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How to Trade Dash

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Why is Everyone Talking About Dash?

There are plenty of reasons why you should care about Dash and even consider it as an investment. Cryptocurrency has come a long way since Bitcoin captured the imagination of a small minority of people in 2009. Now there are hundreds of different altcoins with radically different purposes. From The Ripple network, designed to facilitate faster currency exchange to Ethereum and its smart contracts.

Dash, in particular, is designed to protect the anonymity of its users while also facilitating almost instant transactions.

5 Interesting Dash Facts You Might Not Know

  1. Dash has some impressive features like privatesend and instantsend.
  2. Dash’s network now has 4,100 masternodes, meaning Dash’s peer-to-peer network is one of the largest in the world.
  3. Dash has an extremely informative and well-organized sitemap.
  4. The Dash network has funded a feature-length documentary dedicated specifically to Dash.
  5. Dash has its own news site called Dash Force News.

Data from U.S. Equity Research estimates the cryptocurrency market is expected to grow at a 32% rate by 2023.

According to RnRMarketResearch:

“Growth is propelled by the benefits of compliance-free peer-to-peer transaction, cross-border remittance transfer, increase in use cases, volatility in the stock market, fluctuating monetary regulations in different countries, transparency, and immutability of the distributed ledger technology and benefits such as faster transaction and reduction in total ownership cost.

Institutional Crypto Fund lists Dash as one of his Top 5

Vielle Oehman crypto fund manager at Helvetic Investments on CNBC crypto fund manager at Helvetic Investments on CNBC

Vielle Oehman, crypto fund manager at Helvetic Investments via CNBC

Ville Oehman, crypto fund manager at Helvetic Investments, says the fund sees:

“A lot of potential in second-tier cryptocurrencies.”

Ville lists Dash as one of the top five currencies they will be adding to their crypto basket.

 

Dash.org spoke with Trace Mayer, a popular Cryptocurrency Angel Investor

Trace Mayer discusses Dash at the LaBitConf

Trace Mayer discusses Dash at the LaBitConf 2017 via Dash.org

“There’s this fundimental innovation when it comes to using the cash flow statement as applied to Blockchain with the budget proposals. So between the master node network and these budget proposals, I think that’s a big innovation and I find that to be extermely interesting.”

Investing Haven’s Dash Price forecast for 2018

“Our Dash price forecast for 2018 is 1500 USD with a potential to reach 2000 USD provided the sector leader Bitcoin remains on its uptrend and Dash price remaining above 400 USD. We expect a price correction in the process of reaching 1500 USD where Dash might revisit the 400 USD (or almost) and this backtest has to succeed for the uptrend to continue.”

A Brief History of Dash

Founded in January of 2014, Dash (formerly Xcoin and Darkcoin) was created with the aim to be the most user-friendly and scalable cryptocurrency.

Dash has had a fairly controversial history, beginning with its creation. Within the first two days of Dash’s (then Xcoin’s) creation, approximately 1.9 million coins were “instamined”. This is approximately 10% of the total supply of Dash.

An ‘Instamine’ is a variation of a ‘Premine’, where the developers mine a percentage of the coin before public distribution. These coins are meant to be used to fund development. Premines were controversial in the early days of crypto as some coins were premined and once they achieved a certain value the developers subsequently cashed out and abandoned the development.

An Instamine is similar, except that it is unintentional, and the result of a bug in the launch software. In Dash’s case, they forked from the Litecoin blockchain.

Dash’s creator, Evan Duffield, has claimed that the “instamine” was due to a bug in the Litecoin code used to fork Dash. Specifically that the code incorrectly converted the difficulty and then tried using a corrupt value to calculate the subsidy. In other words, it was an accident.

The controversy is that not everyone was convinced by the developers that claimed that the instamined coins were in fact mined by accident. This explanation has never fully satisfied many members of the cryptocurrency community. Despite Dash’s potential, the questions over the Instamine incident have always hung over its head.

What is Dash?

Dash was designed to improve on Bitcoin’s perceived flaws. Specifically in terms of transaction times and privacy. Its creators view it as being the next logical step towards fully digital cash.

Like Bitcoin, Dash stores all transactions made by users on a public ledger. This is so that the network can verify users have enough funds in their wallets in order to make a transaction. This is where the similarities end. Unlike Bitcoin, Dash runs a two-tier Network where miners and master nodes run in tandem.

One of the reasons Bitcoin transactions take so long is because they are processed by miners, whose function it is to secure the network. This has lead to a scalability problem as the network has grown in popularity.

