and PrivateSend. It is distributed with open source code, compatible with Trzor and Ledger hardware wallets, supports the recovery function using a seed phrase.

Dash wallets for mobile devices.

The DAO has allocated a part of the treasury fund to develop a standalone mobile Dash wallet for Android. It supports advanced features and gives users the ability to scan and display QR codes for quick transfers. It also offers backup and restore, address book management, paper wallets, NC payments, and more.

An iOS version known as the Dash iOS Wallet is also available and can be downloaded from the Apple App Store.

Dash hardware wallets.

The most common hardware wallets are Introduction, Trezor, KeepKey, and Ledger.