Dash Digital Asset Report and Evaluation (DARE) by Crypto Briefing
Our Dash Digital Asset Report and Evaluation analyzes the Litecoin fork and its position and potential within the cryptocurrency world. As a coin focused directly on private payments, the platform has looked to mass adoption in emerging markets and is considered by many to be a ‘true’ digital currency – a replacement for money.
Introduction to Dash
Dash is a fork of Litecoin and is one of the earliest offshoots of the Bitcoin protocol. The cryptocurrency was introduced in 2014 and went through several rebranding exercises before solidifying as Dash in 2015. The project is focused on creating a practical instrument for payment transaction by addressing notable bitcoin shortcomings such as the lack of anonymity, low transaction speeds and governance.
Dash has also put in considerable effort to increase general consumer-service adoption through development of user-friendly features and UI. Despite a number of controversies that have haunted the project, we consider Dash to be one of the more promising cryptocurrencies in the market today.
In 2017, the top 6 credit card brands saw nearly 300 billion transactions worldwide. This is only a fraction of the total electronic transaction market. PayPal alone processed $139.4 billion over 2.3 billion transactions in Q2 2018. There is also a growing trend in contactless payments, with Transparency Market Research estimating that the value of such payments will grow from $14.1 billion in 2017 to $801.4 billion in 2025.
Dash targets the broad electronic transactions market with its range of consumer and merchant features, which present a multi-trillion-dollar opportunity.
However, it is important to note, while Dash is one of the first projects to work on improving speed and privacy features of cryptocurrencies, it is certainly not alone. Monero and Zcash are two of the more notable projects appearing in the coinmarketcap top 20, but there are many others outside of it.
Also, the big credit card players, Visa and MasterCard, have been seriously experimenting with blockchain technology and have filed a number of patents relating to payment transaction processing. This can be viewed as a confirmation that blockchain technology represents a significant commercial opportunity in the electronic payments segment. Dash has gained an early mover advantage, but given the interest from incumbents, it needs to move quickly in order to capitalize on this opportunity.
The Dash Ecosystem Structure
Unlike some of the classical blockchain projects, the Dash ecosystem revolves around a two-tier public network. The first tier is comprised of the miners, consumers, traders and merchants. The first-tier operates much like the Bitcoin protocol that it is based on, with PoW consensus being the key mechanism behind mining and transaction approval. The second-tier involves masternodes. These servers enable Dash to offer specialty features such as PrivateSend and InstantSend for anonymization of transactions and increased processing speed.
Dash is also working on setting up supporting infrastructure, including ATMs, debit cards and POS partnerships. A key part of the effort will be the Dash Evolution platform. The system will ease the use of Dash as a payment tool by simplifying the UI/UX, set up, and integration experience, for both merchants and consumers.
Dash also differs from many competitors in that it is self-governing. New development projects have to be proposed to the community as governance objects and then masternodes vote on them. A proposal must be voted on by more than 10% of the operating nodes in order to be accepted. The DAO treasury is then used to fund the projects.
The combination of continuous infrastructure development and the self-governing mechanism has provided Dash with a sustainable growth path.
The Dash Token Economy
Dash is the native coin of the Dash blockchain and has several use cases within the ecosystem. Unlike many of the other cryptocurrencies, Dash offers more than just mining incentives in an effort to build and maintain the global infrastructure.
Reward – There are three primary entities supporting the Dash ecosystem: miners, masternodes and the DAO. Dash utilizes a PoW consensus protocol, providing a reward for signing new blocks. However, Dash mining rewards are split between the three entities, with 45% going to the miners, 45% going to the masternodes and 10% going to the DAO.
Staking – Similar to a PoS approach, Dash requires masternode owners to stake 1,000 Dash to operate a masternode. This helps to insure the network against malicious actors and also creates a cap on the number of nodes that operate at a given time.
Fees – Dash offers a number of second-layer services that utilize the masternodes. In order to take advantage of features like InstantSend, users must pay a small fee to the masternode operators.
Currency – Dash coins are being accepted by a growing number of retail merchants, enabling users to utilize it for purchasing and P2P transactions. The currency is also widely traded on exchanges for speculative purposes.
The Dash mining supply is scheduled to shrink 7% each year until it is finally exhausted in 2150. The mining reward per block is also tied to the number of miners in the network. This should allow Dash to avoid major liquidity driven price events related to supply cliffs.
Evan Duffield, Founder/Advisor – Evan has 15+ years in the technology industry. He spent his early years working as a software developer for Warped AI, iAcquire, Wells Fargo, and Verizon Wireless. Evan also has experience in social media, AI and fintech and has a Series 65 certification.
Ryan Taylor, CEO – Ryan has 15+ years in the financial services and technology space. He has worked as a hedge fund analyst covering the payments industry and was also an Associate Partner at McKinsey & Company’s Business Technology Office.
Bob Carroll, CTO – Bob has 30+ years of experience in both technology and entrepreneurship roles. He has held senior technology positions at a number of companies including, Informix Software and Everspring. He has also co-founded several companies including Mutual and 808 Partners.
Fernando Gutierrez Mosquera – Fernando has over 18 years of experience in various sales and marketing roles, including stints at Hewlett Packard, Telefonica Publicidad e Informacion and Telefonica Moviles. He has also co-founded a number of companies, including A Mano Fisios and Jemchicomac.
The Dash management team is 12 people strong and supported by 30 developers as well as other staff. Besides the core team, the ecosystem relies on community members and contractors to further its cause. The team has grown and expanded since the inception of the project in 2014 and has been tackling not just the development goals, but also commercial expansion, adoption and popularization of the cryptocurrency.
Dash is a fork of Litecoin and as such is a descendant of the Bitcoin codebase. It utilizes a PoW consensus protocol and the X11 hash algorithm as part of its core. Dash also employs a Dark Gravity Wave algorithm to dynamically adjust mining difficulty with every block. This makes Dash a nimbler currency platform than its predecessors.
However, what makes Dash truly different is its two-tier system. Dash uses masternodes to facilitate advanced features such as PrivateSend and InstantSend. PrivateSend is an evolution of CoinJoin that uses transaction mixing to achieve anonymization. It requires a minimum of three participants and use of common denominations of the…