The disadvantages of bitcoin led to the creation of a rival cryptocurrency called Dash.
What are Bitcoin's blockchain weaknesses which Dash seek to overcome?
Bitcoin’s weakness is 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-time transaction use by adopters.
Bitcoin lacks a developer funding model, which makes its success contingent on 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 a lack of privacy as well in bitcoin transactions; data mining companies have increasingly become adept at identifying the source of Bitcoin transactions. Apart from these technical disadvantages, 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 be 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, and which Bitcoin lacks.
Master nodes: Dash introduced the concept of Masternodes to provide incentives to its adopters, 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 protocol uses the instant Master node feature to send and confirm transactions within seconds. Conversely, Bitcoin’s block propagation takes an average of 10 minutes, and six typical confirmations for large purchases could even take over an hour.
PrivateSend: While Bitcoin transactions can be easily be 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.