Introduction to cryptocurrency by relating it to Bitcoin.
Dash represents a very widespread cryptocurrency in South America (Argentina, Venezuela).
Dash is part of the same ecosystem as Bitcoin, i.e. the Dash blockchain derives from that of Litecoin which in turn derives from that of Bitcoin.
While we consider Bitcoin as digital gold, therefore associated with large movements of money, the purpose of Dash is to be a digital payment system for daily operations (coffee, metro tickets, purchase of items on e-commerce, etc.). It has no associated smart contracts and its focus is on practical utility in the purchase of everyday goods.
Therefore it is a digital currency with a non "store of value" feature.
It is also part of the privacy coin family, as with Dash it is possible to make anonymous payments, not pseudo-anonymous like Bitcoin.
Finally, it can be associated with the family of cryptocurrencies for which some advanced features are delegated to masternodes.
Dash is a fork of Litecoin which in turn is a fork of Bitcoin. However, there are technical differences.
1. Blockchain
The Dash blockchain, like that of Bitcoin, is based on the Proof of Work (PoW). For Bitcoin we have the PoW SHA-256, for Dash the PoW X11, so the hash algorithm varies.
PoW X11 is an algorithm that uses 11 different hash functions. This algorithm is more complicated than a SHA-256 algorithm; one of the advantages of the X11 algorithm is security. In fact, most of the algorithms used in cryptocurrencies use a single hash function for the calculation. There are 11 of them in X11 and this guarantees a higher degree of protection.
2. Block size
The maximum block size of Bitcoin blockchains is predetermined, that is: 1 MB for Bitcoin. Within this space are contained, encoded, the transaction data. For Dash we currently have a block size of 2MB.
3. Average block extraction time
For the Bitcoin 10 min/block, for the Dash 2,5 min/block.
A block time of 2,5 minutes means standard Dash transactions are faster than those of Bitcoin.
4. Cost of transactions
For Dash, transactions are cheaper, have to cost very little or nothing, and have to happen very quickly.
source: link
Halving
Dash rewards reduction is an event when the reward distribution to Dash masternodes is reduced. While Bitcoin reduces the coin emission rate by 50% every 4 years, Dash reduces the emission by one-fourteenth (approx. 7,14%) every 210240 blocks (approx. 383,25 days) as a means to create a smoother transition towards a fully fee-based decentralized financial network. After the reduction, the number of new Dash issued in each block is reduced from apporximately 3,11 to 2,89 Dash.
source: link
About the Bitcon, halving refers to the number of coins that miners receive for adding new transactions to the blockchain being cut in half. This will now diminish from 12,5 Bitcoin to 6,25 and will halve again every 210,000 blocks until the last Bitcoin is mined in 2140 (May 2020).
Therefore Bitcoin halving is the event where the number of generated Bitcoin rewards per block will be halved (divided by 2).
In this upcoming halving, the total number of Bitcoin mined by miners per block will be reduced from 6,25 to 3,125.
This halving event takes place approximately every 4 years and ensures its monetary policy.
source: link
Reward for Bitcoin mining:
100% miners
Reward for Dash mining:
45% miners
45% masternodes
10% fund (Dash project)
There are similarities between Bitcoin and Dash.
The big difference comes into play when it comes to masternodes.
As reported by the official website:
Dash is best known as the first digital currency with a focus on ease of use, anonymity and transaction speed. What many people do not know is that these features are implemented on top of a network of dedicated servers known as masternodes, which gives rise to many exciting features not available on conventional blockchains.
Masternodes are powerful servers backed by collateral held in Dash, and are designed to provide advanced services and governance on the blockchain. Dash has been associated with the concept of masternodes ever since the invention of this novel concept soon after the project started in 2014.
Masternodes host full copies of the blockchain and provide a unique second layer of services to the network, facilitating advanced functions such as InstantSend, PrivateSend and usernames on the blockchain.
Masternodes must be backed by collateral denominated in Dash, and in return their operators receive regular payment for the services they provide to the network. As highly committed custodians of the project, masternode operators are given the opportunity to vote each month on up to 10% of the block reward to fund community projects supporting the Dash ecosystem.
Thank you for taking the time to read this article.
Ad maiora!
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