Bitcoin (BTC) vs. Dash (DASH): Features and Future Prospects
Cryptocurrencies have become the brightest phenomenon in the financial markets of our time. The first cryptocurrency was BTC. Founded in 2009, BTC is the most widely used and well-known crypto resource. DASH was created in 2017 and is, therefore, a relatively new cryptocurrency. But despite this, it is very promising and has a number of advantages relative to BTC.
Distinctive features of DASH and BTC
BTC has served as an example for the creation of many crypto coins, including DASH. BTC is a narrow-profile coin. According to this criterion, it is inferior to newer cryptocurrencies, behind which there are entire developed ecosystems of developers and their projects. A change in the BTC exchange rate affects the state of the entire market. If the price of BTC decreases, then the value of most other coins falls. This is due to the fact that BTC is the main pair on exchanges and the most popular cryptocurrency among investors. BTC is the leading means of payment when compared to other cryptocurrencies.
DASH differs from BTC:
- X11 Algorithm.
- Two levels of transaction validation. Regular transfers are confirmed by including blocks mined by miners in the chain. In parallel, some of these functions are performed by special nodes – masternodes.
- Smooth increase in the difficulty of mining new blocks based on moving averages.
- Complete anonymity of transfers, which is achieved using the PrivateSend technology.
BTC and DASH financing model
Most cryptocurrencies have volatile funding models. The development of BTC is funded on a voluntary basis by large companies and exchanges. This same model is used in Bitcoin Cash, which is funded by Roger Ver and Chinese miners. At the same time, the motivation of sponsors remains mysterious. Each of the groups is accused of being engaged and pulling the blanket over itself. Indeed, this funding model is fertile ground for conflicts of interest.
DASH stands apart – at the moment when a reward for a new block is generated, 10% of the amount is not distributed until the end of the month. During the month, initiative teams can present a budget proposal to the community and request the amount available from the unallocated budget. If at least 10% of shareholders vote in favor of this proposal, it will receive funding at the end of the month.
The money received in this way is directed to the development of the project. In particular, for the salaries of the development team and marketing. Through the mechanism of budget proposals, about 6,000 DASH are allocated monthly for the development of DASH (about $ 1,000,000 for September 2021). This is one part of the foundation on which the long-term development of DASH is built.
Apart from DASH, none of the top 100 cryptocurrencies have a sustainable funding model. A similar mechanism is at the heart of Cardano, but at the moment, it has been declared but not implemented. The DASH cryptocurrency was the first to offer DGBB – decentralized blockchain governance, analogous to the modern DAO.
The bottom line is that anyone can propose a project aimed at developing the DASH network. The innovator pays a commission of 5 DASH. The decision is made by a vote, in which only masternodes participate, which have at least 1000 DASH on their account. For example, this is how the decision was made to increase the block from 1 MB to 2 MB. The voting itself lasted about a day.
The BTC network operates thanks to the Proof-of-Work (PoW) consensus method. A secure SHA-256 hashing algorithm is used. The main function of BTC is to conduct fast, secure transactions with minimal fees. Blockchain technology is used. To transfer cryptocoins is enough to know the recipient’s bitcoin address.
DASH is a two-tier system of miners and masternodes that guarantees anonymity and high transaction processing speed. Confirmation of transactions and generation of new blocks, unlike BTC, can be carried out in three ways (at the choice of the sender):
- standard transaction;
- Instant-X transaction;
- PrivateSend, a modified version of the CoinJoin technology.
According to the developers, a DASH transfer takes only 1 second. According to BitinfoCharts, in June 2021, the estimated block time was 2.6 minutes versus about 9 minutes on the BTC network. The BTC blockchain is not characterized by high scalability and bandwidth. It sometimes takes more than 60 minutes to add a transaction to a block. For comparison, there is Instant-X technology in DASH, which allows the first confirmation of a transaction by masternodes before the record is included in the blockchain.
Using BTC and DASH
BTC acts as an alternative to fiat currencies and is intended for the following purposes:
- Instant P2P transactions.
