Dash is a peer-to-peer cryptocurrency that focuses on security and speed. This page will break down precisely how trading Dash works and the best brokers to trade with. We also cover the history of Dash, wallets, mining, and benefits. Finally, price predictions and guidance on how to start day trading Dash coins will be detailed.
What is Dash?
Formerly known as Darkcoin and Xcoin, Dash was introduced to build on bitcoin’s offering by bringing users increased privacy and speed. It was, in fact, the world’s first self-governing and self-funding blockchain protocol. This allows the network to pay both individuals and businesses that add value to the system. 10% of each block portion is handed back to the developers. The cryptocurrency is also deflationary as the maximum total supply is 22 million coins.
The cryptocurrency uses the following 11 rounds of hashing algorithms to optimise security:
Dash uses a two-tier network as opposed to a single-tier. The first tier is formed of miners and normal users. The second tier consists of masternodes, who offer advanced services to the network.
As their official website details, you can use Dash coins to make instant and anonymous payments either online or in-store. Thousands of users host the platform across the globe.
On January 18th, 2014, Dash was released as Xcoin (XCO). 10 days later the name was changed to ‘Darkcoin’. On March 25th the following year, the coin was rebranded as Dash, a blend of ‘digital cash’.
1.9 million Dash coins were mined in the first couple of days, accounting for around 10% of the total supply. Creator, Evan Duffield, pointed to a bug that was born from when the Litecoin code was hard forked to create Dash. This “incorrectly converted the difficulty, then tried using a corrupt value to calculate the subsidy”.
Although the founder offered to relaunch the coins when the problem has been remedied, the majority of the community disagreed. As a result, the original distribution was left alone and most of the coins mined initially were dispensed on cryptocurrency exchanges over the next few months at low prices.
The Dash Core Team then quickly grew to 30 full-time employees, while 20 part-time employees and tens of unpaid volunteers also joined the ranks. All of these employees are compensated by Dash’s unique budget system. This means they do not rely on donations or sponsorships, which may result in conflicts of interest.
By the time June 2017 rolled around, the daily trading volume of Dash coins had reached around $100 million per day. The overall market capitalisation had also hit the $4.8 billion mark.
2017 also saw Dash enter a partnership with Wall of Coins. This is a web-based and peer-to-peer platform where individuals can buy and sell Dash coins with cash. It also helps facilitate the purchase of these altcoins at traditional institutions, including:
- Wells Fargo
- Western Union
This move helped improve reviews on cryptocurrency forums and blogs, enhancing future price forecasts and encouraging wide-spread adoption.
Bitcoin is a single-tier network, so miners perform all jobs. Dash, however, takes a two-tier network approach. This means specific network functions, including building new blocks, are completed by the miners. Dash’s second tier is then formed of masternodes who undertake the InstantSend, PrivateSend, and governance functions.
Masternodes need to hold 1000 Dash to fend off sybil attacks. While this collateral can be spent at any point, to do so would end the association of the masternode with the network. As a result of masternodes offering crucial functions, miners and masternodes each receive 45% of block rewards. The final 10% then goes into the ‘treasury’ or ‘budget’ system.
It is widely agreed in the cryptocurrency space that this system has significant potential. It is perhaps unsurprising then that a number of digital currencies have since adopted the structure. This approach has also helped drive investment and long-term outlooks.
One of the advantages that frequently comes up in Dash coin discussions centres around PrivateSend. But how exactly does it work? CoinJoin laid the foundation for this coin-mixing function. Essentially, it mixes identical inputs from a number of users into one transaction with numerous outputs. As a result, directly tracking transaction addresses is extremely challenging.
Furthermore, using masternodes stops the use of just one website. Chaining via blending numerous masternodes and limiting the mixing to only specific denominations and passive mode all help to ensure anonymity. By using the special network code DTSX when submitting transactions, masternodes promise even greater privacy.
However, note the maximum transaction via PrivateSend is 1000 Dash coins.
Transfer and validation rates can be slow, particularly in cryptocurrencies such as bitcoin. In fact, performance is so bad, users sometimes have to wait hours.
Yet as the name suggests, InstantSend helps facilitate rapid transaction speeds. Inputs lock into certain transactions and are verified be general agreement in the masternode network. Questionable transactions and blocks will face rejection. Alternatively, a standard block confirmation process can validate transactions if an agreement cannot be reached.
The key information to take from this feature is that it fixes the double-spending problem, without the extensive confirmation times found in the likes of bitcoin. This may seem like it should be one of the basics of cryptocurrencies, but Dash was among the first to address this issue.
Below is a summary of key Dash benefits that make it an attractive proposition for day traders after substantial returns:
- Security – Over 4,500 servers and 200 TerraHash of X11 ASIC computing power confirm transactions. Sophisticated encryption and the trustless protocol all result in security you can rely on.
- Rapid evolution – Their innovative incentive system has helped the cryptocurrency grow to over 4,000 masternodes since its 2014 launch. That makes it one of the largest peer-to-peer networks and one of the most secure, promising access to your digital currency 24/7, whatever your location.
- Speed – The Dash system uses InstantX. You can access this from your wallet and it will fully process transactions in just four seconds.
- Low transaction fees – The majority of transactions cost a few cents to send. This is significantly cheaper than the likes of PayPal and Moneygram.
