What Is Dash Cryptocurrency

3 mins read
by Angel One

Dash cryptocurrency belongs to the group of Altcoins. It aims to become the digital token used for daily transactions.

Dash crypto was launched in 2014, organically called Xcoin. But in 2015, it rebranded as Darkcoin and finally came to be known as Dash. In the cryptocurrency’s whitepaper, Evan Duffield and Daniel Diaz mentioned that Dash aims to offer privacy to the users based on the work of Bitcoin founder Satoshi Nakamoto. In August 2021, Dash was the 50th most valued cryptocurrency with a market capitalization value of USD 2.6 billion. One can use it for cash, credit card, and Paypal transactions.

Dash initially focused on providing complete anonymity to its buyers and senders. However, it has refocused on becoming the medium for daily transactions and has widened its network to fulfil its purpose.

In 2018, Dash decided to expand to Venezuela. The country is currently facing an acute financial crisis and hyperinflation, which rendered its currency Bolivar valueless. In an interview with CryptoSlate, Ryan Taylor, CEO of Dash, said that cryptocurrency is critical for the survival of Venezuela, helping residents to transact quickly and cheaply. The popularity of Bitcoin and Dash has grown significantly because of the country’s ongoing financial crisis.

Dash has also invested in blockchain research at Arizona State University. The study focuses on the development and education of blockchain to improve transaction speed, efficiency, and security.

Differences between Dash cryptocurrency and Bitcoin

The primary difference between the two is the algorithm they use for coin mining. Dash uses the X11 algorithm, an improvement of proof-of-stake (POS) used by other altcoins and CoinJoin mixing to scramble transactions to make them private in the blockchain. Bitcoin uses proof-of-work (POW).

The second most critical difference between the two cryptocurrencies is how they handle transactions in their network. Bitcoin blockchain requires a transaction to validate each node within a network. It increases the time to complete each transaction. With the scaling of Bitcoin transactions, it is becoming impossible to manage it without facing clogging. It led to increased costs of transactions and made Bitcoin unsuitable for daily transactions.

Dash has a different method for handling transactions, called master nodes, run by a subset of Dash users. Each master node has a starting stake equal to 1000 Dash in the system, and it verifies and validates each transaction. It also solves the scalability problem as it requires fewer nodes to complete Dash transactions. As of August 2021, the Dash network had 4,614 master nodes for approving transactions from miner networks, providing payment and privacy on the Dash network.

Dash has better governance than Bitcoin and Litecoin. It has developed a self-funding model that splits block rewards between three stakeholders – master nodes, miners, and treasury in 45%, 45%, and 10%. Master nodes in Dash also play a critical role in determining the direction of the currency.

The bottom line

Dash cryptocurrency has expanded its network as a digital currency used for daily transactions. Since its inception, Dash has scaled and gained prominence as an Altcoin. However, if you want to invest in any cryptocurrency, conduct thorough research to understand the extent of risks associated with it, or it can result in huge losses. Also, cryptocurrencies are highly speculative since investing through Initial Coin Offerings (ICOs) carries a higher speculation risk.


Disclaimer: Angel One Limited does not endorse investment and trade in cryptocurrencies. This article is only for education and information purposes. Discuss with your investment advisor before making such risky calls.