What is Dash Cryptocurrency & How does it Work?
Dash is a digital currency designed to ensure anonymity and enable quick, easy, and low-cost transactions around the world without any interference from a central authority. The digital currency has robust encryption and a decentralized peer-to-peer blockchain network is the linchpin of its seamless transaction. The Dash cryptocurrency was launched in 2014 and has gone through a couple of rebranding phases. Originally known as Xcoin, it was renamed as Darkcoin, and finally, it was christened as Dash in 2015.
Regardless of the name, Dash cryptocurrency users have the freedom to enjoy the convenience of modern shopping while availing the unique features of virtual currency. It is all thanks to its partnership network comprising over 4,800 service providers and retailers. This network makes instant settlements easy with no chargebacks, and zero commission.
Connecting your Dash Address to ZenLedger For Your Crypto Tax Forms
- To import your Dash transactions into ZenLedger for your crypto tax forms, all we need is your public address.
- Select the proper blockchain or wallet from the dropdown list.
- Paste your address into the address field in ZenLedger.
- Select if the wallet is based in the USA or not.
- Then hit the ADD COIN button.
How Does Dash Blockchain Work?
Dash was invented to remodel the payments system by offering a highly functional alternative to hard cash and bank cards, and at the same time, provide low-cost and user-oriented day-to-day payments. That said, before we get into the nuts and bolts of Dash cryptocurrency, here are a few of its notable features:
- X11 hashing algorithm, CPU/GPU/ASIC mineable
- 2MB blocks, which are added every 2.6 minutes
- 56 transactions a second
- Decentralized second-tier Masternode network
- Every year block rewards decrease by 7.14 percent
- Instant transactions using InstantSend
- Superior privacy using CoinJoin
- Total coin supply between 17.74 and 18.92 million
Dash’s framework consists of both Proof-of-Work (PoW) and Proof-of-Stake (PoS). Similar to Bitcoin, the traditional PoW rewards miners for validating block transactions in the network based on their computational power. However, Dash also rewards its users for maintaining and running special servers called Masternodes. To achieve the badge of Masternode, a miner has to deposit a minimum of 1000 Dash cryptocurrency. These Masternodes approve the transactions from the miner network and power services such as InstantSend, PrivateSend, CoinJoin, governance, and the treasury system.
Masternodes not only beef up the security of the Dash blockchain but also facilitate quick and seamless transactions. And since Masternodes put in extra efforts, they are adequately rewarded with 45 percent of the block reward. Dash doesn’t forget the miners either as they also receive a whopping 45 percent of the block reward while the remaining 10 percent is allocated to finance future development projects.
How Is Dash Different From Bitcoin?
The algorithm is the main differentiating factor between these two blockchain networks. While Dash uses the X11 algorithm, which is mineable by CPU, GPU, and ASIC machines or in other words a combination of PoS and PoW, Bitcoin’s algorithm is only minable via PoW.
Even when it comes to handling transactions, both networks are completely different. Bitcoin uses full nodes (nodes dedicated to mining) to validate transactions. This is a resource-intensive process and it also takes a substantial amount of time and money to ascertain optimal operations. With Bitcoin’s scalability issue, this process is increasingly becoming a challenging task. It cannot prevent transaction clogging, which in turn results in higher transaction fees.
Dash, on the other hand, uses Masternodes for handling transactions. Masternodes streamline the transaction validation process with help of nodes which are significantly reduced in number.
How to Buy Dash?
Besides mining, you can buy Dash cryptocurrency from a crypto exchange or a trading platform. Here’s how you do it:
1. Open an Online Account
Find a crypto exchange that supports Dash such as Kraken or eToro. Provide your basic information such as your name, country, date of birth to open your account. To add funds to your account you have to finish the KYC process.
2. Get a Wallet
Leaving your crypto on the exchange is risky as a hack would result in you losing your tokens. Therefore, you should get either a hardware or a software wallet to store your crypto. Choose a wallet as per your budget and security needs.
3. Deposit Funds and Buy Dash
On some exchanges you can add fiat currency to your account and buy Dash while on others you can add both fiat currency and cryptocurrency to buy Dash cryptocurrency. After your account is funded, you can buy Dash and store it in your wallet.
Dash offers a robust solution for cross-border remittances, especially in regions where economic freedom is inadequate owing to either technical hurdles or lack of access. In those regions, Dash offers complete freedom and control to send and receive money anywhere in the world. The users don’t have to be concerned about the exchange rate complexities, paperwork, week-long delays, that add to the financial burden.