What is Dash?
Dash (DASH) is a cryptocurrency based on blockchain technology. The name stands for “digital cash” and it is a fork of Litecoin. That’s why Dash is also very similar to Bitcoin. However, it offers improved privacy, it features a more efficient mining algorithm and better scalability compared to Bitcoin.
Dash is widely considered as an improvement to its elder brother Bitcoin. It features additional privacy for transactions, similar to Monero. The mining algorithm X11 makes mining more energie efficient and less time intense. Transactions on the Dash blockchain are much faster and less expensive compared to transactions on the Bitcoin blockchain.
How does Dash work?
Dash utilizes proof of work as a consensus mechanism. Proof of work is a widely used mechanism to create consensus in a network. One advantage of the mechanism is that it is the most well rounded and best working mechanism because it’s the oldest and most tested one. Bitcoin and Ethereum still utilize proof of work. However, the biggest disadvantage of this mechanism is that it is very power demanding.
Dash tries to solve this problem by using a new hash algorithm, called X11. This algorithm is a combination of eleven different hash algorithms. That’s why mining Dash is more power and time efficient compared to Bitcoin or Ethereum. X11 also makes ASIC hardware completely useless for mining. This gives casual miners the chance to make more profit with mining and it prevents the monopolization of mining.
Nodes in the Dash network that possess more than 1000 Dash, are declared masternodes. These nodes have special responsibilities in terms of network administration and security. They receive a part of the mining fees and they can vote on the further development of the Dash network. Dash is safe from sybil attacks because masternodes can only operate with 1000 Dash, so there are no fake masternodes.
Masternodes enable a feature called PrivateSend. The nodes collect multiple transactions and put them into groups of transactions. Transactions can’t be traced that way because they disappear in large groups of transactions. This makes Dash more anonymous than for example Bitcoin. Another function that masternodes enable is InstantSend. With this function nodes can operate across networks to verify transactions faster.