Dash solves this by using a concept known as masternodes. Instead of a miner performing the function of ordering and verifying transactions, Dash’s masternodes take on some of the functions a miner. This frees up resources from the miners and allows them to concentrate on securing the network. It also decentralizes some of the power that miners would normally have and balances it out with the network’s masternode operators. In effect, rogue miners cannot overpower the network on their own – even if they achieve more than 51% of the mining power, as the masternode operators would keep the miners in check.

To ensure masternode operators incentives are aligned with the network’s best interest, each masternode operator has to contribute and lock in 1000 Dash as a commitment to the network. If a masternode operator cheats the network, they stand to lose their commitment. This ensures that the node operator plays by the predefined rules.masternode basics

masternode basics via youtube

The users running these nodes are rewarded with a share of each new block and they are given voting rights in the network, allowing Dash to run as a form of decentralized network. The masternodes decide on the direction of the network, with each one having a single vote on issues that affect the blockchain. They are designed to help make decisions on the blockchain and enable many of Dash’s most interesting features.

They allow the blockchain to lock in funds and make instant transactions. On top of this, they help to facilitate an advanced version of coinjoin called Privatesend. This allows the masternode to mix three users’ transactions together. Theoretically, this makes it very difficult to find out where a transaction originated.

It should be noted that this is very different than the approach taken by Monero. The privatesend function is used alongside something known as instasend. The masternodes lock in the funds to prevent double spending and help to process transactions almost instantly. This is in contrast to Bitcoin, where transactions can take 10 minutes or even an hour.

Dash believes that this heavily decentralized system will help protect the currency from being controlled by a single large group of miners or centralized third parties. They also argue that the masternode system provides better security than using a “trusted” third party.

Dash vs Bitcoin

How does Dash compare to the leading cryptocurrency Bitcoin? What are the key differences? See below for our head-to-head comparison:
 Dash (DASH)Bitcoin (BTC)
PurposePrivate and instant transfersDecentralized digital currency
Founded20142009
FounderEvan DuffieldSatoshi Nakamoto (alias)
Market CapOver $10 billionOver $250 billion
Current Price
All time High$1,600 (December 2017)$19,908 (December 2017)
All Time Low$0.21 (February 2014)$0.06 (July 2010)
How long did it take to hit $100?37 months51 months
Notable SupportersRobert Genito (CEO of Genitrust)
Roger Ver (Cryptocurrency investor)
Naeem Aslam (ThinkMarket’s chief analyst)
Jeff Currie (Goldman Sachs)
Peter Theil (Venture capitalist)
Christine Lagarde (IMF)
Marc Andreessen (Early internet Pioneer)
Supply Cap18,900,00021,000,000
Initial DistributionMiningMining
Mining MethodASICASIC
Consensus MethodHybrid Proof of work/Proof of StakeProof of work
Network Hash Rate*Over 20 DASH an hourOver 40 bitcoins per hour
Difficulty increaseDifficulty is calculated each blockEvery 2,016 Blocks

*Total number of coins mined hourly on the blockchain

How is Dash Made?

Dash is mined in much the same way as other cryptocurrencies. Unlike banks or governments, which physically print currency, Dash is made by its community.

Like most cryptocurrencies, Dash is based on a decentralized ledger of all transactions, called a blockchain. This blockchain is secured through a consensus mechanism called Proof of Work (PoW)

The miner uses their computer to process complex equations. Once these equations have been solved a new block is added to the chain and the miner is rewarded with some Dash. The effect of this is two-fold. Firstly, it encourages users to process transactions on the blockchain. Secondly, it controls the creation of new tokens.

Where Dash differs is that it runs on a two-tier system. The second tier of the system is the masternodes. These enable many of Dash’s most interesting features. The masternodes are rewarded with 45% of the coins from each new block, with another 45% going to miners and 10% going into the general Dash “Budget”.

Dash masternode rewards

Dash masternode rewards via youtube

 

What is the Price of Dash?

 

What Drives The Price Of Dash?

Dash has seen strong growth, although it has been subject to the same cycle of ups and downs that other cryptocurrencies experience. Generally, if Bitcoin sees a large increase or decrease in its value then you should expect to see Dash and other cryptocurrencies follow suit. As with other cryptocurrencies, Dash is quite volatile. As such you should expect quite dramatic ups and downs.

In the past Dash has grown significantly when partnerships have been announced. In March of 2017 people investing in Dash saw the value of the currency increase on the announcement of a partnership with Blockpay. This saw speculators pour into the currency and it drove its values to all-time highs.

