We are excited to announce a new blog series in which we will be highlighting the most promising Altcoins (alternative crypto-coins) of the crypto world. Bitcoin still is one of the most popular and widely used cryptocurrencies available, but other protocols with their own special feature-sets are quickly catching up. Welcome to the first issue with Dash!
Dash (formerly known as Darkcoin and XCoin) is an open source peer-to-peer cryptocurrency that offers all the same features as Bitcoin but also has advanced capabilities, including instant transactions (InstantSend), private transactions (PrivateSend),and decentralized governance (DGBB). Dash's decentralized governance and budgeting system makes it the first decentralized autonomous organization.
Dash uses a two-tier architecture to power its network. The first tier consists of miners who secure the network and write transactions to the blockchain. The second tier consists of masternodes which enable the advanced features of Dash.
Dash is an open-source peer-to-peer cryptocurrency that offers instant transactions (InstantSend) without confirmation wait times, private transactions (PrivateSend) that blur the transaction origin and a decentralized budget system, making it one of the first DAO’s (Decentralized Autonomos Organization).
It was launched in January 2014 by Evan Duffield, the lead developer of the protocol and has since been regularly updated by it’s team, which is paid through Dash’s blockchain. It’s among the top 10 most popular Altcoins.
Dash uses a number of different hashing functions, including X11 for POW (proof-of-work) and an own method of POS (Proof-of-Service) for it’s Masternode system.
Privacy Unlike the ring-signature technique of Monero, Dash uses a customized version of the “CoinJoin” method for it’s PrivateSend feature. The implementation matches funds of different users and (essentially) shuffles the values via the Masternodes in the network. This obfuscates the flow of funds and transactions can’t be directly traced. PrivateSend is limited to 1000 DASH per session and requires multiple sessions to thoroughly anonymize significant amounts of money.
Masternodes The mixing by PrivateSend is performed by Masternodes, which are servers (can essentially be a Raspberry Pi) operating on the decentralized network. They are randomly selected to sign transactions, secure the network and have a vote in the blockchain’s budget proposals.
As an incentive of operating a Masternode, the selected processing nodes currently earn 45% of the mining rewards. There is a requirement of 1000 Dash to host a Masternode, which avoids the possiblity of a network attack. There are currently (August 2016) about 4100 Masternodes on the network.
Governance & Funding System Dash is one of the first DAO’s (Decentralized Autonomos Organization) with a ‘Sybil’ proof governance and funding system. It’s a decentralized process in which the network determines where money is spent. Each Masternode operator is given the ability to use his mMsternode vote on each new community proposal and the votes are counted in a transparent system. After a submitter has enough support the network will automatically pay out the funds every month. You can find an overview of the latest proposals on Dash Central.
Instant Transactions (InstantX) By utilizing Masternode quorums, users are able to send and receive instant irreversible transactions. This especially allows vendors to use mobile devices in place of traditional POS systems for real world commerce and users to quickly settle face-¬to-¬face non commercial transactions as with traditional cash. This is done without a central authority. An extensive overview of this feature can be found in the InstantX white paper.
Mining Difficulty Adjustment (Dark Gravity Wave) Dark Gravity Wave (DGW) is a mining difficulty adjustment algorithm created by Dash core developer Evan Duffield to address flaws in Kimoto’s Gravity Well. It uses multiple exponential moving averages and a simple moving average to smoothly adjust the difficulty, which is re-targeted every block. The block reward is not adjusted strictly by block number, but instead uses a formula controlled by Moore’s law.
The development team is working on a new update called “Dash Evolution” since more than year now: Dash Evolution creates a new type of cryptographic currency with various advanced features that assist in the creation of decentralized technology. Dash introduces a tiered network design, which allows users to do various jobs for the network, along with decentralized API access and a decentralized file system.