Everything you would like to know about Dash cryptocurrency: a detailed manual

Dash

DASH is a cryptocurrency produced since 2014 by Evan Duffield (author and developer). Interest in this currency grows as its value increases – recently the price of the coin has risen dozens of times to more than $600.

To understand the reason for the rapid interest it is necessary to understand the features and advantages of cryptocurrency.

    1. How the Dash works
    2. Decentralization
    3. InstantSend
    4. PrivateSend
    5. MasterNodes
    6. InstantSend
    7. X11
    8. Dark Gravity Wave (DGW)
    9. How to buy Dash cryptocurrency
    10. How to store Dash
    11. History
    12. What the Dash cryptocurrency rate depends on
    13. Differences from Bitcoin
    14. Benefits of Dash
    15. Prospects for Dash

How the Dash works

Dash, built on Bitcoin software, includes a number of original developments that define its advantages. The speed of transactions has increased significantly due to the fact that miners are not involved in their confirmation, for this purpose is used  masternode technology.

The system guarantees the anonymity of transactions, excluding the tracking of addresses from which money was sent and where it was received.

A large number of varieties of e-wallets have been developed for the Dash system, ensuring reliable safety of money and ease of its use. Electronic wallets are developed in the form of applications for PCs and mobile devices and provide the convenience of using cryptocurrency, comparable to conventional money, guaranteeing full privacy of payments.  These advantages are achieved by using a number of the latest technologies.

Decentralization

To begin with, all decisions in the Dash community are made by general vote. Everyone can propose a project to the community. The project will be discussed by all participants and then the decision will be made by a vote.

InstantSend

InstantSend provides instant transaction speed. It works on the principle of blocking inputs only for a specific transaction, which is checked by the consensus mechanism. If the system notices conflicting transactions, they are rejected and blocked.

There are cases where consensus cannot be reached. Then the standard block validation algorithm is responsible for the validation. Thus, in Dash the problem of double spending is solved. And this solution does not require a long wait, as it happens, for example, with bitcoin.

PrivateSend

To ensure anonymity, the Dash system uses the “PrivateSend” payment mixing technology provided by Masternodes servers. The basis of the technology is CoinJoin. Over time, the method has been built into the client program, as well as improved.

The current version of the system increases the anonymity of transactions by combining inputs from multiple users into a single transaction. Such a transaction has multiple outputs. This approach hides the flow of funds and virtually eliminates the ability to track specific transactions. According to unconfirmed information, the hierarchical list mechanism can be used to bypass the security mechanism, but this possibility has not been supported by practical evidence.

PrivateSend works in stages:

  1. Pre-denomination. This is a process where all payments are split into parts, eliminating the ability to track by specific amounts.
  2. Each part of the payment goes through stages of anonymization.

Important to note:

  • Only parts are anonymized, not the entire sum.
  • The agitating masternode changes at each step.
  • The parts are mixed only if they match in volume.
  • After mixing, the owner receives the sum to the new anonymous addresses. Mixing occurs in advance, so there is no need to wait for this process.
  • In simple words, “PrivateSend” service allows to provide payments anonymity by combining several incoming transactions and several outgoing payments. Tracking such transactions is a time-consuming process if not proven to be feasible.

MasterNodes

Masternodes – are special servers (they can also be called nodes) that provide the mechanism of mixing in the PrivateSend technology. Masternodes are decentralized and managed by a community of volunteers. The user, using PrivateSend, specifies the number of shuffles (usually 2-8, but more is possible). The more rounds of shuffling, the higher the degree of anonymity.

Dash CoinThere could theoretically be a scenario where most of the masterminds on the network are managed by a fraudster who wants to expose the anonymity of transactions. In that case, there is a deterrent: a Dash deposit of 1,000 is required for each masterknot that is connected. But there is a reward for the work of volunteers: 50% of the Miner’s reward for the mined block. This is necessary to incentivize volunteers. The more users the system has, the more Masternodes it will need.

