If there’s a cryptocurrency that makes people outside the cryptocurrency community sceptical its DASH.
On the one hand, DASH is one of the leading cryptocurrencies and a permanent feature in the top ten. With a market cap averaging around $6bn and a daily trading volume exceeding $200m, this is a digital token that has more going for it than a speculative asset.
Yet, some of the attributes associated with DASH raise a red flag.
Is DASH a good investment tool and can we trust those involved behind the scenes?
Here’s everything you have to know about DASH:
- Benefits of DASH
- How does DASH cryptocurrency work?
- What is DASH Masternodes?
- Controversies Around DASH
Benefits of DASH
Bitcoin may have grabbed all the headlines since its inception in 2009, but projects like DASH are rising to the surface on the basis they deliver the shortcomings of the Mother Coin.
DASH became the first blockchain protocol to be self-governed and self-funded.
It was also one of the first to resolve issues with digital payments that exist with Bitcoin, namely:
- Speedy transaction times
- Pay anybody, anywhere
- Low Fees
Given DASH is short for digital cash, the primary purpose for the developers was to develop a source of effectively using cryptocurrency in a real-life situation, but with a practical function, Bitcoin cannot deliver.
Speed is the advantage DASH has over most of its competitors.
Bitcoin transactions, for example, take at least 10 minutes to process. With InstantSend, DASH completes the transaction in 1.3 seconds.
Users have to pay a transaction fee to use InstantSend, but fees are still lower than bank charges and other online payment gateways such as MoneyGram and PayPal.
Privacy and security are also a major plus.
DASH users do not have to register their email address to send or receive tokens, nor do they have to go through a third party which would typically involve handing over personal information.
That’s not to say that transactions are completely anonymous.
An illegal activity could still be traced back to the source. Government security services and watchdogs will still be able to recover data to investigate crimes.
The advantage is that DASH’s trust protocol gives buyers and sellers security against marketers or firms selling or leaking personal data to large companies as we saw with the recent Facebook-Cambridge Analytica scandal.
DASH can achieve all this through a complex network of servers they call masternodes. And it is here where DASH appears sketchy.
How Does DASH Cryptocurrency Work?
While the majority of cryptocurrencies use a single-tier network, DASH operates with a two-tier network; miners and masternodes.
The first-tier consists of an extensive network of computers that communicate with one another to verify data within the blockchain. Providing all the data with a single transaction corresponds data in previous transactions, there is no problem, and the transaction will be verified.
The second-tier is what the DASH team call masternodes. These are the specialist computers that perform the tasks to ensure the blockchain functions and that protocols are enforced.
For example, masternodes are responsible for overseeing the functionality of InstantSend. The owners of the principle computers also control the development of the DASH network.
Clearly, not just anybody can be a masternode.
What Are DASH masternodes?
Masternodes are complex computer rigs that are designed for the heavy duty work that is required to power blockchain and cryptocurrencies.
In this respect DASH, masternodes are no different from any other digital tokens.
DASH masternodes are also given an incentive of a 45% share of transactions in a block every time they solve the algorithm and close the seal. Payments of one DASH are typically paid every three to four days.
Masternodes can also charge fees for people to use their services; i.e., InstantSend, PrivateSend. Masternodes also govern the “decentralised” network giving a central core of people the right to vote on the progress and development of the blockchain.
This is where DASH differs to most cryptocurrencies whereby decentralised systems are public, and everyone in the network has a choice.
At some level, there is unified control over what happens on the network. Here there is no room for manipulation.
Furthermore, to become a DASH masternode, investors have to put up collateral that is equivalent to 1000 DASH – which at the time of writing pans out at US$303,492.
Do you have that sort of pocket change lying around?
Controversies Around DASH
Needless to say, qualification for DASH masternodes is reserved for people that are already rich; and not for the general public which, in essence, goes against the intended spirit of the cryptocurrency community that hopes to create a level playing field.
Another stumbling block for most people is you need a virtual private server (VPS) that can operate for 24-hours on a secure internet connection.
In other words, this is not a rig you can run from your bedroom or garden shed. The running costs alone would be gargantuan on top of the hardware costs.
Another fact worth noting is DASH has a limited supply of between 18 and 19 million tokens, depending on which report you read. This is not unusual for cryptocurrencies.
However, within the first two days of being launched in 2015, the 1.9m token was mined – snagging 10% of the 19m that will be released.
To date, around 7.7m coins have been mined which is a massive slow-down and still go to the masternodes everytime they seal a block – which only happens when people that buy DASH spend DASH.
This type of instant uptake of a cryptocurrency suggests there are a core group of people wanting to monopolise the tokens.
The group has control over the development and decisions are coming from within the inner-circle of the second-tier and nowhere else.
Unless you have US$3.5K knocking about, you are nowhere.
What you have to know about DASH is this is a cryptocurrency that has the potential to be one of the leading digital tokens and solve problems other blockchain technologies have not resolved.
But what we don’t know about DASH is which group owns the lion share of the tokens, or what they plan to do in the future.
They are already charging transaction fees; another kick in the teeth for crypto enthusiasts.
Read more about Top Cryptocurrencies To Invest For 2018.
What are your thoughts on DASH? Do you agree with the currency being primarily controlled of do you think it’s an answer to blockchain’s problems?