Hey everybody, welcome to a new episode on BLOCKCHAIN CENTRAL! First of all, please note that this content does neither represent financial, legal, or tax advice, nor is it supposed to be understood or interpreted as solicitation to buy or sell any securities, coins or tokens In this video, we’ll take a closer look at a cryptocurrency known as Dash
Dash stands for Digital Cash We will talk about the main features of Dash, namely masternodes, InstantSend and PrivateSend as well as how it was developed As the name already suggests, Dash wants to serve as a digital currency for users around the globe Let’s talk about how they are trying to do this and what makes Dash different from other cryptocurrencies Dash is based on the Bitcoin protocol, with a few differences and improvements compared to its bigger brother
This blockchain-based technology has a faster block rate, larger blocks and so-called masternodes As we already know from earlier videos about Bitcoin, nodes are basically different computers inside the network which can verify the transactions For example, when I’m sending you some Bitcoins, I can broadcast this information to a single node, which will distribute the information to other nodes, until everyone in the network has verified our transaction Nodes also help miners create new blocks on the blockchain In the Dash network, masternodes are very similar to the nodes in the Bitcoin network, with some additional features
If you want to set up a masternode, you have to deposit 1000 Dash, which is approximately 450000 USD In return, masternodes have more responsibility in the network than normal nodes The deposit is an incentive for the owner of a masternode to behave responsibly and can otherwise be revoked by the network Besides this, masternodes have two additional features: InstantSend and PrivateSend
InstantSend is exactly what it sounds like It allows for an instant approval of a transaction by the network Doing so, your InstantSend transaction is confirmed on the spot and you don’t have to wait for confirmations from other nodes This is actually a big advantage over Bitcoin and helps Dash perform just like digital cash PrivateSend, on the other hand, protects your privacy while transferring money in the network
This comes with a few limitations for transactions: you can only send amounts, which are multiples of 001 Dash The reason for this is a mechanism called CoinJoin CoinJoin brings together Dash users who want to send a similar amount of Dash and mixes them together Doing so, it is not possible to obtain the origins of your funds and gives you true financial privacy
The masternodes help mix your inputs with the inputs of two other people This process must be done for every denomination and may take some time A PrivateSend might take several hours or even days, depending on the amount and privacy level Despite clear advantages of PrivateSend, there is controversy about its quality Some critics say that low liquidity and a rather centralized mixing of inputs by a few masternodes may harm the actual privacy of PrivateSend transactions
But why should masternodes perform these additional tasks? The answer is very simple: Users are rewarded for running masternodes Every 25 minutes, the Dash network creates a new block and rewards miners with new Dash coins The reward is split between a regular node and a masternode, each receiving 45% of the reward After doing the math, you might ask yourself what happens to the remaining 10% of the reward
This reward is allocated to the treasury system of the Dash network The money is then used for the further development of the Dash network While other cryptocurrencies have to rely on raising Venture Capital to fund additional projects or even become a non-profit organization, Dash has its own built-in self-financing mechanism The treasury budget depends on the value of Dash and is currently around 2 million USD per month With this money, various Dash projects can be funded
First of all, there is the core team which is responsible for the development of the cryptocurrency Then, there are expenses for advertisement to make the Dash network more popular But there are also other projects, such as setting up Dash ATMs around the world or organizing Dash meetups As you can see, the treasury budget helps Dash grow and to get closer to the goal of becoming digital cash Decisions on where to spend the treasury budget is made by the Dash DAO
DAO stands for ‘decentralized autonomous organization’ and can be compared to a computer system, which is controlled by votes for certain projects The voting power is given to the masternodes and every masternode receives one vote There is an incentive to own more masternodes to have more influence on the decisions in the Dash network The Dash network has proven to be quite successful over the past 4 years With the increase in popularity the value of Dash went up, and today it is ranked among the Top 20 cryptocurrencies in terms of market capitalization
Ok, so what can you take away from this video? Well, first of all, you are now aware that Dash is based on the Bitcoin network with a few differences The two-tier network with its normal nodes and its masternodes, allows fast transactions with InstantSend and anonymous transactions with PrivateSend Setting up a masternode requires an initial investment, but gives investors an opportunity to earn money, while running the network Unlike most other cryptocurrencies, Dash has a self-financing mechanism and decisions are made by masternodes within the Dash DAO This is helpful for the further development of Dash and its digital cash
Thanks for watching, I hope you liked it and found this overview useful If you have any suggestions for our future videos and would like us to investigate a topic, please leave the suggestion in the comments below Also, make sure to hit that like button if you liked this video and don’t forget to subscribe to Blockchain Central to never miss a beat! Happy investing!
Recent Comments