How does Dash work?
Dash is a digital currency that works on a decentralized peer-to-peer network.
It is based on the Bitcoin protocol, but with some key differences. Dash is designed to be more user-friendly and efficient than Bitcoin, with faster transaction times and lower fees. The Dash network is powered by a two-tier architecture.
The first tier consists of miners who secure the network and write transactions to the blockchain. The second tier consists of masternodes, which enable advanced features such as InstantSend (instant transactions) and PrivateSend (anonymous transactions). Masternodes are incentivized to perform these services by receiving 45% of the block reward.
This reward structure helps ensure that the network remains secure and reliable. Masternodes also vote on budget proposals submitted by the community, allowing for decentralized decision making within the Dash ecosystem. Dash also has a self-funding model that allows it to pay for its own development and marketing efforts.
10% of each block reward goes towards funding projects that benefit the Dash network, such as new features or marketing campaigns. This helps ensure that Dash remains competitive in an ever-evolving cryptocurrency landscape. In addition to its two-tier architecture and self-funding model, Dash also utilizes a unique consensus algorithm called X11.
This algorithm combines 11 different hashing algorithms in order to make it more secure and energy efficient than other consensus algorithms like Proof of Work (PoW). This makes it more difficult for attackers to take control of the network, while also reducing energy consumption compared to PoW networks like Bitcoin.