- First self-governing and self-funding protocol – Another factor contributing to Dash’s worth is their accessibility to anyone who can help develop their platform. The cryptocurrency funds its own growth, while also ensuring all can be held accountable. All you need to do is send off a Treasury proposal and present your idea.
- Popularity – You only need to head over to BitcoinTalk to see Dash is one of the most talked about digital currencies. Its development, usage and differences from competitors have all been clearly explained online. There has been a real focus on ensuring individuals have all necessary definitions and news of all-time highs to enhance future expectations. The result is a widespread interest which could lead to price fluctuations and opportunities for intraday traders.
Before you start loading up price charts and developing strategies for day trading with Dash, there are some drawbacks, including:
- Anonymity flaws – It is possible to unwind the mixing of transactions used to mask identity with certain tools.
- Funding concerns – Marketing budgets and resources are taking precedence over innovation. From a long-term outlook, this could lead to a decline in features and functionality at the expense of reeling in new customers.
- Critical mass – Dash is yet to achieve a critical mass of merchants and users. This makes creating long-term price forecasts challenging at best.
- Competition – A quick look at Dash’s background and you quickly realise the cryptocurrency market is already tough and it’s unclear whether Dash will be able to maintain let alone increase their market capitalisation.
- Coin limitation – This cryptocurrency promises a fixed number of coins, approximately 19,000. However, there may actually be fewer coins in circulation than it appears. This is because of masternodes. Each masternode represents 1,000 coins. There are thousands of masternodes, meaning a significant number is not available for use. As long as the coins create value this is fine. However, if masternode owners get nervous there could be a huge dump of coins. As a result, prices may substantially drop. There is also the risk of an artificial pump and dump to bear in mind.
Overall then the price today may not be at all reflective of its value in the future. So deciding whether Dash is a good investment is not a straightforward decision.
Video – Dash Explained
Where to Buy & Store Dash
If you have decided Dash is worth investing in, you will need to get your hands on some of the cryptocurrency coins. Fortunately, there are a number of ways to go about this:
- Debit card – CEX.io is one of the longest standing brokers. You can use a credit or debit card to purchase the cryptocurrency through their exchange. There is also eToro, however, they won’t supply you with actual coins, so no Dash wallet is required. You can, however, speculate on whether prices will rise or crash, conduct technical analysis and implement an effective strategy. BitPanda will also let you buy the cryptocurrency with a credit card, although they are only available to Europe and the limit is 600 euros.
- Wire transfer– Kraken allows you to fund your account with USD or EUR via a wire transfer. You can then buy the cryptocurrency directly. In addition, you can view trading history, long-term price predictions and see view other index lists. You can also turn to AnyCoinDirect, where you can expect to receive your Dash coins within a couple of days.
- ATM – Cryptocurrency explorers can also use Dash ATMs. For example, there are three locations in the US, Oregon, New York and Florida. However, fees are high. WallofCoins users can also pick up coins at near spot price by depositing cash at a local bank. They are available in Brazil, Germany, Poland, Latvia and the Philippines.
- Exchange Bitcoin – If you have Bitcoin, Shapeshift, Kraken, Bitfinex, Poloniex and Changelly will all allow you to trade in your BTC for Dash.
Note many of the above will also offer valuable additional resources, from current prices and coin worth to converter graphs and trend expectations. Exchanges, in particular, are useful if you want statistics, as well as product descriptions and explanations.
It’s not just a question of how to buy your new cryptocurrency, it’s also about storing it. Wallets are essential as coin stock can be lost or stolen on exchanges. Once in your wallet, your cryptocurrency should be totally secure.
Fortunately, you can now find a huge choice of wallets and reviews online. Alternatively, there are offline, paper wallets. Once in your wallet, you can then focus on making live price expectations and joining the cryptocurrency rich list.
Dash’s blockchain is built on a decentralised ledger that records every transaction that takes place. ‘Proof of Work’ (PoW) then keeps the blockchain secure. Miners use computers to solve complex mathematical problems. If they are correct, they can add a block to the blockchain. In return, the miner receives dash currency as a reward.
For those interested in how to mine, specialised computers known as Application Specific Integrated Circuits (ASICs) will be needed. They will solve Proof of Work problems as efficiently as possible.
While solo Dash miners exist, many will join a Dash coin mining pool. Note that mining is not necessarily free and could incur significant electricity costs. In addition, in terms of cost-effectiveness, CPU and GPU mining is not always the best choice. Even once you have found the fastest possible hash rate for your CPU, more optimised miners may exist.
Fortunately, mining hardware is relatively easy to get your hands on. There are plenty of websites that can point you in the direction of mining rigs and miners for sale. There are also in-depth cloud mining guides and hash rate calculators available online.
What’s Next for Dash?
Dash’s value has grown significantly since its launch date. This demonstrates some investors do see long-term potential. Developer teams are constantly bringing in new updates and keep users up to date with regular announcements. Also, its speed and privacy capabilities continue to impress even when compared to competitors and other cryptocurrency alternatives.
However, Dash does need to address certain issues, including security flaws and a focus on short-term gains. So there is always the possibility prices could start falling sharply.
If you do want to start day trading with Dash, you will need to stay up to date with the latest news and have a secure online or offline wallet to hold your cryptocurrency coins.
For further crypto guidance, see our cryptocurrency page.