Similarly, Dash saw an increase in value just before the Dash Conference in September of 2017. This was in anticipation of more announcements. During the conference, more partnerships were announced and you should generally expect to see the value of your Dash investment increase on the back of press releases and conferences.

Like Monero, Dash will also see gains if cryptocurrency regulations look imminent. People will be looking for a way to protect their money from seizure by the authorities. Admittedly Monero is widely regarded as the more secure currency so they will see a bigger boom from any potential regulations.

Dash designed their cryptocurrency to be used in the same way as cash. Its value will increase as more partnerships and more ways to spend Dash are implemented. You should expect to see large spikes in value if online merchants begin to announce that they will accept Dash as a payment method. Dash has a higher chance of this happening than certain other currencies thanks to the instantpay function.

What is The Price Outlook For Dash, and What Do Experts Say on Prices?

As with most cryptocurrencies, the short-term outlook for Dash is volatile. Generally, you will see a small increase in value followed by a large spike as traders pile in. This is then followed by a correction period where the value of the cryptocurrency falls back to something resembling its actual market value.

Most long-term traders will want to buy at the end of that correction period, this is typically the balance just before any major leaps in value, but you will need to use your own judgment.

In the long-term Dash has the potential to do well. Even though many experts still harbor suspicions over the insta-mine controversy Dash will be able to do well if they can convince more end-users to adopt their currency. If more services like Blockpay begin to adopt Dash then you should expect prices to rise.

Experts are divided on whether investments in Dash will do well in the long term. Many such as Peter Todd believe that Monero is more likely to win the war on privacy based currencies. He argues that the pre-mine makes Dash too high of a risk for traders and encourages traders to instead look there. Others, such as Riccardo Spagni have gone further, arguing that the instamine controversy makes Dash an outright scam.

Some have taken a more positive approach to the currency, Joël Valenzuela, the editor of Dash Force news, has argued that the increase in the price of Dash is long overdue. Specifically, because the currency has solid plans for long-term growth and has mass marketing potential.

joel Valenzuala - Dash.org

joel Valenzuala via youtube

When asked where he thinks Dash will be in 5 years time:

“At the current rate of growth and checking out the competition, I would say as one of the dominant payment systems on the planet, and the first global and wildly successful decentralized autonomous organization. In short, as the first “out of beta” crypto whose primary use is in daily economic life rather than experimentation.” source: cointelegraph

While Venezuela’s words should be taken with a dash of salt, he is correct that Dash is one of the more usable currencies out there. This will certainly work in Dash’s favor as cryptocurrency becomes more mainstream. In particular instant transaction times give Dash a good chance of being adopted by mainstream merchants.

Other cryptocurrency experts take a positive view of Dash’s privacy-enhancing potential. When questioned on the matter both Manfred Karrer and Anthony Di Lorio said that they believe Dash will play an increasingly important role over the next few years as users become more concerned about their privacy.

Despite the many misgivings, some experts have Dash is in a good position to do well. The technology is simple to use and this could see it enter the mainstream over the coming

Dash Market Sentiment

We’ve gathered data from leading exchanges to determine the general feeling in the Dash market. Its calculation is simple; using data from the exchanges listed below, we gather buy and sell volumes for a given time period and weight this against the total transaction volumes.

Buy/Sell Sentiments:
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Source – CryptoCompare Public API.

3 Reasons to Invest in Dash

  1. Innovative Technical Features
  2. Improved Governance Model
  3. Added Utility and Growing User Base

Innovative Technical Features

Developed years after Bitcoin, Dash had the benefit of hindsight. The developers concentrated on Bitcoin’s weaknesses and have come up with innovative technical solutions like InstantSend and PrivateSend adding speed and privacy to transactions. Instead of relying on volunteers to develop and maintain the network, they have provided incentives at the protocol level – namely 15% of each block reward going to a development and promotion fund – earning a reputation as a ‘self-funding’ protocol.

Improved Governance Model

Unlike Bitcoin and other cryptocurrencies that need almost an absolute consensus for improvements and upgrades, Dash has incentivized Masternodes. Their operators have had to stake some money into the network in order to run a Masternode, and so can be considered as the network’s guardians in the sense that they would always act in the network’s interest. Each masternode gets 1 vote toward protocol governance issues.

Added Utility and Growing User Base

Dash’s extra features, particularly instant and private transactions, are proving quite useful to Dash’s vibrant and growing community of users. Many say Dash has some of the most ardent and vocal adherents – which is probably due to their development fund being used to perpetually evangelize the coin. This virtually guarantees that it is unlikely to die off or become obscure.

