The disadvantages of bitcoin led to the creation of its rival cryptocurrency, Dash.
What does Bitcoin blockchain weaknesses Dash seek to overcome?
Bitcoin’s weakness lies in its block-size limit that slows down the transaction’s processing-time, as well as its 10-minute block creation period that restricts Bitcoin’s real-world, transaction-usage by users.
Bitcoin lacks a developer funding-model, which leaves it at the mercy of volunteers, or powerful interest groups. It also lacks a coherent governance mechanism that should allow changes to be applied to the protocol easily.
Furthermore, there is the lack of privacy as well in bitcoin transactions; data mining companies have increasingly become adept at identifying the source of such transactions. Apart from these technical glitches, bitcoin also faces hurdles related to market adoption, since the idea of a true P2P electronic cash has been restricted by endless debates and slower upgrades.
So, what does Dash do better than Bitcoin?
The developers of Dash wanted to design a new blockchain, which shall remain free from these weaknesses and hence created Dash to be the world’s first self-funding and self-governed blockchain protocol, with instant payments. Here are some of the many components that Dash is made up of, that Bitcoin lacks integrally.
- Master nodes: Dash introduced the concept of Masternodes to provide incentives to the users, with secure payments on the network, in addition to introducing transactional features like InstantSend. Operators of this technology have invested 1,000 dash in hosting a Master node. The operators get 45% of the reward, for every Dash block that’s mined. Each operator receives their reward of around seven dash, each month.
- InstantSend: This uses the instant Master node feature to send and confirm transactions within seconds. On the other hand, Bitcoin’s block propagation takes an average of 10 minutes, and six typical conformations for large purchases could even take an hour.
- PrivateSend: While Bitcoin transactions can be easily traced to their users, Dash introduced PrivateSend transactions that allow users to enjoy full-privacy and security in their transactions.
- Self-Sustainable Decentralized Governance: While Master nodes can govern the blockchain with one vote per Master node, the Dash blockchain is self-funded. A portion of each block, currently at 10%, is allocated to the Network Development and Promotion Budget; therefore, Dash developers and promoters are liable to receive payments for their contributions, unlike on Bitcoin where contributions are voluntary and unincentivized.