In the Dash payment network, mining takes place in the traditional way, that is, on computing devices, but because there is a second level of control half of the reward for the block is deducted from the master nodes. How does it work in practice?
- The first level of dash miner works on the POW (Proof of Work) algorithm. Miners process transactions, sign blocks, and are responsible for protecting the system from a double spending attack.
- The second level masternode operates on Proof of Service, does not participate in the mining process, but has the right to cut off invalid blocks. Masternode controls the system and is responsible for PrivateSend and InstantSend services.
- Since the owners of master nodes earn money on a par with miners, it is necessary to talk about the peculiarities of their setup and keeping.
The developers of the coin were the first in the crypto industry to launch a masternode system, then other peer-to-peer networks started using the proof-of-service. Masternode, unlike ASIC or gpu farms for virtual coin mining, does not consume much power, but running it is a serious investment in the crypto network.
A master node is a server with a full replica of the Dash blockchain that guarantees a specified minimum level of performance and functionality to perform certain blockchain validation tasks, as well as PrivateSend and InstantSend mechanisms for confidential and instant transactions. Masternodes are remunerated for this service and are also allowed to vote on management and funding proposals. Each Masternode receives one vote (yes/no/abstention) on each proposal submitted to the system. In this way, a sufficient level of decentralization is ensured. The mandatory requirement of 1000 coins does not allow one person to control a large number of masternode. Coins must be stored in a certain way and the balance must be transparent to the entire network.
In the case of a change of address or spending money, the masternode will be blocked until the balance is restored.
Masternodes are paid for supporting PrivateSend, InstantSend services and participating in network management.
According to the distribution scheme, 45% of the reward per block goes to masternode, another 45% goes to crypto stars and 10% goes to the network development fund. But in reality, rig owners and masterminds split the reward per block in half, and one superblock is generated every 16616 blocks (about once a month), the reward for which goes to fund new developments that have received community approval. Masternode, one by one, participates in the maintenance of the network and, having received a reward, moves to the end of the list.
Setting up a masternode requires an understanding of the Linux operating system and blockchain technology. The user must perform regular maintenance and adhere to security measures, especially in the absence of a hardware wallet. However, having 1,000 Dash, which is equivalent to $125,000 at the current exchange rate, and not buying a $100 physical wallet to keep it safe is ridiculous. We will try to briefly explain the startup algorithm.
You can run the masternode on your PC and delegate the work of your node to one of the professional operators. Of course, this does not mean that the bail money will also be with him. When using the services of hosting you pay only a certain percentage of compensation.
What you need to set up and run the masternode:
- Put 1000 coins in a Dash wallet or Dash Core.
- Install a Linux server on your PC, but it’s better to use a VPS, so you ensure trouble-free operation and a static IP address.
- Choose a virtual server provider.
- Create an account and top up your balance.
- Add a new server and specify its location. The optimal server type is Ubuntu 18.04 x64.
- Specify a server size of 60 GB and 2 GB of RAM and add a swap file.
- Write a hostname and label for your server.
- Once the installation is complete, click Manage and write down your IP address, username, and password.
To connect to the server, install PuTTY on Windows. On Linux, simply type ssh root@<server_ip> in the terminal and enter the password that your hosting provider told you. For security reasons, it is recommended that you change your root password and perform system updates using Ubuntu repository packages. Install fail2ban to prevent hacking. This is optional, but it is better to take additional security measures. Once the configuration is complete, reboot the server to save the changes.
A Dash address with one unspent transaction output (UTXO) of exactly 1000 coins is needed for the masternode to work. Once money is sent to it, the transaction needs to be registered so that the masternode can be included in the deterministic list.
If you are using the Trezor wallet:
- Add a new account.
- Open Receive.
- Send exactly 1000 coins to the displayed address.
Once the transaction is displayed in the wallet, click on the QR code on the right to go to the blockchain browser. While waiting for 15 confirmations, download the latest version of the Dash Masternode Tool (DMT) from GitHub. Unzip and run the file.
Click the third button from the left Check Dash Network Connection in the upper left corner of the startup screen to make sure the connection works. Then connect to your Trezor device and click the next Test Hardware Wallet Connection button to make sure the connection to Trezor works. After you complete the 15 confirmations, you need to create three private keys and register a new master node on the Dash network.
- Click Generate new in the Masternode Tool window and save the keys;
- Click Register masternode. You can specify a different payout address and then click “Continue”.
- Select Remote Dash RPC Node and confirm the following two messages.
The BLS private key must be specified by dash conf in order for the masternode to perform network maintenance tasks. Log into your masternode using ssh or PuTTY, edit the configuration file, and restart the server again.
Mining with CPU or video card
Mining Dash coin is only for integrated circuit devices. Even if you got the hardware for free and don’t have to worry about electricity bills, there are still more profitable coins to mine on graphics gas pedals and cpu.
Dash mining on ASIC equipment
StrongU STU-U6 and FusionSilicon X7 devices work on the X11 algorithm used for mining Dash. Bitmain Antminer D5 ASIC can only be used with a free outlet.
Unlike a video card-based mining farm, setting up an ASIC miner does not require special skills:
- Take the miner out of the package and turn it over several times to make sure the chips are securely fastened.
- Connect the power supply.
- Connect the device to the mains and internet and press Start.
- Install the ASIC finder software on your computer.
- Find the miner and fix the IP address.
- Enter the IP found into the search box to go to your device’s configuration page.
- Specify the mining pool you want and add two backups.
- In the pool settings, specify your payout Dash wallet. If the pool requires registration, open its website on a PC, create an account and specify the username + password in the ASIC-miner configuration.
- Reboot your device.
Now your ASIC will mine Dash on the selected pool, and in case of failure it will switch to the backup pool. Mining statistics can be monitored on the pool website or a special mobile app. At the first launch, it will take about 15 minutes for the data to appear. If after half an hour the miner is not detected, check the configuration, contact the technical support of the service of your choice. Calculating the yield and determining the payback period of the device will help calculate the Dash WhatToMine mining calculator.
The best pools
There is a list of available servers at https://miningpoolstats.stream/dash. There are 18 dash mining pools in total, but almost half of the hash rate falls on cybtc. Of the other resources, I should mention f2pool.com, a multi-currency server with a user-friendly and intuitive interface and guaranteed payouts. Almost all Dash mining pools are Chinese, some don’t even have an English interface. Registration via email or cell phone is required to work on any of them.
The best online Dash mining profitability calculators are WhatToMine and Coinwarz. To calculate profitability you need to know the hash rate and power consumption of your device, as well as the cost of electricity in your area and the commission on the selected pool.
- Go to the mining calculator website;
- Choose a coin;
- Enter all the necessary data and click “Calculate”.
This resource will display the possible profit for a certain period of time, without taking into account possible downtime and changes in the exchange rate of the mined coin.
It costs less to buy an ASIC than to invest in a masternode. In addition, the device on integrated circuits cannot be operated in a residential home. You would need a mining hotel, or at least a garage. If you cannot afford it, contract with one of the cloud mining services. It won’t require a significant investment and the hassle of setting up equipment and software. But keep in mind that there are a lot of scammers working in this niche of the crypto industry, so you won’t lose your money
- Study the feedback about the project on thematic forums and social networks;
- Carefully read the terms of the contract;
- Pay attention to the pictures of a data center with working equipment.
And most importantly, never invest more than you are willing to lose.
Mining is very exciting, you can print and then spend quite real money. But it is still first and foremost a business that requires a lot of expenses and special skills.