Dash is one of the most popular and successful altcoins to date. Previously named “Xcoin” when it was first launched in 2014, it later became “Darkcoin,” before eventually landing the name we all know today, Dash.
Dash was the first self-funding and self-governing protocol, as well as one of the first DAOs, short for Decentralized Autonomous Organizations. Developed to solve most of the problems usually associated with Bitcoin, its main selling points are instant transactions (InstantSend) enhanced privacy (PrivateSend), and security (transactions are confirmed by a 200 TerraHash algorithm).
At the time of this writing, Dash (DASH) is ranked 15th on CoinMarketCap, with a total market capitalization of $1,654,703,119, a current price of $200,73 and a circulating supply of 8,243,632 DASH coins. Dash was developed so that there can only be a total supply of 18 million coins. The company hopes to reach the 18 million mark somewhere around the year 2030.
Below, users can find a guide that explains how Dash is mined, as well as all the hardware and software required for completing this process.
Dash’s Consensus Mechanism
Dash uses a Proof-of-Work (PoW) consensus mechanism and a hash algorithm called X11. Developed by the Dash core developer, Evan Duffield, the algorithm gets its name from all 11 sequential hashing algorithms it uses. The main advantage of this algorithm was that it required less computational power and energy consumption when compared to Bitcoin’s SHA-256 PoW algorithm.
Dash Mining Explained
If PoW sounds familiar, it’s because it’s the same one used by Bitcoin. The same basic principle applies: in order for miners to earn rewards while mining, they have to solve difficult math problems, which then have to be approved by others on the same network. This can be achieved by employing a combination of specialized software and hardware elements.
One other noteworthy aspect of Dash is the fact that it uses an open-source algorithm that constantly adjusts the mining difficulty, called DGW, short for Dark Gravity Wave. This algorithm ensures that the difficulty level is adjusted for every block and not once every 2016 blocks, like in the case of Bitcoin. The coin has a variable clock that is set to decrease at a rate of about 7.1% annually.
The DGW system has evolved over the years reaching its third version and has been upgraded to solve most of the issues usually associated with time-warping exploitation, floating point accuracy and difficulty retargeting.
On Dash’s two-tier network, the miner will share the block reward with the masternodes and the system. The miner will then receive 45%, the masternodes also get 45%, and the rest of 10% goes to support the system. The 10% is used to payout network contracts looking to develop and invest in the Dash ecosystem. The nodes are used to maintain and secure the network by performing transaction verifications and currency creations.
As you can imagine, masternodes are very important for Dash’s ecosystem. To set up and run a masternode, users must ensure that they own and store 1000 DASH coins, that they either have a Virtual Private Server (VPS) or a Linux server, as well as a DASH Wallet. The 1000 coins have to always stay in your wallet in order to run the masternode, as having less than the aforementioned number will result in your masternode being removed from the Dash network.
Dash Mining Hardware
Just like most other cryptocurrencies, Dash can be mined as well. Even though in the early days mining was possible with just a simple computer, nowadays, CPU and GPU mining are no longer profitable.
To mine Dash, users will require a specialized ASIC miner. One of the best Dash miners is the Antminer D3 developed and released by Bitmain in 2017. It uses the same algorithm as Dash (X11), and it has a hashing power of 19.3 Gh/s and power consumption of around 1350W. Besides the actual miner, users are also required to purchase a PSU, Power Supply Unit.
Dash Cloud Mining
Of course, buying all this specialized hardware comes at a cost. Another, more cost-friendly alternative comes in the form of cloud mining. Usually, the processing power is provided by various PCs located in low energy cost countries. Users can, therefore, rent the hash power from these farms in exchange for fiat currency. Some of the most reliable cloud mining providers are Bitminer, MinerGate, CoinMine, and NiceHash.
Buying your own hardware mining equipment or joining a mining pool is just part of the whole process of mining. In order to mine Dash, users will also require a wallet to hold their Dash coins. Some of the best Dash wallets, as recommended by the official website, are Dash Core, Dash Electrum, Exodus, and Jaxx for desktops, and Dash Wallet, Dash Core iOS, Edge Wallet (Android and iOS), Coinomi, and Jaxx (Android and iOS) for mobile devices.
How profitable is Dash Mining nowadays?
The global hashrate for Dash has seen its ups and downs over the past couple of years. The profitability is not as high as it was in the first years. However, the X11 algorithm is a relatively easy algorithm to mine when compared to other cryptos out there, and the hash rate is related to the price of the coin.
To conclude, Dash mining can still be profitable, just as long as users take the time to thoroughly research the mining equipment required as well as to calculate the total cost and profit potential. Read as much as possible regarding Dash mining and make sure never to let yourself be lured in by get-rich-quick schemes. Don’t forget, Dash mining is safe if you’re using the right channels and the right equipment.