The more Masternodes, the higher the anonymity and payment speed.

With “PrivateSend”, the owner of the money determines the number of shuffle cycles, self-regulating anonymity. Random MasterNodes technically shuffle transactions. The uncertainty of choice and the independence of the MasterNodes, ensures that no information is in one place.

InstantSend

Ensuring transaction speed is implemented by the “InstantSend” service. It blocks only inputs for a particular transaction, verified by a consensus mechanism in the Masternode network. Payment confirmation is possible using the standard InstantX mechanism – this allows to reduce the time spent on confirmation.

InstantSend works on the principle of blocking inputs only for the specific transaction that is verified by the consensus mechanism. If the system notices conflicting transactions, they are rejected and blocked.

There are cases where consensus cannot be reached. Then the standard block validation algorithm is responsible for the validation. Thus, in Dash the problem of double spending is solved. And this solution does not require a long wait, as is the case, for example, with bitcoin.

X11

The X11 system is the application of a chain of eleven different hashing functions, to prove the work.  It is a set of eleven hashing algorithms, such as cryptographic hash functions, etc. Introduced to make it more difficult to use specialized mining equipment. The use of this technology reduces the cost of miners, extends the life of the equipment and reduces the efficiency of the use of specialized equipment.

The latest generation CPUs have approximately the same performance as GPUs when working with sequential hashing.

Dark Gravity Wave (DGW)

Dash uses a special algorithm to tweak mining complexity, the Dark Gravity Wave (DGW).

DGW is designed to address the shortcomings of Kimoto’s Gravity Well (an algorithm that recalculates network complexity every 2016 blocks). Dark Gravity Wave uses a simple moving average, which is calculated for each block. What makes the algorithm different is that the reward does not change based on the block number, but on a formula:

Based on Moore’s Law: 2222222/((Difficulty+2600)/9)^2

How to buy Dash cryptocurrency

Today, Dash mining is carried out mainly on video card processors. As we mentioned above. Dash uses the X11 algorithm, which gives a huge advantage compared to the Scrypt algorithm: the power consumption of mining has dropped to 50%, and therefore the heat dissipation for the same reason is reduced by 40-50%.

Will there ever be an ASIC for this algorithm?

The developer of Dash has repeatedly noted that his brainchild is not considered ASIC-proof. In his vision, Dash should go the way of Bitcoin: mining on CPUs, mining on video card processors and the transition to mining on Asics.

There are several classic ways to acquire cryptocurrency, each with its own advantages and disadvantages.

One of the least profitable ways to buy is using crypto-exchangers. They offer less favorable coin exchange rates than cryptocurrency exchanges.

The second way to buy Dash is to exchange it for Bitcoin or another cryptocurrency on one of the many exchanges. The exchange is conducted on trading platforms such as: Yobit.net, EXMO.com. Cryptocurrency exchanges provide for the purchase of Dash for other cryptocurrencies and for the classic convertible currencies of states.

After registration, you need to fund your account with U.S. dollars or euros to exchange. Money is transferred from the plastic cards of any bank, including in rubles with automatic conversion at the bank’s rate. Received funds are available for the purchase of cryptocurrencies.

After the purchase of Dash, coins are credited to the exchange account. To ensure the complete safety of funds, the purchased cryptocurrency must be transferred to your own wallet.

How to store Dash

DashDash cryptocurrency offers several ways to store coins depending on the requests and preferences of users. Any of the wallet options are available for download on the official website:

  • PC wallet – one of the safest ways to store currency;
  • Mobile applications – designed for tablets and smartphones;
  • Hardware wallet (Ledger Nano S) – fully protects against attacks and malicious influences. Such a wallet provides key generation, transaction signatures;
  • Paper (Dash Core) – a wallet for the computer, which has high security, but takes up much space on your computer’s hard drive.

You can use the Dash online wallet on our website: https://www.dash.org.

