Investing in Dash: What to consider
Dash is one of the world’s top 10 cryptocurrencies, and as of 2017, a member of the $1 billion market cap club. Designed for speed and anonymity, Dash made a name for itself as the cryptocurrency industry expanded, being chosen as a form of payment by many vendors, sometimes replacing Bitcoin (BTC). Created in 2014, when faith in cryptocurrency market hit a low point, Dash was able to weather the storm and establish itself as a legitimate currency.
Who should include Dash in their portfolios?
Cryptocurrency enthusiasts: As the digital coin market continues to expand, investing in DASH could come as part of a balanced crypto-based portfolio.
Speed freaks: One of the major drawbacks of Bitcoin is slow processing times, which made several vendors choose Dash over Bitcoin, due to the former’s speedy processing.
Bitcoin investors: Since on occasion, price drops in Bitcoin are a result of it being too slow, DASH could be used as a hedging tool.
Currency traders: Dash is paired with over 20 mainstream currencies in various exchanges. Therefore, it could be used as part of a balanced currency-based portfolio.
What drives Dash’s price?
As with most cryptocurrencies, DASH token’s price is affected by internal factors within the cryptocurrency market, especially Bitcoin price fluctuations, since BTC is the largest currency. However, Dash has separated itself from other major currencies with its anonymity, unique governing structure, and quick processing times. Therefore, its movements might not coincide with other currencies on the crypto market. Among other factors, its price could be influenced by:
Profit-taking: Soon after Dash entered the billion dollar club in May, 2017, it experienced a price drop, moving below the $1 billion threshold. This was a result of traders who were quick to cash in on the milestone.
Mainstream acceptance: From a practical standpoint, many exchanges and vendors favor Dash over other currencies. Therefore, it is gradually being accepted by more institutions, establishing its legitimacy at an increasing pace.
Increased market competition: The cryptocurrency market is still relatively new, and as the market becomes more mainstream, the direct competition between currencies will increase. In such a situation, Dash could have an advantage over many other currencies.
Dash: A Decentralised Autonomous Organization
Unlike other cryptocurrencies, Dash is a Decentralised Autonomous Organization (DAO). This means that some of the decisions made within the community are put up to a vote, and masternodes, community members who put up 1,000 DASH as collateral and serve as moderators of sorts, receive the opportunity to vote. The tradeoff for this governing system comes in the form of a 10% commission which the Dash organization receives from every block mined. This means that Dash has a steady budget, allocated for hiring programmers, as well as maintaining and developing its software infrastructure.
While this could be seen as a downside by cryptocurrency miners, it could actually work in Dash’s benefit in the long run. The DAO system enables Dash users to both enjoy the freedom and anonymity offered by a cryptocurrency, while enabling the community to have more control and security.
Another advantage of this system is that it enables the use of masternodes for Dash’s two main products: PrivateSend, which allows users to make transactions in complete anonymity, and InstaSend, which facilitates almost instantaneous transfers of up to 1,000 DASH - an extremely rare feature in the cryptocurrency market.
The Dash community is known to be very involved in discussing various aspects of the currency, and is considered the most active cryptocurrency community.
History of Dash
Created in 2014 by Evan Duffield, Dash was originally called XCoin, and was designed first and foremost for speed and anonymity. When it was launched, the cryptocurrency space was overflowing with scams in which people would create currencies, pump up their values, and then abandon them after receiving their money. As a result, there was a lack of faith in cryptocurrencies at the time.
XCoin was launched nonetheless, with 1.9 million DASH mined within the first two days. While this rapid mining pace was caused by a technical issue, the Dash community refused any attempts by Duffield to relaunch or rebalance the currency. XCoin was later renamed Darkcoin, and then rebranded again as Dash (short for “digital cash”) in 2015.
During its first three years of existence, Dash has made a name for itself as a reliable currency with incredible transaction speeds. It is traded on several exchanges throughout the world, and paired with more than 20 mainstream currencies such as the US Dollar, Euro and others. As of 2017, Dash’s market cap exceeds $1 billion and it accounts for 5% of the global cryptocurrency trading volume.
Conclusion: Dash’s uniqueness is its advantage
In the ever-growing cryptocurrency market, it is hard for those not belonging in the top three currencies to stand out. Bitcoin was here first, and then Ethereum took the market by storm, so other currencies seem to be in their shadow. However, as the popularity of the top two continues to grow, the market as a whole is beginning to attract more investors and its legitimacy as a mainstream trading opportunity increases. In such a market, it is important to be as-good-as, if not better, than the competition. To that extent, Dash is doing a good job.
Dash has created a unique sales proposition for crypto-traders: by creating a unique decentralised governing system, together with developing tools to ensure two of crypto-traders most important demands, speed and anonymity.
Moreover, its relatively low coin count of just over 7 million (as opposed to Bitcoin and Ethereum’s counts of 16 and 92 million respectively), coupled with its gradual acceptance by mainstream exchanges, could appeal to a wide range of cryptocurrency traders and investors. Despite being launched in the midst of a cryptocurrency storm, Dash has proved that it is a stable and reliable currency, and could continue to solidify its status as a top cryptocurrency.
*This content is for informational and educational purposes only and should not be considered investment advice or an investment recommendation.
*Past performance is not an indication of future results. All trading carries risk. Only risk capital you're prepared to lose.