Unlike other Blockchain projects such as Ethereum or Stellar, Dash advocates itself as a peer to peer electronic cash. The project aims to be as liquid as real cash.
Back to history:
Like all the bitcoin adopters, Evan Duffield, the founder of Dash, discover the giant decentralized coin and started to fix the fundamental challenges encountered. In fact, Evan major focus was reduicing transaction time, privacy and anonymity.
After research for several months, Dash was launched in 2014. The project first name was Xcoin, then rebranded to Darkcoin, and then rebranded again to Dash.
Despite Dash was a hard fork of Bitcoin, the new project have different features.
Anonymity does not mean privacy…
For Dash team, having anonymous transactions was never enough because this does not mean that that they are truly private. Actually, all the transactions are shown on a public blockchain for anyone. This seems tricky for some people. Despite the fact that these transactions are not linked directly to specific individuals, some claim that with deep research, people can be able to uncover this.
As a solution, Dash was designed with optimal privacy features for users concerned about privacy. The project enables users to send funds privately through its ‘PrivateSend’ feature which uses a coin-mixing service. This service works through mixing the user funds with other users during the transaction with the intention of mixing up the trail back to the fund’s original source.
How Does Dash Work?
On Dash, miners have the responsibility of creating new blocks and securing the blockchain. However, in contrast to Bitcoin miners who receive 100% of the block reward, Dash miners receive 45% of the block reward. The other 55% is allocated elsewhere (masternodes and development).
For mining, Dash development team created a unique hashing algorithm under the name of X11. The algorithm requires sequential and repeated hashing. As a result, the algorithm uses 30 percent less wattage than Litecoin’s Scrypt algorithm.
Furthermore, the servers of Dash are called Masternodes. These masternodes helps in facilitating transaction in a matter of seconds, coin making, and voting on governance proposals. In exchange for these services, masternodes are paid through 45% of the block reward. In Dash blockchain, anyone can create a masternode but it is required to prove that you own 1,000 DASH (which is, currently, around 120,000$). The 1,000 coin minimum is a barrier to prevent attacks against the P2P network. Those attacks involve creating many fake accounts in order to influence the network (Sybil attack). Thus, by the 1,000 DASH, the attacks are very expensive. Moreover, the required amount of DASH has an important role in maintaining the price of the coin stable since the masternodes vote on the governance proposals which are invested in the success of the network.
Proof of work: X11 algorithm
Created by Evan Duffield, Dash founder, X11 is Dash hashing algorithm. This algorithm combines 11 different individual hash functions for proof of work. As a consequence, the decentralization level of the currency increased by making ASICs difficult to develop. Compared to Bitcoin, the hash function used gives Dash a further step in security. However, many claims that Dash is today not ASIC-resistant. It’s considered sort of a fail since now ASICs are capable of efficiency mining the algorithm.
In addition, another advantage of the X11 algorithm is that GPUs requires around 30% less wattage and between 30% and 50% cooler than they do with Litecoin’s Scrypt algorithm/
Dash next steps
According to the project website, Dash team will be focusing on increasing the scalability of networking through improving the consensus and focusing on more potential use cases for the network. The development team will be also working on network security by trying to reduce the risk of a 51% attack on the network.
The project will be also working on a better user experience through enabling users to create personalized and memorable usernames ( instead of by their long, confusing cryptographic addresses) along with creating lists of contact to pay their friends and family by username.
Pros & Cons
- Dash ensures users financial and transactional privacy through PrivateSend option
- Compared to other Proof of Work blockchain projects, Dash is much faster through InstantSend
- Block rewards are split between miners, masternodes and development pool. This helps in incentivizing masternodes and Dash development.
- Through the masternodes democratic voting, decisions in regards to funding development and other aspects concerning the community are quicker.
- Dash transaction fees are significantly lower than credit cards or even banks.
- Some claims that the development team set aside 2 million coins of the total 18 million coins through fast mining them in the first 24 hours of its release.
- According to some speculations, a large number of masternodes are owned and run by the core development team.
- One of the privacy features is the mixing process. Some developers claim that this process is theoretically traceable. In fact, this can happen if someone controlled the masternodes that the transaction passes through.