A Beginner’s Guide: What Is Dash Crypto?

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When analyzing the history of cryptocurrencies — and especially the most prominent cryptocurrency of all, Bitcoin (BTC) — you’ll come across cryptocurrencies that were built based on the “blueprints” of Bitcoin. One such cryptocurrency is Dash (DASH).

Dash is a cryptocurrency with an open-source blockchain that has been gaining attention, especially recently.

Before investing in a cryptocurrency such as Dash, you need to know a little about its background, unique features, price timeline and future plans, as well as its “controversial” history. So, let’s begin with a brief explanation of Dash.

What Is Dash?

Dash is a cryptocurrency that was created due to a Litecoin fork. Since Litecoin is a Bitcoin fork, these three cryptocurrencies are very similar. The name DASH is a blending of the words “digital” and “cash.” Indeed, digital cash is essentially what a cryptocurrency is.

Dash intends to become a better version of both Bitcoin and Litecoin. Additionally, it aims to be a successful medium that allows people to complete daily transactions.

Dash is open-source, which means that anyone has access to new updates and can propose protocol changes if the majority of nodes agree. 

It is worth noting that Dash, just like other cryptocurrencies, is decentralized and does not have a central authority. Dash, however, is governed by DAO (Decentralized Autonomous Organization).

What makes Dash unique is the efficiency it provides when compared to the likes of Bitcoin and Litecoin. Moreover, the Dash network tries to improve privacy protocols, meaning that they promote a more private transaction than other cryptocurrencies.

It has a limited supply of 18.9 million, with around 10 million already in circulation.

Dash is a fungible cryptocurrency, which means that one coin cannot be traced back to earlier transactions.

How Does Dash Work?

What differentiates Dash from other cryptocurrencies is the way it works. Dash has three distinct features that make it the cryptocurrency it is today: Masternodes, PrivateSend, and InstantSend.

There are two main systems that work on Dash, namely those of miners and Masternodes. Miners on the Dash network work in the same way as other cryptocurrencies. Masternodes, on the other hand, are users who own more than 1000 DASH.

These Masternodes serve as DAO (Decentralized Autonomous Organization) in the DASH network. They have more leverage than smaller users and possess the ability to operate various functions within the Dash blockchain as well as govern the network. In order to do so, Masternodes need to spend a lot of money for running every service within the network. 

But what is the benefit of being a part of Masternodes besides owning 1000 DASH?

Masternodes are rewarded in the same way that miners are rewarded. Whenever 1 DASH is mined, 45% of the mined DASH goes to the miner responsible for mining, another 45% goes to the Masternodes to reward them for their contributions to operating the Dash blockchain, and the remaining 10% is used by DAO to improve the Dash network on other fields.

There are two main functions for which Masternodes are responsible. These are PrivateSend (private transactions) and InstantSend (instant transactions). 

PrivateSend makes it possible for users to secure transactions, even more than before. Users that trade DASH have options to make the transactions completely untraceable and invisible to other users. In other words, users may not be able to check on your DASH transaction history, transaction amount or even your address. PrivateSend has made DASH one of the most prominent cryptocurrencies when it comes to anonymity and security. 

InstantSend is another feature that Masternodes make possible for users. This service makes DASH transactions much faster than those of most other cryptocurrencies. To put it more concisely, around two-and-a-half minutes are needed for a DASH transaction to be completed, which is much faster than with a lot of other cryptocurrencies. Moreover, users can pay a very small fee to Masternodes if they want to complete the DASH transaction instantly.

As a consensus mechanism, Dash uses a hybrid version of both Proof-of-Work and Proof-of-Stake.

Dash vs. Bitcoin

DASH and BTC share many features in common. However, since Dash was created to become a better version of Bitcoin, there are a lot of differences between the two.

Similarities

  • Concept
    • Since Dash is considered a Litecoin fork, which in itself is a Bitcoin fork, many protocols are similar, and the concept and idea that they convey is the same.
  • Decentralized
    • Both Dash and Bitcoin are decentralized cryptocurrencies, not requiring third parties or central authorities who control the transactions.
  • Limited supply
    • Both Dash and Bitcoin have a limited supply. While Bitcoin’s limit is 21 million BTC, Dash’s limit is 18.9 million DASH.