History

Cryptocurrency developer Evan Duffield came up with an algorithm to improve the Bitcoin system, but it was rejected by the developers of the system. This prompted Duffield to create his own cryptocurrency, incorporating promising new solutions. The initial release took place on 18.01.2014 under the brand name Xcoin (XCO).

It is necessary to note the misunderstanding, which still causes lively debates in the Dash community. The bottom line is that the initial mining complexity was set incorrectly. This led to the fact that in the first two days 32% of all coins obtained during the year after the launch were mined. Of course, the error was quickly corrected. But the issued coins remained in the system, that is, someone absolutely easily received a huge amount of Dash. Rumor has it that the developer himself has something to do with this incident, but this is just a rumor.

The original name of the system was Xcoin. Ten minutes after the project’s launch, it was renamed Darkcoin. In this way Evan Duffield decided to emphasize the main advantage of the coin, – enhanced anonymity. And only on March 25, 2015 the third rebranding took place, so the cryptocurrency would not be associated with the black market, it was renamed to Dash – which means “striving forward”, “energy spurt”.

The new name fully reflects the developers’ aspirations for a breakthrough in the technology of using cryptocurrencies. The anonymity of the cryptocurrency and technology “Darksend” does not apply to the developers of the project – they openly declare their plans.

What the Dash cryptocurrency rate depends on

The rate of Dash depends on further expansion of the system. The payment system is used around the world. Users’ transaction costs are minimal.

Further implementation of Dash in the system of international money transfers and accepting payments for goods and services will predetermine the demand for the crypto coin. The introduction of a payment instrument in the form of a payment card will expand the possibilities of the currency.

The growing demand for the coin determines its attractiveness as an investment instrument, given that the value of Dash cryptocurrency has grown by 1240% over the past year.

Differences from Bitcoin

Dash currencyThe key differences of Dash are defined by the following:

  • Dash developers have implemented an architecture that allows for much easier and faster updates and improvements. This is also proven in practice: as soon as the community finds problems, they are promptly solved.
  • High anonymity of transactions. Of course, Dash is not the most anonymous cryptocurrency. However, it leaves Bitcoin, which does not use PrivateSend technology, far behind.
  • Dash mining is much more energy efficient. Transactions in this system are confirmed much faster and the commission is lower.
  • The developer cannot make significant changes to the system on his own. A system of universal voting is used for this purpose.

Benefits of Dash

The advantages of Dash cryptocurrency are based on the fact that it is a public project that has its active creator, Evan Duffield, who is involved in the development of the system. The project has a team of high quality programmers working to improve the project. The developers are actively engaged in PR and promotion of Dash, which led to the active use of the currency and the growth of its value.

But the strongest side of the project is considered its technology Masternode network.

This system allows the use of innovations that are not available to other cryptocurrencies, including InstantSend, PrivateSend and the Budgeting System. In this way, problems not solved by other cryptocurrencies are solved – speeding up transactions, ensuring anonymity, distributing decision-making.

A distinctive advantage of Dash is the system of building a reward for mining coins. Miners don’t get all the funds mined – 50% of the coins are distributed among the Masternode. The block generation rate is much higher than in other networks.

Prospects for Dash

In the prospects of cryptocurrency development, the main direction is the further work on the improvement of fully anonymous payments. In this case, the privacy of transactions increases with the expansion of the system due to its architecture.

The developers are working on the introduction of cryptocurrency payments in everyday life, by issuing debit cards that are accepted by regular stores, not only online resources.

Financial market specialists are optimistic about the prospects of promoting the currency. This is promoted by the growth of Dash capitalization, owners of big money interested in anonymity prefer Dash to other cryptocurrency systems.

 

About Ankur Suri 8 Articles
Ankur Suri is a blockchain developer who became interested in cryptocurrencies while studying at UCLA. He follows cryptocurrency market news closely and is as passionate about writing as he is about programming. Together with a group of crypto enthusiasts, Ankur is involved in the development and promotion of the alternative Dash wallet, aiming to provide users with the most convenient tool for transactions with this coin.

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