AN INTRODUCTION TO DASH CRYPTOCURRENCY

Since Bitcoin’s strong arrival into the financial world, there are now about a hundred other cryptocurrencies currently in circulation. With Bitcoin being the pioneer of this new way of using money, the projects that followed are, in its majority, aimed at trying to improve this system and solve all of Bitcoin’s problems, because it is still seen as “rudimentary” in a lot of senses.

DASH is considered to be the cryptocurrency that has made the most improvement to the initial model, and people in this community have high hopes for it to deliver. So if DASH is going to become the next Bitcoin, we better get informed about it. But first, let’s start by learning a little bit about what it is and its history.

WHAT IS DASH?

DASH is short for “digital cash”, and it is a cryptocurrency with the same features Bitcoin offers (an open source cryptocurrency that aims to work just like cash). The thing that sets DASH apart from Bitcoin, and all the other cryptocurrencies, is that it also provides some advanced features that solve the main problems found in them.

This cryptocurrency offers services that have never been done before, and that’s why it is considered so innovative. Some of these features include the option to make instant transactions through a system called “InstaSend”, or private transactions through the “PrivateSend” system. These will be further explained later.

You may be a bit confused when you read about DASH, as the name has gone through some changes ever since the beginning. It was originally named XCoin, released in early 2014. Quickly after, in February, it was renamed Darkcoin. They finally settled with DASH in March 2015, and have stayed that way up to this day.

INSTAMINE CONTROVERSY

That last name change came as the result of a controversy they got involved with during the launch. One of the main points that have been criticized about DASH is the “instamine controversy” that went down over the first 48 hours after they launched the coin. About 1.9 million coins were mined during this period of time, way more than what was expected. As of March 2017, that quantity constitutes approximately a quarter of DASH’s current supply.

This was addressed by DASH’s creator, Evan Duffield, who stated that the instamine was caused by a code error on the difficulty adjustment. He then offered solutions to the community, like relaunching the coin, or “air-dropping” coins to make up for all the coins that were already mined, but the public disapproved of all of them. Instead, the project continued developing as planned, sweeping the instamine incident under the rug.

A lot of rumors floated around this mistake, the main one being that the coins were premined by the developers. Some have said that the “error” was done on purpose and that the developers were the ones involved in the instamine. There’s no proof to any of these accusations, but they managed to make quite a lot of damage on DASH’s reputation. Some of the users didn’t mind this, saying it wouldn’t affect them, but others lost their trust in the coin and their developers.

A PROPER DAO

DASH is considered to be the first proper DAO (Decentralized Autonomous Organization), because of two main points: the way they get their funds, and the way they make decisions.

First, let’s talk about their funding. Instead of the block reward going in its entirety to the miners (like every other cryptocurrency), DASH splits it into three parts: 45% to the miners, 45% to the masternodes (we’ll explain what they are later), and the remaining 10% goes to a treasury destined to support other important jobs, like developing, coding, or marketing.

In other cryptocurrency models, every other job that isn’t mining is funded through donations or sponsorships. By splitting the block reward to fund every possible job needed to develop DASH, they are completely independent and self-sufficient (autonomous), giving the workers a higher motivation.

Now that we’ve covered the funding, let’s talk about the decision-making. This is where the masternodes come into play. They are a select and relatively small group of people who get their masternode “status” with just one requirement: to already have 1000 DASH to their name. If someone meets this criteria, they can apply to become a masternode.

The masternodes are the ones who make all the decisions that affect the cryptocoin, and this is because they’re the ones who will benefit the most by good decisions, as they already own 1000 DASH (which is a lot). See how they run on motivation? These decisions are made through a yes/no voting system, with proposals coming from the dash.org forums or DashCentral (a community-driven website). This completes the idea of a DAO, by making it decentralized.

Now, masternodes are not only there to simply make decisions, they have to somewhat earn their voting privileges. The masternodes have 3 main jobs: 1. keep an updated copy of the blockchain at all times, 2. provide InstantSend, and 3. provide PrivateSend.

INSTANTSEND AND PRIVATESEND

We mentioned earlier that DASH includes features that solve main problems with Bitcoin and other cryptocurrencies, the first one being how long each transaction takes to be confirmed. InstantSend is a feature that allows transactions to be confirmed in just, wait for it, 1.3 seconds. Just compare that to the 10 minutes it takes Bitcoin!

This is achieved by sending the transactions made through InstantSend to the masternodes instead of the miners (like a regular one). As they are a smaller and selected group of people, they make the transaction and reach consensus faster. This confirmation is considered irreversible and would solve the double-spending problems. If the consensus isn’t reached, the transaction will go through the normal process.

Another problem the current models face is how traceable each cryptocoin is. The regular blockchain system allows the cryptocoins to be traced through every transaction made with them. The PrivateSend feature allows users to make anonymous transactions, again, by sending them to the masternodes instead of the miners. The masternodes then “mix” the coins with other user’s coins, and make the transaction using those coins. This way, the coins sent aren’t traceable to a specific person.

These two features are what make DASH the cryptocurrency closer to the concept of cash, as it incorporates its two main characteristics: 1. making instant transactions, and 2. making the money fungible.

WHAT’S NEXT FOR DASH: EVOLUTION

Even though DASH has solved some key problems in the cryptocurrency world, they plan on continuing to do so. One big thing about the crypto-world is that it is not, in the majority of the cases, very user-friendly. Accessibility is one big factor that has kept cryptocurrencies from entering the mainstream, and DASH is trying to change that.

A new version of DASH is set to be available in late 2017, and it will have new features that tackle the subject of accessibility. This “reinvention” is being referred to as Evolution, and, to quote Amanda B. Johnson (a DASH correspondent), it will make DASH a cryptocurrency even your mother can use.

They are set to do this by implementing three new changes: 1. replacing complex alphanumeric addresses with usernames, 2. give the option to reset passwords and make automatic backups, and 3. make transactions easier, by providing features used in modern banks, like creating different accounts, enable automatic payments, and make a list of contacts.

If the Evolution project runs successfully, these new features have the power to completely change the cryptocurrency game. To make a transaction the way you would send a tweet, or publish a Facebook post can bring cryptocurrencies to the mainstream and be one step closer to replacing banks.

But whether Evolution succeeds or not, the truth is DASH has already changed the game immensely. This is a cryptocurrency model all on its own, much more oriented to community, accessibility, marketing, and trust. With Bitcoin on the advantage for being the first one, DASH is still in the 9th spot on the Market Cap., but perhaps in a few years, we’ll see Bitcoin be dethroned.