2 Reasons Not to Invest in Dash

  1. Stiff Competition
  2. Second-Tier Development Issues

Stiff Competition

Dash set out to be an improvement on Bitcoin, and even innovative features that at the time were unique – but it now has to share that mantle with an ever-increasing amount of coins that have the similar features. Litecoin and Bitcoin Cash also provide near-instant transactions and Monero and Zcash lead the pack of a slew of ‘privacy’ coins.

Second-Tier Development Issues

Although the protocol has achieved self-funding for development and marketing purposes, third-parties service providers seem to be slow to the table. Dash has been very slow to see any merchant adoption, and unlike Bitcoin and Ethereum, third-party software developers are mainly absent – meaning that the core protocol developers also need to build out the second-tier infrastructure themselves such as wallets and storage security software.

How to Buy Dash

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all traders. Trading cryptocurrencies directly is not supervised by any EU regulatory framework but trading cryptocurrency CFDs is. Your capital is at risk.

So you want to buy Dash? The next problem is figuring out how on earth to get some. Getting hold of Dash isn’t as simple as acquiring Bitcoin, Litecoin or Ethereum. If you want to purchase Bitcoin it is usually as simple as logging onto an exchange and buying it with Fiat currency. Dash normally has to be traded for other cryptocurrencies. The easiest way to do this is to trade BTC for DASH.

Your first instinct is probably to use an exchange like Bitfinex. This involves buying coins with fiat currency and storing them in a virtual wallet. This is the approach taken by many users but it carries a number of risks.

There are several exchanges to choose from and it can be a little overwhelming to choose the right one. Here are two options we recommend if you are set on buying Dash:

Coinbase

When you’re considering how to invest in Dash the first step is to buy Bitcoin. One of the better choices for this is Coinbase. They are one of the oldest and most well-established cryptocurrency exchanges. They offer an exchange, a wallet, and a user-friendly interface. You can purchase Bitcoin, Ethereum, and Litecoin using either bank transfer or credit/debit card. Their fees for this are also fairly low. Coinbase charges 1.49% for most forms of bank transfer and 3.99% if you choose to pay by credit or debit card.

Privacy diehards may balk at using Coinbase. Like many other more reputable exchanges Coinbase uses ID verification. This is to ensure that the exchange isn’t used for illegal activities and to comply with KYC (know your customer) regulations. This is considered best practice by many exchanges.

LocalBitcoins

If you wish to avoid giving your ID to an exchange you may want to look at Localbitcoins. They are a Peer-to-Peer exchange that does not require ID verification. Keep in mind that not every user on these kinds of services is honest. Always make sure to read reviews before you trade to avoid being scammed out of your bitcoins. If you take steps to protect yourself from scams then LocalBitcoins is easy to use and their low fee of 1% makes it a good choice to buy Bitcoins.

However…

Managing your own cryptocurrencies can be a challenge. You might fall prey to a phishing scam and have your coins stolen. You could misplace your access codes and leave your coins forever trapped in a wallet you cannot access. If you use a wallet on your smartphone, if your phone were stolen then your cryptocurrencies could be gone as well.

On top of the more obvious risks, there’s also one you may not have thought of. Your Dash investment could also be compromised by the exchange. Cryptocurrency exchanges are the biggest fail point in your security and it is completely outside of your control. If the owners prove to be incompetent or corrupt then your investment is very much at risk. This is a reality that many MtGox users found to their cost in 2013.

MtGox controlled 70% of the cryptocurrency market and was generally considered to be trustworthy. The problems began in March of 2013 when Fincen seized MtGox’s accounts. This prevented users from withdrawing any of their USD funds. Soon after this MtGox was hit by one of the worst hacks in cryptocurrency history. The attackers stole around $500 million worth of bitcoin.

Many MtGox users lost everything.

History repeated itself in 2017 when Bitfinex was rocked by a similar attack. The hackers made off with $72 million worth of Bitcoin stolen by emptying random users’ wallets. In order to offset the loss reduced the balance of all users accounts by around 37%. This prevented some users from losing everything but was understandably a deeply unpopular move.

Events like these can represent an unacceptable risk to many traders. The question is whether there is there a safer way to trade Dash? Thankfully, yes there is. Rather than buying your Dash directly through an exchange you could instead opt to trade contracts for difference (CFDs) through a safer, regulated broker.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all traders. Trading cryptocurrencies is not supervised by any EU regulatory framework however CFD trading of cryptocurrencies are.

eToro

Our preferred option is to trade Contracts for Difference (CFDs) using a regulated broker.

