DASH is a blockchain project based on the codebase of Bitcoin but which offers users added speed and privacy features. Dash has positioned itself as a comprehensive online payment system and a low cost alternative to conventional cash and card transactions.
Dash was launched in 2014 by developer Evan Duffield as a fork of the Bitcoin protocol. Originally known as Xcoin, and then briefly as Darkcoin, Dash was conceived as a way to enhance the privacy of the Bitcoin network and significantly reduce its transaction times.
In the months following its launch, Dash (or Darkcoin as it was known at that time) was the subject of news reports that suggested it was being used on the dark web to facilitate illegal drug sales and the sale of other contraband items. Regulators were concerned that Darkcoin’s privacy features would allow users to conceal their transaction histories and evade anti-money laundering and counter-financing of terrorism measures put in place to detect and prevent criminality. As a response to those concerns, a number of cryptocurrency exchanges, including eToroX and ShapeShift opted to delist the token from their trading platforms (although eToroX subsequently relisted Dash).
Darkcoin was rebranded as Dash in 2015 in a move to shed the token’s negative reputation and emphasize token’s efficacy as a payment system and a currency suitable for daily use: indeed, ‘Dash’ was chosen as a portmanteau of ‘digital cash’. In 2017, Duffield joined a business incubator run by Arizona State University and by April 2018, Dash had become one of the top 12 cryptocurrencies by market value. The currency had also expanded into Venezuela in an effort to address the country’s economic volatility.
Dash is a decentralized autonomous organization (DAO) which means that governance issues are handled entirely by the Dash user community rather than by a centralized authority. When governance issues arise, masternodes vote on decisions until a consensus is established, with voting rights partially based on the amount of DASH a masternode holds.
Dash has positioned itself as a competitor to fiat currencies and digital payment systems, and to virtual currencies. In addition to its privacy benefits, Dash emphasizes the speed of its transactions and its low transaction fees when compared to credit and debit card payment services, online payment services such as PayPal, and competitor cryptocurrencies such as Bitcoin. Dash seeks to position itself as being equally usable in an AML compliant way as Bitcoin, pointing out that its transactional protocols are identical to Bitcoin.
Dash has also imposed a token cap: Only 18.9 million DASH tokens will ever be created.
Like Bitcoin, Dash functions as a digital currency that enables users to send and receive payments anywhere in the world with transactions recorded on the blockchain. Dash is open source, and the protocol makes it possible or developers to innovate and deploy dApps on the network. Dash miners verify and record transactions and collectively receive 45% of the DASH reward for each new block added.
The Dash dApp ecosystem includes a range of tools and solutions, including:
- Payment processing solutions
- Cryptocurrency custody tools and APIs
- Software development kits
- Business services solutions
- Fiat onramp solutions
In another contrast to Bitcoin, the Dash blockchain uses a second verification layer made up of ‘Masternodes’ that enable the network’s speed and privacy benefits. Any node on the Dash network can become a Masternode by possessing at least 1000 DASH and meeting certain technical requirements such as CPU type, RAM, and network bandwidth. Masternodes simplify the Dash verification system: a single Masternode can approve transactions submitted by miners, reject improperly formed blocks, and store a complete copy of the blockchain. Masternodes and miners each receive 45% of the DASH reward for verifying new blocks – with the remaining 10% allocated to the Dash treasury. Masternodes also have final say on Dash governance decisions that are proposed by the stakeholder community.
Dash features: The privacy and speed features that distinguish Dash from Bitcoin are known as Instasend and Privatesend:
- Instasend: The Instasend feature allows Dash users to complete transactions on a near-instant basis. Instasend eliminates the waiting times that are associated with crypto transactions by bypassing miner verification and instead using the Masternode system.
- Privatesend: The Privatesend feature allows users to conduct untraceable transactions on the Dash blockchain and also relies on the network’s Masternodes. The Masternodes act as a built-in mixing service, mixing up transaction inputs multiple times in a matter of seconds, obscuring the original transaction and the identities of the parties involved.
Dash can be used to pay for a range of goods and services in both digital and real world contexts.
As of Q4 2020, Dash was accepted by over 4,350 merchants and vendors.
Dash continues to encourage developers to build applications on the open source Dash network. In 2021, Dash is seeking to roll out the DashPay program, a wallet app that streamlines acceptance of Debit and credit card payments. The DashPay wallet effectively aims to be a social crypto wallet that allows users to create personalised usernames and readable addresses as well as establishing networks with friends and family in order to make Dash payments more straightforward.
- What is Dash?