Resistance to ASIC Mining
Dash uses the X11 mining algorithm, developed just for Dash. X11 uses a sequence of eleven scientific hashing algorithms for proof-of-work. Since each hashing algorithm is unique, it’s difficult to engineer an ASIC that will be able to outperform CPU and GPU miners for each one. ASICs are generally designed to efficiently solve a single hashing algorithm. Dash developers estimated that it will take years to develop an X11 ASIC.
At the heart of the Dash network are MasterNodes, which are special nodes that enable many of its privacy capabilities. Coinholders can run one MasterNode per 1000 DRK they currently hold. In return for operating a MasterNode, a user earns a portion of the mining reward. MasterNodes are responsible for performing different types of transactions, including anonymizing transactions and instantly locking them. For most of these, MasterNodes are selected psuedo-randomly each block. Masternodes behavior is monitored using ‘proof-of-service,’ which temporarily bans a MasterNode from the network if they don’t perform their functions during that block.
Native Transaction Mixing
One core capability MasterNodes enable is PrivateSend, a mixing protocol that allows users to make Dash transactions anonymous. Transactions in dash can get pooled together with other transactions of similar size, then potentially remixed with other pools, making it difficult to track individual transactions. This takes significantly more time than a transparent transaction, and users must designate which transactions they want to go through a PrivateSend mixing process.
Rapid Transaction Confirmation
Another core capability MasterNodes enable is InstantSend, the confirmation of transactions within a few seconds. These transactions are designated with a special command in the code and sent to a set of ten MasterNodes that are selected pseudo-randomly each block. All ten need to agree on the transaction, then they broadcast it to the network and lock the funds. Thereafter, if any sender other than the recipient attempts another transaction with those funds, all nodes reject it. This enables funds to be spent multiple times in one block.
History and Launch
On January 18th, 2014 Evan Duffield announced the launch of Dash on Bitcointalk. However, due to errors, it was relaunched on January 19th. The announcement claimed no instamine, though within the first 48 hours, almost 2 million coins (approximately 10% of eventual supply) were released. Evan has said repeatedly that this ‘instamine’ was unintentionally caused by an error in the code that didn’t correctly calibrate the difficulty. It was fixed shortly after launch, but all mined coins were considered valid.
In February 2014, a hack on the exchange c-sec resulted in a massive buying and selling of darkcoin for bitcoin, effectively distributing the currency again.
On June 10th, 2015 Dash implemented a Decentralized Governance System. The decision to move to a decentralized governance model was decided by a vote of the MasterNodes. It passed with 99% approval and with 70% participation.
Consensus: Proof-of-work (POW)
Hash Algorithm: X11
Block creation time: 2.5 minutes
Launch condition: Intended to launch with no premine, but a bug in the hash difficulty algorithm caused an unintentional emission of almost 2 million coins.
Total Supply: 18.9 million at full mine
Inflation Rate: 7% decrease in mining rewards per year beginning with 100,000 DASH in 2014