The most unique aspect of Dash is its masternodes system. A masternode is a special server with a full copy of the Dash blockchain. Users who have at least 1,000 Dash can operate masternodes that power several of Dash’s features.
These features include InstantSend, which allows for fully confirmed transactions within two seconds, and CoinJoin, a method of running a sequence of transactions and making them harder to trace. In exchange for running masternodes, users receive a portion of the block rewards from Dash mining.
While most merchants don’t accept any types of cryptocurrency, Dash has had some success in this area. It launched DashDirect, a retail savings app, on July 27, 2021. The app allows you to make purchases using Dash in more than 155,000 stores and 125 websites. It also includes discounts, with the discount amount depending on the retailer.
One final thing worth noting is how user-friendly Dash is. Its website clearly explains how Dash works and where you can buy it. This may seem minor, but it stands out compared to all the cryptocurrencies with overly complicated websites.
What Is DASH
At its heart Dash works in a very similar manner to Bitcoin. It is completely decentralized, with no authority controlling transactions or activities on the blockchain. Everything that happens with Dash is recorded its distributed ledger, and all value transfers happen in the most transparent manner.
The Dash network is comprised of master nodes, which are servers that have their resources allocated to processing and verifying transactions on the Dash network in return for rewards of Dash fees and coins.
While the use of master nodes doesn’t immediately seem so important, this architecture gives the Dash network significant processing power and has allowed for the inclusion of two important Dash features: InstantSend and PrivateSend. These two features make Dash a unique project.
To keep things simple I’ll just mention that InstantSend isn’t literally instant. It takes about 4 seconds to confirm an InstantSend transaction. That’s pretty near instant when compared with the 10 minutes or more that the Bitcoin network needs to confirm a transaction.
The master nodes do the initial consensus on the validity of each transaction, and they then lock the funds to promise the network that the transaction will be completely validated in the coming blocks.
PrivateSend is a great feature since it allows users to keep their identity hidden, while also obscuring the origin of funds sent, thus keeping accounts private as well. Dash accomplishes this through a process of virtual mixing of wallet inputs. This mixing doesn’t involve any transfer of coins, but it serves to solidly obscure where funds come from.
How Dash works
Dash is based on Bitcoin (CRYPTO:BTC), but it uses a two-tier network structure for improved efficiency. The first tier is a proof-of-work system where mining devices solve complex mathematical problems. When a miner finds the correct solution, they can add a new block of transactions to Dash’s blockchain.
The second tier is Dash’s masternodes. Anyone who proves ownership of 1,000 Dash can run a masternode. These masternodes are responsible for Dash’s InstantSend and CoinJoin features, and they’re also allowed to vote on governance and funding proposals.
Every time a block of transactions is added to the Dash blockchain, it generates rewards. The rewards are split three ways:
- 45% to miners
- 45% to masternodes
- 10% to Dash’s governance budget
There are currently more than 10 million Dash in circulation, and it has a maximum supply of 18.9 million. Dash can be used for purchases with retailers through its DashDirect app. It can be traded on cryptocurrency exchanges that list it, which include:
- Coinbase (NASDAQ:COIN)
The popularity of Dash didn’t come from nowhere: in addition to the smart decisions made by its team, such as expanding into Venezuela in 2018, the coin is also backed by its incredible technical fundamentals. Dash offers its users quite a lot of benefits when it comes to making cheap and private transactions — for example, its transaction speed is just 1 second.
The benefits and advantages Dash can provide to its users are attributed to its features, such as PrivateSend, InstantSend, and others. Let’s take a closer look at them.
PrivateSend is a feature that swaps coins between users, thus breaking the traceability of individual Dash coins and making the network safer for all parties involved. It prevents coins from being traced and blocks outsiders from accessing each coin’s transaction history.
Any user that can prove that they own at least 1,000 DASH can run a masternode on the Dash network. Masternode owners are allowed to vote on funding and governance proposals. Additionally, users can receive rewards for running a masternode. Every time a new block is added to the blockchain, it generates some rewards, which are then split in three ways: 45% goes to the miners, another 45% goes to the masternodes, and the remaining 10% goes to Dash coin’s governance budget.
Masternodes are also responsible for the CoinJoin and InstantSend features.