- Transfers abroad.
- Savings savings (inflation is controlled by limited emission, which makes keeping funds in cryptocurrency more attractive than in fiat currency).
- Payment for goods and services.
- Reward miners for supporting the network.
In the future, if the planned protocol updates are introduced (for example, Taproot), the developers will also need coins to launch and use services, smart contracts created on the project’s blockchain.
DASH coin is used in everyday transactions. High speed of transaction processing and protection against hacking allows you to use tokens to pay for goods and services.
Due to the high degree of anonymity of DASH transfers, the asset is often criticized and accused of aiding illegal activities. In May 2018, the Japanese authorities limited DASH circulation. Similar measures were taken at the end of 2020 by the government of the Republic of Korea. At the moment, there is a fight against the legalization of funds obtained by criminal means. In this regard, further use of the DASH cryptocurrency with the PrivateSend algorithm may be difficult. This will undoubtedly cause a drop in demand for DASH tokens.
The future and prospects of BTC and DASH
The assessment of the project has changed as alternative platforms emerged, trends in cryptocurrency markets changed and statements from major DASH holders were made. For example, in December 2015, currency founder Evan Duffield spoke out about the future of the platform. Since DASH operates on the principle of decentralized financing, it is supposedly independent of the founders. But after 4 years the situation has changed. In March 2019, the development company Dash Core Group announced the forced layoff of some of its employees. During this period, the token was near price lows. The market situation was unfavorable for cryptocurrencies. The prospects for DASH can only be assessed taking into account the demand for other tokens.
Unlike DASH, the BTC project is not backed by a specific company that is developing it. All proposals are made and discussed by the developers. BTC, despite the increased demand, does not stand still. New soft forks are being developed that will drive price increases. Among them:
- Taproot. The update is scheduled for November 2021. It will allow you to efficiently execute smart contracts and successfully integrate with popular financial systems.
- Schnorr scheme. An algorithm that combines multisignatures and keys into one signature that miners will work with. According to the plan, it will work in conjunction with the ECDSA scheme.
- MAST. A solution that allows you to generate complex smart contracts without disclosing the main terms of the agreement.
- Signet. It will provide increased reliability and better coordination when validating long term scenarios.
- Improved Graftroot. It will make it easier and more flexible to create scripts and transactions while maintaining confidentiality.
Large crypto investors and economists predict further growth in the BTC rate. Forecasts are optimistic. For example, the founder of Morgan Creek Digital, Anthony Pompliano, believes that BTC will break the $ 250,000 ceiling in 2022.
Mike McGlone (analyst at Bloomberg, a leading financial information company) estimates a price tag of $ 170,000 in 2022. Investor Tim Draper believes the coin will be trading at $ 250,000 by early 2023.
Pros of BTC and DASH
The main advantages of BTC:
- The leader in the world of cryptocurrencies, setting the general direction of the market.
- Accepted by TOP companies, corporations, websites, payment systems.
- A wide range of buying methods: from crypto exchanges to e-wallets and ATMs.
- High liquidity.
- It is widely covered in the media, has the support of major world investors.
- Increased safety and reliability.
- Wide variety of storage wallets.
- Anonymity, which is implemented through the PrivateSend protocol.
- High speed of transaction processing.
- The X11 protocol, which improves security and protects users from being taken over by large mining pools.
- Smooth increase in the difficulty of mining new blocks.
Cons of BTC and DASH
Cons of BTC:
- Low scalability and bandwidth.
- Not the best option for trading and long-term deposits. The rate is growing more slowly than many other cryptocurrencies.
- Only mining on specialized, expensive devices is available. GPU mining is not profitable.
- Slow rollout of updates, as changes to the protocol require majority support.
Cons of DASH:
- Deterioration of project indicators in the rating of major cryptocurrencies. DASH dropped to the bottom of the top 70 for this indicator.
- Legal restrictions imposed by certain government agencies in the fight against money laundering.