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What is Dash Coin?

By Alex Nimoy Oct. 12, 2019, 3:46 p.m.
dash.jpeg

Dash is an open source cryptocurrency and is a form of decentralized autonomous organization (DAO) run by a subset of users, called "masternodes". It is an altcoin that was forked from the Bitcoin protocol. The currency permits fast transactions that can be untraceable.

History

The currency was launched in January 2014 as "Xcoin" by Evan Duffield, as a fork of the Bitcoin protocol. It is an altcoin and in its early days it was subject to pump and dump speculation. It was rebranded as Darkcoin, which received press for being used in dark net markets. In March 2015, it rebranded again with the name Dash as a portmanteau of 'digital cash'. As of August 2016, Dash is no longer used in any major dark net markets worth noting.
In early 2017 Duffield, who lived in the Phoenix area, and some other people working on Dash took space in a business incubator at Arizona State University. The Dash DAO later funded a blockchain research lab at ASU.
As of April 2018, Dash's market capitalization was around $4.3 billion and it was one of the top 12 cryptocurrencies.
As of February 2019, Dash was the most popular cryptocurrency in Venezuela according to Der Spiegel.

Design and governance

Dash was designed to allow transactions quickly and to have a swift governance structure in order to overcome shortfalls in Bitcoin.

Governance

Governance is handled through a form of decentralized autonomous organization in which decisions are made on a blockchain via masternodes. Masternodes perform standard node functions like hosting a copy of the blockchain, relaying messages, and validating transactions on the network, and in addition act as shareholders, voting on proposals for improving Dash's ecosystem. Along with masternodes, the system includes standard nodes and miners.
Running a masternode requires ownership of 1000 Dash. Masternodes are also required to have a static IP address and meet minimum requirements for CPU, RAM, disk space and network bandwidth.
A proof of service protocol ensures that masternodes have the most current blockchain protocol and are online.
The system's decentralization has been criticized due to a mishap allowing too many coins being distributed at release, concentrating the wealth and giving a small group disproportionate power in decisions over the currency’s future.

Consensus

As of 2018 coins were mined using a proof of work algorithm with a hash function called "X11", with eleven rounds of hashing, and the average time to mine a coin was around two and a half minutes.
Transactions
Masternodes provide two additional kinds of transactions. "InstantSend" bypasses mining and instead requires a consensus of masternodes to validate a transaction, speeding transactions."PrivateSend" is intended to make transactions untraceable; it mixes participating users' unspent Dash before executing a transaction.
In 2018 the e-commerce payment system company Alt Thirty Six (Alternative36, Inc.) began offering electronic payments in Dash for companies in the legal cannabis industry in the United States.

Dash-funded organizations

The Dash DAO uses the 10% it receives from mining to invest as the DAO chooses.

How To Buy

Dash can be purchased and sold in several ways, each with different advantages and disadvantages. The following options are available:

Exchanges are one of the most popular ways to trade cryptocurrency. A wide range of exchanges exist, each offering slightly different features. Some serve different markets, some are in direct competition, some have cheaper fees, and some are subject to more or less strict regulatory requirements. Most exchanges are centralized, meaning they are operated by a single company, which may be obliged by the laws of the jurisdiction in which it operates to collect data on its customers. Others are decentralized, but as a result have higher escrow requirements since you are dealing peer-to-peer instead of with a trusted entity. Exchanges can be broadly broken down into two categories: exchanges which accept national currency (fiat money) and exchanges which deal in cryptocurrencies only. For safety, exchanges should not be used as wallets. Exchanges are for trading, not for savings.

Instant exchanges perform a similar function to normal exchanges, but without the requirement to log in. They effectively convert one currency to another, with some limits on the amount to be exchanged and usually at a less advantageous rate. Others may even offer to sell cryptocurrency as a credit card purchase.

Over the counter exchanges have recently appeared to facilitate sale of Dash directly from a company to the individual at a specified price, or peer-to-peer between individuals at a negotiated price. Volume may be limited compared to exchanges, but these services are usually much easier to use. More advanced peer-to-peer sites offer escrow services for a fee to prevent cheating during the sale between two parties who have never met.

ATMs accepting card and cash payments in return for crypto are widely available. Mapping services can show the specific location of these machines, or you can even set one up at your own business and earn a percentage of sales.

Exchanges

Cryptocurrency exchanges exist to convert national currency, also known as fiat money, into cryptocurrency. Many exchanges do not accept fiat money, and exchange between various cryptocurrencies only. Trades are handled on markets, and trades are created between pairs of currencies, identified by their ticker codes. Dash is widely accepted on exchanges and many pairs exist against both fiat money and cryptocurrency. This means it is possible to exchange EUR for DASH, or DASH for BTC, for example. The volume traded on an exchange provides a good indication of how quickly a buy or sell order you place will be filled. This section introduces some of the most popular exchanges for trading Dash.

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