CoinJoin is a feature that ensures the privacy and security of all participants of a crypto transaction. It is a trustless (non-custodial) method of running a sequence of transactions in a way that makes it difficult for outsiders to trace and monitor the transaction history.
CoinJoin is currently available in the Dash and Dash Electrum wallets.
InstandSend is a feature that allows Dash users to instantly send Dash coins to each other. It is supported by a wide range of wallets and vendors, including but not limited to Kraken, Dash iOS and Android wallets, Bitrefill, and others.
X11 is a unique hashing algorithm that was created by one of Dash’s core developers Evan Duffield. It is a chained proof-of-work algorithm that utilizes a sequence of eleven different hashes for maximum efficiency and fairness. It is capable of providing users with increased security while simultaneously reducing the uncertainty associated with any crypto asset.
ChainLocks is a feature that protects Dash from the 51% attacks that are common in the crypto world. It provides an effective and quick alternative solution to the blockchain reorganization threat.
Dark Gravity Wave (DGW)
Dark Gravity Wave, DGW for short, is an open-source difficulty adjustment algorithm for Bitcoin-based cryptocurrencies. It adjusts the difficulty levels of every block based on the data from recently found blocks. This approach enables the network to issue new blocks at relatively consistent times, preventing the time-warp exploit even during high fluctuation periods.
How safe is Dash?
Dash is extremely safe to use as a result of its X11 mining algorithm. Dash employs a Decentralized Project Governance that serves three (3) different functions. Two of the functions are InstantSend and PrivateSend. The third is CHAINLOCKS. ChainLocks secures the blockchain in a way where it cannot be modified. This is the primary reason why DASH has not been subjected to or used in any ransomware schemes since its inception in the crypto market in 2014.
Is Investing In DASH Risky?
Investing in Dash could be risky due to the unpredictability of the cryptocurrency market. DASH began last May in a bullish fashion. The digital cash opened Saturday, 1st May 2021 at $319.58 and closed the day at $322.05. The digital asset opened Wednesday, 5th May with a trading price of $360.59 and reached an intraday high of $419.26. In a few hours, it shed 14.454% of its new price and dropped to a day low of $358.66.
Dash reached a new high of $476.85 on 7th May, and from then went on a downward spiral. Trading at an opening price of $426.61 on Wednesday, 12th May, Dash plunged on Sunday, 16th May. This came after Elon Musk’s response to a tweet about BTC HODLers finding out in the future that Tesla has dumped its BTC holdings.
Dash has shed 82.8% of its price high in May at the time of writing. This uncertainty makes DASH a cryptocurrency that is extremely risky to play with your hard-earned money.
Could Dash Be A Bad Investment?
Investing in Dash could be a bad investment in the long term due to its overreliance on its partnerships, adoptions, and integrations. Uniswap (UNI) is a decentralized exchange running on the Ethereum Network. UNI currently commands a price of $23 although it’s a DeFi coin and not a mainstream cryptocurrency. UNI has a relatively bigger market capitalization than DASH which stands at $14 billion and makes it the 11th largest digital asset in the world.
As per information retrieved from the 2021 – Global Crypto User Index, one of the key areas was decentralized finance. 66% of crypto users admitted to using DeFi applications. Aside from this, 60% of users opined that they keep their digital assets within exchanges. Uniswap is one of the popular decentralized exchanges in the world and its coin UNI commands billions of dollars in volume daily.
If the Dash Core Group does not initiate forks (soft and hard) to take advantage of Dash’s open-source network, the cryptocurrency may not command a hefty price tag in the future. It would continue to trade below the $500 milestone for a long time.
Additionally, DASH faces strong competition from other cryptocurrencies with the sole aim as a transactional currency. Other transactional currencies are Bitcoin, Bitcoin Cash, Ether, Litecoin, and Dogecoin among others. These digital currencies are used in settling more transactions than Dash. This means more liquidity is being poured into other cryptocurrencies which do not bode well for the valuation of DASH in the future.
Should I Invest In DASH?
DASH is currently trading at a relatively lower price. It has forged a new partnership with Cloudbet where it will be gaining access to more than 100,000 people. If there are more announcements about DASH crypto payments as well as major investments by institutional investors, then the digital cash could soar into the price milestones forecasted by analysts and experts. At DASHs current trading price, it would be extremely easy to see more than 100% returns by the end of the year.