A contract for difference is a contract between you, the buyer, and the broker. You pick an instrument, in this example Dash, and take a short or buy position. Then, if the market moves in the direction you choose, the broker agrees to pay you the difference. If the contract moves against your position then you will end up paying the broker instead. This allows you to make money from Dash without ever owning a single coin.

There are a lot of brokers out there and it can be a challenge to separate the good from the bad. The first rule when deciding how to buy Dash CFDs is to always use a regulated broker. They have to abide by strict codes of conduct so are much safer than an ordinary broker. You also need to compare the different fee structures and look at what extras a broker offers. Many brokers also offer demos and it is a good idea to take advantage of them before you settle on a platform.

To save you some time, we compared dozens of brokers on 10 key factors such as reputation, safety, fees and account requirements (see full list). Based on our extensive research, eToro stands out as our choice to trade Dash CFDs.

eToro_logo

eToro is a secure way to trade Dash CFDs.

eToro subsidiaries are individually regulated by the following agencies; Financial Conduct Authority (FCA) and The Cyprus Securities Exchange (CySEC).

See the table below for exactly which regulator covers you in your country and what protection is offered.

RegulatorCountries CoveredProtection OfferedAdditional Protection Offered
Financial Conduct Authority (FCA)Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechenstein, Lithuania, Luxembourg, Malta, The Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, UKAll client funds are held in a segregated client bank accountFinancial Services Compensation Scheme (FSCS) may cover up to £50,000 if eToro fails.
Cyprus Securities Exchange (CySEC)Argentina, Australia, Bahrain, Brunei, Canada, Chile, China, Colombia, Egypt, India, Jordan, Kuwait, Mexico, Malaysia, New Zealand, Nigeria, Oman, Paraguay, Peru, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Switzerland, Thailand, Ukraine, United Arab Emirates, Uruguay, Venezuela All client funds are held in a segregated client bank accountThe Investor Compensation Fund may provide up to €30,000 if eToro fails.

How much does it cost to trade Dash CFDs?

One of the unique selling points of eToro is that you are able to buy actual cryptocurrency rather than just contracts for difference. As of the 3rd of September 2017 buying Bitcoin, Ethereum, Dash, Litecoin, Ripple and Ethereum Classic means that you are buying the underlying asset rather than a contract for difference.

This allows users to potentially make more profit than by simply buying a CFD.

It does mean that you have to purchase cryptocurrency 1 for 1 and are unable to take advantage of leverage. It is not currently possible to withdraw cryptocurrency from the platform, instead you will withdraw fiat currency equal to the value of your underlying asset.

There are some caveats to eToro’s cryptocurrency offering. If you “copy” other traders then you will be buying CFDs, rather than cryptocurrency. Likewise any short positions that you take will also involve purchasing a CFD rather than the underlying asset. You will also not be insured by trader compensation schemes in the UK and Cyprus.

If you choose to buy Dash through eToro you should keep in mind that there is a daily limit on the total amount of Dash that can be bought. Once this is reached all trading will be closed for new traders and reopened the following day.

eToro have gone out of their way to make their platform accessible to traders around the world. The interface is simple to understand and should help newer traders ease into trading Dash. They also offer their service in several languages. See our eToro platform review.

eToro also provides some of the best risk management tools out there. They have many of the tools you would expect from a good, regulated broker. You have the ability to customize your leverage and set close at loss or close at profit limits You can also set a close at loss or close at profit position which is very useful.

Keep in mind that there are premiums for holding an overnight position and you might be charged an inactivity fee after a 12 month period.

eToro Summary

  • Convenient, safe access to Dash CFD trading.
  • Easy sign-up, compared to the cumbersome process of enlisting in a Dash trading exchange.
  • Guaranteed execution at a fixed price, without having to wait for another Dash trader to agree to a buy or a sell transaction.
  • Allowance for credit or debit cards, a service generally not allowed on cryptocurrency trading exchanges.
  • Trade 6 cryptocurrency CFDs, including Bitcoin, Ethereum, and Dash.
  • Intuitive charting tools.
  • CopyTrader feature to follow other traders, discuss trade ideas and even copy the successful trading strategies of other traders in the community.

eToro_logo

Start Trading Dash CFDs today

Remember that your capital is at risk

Saul Bowden Author
Saul is our resident cryptocurrency expert. He spends his days searching for the next Bitcoin. A longtime advocate of blockchain technology, Saul believes that cryptocurrency represents so much more than an excellent investment, it represents the future of finance.
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