Dash is one of the most popular cryptocurrencies reinventing financial transactions. Our team put together an in-depth summary of DASH and how you can easily access it all within your Uphold account.
In the world of cryptocurrency, many people are familiar with Bitcoin and Ethereum, the two biggest and arguably the most famous digital currencies in the market. However, there are a number of interesting and popular cryptos that while not yet mainstream, have been growing in popularity and DASH is one of those. Dash was introduced to the crypto world on January 18, 2014, with ambitions to not only outpace Bitcoin in value but also in the amount and quality of features it offers.
Here’s a little more about the history of Dash, and why many investors consider it for their cryptocurrency portfolios:
History of Dash
Evan Duffield, the founder of Dash, closely followed the creation of Bitcoin. With his mind set on creating solutions to real-world problems, Duffield saw an issue in Bitcoin’s handling of its “blockchain”.
The blockchain is the underlying system of cryptocurrencies providing the crucial ability to facilitate peer-to-peer (P2P) payments. This means that payments between crypto users can be completed without any centralized authority, like a bank or government institution, controlling transactions.
The reason it’s called blockchain is that every transaction within the currency’s network is recorded in a “block”. Upon completion of a transaction, a new block is created and attached to the link of blocks that came before it, hence, forming a chain — a blockchain.
Bitcoin’s blockchain is unique because every block records data that creates a history of how digital coins originated, and where they are headed to. Taking it one step further, Bitcoin makes its blockchain publicly accessible for anyone to see and audit.
On the one hand, this creates an increasingly safe accounting ledger, because manipulating a system that millions of eyes are watching is almost impossible. On the other, it diminishes the privacy of users, because programmers with malicious intent could trace block data back to the information of users who participated in the transaction.
This irked Duffield, so he suggested that Bitcoin’s community work on improving the system’s privacy. Bitcoin, however, was already set in its ways and rejected the proposal, so Duffield went about creating Dash utilizing the “fork” process unique to cryptocurrencies. A fork duplicates existing code. To initiate the fork, he created a new block that was attached to Bitcoin’s original blockchain but changed its core features, which caused it to split off into a new blockchain — creating a fork — from Bitcoin’s legacy chain.
When Dash was first released in 2015, it was called “Darkcoin” to emphasize its focus on privacy; but the name was soon associated with illegal activities, so on March 25, 2015, it was renamed to “Dash” (short for “digital cash”).
The new solutions Dash provided over other cryptocurrencies were so well received that it quickly found itself among the top 15 cryptos, based on market capitalization.
Key Features of Dash
According to Dash’s official website:
“Dash aims to be the most user-friendly and scalable payments-focused cryptocurrency in the world. The Dash network features instant transaction confirmation, double spend protection, anonymity equal to that of physical cash, a self-governing, self-funding model driven by incentivized full nodes.”
So, what does that mean?
Privacy and Fungible Coins
First and foremost, the feature most critical to Dash and its user base is privacy. As discussed, Bitcoin’s blockchain — and that of many other cryptos — is a public ledger recording and publishing data that can be traced back to its users.
This history data attached to each coin is not only a privacy issue, but can also affect the coin’s value. That’s the case, for example, when a bitcoin might be associated with illegal activity. As a result, some of the value in bitcoin can be tainted, and worth less than others.
“From time to time, the history is actually removed from all of the coins on the Dash network,” Duffield assures. This makes Dash harder to trace (to protect privacy), and more fungible to avoid double-spending.
Masternodes and Transaction Speed
While privacy is a key feature, maybe the most revolutionary aspect of Dash is Duffield’s creation of “Masternodes”.
To understand what Masternodes are, let’s take a step back and look at how the blockchain operates. In order to create a new block, Bitcoin introduced the concept of “miners”. These are people with computers powerful enough to process blockchain transactions.
Miners make the core idea of decentralizing the overall system possible because instead of one centralized banking authority in total control, the task of auditing and processing transactions is spread across thousands of tech-savvy people around the world.
The problem, however, is the intense competition among miners. That’s because only the miner who first solves the Bitcoin’s algorithmic challenge receives a small reward in the form of bitcoin (a commission). The other miners, who weren’t fast enough, walk away empty-handed; so it’s sort of an honor-based, voluntary system.
In addition, due to Bitcoin’s growing volume of users, transactions have started to slow down. The platform’s algorithmic challenges are increasingly complex to solve, which requires far more computing power, energy, and time than in the early days.
To avoid this from happening with Dash, Duffield introduced — in addition to miners — Masternodes, which have access to more powerful hardware and software. This creates a two-tiered network in which miners mainly focus on creating new blocks, and Masternodes complete more specialized tasks like Dash InstantSend, PrivateSend, and governance functions.
According to Dash.org, “Dash’s powerful Masternode network allows for features in the protocol level that other digital currencies must push off to centralized third parties.”
Unlike Bitcoin, which pays out small commissions to miners, Dash shares its mining block rewards three ways…
- 45% goes to a pool that is shared by Masternodes
- 45% goes to the miners
- 10% goes to the virtual Dash corporation to function efficiently
This results in an interesting ecosystem enabling constant growth: If the volume of overall transactions increases, more profit is being made, meaning the Masternode and miner financial pool grows, incentivizing more Masternodes and miners to join and keeping transactions consistently fast and secure.
How To Buy Dash On Uphold
At Uphold, we make it easy to access over 30+ traditional currencies and cryptocurrencies. Here are a few simple steps to purchase your first DASH:
- If you haven’t yet, you’ll want to sign-up for an account. You’ll be prompted to become a “verified member” when you first sign up. Verified members have full access to the entire ecosystem including additional account funding options, higher limits on the total value of their lifetime transactions above $1,000 US dollars.
- After the initial registration is complete, you’ll be taken to the dashboard. The dashboard features different money cards which represent each currency. Click on your DASH card, or “Add card/currency” to add DASH to your dashboard.
- Once you are in your DASH card, select the “Add Funds” tab at the top right. You can buy DASH with a bank account or from another currency card. Simply click on the box with your preferred payment method.
- Now, all you have to do is fill out the necessary information on the following page and specify how much Dash you’d like to buy. Then, click “Confirm” and you’re done!
Dash certainly has potential due to its unique two-tiered network and methodical governance. If it stays on track, it might soon be able to realize Duffield’s original vision of becoming the go-to consumer coin and providing a worldwide solution for merchant processing.