There are only a few cryptocurrencies out there that manage to break into the social sphere and gain a reputation (good or bad) with the public. For one, this came from the financial turmoil of Venezuela and the hyperinflation of its native currency - the Bolivar.
From 2014-2018, this currency ended up succumbing to inflation from 180% to 1.7 million percent. All throughout this crisis, native Venezuelans found themselves resorting to alternative solutions to a now brutally devalued Bolivar. One of the avenues for these citizens was to use a cryptocurrency, more specifically, anonymous cryptos like Dash.
According to a report from the German Newspaper 'Der Spiegel' this year: Dash is actually the most popularly used digital currency in Venezuela. But why? And what exactly is Dash?
From Forking to Funding - Dash
Initially, Dash began its life as a hard fork of the Bitcoin protocol back in 2014. This was back when its creator referred it to as Xcoin: Evan Duffield, but this same currency would undergo a series of re-namings.
In quick succession, it became better known as 'DarkCoin,' which gained a further reputation by Wired Magazine as being 'Bitcoin's Stealthier Cousin' thanks to its broader application by users of the Dark Web.
One of the pre-requisites for popular use on the Dark Web would mean that it would have to be provably 'stealthier' than Bitcoin, surely. This is something that it does afford to its users, however, sporting the reputation as “the first privacy-centric cryptographic currency.”
How it does this is through the CoinJoin anonymity solution referred to (at the time) as 'DarkSend,' now known as PrivateSend now. What PrivateSend does is collect the transactions of multiple users, mixing them and sending them all in a single transaction.
This process makes it far harder to ascertain which address sent what amount to which recipient, hence why it was previously a currency of choice for those looking to safeguard their privacy on the Dark Web.
So why is it we say 'was' a currency of choice for this community? It's mainly because this same clutch of users found alternatives with more covert methods of masking their activity. Specifically crypto's like Monero, which used Ring Signatures to mix and shift transactions. For more information about Monero, check out our guide.
With that said, Dash (which was the name of choice as of 2015 as an acronym of Digital Cash) still supports industries that would otherwise be shrugged off by the mainstream.
More recently, Dash has provided support for the emerging Cannabis industry in the United States. Offering businesses a much-needed source of financial liquidity in the absence of otherwise flighty institutional investors.
How Does it Work?
While it originates as a hard fork of Bitcoin, Dash has come a long way to differentiate itself over the years. Operating on top of a network known as MasterNode, these effectively support and run the digital wallet for Dash, and can actually be set up by anyone interested in supporting the network.
In order to set one up, users will need to have a stable supply of 1,000 DASH, as well as having a dedicated IP Address that can run for 24 hours a day. It's actually thanks to these Masternodes that Dash can ensure the privacy of its users.
These MasterNodes actually work as part of a trio of solutions. With MasterNodes supporting the digital wallet, PrivateSend, which allows for coin mixing to take place, and coin locking with the support of InstantX (now known as InstantSend)
Along with every user having the ability to operate as an auditor within this network, Dash has an interesting feature that prevents the chance of double-spends. Known as InstantSend, this solution effectively takes any transactions that have been conducted within the Dash network and locks them.
The process itself doesn't take up time, either; allowing the transaction to be validated and completed within four seconds while stopping any other users trying to spend it.