Dash cryptocurrency was launched in 2014 and was initially known as Xcoin. After rebranding to Darkcoin, it settled on its current name, Dash, in March 2015. When it was originally created, it was designed to ensure users’ privacy and anonymity. The cryptocurrency’s white paper, authored by Evan Duffield and Daniel Diaz, describes it as a privacy-oriented cryptocurrency based on the work of Bitcoin founder Satoshi Nakamoto.

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Key points of understanding Dash cryptocurrency

• Dash aims to become a daily transaction tool as a digital currency that can be used as cash, credit card or through PayPal.
• In 2018, the digital cash company expanded into Venezuela, the cryptocurrency’s first foray into the economically troubled country.
• Dash is run by a subset of its users called masternodes.
• All masternodes have an initial stake equal to 1000 Dash in their systems.

While still boasting strong encryption features, the company has since scaled back its ambitions. Dash now aims to become a medium for daily transactions as a digital currency that can be used as cash, credit card or through PayPal. Dash is an open source project that includes a decentralized payment network. As of August 2021, Dash is the world’s 50th cryptocurrency by market capitalization ($2.6 billion). Dash cryptocurrency value is 251.68. It is 3 dollars.

Understanding Dash Cryptocurrency

Dash aims to become a medium for daily transactions and has built a wide network to realize this ambition. In 2018, the digital cash company expanded into Venezuela, the first influx of cryptocurrencies into an economically troubled country. Demand for cryptocurrencies – and the number of Dash users – has grown rapidly since the virtual currency was first introduced three years ago. The reason for this is the need for exchange currency. Venezuela is currently experiencing a period of internal unrest and hyperinflation to the extent that the local currency (the bolivar) has become essentially worthless.

In an interview with CryptoSlate, Dash CEO Ryan Taylor said the cryptocurrency is critical to Venezuela’s “survival.” Citizens of this country have turned to cryptocurrencies such as Bitcoin and Dash because they can be traded quickly and cheaply.

The Dash cryptocurrency   has also invested in research, funding a blockchain research lab in partnership with Arizona State University (ASU). Through this lab,  Dash  will establish research “designed to accelerate research, development, and education that will increase blockchain transaction speed, efficiency, security, and expansion of use.”

What is the difference between Dash and Bitcoin?

The main difference between  Dash cryptocurrency    and Bitcoin (what is the difference between Bitcoin and Ethereum?) is in the algorithm that each technology uses to mine coins. Dash uses the X11 algorithm, a modification of the Proof of Stake (PoS) algorithm. It also uses the CoinJoin combination to entangle transactions and enable privacy on its blockchain. Bitcoin uses the Proof of Work (PoW) algorithm.

These two cryptocurrencies have different systems for managing transactions. Bitcoin blockchain transactions must be verified by all nodes within the network. This process, designed to ensure consensus without authority, requires a significant infrastructure investment for full nodes (full nodes are nodes dedicated to mining). In this system, Bitcoin miners running full nodes commit to increasing their time and money to ensure optimal operations. As the Bitcoin network expands, this becomes an increasingly impossible task.

This process takes time and cannot prevent clogging. Slow processing leads to the accumulation of transactions in the Bitcoin memory pool. And in turn, this can lead to high transaction fees, making Bitcoin unsuitable as a cryptocurrency for day-to-day trading.

Dash uses a different system to process transactions. Dash is run by a subset of its users called masternodes. Masternodes simplify the verification and validation of transactions. All major systems have an initial stake equal to 1000 Dash in their systems. In the cryptocurrency white paper, the founders say it allows users to pay for services and earn capital.

Read more: Digital currency training

Continue comparing Dash and Bitcoin cryptocurrency

It also solves the scalability problem for transactions. This is because the number of nodes required to successfully confirm a transaction is reduced to a manageable number. Masternodes are responsible for verifying miner network transactions and providing services such as payment and privacy to the Dash network. As of August 2021, there are 4614 masternodes in the Dash network.

The second innovation in the Dash ecosystem lies in its governance model. Bitcoin and Litecoin, two cryptocurrencies with similar ambitions to Dash, grew out of academic institutions. To a large extent, the future development of these cryptocurrencies is highly dependent on these institutions. Unlike Bitcoin and Litecoin, Dash has pioneered a self-financing model by dividing block rewards between three stakeholders – masternodes, miners and the treasury. The first two people each have 45% share. The 10% share allocated to the treasury will be used to finance future development projects in Dash. Masternodes play an important role here as well: their vote determines the future development paths of the cryptocurrency.

Investing in cryptocurrencies and other Initial Coin Offerings (ICOs) is extremely risky and speculative (Everything You Need to Know About Phantom Cryptocurrency) and this article is not a recommendation by Investopedia or the author to invest in cryptocurrencies or other ICOs. Because each person’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no guarantees or warranties as to the accuracy or timeliness of the information contained herein. As of the writing date of this article, the author has 0.1 Bitcoin.

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