Dash is combination of two words, ‘Digital’ and ‘Cash’. For the first time it announced on 18, Jan, 2014 under the name “Xcoin” by Evan Duffield and Daniel Diaz. But its named changed to “Drakcoin” on 28, Jan, 2014 and finally on 25, Mar, 2015 rebranded to “Dash”.
Dash focuses on privacy and anonymity and as mentioned in its whitepaper it is “the first privacy centric cryptographic currency”. The cryptocurrency aimed to become a medium of exchange for daily transactions to buy services and goods and its website boldly proclaims that “Dash is Digital Cash you can spend anywhere”.
In the time of writing ِDash,it’s the 19th most valuable cryptocurrency and its price experienced 8.000% growth in 2017.
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What is Dash?
Dash is a cryptocurrency based on Litecoin, which is a fork of Bitcoin. So, they are similar and most of the times get compared. Dash created by Evan Duffield and Daniel Diaz in order to solve the issues and bugs, which Bitcoin has. The three main issues that exist in Bitcoin network are; privacy, governance and transaction speed. Dash came to solve these issues and make digital cash more usable. For instance, you can send Bitcoin for online transactions, but the confirmation takes long and it makes the Bitcoin infeasible to use for in- store transactions that require instant confirmation. Another example could be the Bitcoin’s network transaction fees, which make it a poor choice for small amount transactions. So, as we will describe in this article, it created to solve these problems with its innovative architecture.
Dash Vs. Bitcoin, the differences
The main difference is the algorithm used by them to mine coins. Bitcoin uses SHA-256, Proof of Work algorithm. On the other hand, Dash uses a modification of Proof of Stake called X11algorithm.
Masternodes in Dash network
The next difference between these two cryptocurrencies is the way how they handle the transactions. As we know, on Bitcoin’s blockchain each transaction needs to be validated by all the nodes in the network. To be a full node or a node in Bitcoin network, it requires considerable amount of investment infrastructure to mining. As a result, full nodes have to increase Time spent and money to ensure optimal operations, which leads to high transaction fees and make the Bitcoin not a suitable choice for daily transactions. Dash instituted a system of Masternodes to simplify the verification and mining process. In fact, Masternodes are full nodes who are responsible to approve transactions from the miner network and provide services, such as payment and privacy to the network. To be a Masternodes it requires to deposit 1.000 Dash in the system. As it mentioned in its whitepaper, this deposit amount is for returning the services and Masternodes investment.
Privacy and anonymity are another features that Dash provide it among all other its unique features. The Masternodes provide a service called PrivateSend. Using this feature makes it almost impossible to identify the source, which the money were sent from. It’s notable that this service is limited to 1000 Dash value and requires multiple sessions to ensure that the process has been completed properly.
Another innovation provided by Dash is its governance model. It developed a self-funding model by splitting block rewards between all stakeholders consist of Masternodes, Miners and Treasury. Masternodes get 45% share as a return of their investment, Miners also get 45% share as a reward to keep transactions verifying and the other 10% share which called as Treasury is used to finance the future development projects of the network.
As we mentioned before Dash came to solve Bitcoin issues such as transaction speed. In Bitcoin network, a transaction takes around 10 minutes to be confirmed. But, in Dash network Masternodes enable a feature called InstantSend, which reduce the confirmation time to around 2 minutes for each transaction to get verified.
As a last point in our comparison we can talk about the future development of Bitcoin in compare to Dash. Bitcoin developed from academic institutions and any future development depended on largesse from these institutions. But it would be a different story for Dash, in Dash’s network Masternodes play a significant role here too. In other words, their votes determine future development directions for the cryptocurrency.