In 2014, 32 year old Evan Duffield launched what would later become Dash. Duffield had been developing the software since he was 15. And he had a history in finance and economics, both skillsets required to launch a viable cryptocurrency.
He had discovered Bitcoin four years earlier and had become gripped by its potential. But he wanted to add a layer of anonymity to the currency. Bitcoin was and remains completely transparent in terms of recording all transactions, including the addresses to and from where bitcoin is sent, along with the amount.
Duffield had come up with his own code to implement privacy in bitcoin , but he was resigned to the fact that Bitcoin’s core developers would not implement it.
So while working a full time job in finance, he launched X-Coin on January 18th, 2014…
A VERY MESSY BEGINNING…
After launching X-Coin the code got stuck very early on…around 42 blocks in.
In any blockchain, blocks of transactions are stacked on top of each other and linked together, the “block height” denotes the current height of the blockchain. So after 42 blocks of X-Coin, something went wrong.
Duffield wasn’t sure what the problem was, so he announced they’d relaunch later. When they did, a huge number of “miners” (i.e. people who run mining software to “mine” the transactions that support the network) flooded in, causing a large spike in . Miners are rewarded with coins every time they successfully mine a block.
Usually in a blockchain like Dash (or Bitcoin ), when more miners commit more computational capacity to the number crunching required to mine blocks, and secure the network, blocks are mined faster…but the underlying algorithm has a “difficulty adjustment” mechanism.
That is, the algorithm makes it harder to produce blocks. This slows down the speed of block production, and hence the speed of new coin issuance for mining blocks (I.e. block rewards).
Think of it this way: Imagine that 100 people (miners) each have a Rubik’s cube (algorithm to solve) and the first one to solve it gets some money (block reward of DASH coins).
Let’s say on average it takesroughly ten minutes for someone from the group to solve a cube and get their cash reward.
The imagine all of a sudden, you have 50,000 people (a LOT more miners) with Rubik’s cubes. Now, we’re getting solved cubes (i.e. block rewards of Dash) every 12 seconds instead of ten minutes.
What happens? You get a massive surge in coin supply.
This is essentially what happened in the X-Coin launch.
Typically, the difficulty adjustment is there to make the puzzle harder to solve (i.e. in my example, the Rubik’s cube has more squares on each side). It does this to keep the block rewards issued at a fairly constant rate. In the case of bitcoin , blocks are mined roughly every ten minutes.
In the case of X-Coin, the sudden surge of computational hashpower couldn’t be stemmed fast enough and coins flooded in.
The benefit of this big spurge of coins was distribution – miners had a lot of X-Coin.
LAUNCHED WITH PRIVACY IN MIND…
X-Coin was subsequently rebranded (terribly) to “Darkcoin” a month later, and then a year after that it became Digital Cash, or Dash.
Duffield had originally sought to market a coin with far greater privacy that Bitcoin . By mixing up user transactions with other ones, it makes it far harder (but not technically impossible) to trace a payment to a person.
So if absolute privacy is your goal, then Monero does a better job of this and you can review my Monero recommendation for the nitty gritty.
But the reasons I like DASH are as follows:
Unlike Bitcoin’s single-tier network, where everything is done by miners, Dash utilizes a two-tier network.
Certain network functions, like creating new blocks, are taken care of by miners. But the second tier of the Dash network employs “masternodes” which perform transaction and governance functions.
Anyone can set up a masternode, and there are now approximately $,700+ spread all over the world – this infrastructure allows for fast and cheap payment processing times.
Masternodes are currently required to put in 1,000 Dash as collateral (although note, this never leaves their possession).
Masternodes also get to vote on governance matters (which I/ll cover shortly) as well as earn some DASH for helping process transactions.
1,000 DASH deposit (~USD $300,000) is there to prevent what are known as “Sybil attacks”, where multiple accounts are created and spam a network.
II. SPEED…IN PRACTICE…
To test DASH’s transaction speed for myself, I downloaded the DASH wallet. I sent myself approximately $50 USD in DASH from my DASH wallet set up in Exodus.
The transaction appeared on my mobile wallet immediately pending confirmation, which followed approximately 30 seconds later.
I sent the funds back to my original DASH wallet on Exodus (highly recommended BTW)
The transaction processed instantly.
All in all, the transaction cost less than 1.5 cents each on a $50 transaction.
Those two transactions doe using bitcoin could have cost anywhere from $3 to $5
These kinds of transaction speeds and costs are extremely encouraging!
III . GOVERNANCE & COMMUNITY…
DASH has implemented a decentralized governance system using its networks of masternodes. Whenever a block is mined, the rewards are split as follows: 45% to the miners, 45% to the masternodes, and 10% goes to “budget proposals”
This “budget proposal” mechanism creates a pool of funding that anyone in the world can bid for, usually for development or marketing…basically, anything that’s going to benefit the DASH network.
Masternodes then vote on these proposals.
This creates a virtuous economic circle where the community, miners and masternodes are all incentivized to help grown the DASH platform.
And in DASH, all of the founders combined have less than 10% total of the current supply.
As a result, it’s one of the most engaged communities I’ve come across in the crypto space without a lot of bickering that plagues other cryptos.
IV. THE FUTURE…
DASH is planning to massively scale and recently issued a roadmap to global scalability called Evolution.
“Think of Evolution as online payments, a system similar to PayPal or Venmo, but completely decentralized, so that a user is always in control of his or her own money”. Dash Core CEO Ryan Taylor explained.
The goal is to become a global payments processor, comparable to Visa and MasterCard. Duffield even recently moved to Hong Kong to set up DASH labs, along with CTO Andy Freer. This team will be the scientific arm of the project, focusing on research and the development of custom hardware.
One of the key reasons is to be closer to China. The team is looking to design Dash-specific hardware configure for the massively scalable processing that the Dash network will require.
I’m a huge fan of the team’s focus on user friendly experiences for their users. The crypto world is plagued with software built by techies who simple don’t understand how to build intuitive customer interfaces for a non-technical user. Dash is focused on addressing that. Part of its mission is making digital cash easy to use and accessible for anyone and everyone.
Dash will also be releasing an integration that allows businesses to easily accept payment for goods and services in Dash.
I don’t for a moment envision that Dash could supercede Bitcoin , but with decentralized governance system, a hugely incentivized community, a growing tech team and a roadmap into mid-2021 and beyond, I believe you should be getting in bed with DASH now!
CALL TO ACTION: BUY DASH at $77.50 or less.
Stay ahead of the masses,