“Digital Cash”
Dash was released in 2014 as “XCoin”, the Dash coin is built on top of the Bitcoin infrastructure, utilizing the same technology, protocols and ideas. The main difference lies in how the system has been designed in the background, especially with its network.
By design, Bitcoin is somewhat restrictive and prone to issues with both security and processing times / reliability. Dash, as with a number of other coins, aimed to solve those issues by developing its own infrastructure on top of Bitcoin’s.
What resulted was the likes of a two-tier network (as opposed to Bitcoin’s single tier of miners) as well as several custom transactional protocols. Unlike other coins (especially Bitcoin), the Dash team is comprised of over 30 full time staff, 20 part-time employees and a large number of unpaid volunteers & contributors.
With the coin being completely open source, the main way the central development body keeps funded is through a treasury system which takes a small percentage of exchange fees as revenue. By 2015, this treasury system was worth $14,000 per month; by 2017 increases in the price of Dash left it at $650,000 per month.
Whilst it’s a popular coin, people have cited that it’s not very applicable in the wider world, and most dissenters have alluded to its lack of differentiation from Bitcoin as being the primary issue facing its adoption moving forward.
What is Dash?
Like many other “alt” (alternative) coins, Dash was created to solve a number of problems inherent in the Bitcoin infrastructure.
It was released as XCoin in 2014 after forking the Litecoin repository, quickly rebranding itself “Dark Coin“, and then “Dash” (Digital Cash) in 2015. The reason why it was released was to provide the most user friendly and on-chain scaleable cryptocurrency.
To do this, it offers 3 pieces of functionality:
- InstantSend
- Instant transactions – whilst this is present in all cryptocurrencies, Dash’s system is built in such a way as to prioritize the speed of a transaction whilst not sacrificing security.
- PrivateSend
- Private transactions – the Dash system will scramble the origin of your funds to truly decentralize the storage and transaction of money to others.
- Masternode Network
- This is probably the most prominent Dash feature – a special tier of masternodes which prioritize the InstantSend and PrivateSend transactions. Operators of the various MasterNodes receive more of the rewards (Dash coin) for their computation resource investment.
The most important feature of Dash has almost certainly been the development of its network (especially the masternodes system). This not only ensures enhanced security but, unlike Bitcoin with its exponential difficulty issue and issuance limitations, it means that the speed of transactions remains permanently high.
The important thing to consider with Dash is the heightened network incentives (which have attracted a growing group of committed miners) have made it a transaction-processing powerhouse. Far eclipsing the Bitcoin network in power and speed, the main reason for Dash’s rapid price rise has been due to its ability to turnaround transactions extremely quickly, rewarding the miners far better than bitcoin.
Ultimately, in the brave new world of cryptocurrencies, Dash certainly offers an insight into what’s available and certainly ahead of the competitors… but whether it’s going to be adopted is generally, still, a question by the investment community as a whole.
Who created it?
Dash was originally created by Evan Duffield and Daniel Diaz, neither of whom are covered with any sort of veracity by some of the Dash community.
Like most cryptocurrencies piggybacking off Bitcoin’s success, the acumen of the creators of Dash, namely their programming skill set and ability to carry the project forward have been the subject of a lot of scrutiny.
Why does it exist?
The Dash infrastructure was mainly built as a compliment to that of Bitcoin.
Most specifically, its heightened two-tier “Masternode” infrastructure network gave it a huge amount of scalable power capacity, something the Bitcoin network would never be able to muster.
According to their whitepaper:
A main issue with the acceptance of Bitcoin in point-of-sale (POS) situations is the time required to wait for the network to confirm the transaction made is valid, alternatively payment companies have created methods to allow vendors to take zero-confirmation transactions, but these solutions utilize a trusted counterparty to mediate the transaction outside of the protocol.
Bitcoin provides pseudonymous transactions in a public ledger, with a one-to-one relationship between sender and receiver. This provides a permanent record of all transactions that have ever taken place on the network. Bitcoin is widely known in academic circles to provide a low level of privacy, although with this limitation many people still entrust their financial history to it’s blockchain.
Dash is the first privacy-centric cryptographic currency based on the work of Satoshi Nakamoto. In this paper we propose a series of improvements to Bitcoin resulting in a decentralized, strongly anonymous crypto-currency, with tamper-proof instant transactions and a secondary peer-to-peer (P2P) network incentivized to provide services to the Dash Network.
You can view the Dash Whitepaper here.
Trajectory
According to CoinMarketCap, the June 2017 daily trade volume of Dash was approximately $100 million and its market capitalization was approximately $5bn.
The coin has become one of the most active on BitcoinTalk, reaching 6400+ pages, 133k replies, 7.9M reads since its introduction in 2015. Whilst these seem impressive, the underlying concern for the investment community is the ability for this coin to actually provide an underlying economic model which can be harnessed.
The main issue is that since the coin is based almost entirely on Bitcoin, it’s facing difficulty in scaling due to lack of mainstream adoption. But recent developments, updates, and partnerships takes Dash one step closer toward this real-world adoption.
As mentioned, its underlying technology (namely the MasterNode network) give it an unprecedented advantage over the majority of other Bitcoin clones.
