Mining in the context of cryptocurrency such as Dash refers to the process of searching for solutions to cryptographically difficult problems as a method of securing blocks on the blockchain. The process of mining creates new currency tokens as a reward to the miner. Mining is possible on a range of hardware. Dash implements an algorithm known as X11, which the miner must solve in order to earn rewards.
The simplest and most general hardware available for mining is the general purpose CPU present in every computer. A CPU is designed to be versatile but offers less efficiency than a GPU, which is designed to rapidly calculate millions of vectors in parallel. While specific CPU instruction enhancements related to cryptography such as AES or AVX can provide a decent boost, GPUs offer a significant performance increase due to their multiple pipelines for predictable calculations of the type involved with mining. Finally, ASICs can perform a single operation only. A number of X11 ASICs are now available on the market, which are quickly making CPU and GPU mining uneconomic due to the increased difficulty of hashing arising from the rapidly increasing hash rate. The result is a currency, which is more secure against brute force attacks on the Dash blockchain.
Many people don’t know that the Dash features such as anonymity and transaction speed, are implemented on top of a network dedicated servers knows as masternodes. Masternodes are known only because of Dash in the crypto world and they are necessary for achieving the speed and privacy which Dash offers. Masternodes:
- features inludes the anynomous and instant transactions,
- also the governance of the development of the Dash network though a monthly budget and voting,
- masternode provides crucial services to the network,
- system is referred to as Proof of Service (PoSe)
In fact, the entire network is overseen by the masternodes, which have the power to reject improperly formed blocks from miners. If a miner tried to take the entire block reward for themselves or tried to run an old version of the Dash software, the masternode network would orphan that block, and it would not be added to the blockchain.
Masternode versus Mining
Because Dash is two tier cryptocurrency, miners power the first tier – basic sending and receiving of funds and prevention of doublespending. Masternodes power the second tier which provide added features that make Dash different from the other cryptocurrencies. Mining computers cannot serve as masternodes and vice versa. Each masternodes is secured by 1000 DASH.