Unlike DASH, BTC is also trading at a relatively lower price than its all-time high but it is still expensive. The crypto boom of 2021 was a blessing as well as a curse. With almost every discussion on social media (Reddit, Twitter, and Facebook) centered on up-and-coming cryptocurrencies and projects, several authorities have started to take a stand. This is crashing the market to new lows. BTC has lost one of its major partners in Tesla after it decided to stop accepting digital gold as an option of payments for its vehicles.
Verdict on What to Buy (DASH or Bitcoin)
Long-term investors should consider buying DASH due to its potential in the market based on consistent partnerships. Buying BTC for the long term is not a bad idea but it’s not recommended.
Currently, with the crash of Bitcoin, it would take two to five strong institutional investors to push the crypto trading asset near its all-time high.
With $3,000 at your disposal, buying 10 DASH will cost you $2,450. At the same price, buying Bitcoin will get you a fraction of the cryptocurrency. What’s more, BTC will have to double to at least $136,000 in the future for it to return 100%. On the other hand, if DASH reaches the $1,000 price milestone, your 10 DASH multiplied by $1,000 will result in $10,000. In the process, DASH would return 308.16%. This makes DASH a better long-term investment for HODLers with low investment budgets.
You can take advantage of the current outlook of the market and make gains. Due to the volatile nature of the market, there are multiple percentage swings in price for both DASH and BTC. With independent fundamental research and technical analysis from financial trading websites, you can be in a position to make enormous returns from the price movements of the two assets in perspective.
At Trading Education, we would recommend diversifying your portfolio with DASH and BTC. Additionally, you can buy less volatile assets such as metals, commodities, and stocks to shield any losses you may incur from your crypto holdings.
How legit is Dash?
Dash is an extremely legit cryptocurrency. It’s extremely understandable to be afraid of investing in DASH due to controversies surrounding the cryptocurrency market. With that said, eToro is a credible multi-asset brokerage firm that allows users to buy, sell and hold more than 90 cryptocurrencies.
eToro has served millions of customers globally and has a range of payment options that will fall into your interest. eToro listed DOGE on Monday, 10th May 2021 after years of ignoring the cryptocurrency due to its association with shady and pump and dump schemes. For DASH to have been listed on eToro for years certify the cryptocurrency as a legitimate asset that is not heading for extinction zones in the future. To put it simply, invest in DASH with eToro.
What are the risks of Dash?
Here are the most significant risks of investing in Dash:
It’s extremely volatile, and its price can change by 10% or more in a single day. This is an issue with any cryptocurrency investment because they’re high risk, high reward.
Dash faces a common issue for cryptocurrencies — whether it’s a currency or an investment. Its goal is to be a global payments system, but that will require a more stable price. Otherwise, consumers will prefer to hold Dash in the hopes of the value increasing.
Dash has been called a scam due to issues when it launched. Most notably, the difficulty of mining didn’t adjust quickly enough, leading to nearly 2 million DASH being issued in the first 24 hours. While creator Evan Duffield says this was an error, some in the crypto community claim it was planned so that a small group of people could mine a large amount of Dash.
If you decide to buy Dash, only put in what you can afford to lose. And, if you’d prefer crypto exposure at a lower risk, consider cryptocurrency stocks.
Is Dash a good investment in 2022?
The Dash cryptocurrency has the potential to be a profitable investment. If it fits into your portfolio, it can be a good buy.
Does Dash have a future?
Dash has a solid technical foundation and proven real-world applications. Most DASH price predictions expect the coin to rise in the future.
Can Dash hit $10,000?
The Dash price is unlikely to hit $10,000 any time soon or at all. However, it is still possible.
Is Dash better than Bitcoin?
As Dash was based on Bitcoin, it solves some of the issues that the biggest cryptocurrency in the world still faces to this day (for example, Dash is more efficient and uses less energy).
What will Dash be worth by 2023?
According to our Dash price prediction, the coin will be worth $300 in 2023.
How much will Dash be worth in 2025?
According to our DASH forecast, this cryptocurrency can potentially hit $2,000 in 2025.
Is Dash mining profitable?
Dash mining is hardly profitable at the moment. If you would like to make money by mining crypto, you can try mining Dogecoin or Litecoin instead.
Will Dash’s Price Go Up?
If the majority of price predictions are to be believed, then DASH will rise in the future.