Differences

  • Transaction Cost
    • Transaction fees are much larger for Bitcoin when compared to cryptocurrencies such as Dash.
  • Network Control
    • Bitcoin is collectively controlled by all the nodes that are part of the blockchain. Dash, on the other hand, is controlled by a Decentralized Autonomous Organization.
  • Privacy
    • One of the main goals of Dash was to make cryptocurrency transactions more private than with Bitcoin. This is achieved through PrivateSend, which makes Dash a fungible cryptocurrency, meaning that past transactions cannot be traced and each coin is worth the same as any other. Bitcoin, however, does not have the same policies. Anyone has access to the transaction history of Bitcoins.
  • Mining
    • The mining process is almost the same in both of these cryptocurrencies. However, users who own more than 1000 DASH become Masternodes, with more leverage on the functionality of the Dash network. Moreover, mining DASH requires that 45% of the mined DASH goes to the user, 45% to Masternodes, and 10% to the treasury for network maintenance. The same does not apply to Bitcoin.
  • Efficiency
    • Due to InstantSend, Dash transactions are much faster than Bitcoin transactions. It can take hours or even days for a large Bitcoin transaction to be processed if the market is crowded. However, Dash transactions can be completed in a matter of minutes.
  • Consensus mechanism
    • Bitcoin uses only Proof-of-Work as a consensus mechanism, meaning that “trapdoor” functions are used to ensure that transaction verifications are valid. Dash uses a hybrid version of both Proof-of-Work and Proof-of-Stake. The latter is a consensus mechanism that ensures that the mining reward is based on the number of coins a user owns, rather than computational power.

The History of Dash

Since Litecoin is considered one of the first Bitcoin forks, Dash is considered by most as a Litecoin fork. Initially, it was launched in 2014 with the name XCoin by software developer Evan Duffield. Later, its name was changed to “Darkcoin” before receiving the name “Dash.”

Controversy surrounded Dash from the very beginning of its operation, when 1.9 million Dash (around 10% of the total supply) were mined within a span of just two days due to a bug that appeared when the fork from Litecoin occurred.

In its early stages, Dash received a lot of criticism because of reports that people might be using Dash for illicit transactions in black markets. This allegation was resolved as of August 2016.

Dash has been growing as a cryptocurrency and as a community ever since.

Dash expanded its network in Venezuela, by 2019 becoming that country’s largest cryptocurrency. 

Dash Price History

According to CoinMarketCap, DASH had a starting price of $0.36 on February 16, 2014. The price went on to a good start, reaching $14 by May 2014. Its price started rapidly declining in the next few months, reaching as low as $1.34 by the beginning of 2015. It then started its longest and biggest bullish run. The price increased relatively slowly until the beginning of 2017.

Along with a lot of other cryptocurrencies (including Bitcoin), DASH’s price drove higher than ever before. Within three months, it exceeded the $100 mark. It kept growing at the same rate throughout 2017, reaching $374 in August. After a couple of months of stagnation, the price started increasing again, finally reaching its all-time high on December 20, 2017, with a value of $1,437. Then, following the crypto bearish run, Dash dropped as low as $40 by the end of 2019.

The price ranged from $40 to $100 for the majority of 2020. In 2021, the price of DASH has been constantly increasing, but not at the same rate as some other cryptocurrencies that have had the biggest bull runs in their history. As of May 2021, DASH had reached a price of around $400, a more than 300% increase over what it had been at the very beginning of the year.

Dash price throughout the years. Source: Coinmarketcap

What is The Future of Dash?

Now that we know the basics required before investing in DASH, let’s look at what many experts predict about the price of DASH for the future.

Price Predictions

When it comes to price predictions over the next few years, Digitalcoin predicts that the price of DASH may get close to $650 by 2022, and $1,090 by 2025.

TradingBeasts predicts DASH may reach $490 by 2025, an increase of around 38% over current prices. 

WalletInvestor forecasts that by 2025, DASH could reach between $660 and $1,300 in price.

Elsewhere, YouTuber BitBoy Crypto predicts that DASH may reach a price of $220 by the end of 2021. One of the reasons for this might be the fact that DASH has yet to exceed its previous bull run in the same way that other cryptocurrencies have done.

Price Factors

What influences the price of DASH? Here are the main factors:

  • Supply
    • Dash has a limited supply of 18.9 million DASH. With around 10 million already in circulation, DASH is getting scarcer each day. Scarcity can drive the price of a cryptocurrency higher.
  • Privacy
    • What makes DASH so unique is the privacy it can offer in transactions. A lot of people may favor this privacy in the future and be inclined to use more DASH, which consequently could increase the price.
  • Potential
    • A lot of cryptocurrencies have exceeded their previous bull runs with the current bull run of 2021. The same cannot be said yet for DASH. However, the possibility that it may happen exists if more people start noticing that.

The Bottom Line

A lot can be said about Dash — its background, controversial history, system, historical price patterns and predicted future value. All of these considerations lead to the conclusion that DASH definitely has potential, whether due to the ultimate privacy it provides or the likelihood that it will exceed its all-time high at the end of 2017’s infamous crypto bull run. Overall, DASH’s future seems to be pretty promising.

Disclaimer

This article is intended for and only to be used for reference purposes only. No such information provided through Bybit constitutes advice or a recommendation that any investment or trading strategy is suitable for any specific person. These forecasts are based on industry trends, circumstances involving clients, and other factors, and they involve risks, variables, and uncertainties. There is no guarantee presented or implied as to the accuracy of specific forecasts, projections, or predictive statements contained herein. Users of this article agree that Bybit does not take responsibility for any of your investment decisions. Please seek professional advice before trading.

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