The Dash cryptocurrency is one of the more popular altcoins on the market. Known previously as “Xcoin” when it first launched, before becoming “Darkcoin” a short while after. Today, it goes by the name we all know it by, Dash. Dash was the first self-governing and self-funded protocol. In addition to this, Dash was also one of the first Decentralized Autonomous Organizations (DAOs). Initially, it was developed as a solution to many problems that plagued the bitcoin network. Some of Dash’s main selling points are fast transaction speeds (InstaSend) enhanced privacy (PrivateSend) and strong security. All Dash transactions are confirmed by a 200 TerraHash algorithm. In this post, we will be looking at Dash mining.
The Dash cryptocurrency uses the Proof of Work consensus mechanism, similar to Bitcoin though it has a different hash algorithm called x11. Developed by Evan Duffield, Dash Core developer, the algorithm takes its name from the 11 sequential hashing algorithms it implements. The main advantage this hashing algorithm has is that it requires far less computational power and energy in comparison to bitcoin’s SHA-256 hash.
Regardless, the same basic principle remains. If a miner wants to earn rewards for mining, they must apply computational power to solve maths problems, which then need to be reviewed by other miners on the network. Powerful hardware like GPUs or ASIC mining hardware makes this possible. A noteworthy feature of Dash mining; is that it uses an open-source hashing algorithm that constantly adjusts the mining difficulty for the network. This is Dark Gravity Wave or DGW. DGW is in place to ensure that the network difficulty is adjusted for every single block added to the chain. This is vastly different to bitcoin, which only adjusts after 2016 new blocks.
The DGW algorithm has been evolving over the years, recently reaching its 3rd version; upgraded to solve most of the issues associated with Dash’s time-warping exploit, floating point accuracy and difficulty retargeting. On the two-tier Dash network, miners will share their block rewards with masternodes and the system. Miners will receive 45%, master nodes get 45%, and the remaining 10% of the block reward goes towards supporting the system. This 10% mainly goes toward paying out network contracts that look to develop and invest into the Dash ecosystem.
As you could imagine, masternodes play a highly important role in the Dash ecosystem. To set up and run a masternode, users must ensure that they have 1000 DASH coins in a Dash wallet. They must also ensure they either have a Linux server, or a Virtual Private Server (VPS). In order to run the masternode, all 1000 coins must stay in your wallet. Having less than the aforementioned number cause your masternode to be removed from the Dash network.
Recent controversies in other #cryptocurrency projects prove 51% mining attacks are real; Monacoin, Bitcoin Gold, ZenCash, Verge & Litecoin Cash have all been victims. Today #Dash announced #LLMQ-Based #ChainLocks solving 51% attack vector.
More info: https://t.co/mmav6emz57 👀👍 pic.twitter.com/MU57RMaOeg
— Mark Mason (@StayDashy) November 29, 2018
In the early days of Dash mining, it was easy to make a profit by CPU or GPU mining on your personal computer.
But now due to ASIC mining hardware entering the fray, the only way to make a worthwhile profit is to invest large amounts of money into an ASIC miner.
Before doing this, be sure to check a mining profitability calculator in order to see if it’s possible for you to make a profit. Factors to take into consideration are; Hardware costs, Electricity costs, Hash rate, mining difficulty.
Often, people only plan for the first 2 months of their mining adventures, without taking network difficulty into consideration. Over time, network difficulty will increase, this is inevitable. The consequence of this is that eventually, you will start making less crypto overtime even with the same hardware. To counteract this, some miners either stop mining once they are mining at a loss, or double up and buy a second ASIC miner to double their hashrate.
One of the best Dash miners is the Antminer D3, Developed by Bitmain in 2017. Using the x11 algorithm with a hashrate of 19.3 GH/s with a power consumption of 1350w, this hardware is a great choice for Dash mining. Please remember you will need to buy a PSU as well as the hardware.
If purchasing all this expensive hardware made you turn your nose, there could be another option for you. Cloud Mining. Cloud mining is a relatively cheaper alternative to mining. Usually, processing power comes from many different PCs in countries all over the world with low energy costs. This allows users to rent hashing power from mining farms in exchange for fiat currency and sometimes even cryptocurrency. Some cloud mining providers are Bitminer, HashFlare, and NiceHash.
While this may be tempting for new adopters. Think about cloud mining like this; If you’re paying someone else to mine cryptocurrency for you, why wouldn’t they just mine directly themselves? Because they’re making a profit off of you. Cloud mining isn’t going to make you a profit, and you will see your returns slowly decrease as the mining difficulty increases.
We have a blog post about mining the top 10 cryptocurrencies. This post touches on all different types of cryptocurrency mining including cloud mining, explaining why it’s not a good idea. Believe it or not, we’ve had tons of threats from cloud mining service providers as a result of exposing this cloud mining fallacy. Read how people get caught in the trap!
Purchasing your mining hardware and joining a mining pool is just a part of the process when attempting to start cryptocurrency mining. If a user wants to mine dash, they will also need a wallet that can accept their Dash tokens. If you’re not going to get a hardware wallet, there are some online wallets you can get for free also although they are less secure.
The global hashrate for Dash has been up and down for the past couple of years. While currently, the profitability is not as high as it once was following its genesis, the x11 algorithm is relatively easy to mine. The hash rate will always be related to the price of the coin, so if you believe in Dash even when the price is low, then mining it in abundance while the price is low could help you build up your Dash portfolio.
Much like any cryptocurrency, Dash mining is able to be profitable. If you spend the time to thoroughly research the mining equipment you need as well as calculating the total cost and potential profit, you can definitely profit. Don’t be fooled by getting rich quick schemes. While mining sounds like you buy some hardware, load it up and generate money, there’s far more to it. Many miners have spent weeks or even months researching all the hardware and best electricity deals they can get before investing so they can maximize their returns.
This article is intended to educate and should in no way be seen as investment advice or an enticement to use the ice3x.com platform. Bitcoin is highly volatile with big profit opportunities but you should also remember that you could lose part or all of your investment whenever you take part in any high risk investment. Bitcoin trading is not a regulated industry in South Africa, which in itself carries additional risks. IF YOU ARE NOT AN ASTUTE BITCOIN TRADER, SEEK INDEPENDENT FINANCIAL ADVICE BEFORE MAKING ANY INVESTMENTS.