Dash: Paving the Way for Next-Generation Digital Payments
Understanding Dash is essential for those seeking to navigate the world of digital currencies, as one of the oldest players in it, it offers a unique blend of privacy, speed, and governance features that set it apart from other cryptocurrencies. Let’s explore more in this article.
Founded in 2014 by Evan Duffield, Dash originated as a fork of Litecoin, which was itself forked from Bitcoin. The currency was first released as Xcoin, only to be rebranded months after as DarkCoin, and in 2015 as Dash.
The term "Dash" is a fusion of the words "Digital" and "Cash", signifying its aim to provide a digital equivalent of traditional currency. One of the key aspects that set Dash apart, is its goal to establish itself as a digital payment tool as easy to use as PayPal.
It’s also worth mentioning that Dash is one of the first and oldest decentralized autonomous organizations (DAOs). The network's masternodes possess the power to vote for proposals, and when a proposal gathers enough support, Dash's developers can implement it. This decentralized decision-making process allows users to shape the future of the Dash network.
First of all, it's important to understand that Dash works with a two-tier architecture for its blockchain. The first tier is where miners work their magic to solve cryptographic puzzles in order for transactions to be completed.
On the second tier, we can find what are known as Dash’s "masternodes", which provide and perform many critical functions. When Dash is mined, 45% of the block rewards goes to the miners, 45% to the masternodes, and 10% to a system budget.
Now, let's talk about governance. Dash employs a voting system that enables quick implementation of any changes that need to be done, and it also ensures a dynamic and responsive network. Here is where the 10% that's allocated to the budget comes into play.
Security is a critical aspect of Dash's design, achieved through the use of the X11 algorithm. This algorithm offers the best possible user privacy while enabling rapid transaction processing. By leveraging masternodes, Dash achieves faster confirmation times and improved efficiency.
To become a Masternode in the Dash network, a node must possess a minimum of 1,000 DASH tokens. Masternodes play crucial roles within the system, enabling private and instant transactions, scrutinizing and rejecting improperly formed blocks, and maintaining a complete copy of the blockchain ledger.
As mentioned earlier, masternodes receive 45% of the block rewards as an incentive for their work. Additionally, they have the privilege to vote on the allocation of the remaining 10% of the block reward, which means they get to actively participate in shaping the network.
InstantSend is an additional service provided by Dash that allows transactions to be confirmed within two seconds. Even without InstantSend, Dash transactions are still confirmed swiftly, taking approximately 2.5 minutes on average. For comparison, a transaction in the Bitcoin blockchain typically takes 10 minutes to several hours!
CoinJoin provides consumer-grade financial privacy by using a shuffling mechanism to combine your Dash tokens with other users'. In your wallet, the Dash is composed of various inputs, each representing separate and distinct coins. With CoinJoin, your inputs are merged with at least two other individuals within a single transaction, ensuring that the correct Dash value remains within your wallet.
ChainLocks ensure privacy in every transaction. This feature protects Dash's blockchain against 51% attacks by signing blocks as they are mined. When using ChainLocks, especially if combined with InstantSend, you don't have to worry about multiple confirmations for the transactions to go through. In a few words, it helps you be sure that transactions are safe and fast.
It’s official! Maya is currently working to integrate the Dash blockchain in a CACAO/DASH pool that will present a number of promising benefits for both ecosystems. Official dates, announcements and details will be published separately, so stay tuned to our official Discord Server!