A portmanteau of “Digital Cash,” Dash is an altcoin that started life as a fork of Bitcoin in 2014.
Since then, the blockchain has developed its own unique architecture to help fulfill its goal of becoming a dependable digital cash solution for the global economy. This is what Dash calls the proof-of-service algorithm – a two-tier network structure that uses both miners and masternodes on different layers.
Anyone looking to get involved with mining or staking Dash will want to familiarize themselves with this model, which has also been implemented by many other cryptocurrencies.
Miners, or nodes, are responsible for solving the complex cryptographic puzzles needed to introduce new coins to the network and facilitate transactions on the blockchain. Just like with Bitcoin and every other proof-of-work cryptocurrency.
Masternodes represent a second, more superior layer of governance that not only helps with providing quicker transactions (InstaSend), and private transactions (PrivateSend), but also acts as an overseeing democratic mechanism. Masternode holders can vote on issues affecting the network and take part in activities like conflict resolution.
Together, these different tiers of the network allow for privacy, fast transaction times, and decentralization, making Dash one of the most popular altcoins around. Because miners and masternodes share responsibility for the network, each of them receives rewards: For every block that is mined, the miner gets 45% of the block reward, masternodes get 45%, and the Dash DAO (decentralized autonomous organization) gets 10%.
Anyone with the correct equipment, or enough money, can be rewarded for supporting the network by setting up as a miner or masternode holder.
