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How to Buy Dash (DASH): Quick Guide
How to Buy Dash (DASH): Quick Guide
DISCLAIMER: None of the following is intended to be investment advice. This is only meant to be a description of what has worked well for me so far, and my own opinions. Also, full disclosure, my links to Coinbase, Binance, KuCoin etc., include referrals. It actually benefits you to use them because we will both get an extra $10 worth of BTC for free if you deposit at least $100 to Coinbase. Thanks in advance if you follow the links when you make your accounts - and even if you don’t, I hope you find this article useful! Remember: Always do your own research. This is not financial advice, so do not make any purchases or sales based on the opinions written on this website.
This guide will teach you how to buy DASH from square one (i.e., all you have is fiat money, no cryptos). It will also work for most other cryptocurrencies, but as I’m interested in DASH right now, I am going to write a quick foreword about it and then we’ll get right into the meat of the guide.
What is DASH?
There is a massive subset of people who are new to the crypto-space entirely but have only heard of Bitcoin. Then they go online, search around, and figure out there are actually many, many cryptocurrencies out there with many different use cases. While some argue that Bitcoin is meant to be a store of value rather than an easily fungible currency, this coin goes in the opposite direction - in fact, its name is quite literally shorthand for “Digital Cash”! This is a summary from the Dash website:
Dash is an open source peer-to-peer cryptocurrency with a strong focus on the payments industry. Dash offers a form of money that is portable, inexpensive, divisible and fast. It can be spent securely both online and in person with only minimal transaction fees. Based on the Bitcoin project, Dash aims to be the most user-friendly and scalable payments system in the world. In addition to Bitcoin’s feature set, Dash currently also offers instant transactions (InstantSend), private transactions (PrivateSend) and operates a self-governing and self-funding model that enables the Dash network to pay individuals and businesses for work that adds value to the network.
Well, there’s quite a lot to unpack here, but the reality is that it’s not that complicated. There’s no “platform” to describe here - Dash is not some ERC-20 utility token. Instead, like Bitcoin, it is a coin on its own blockchain and its designers want it to form the backbone of the digital economy.
Dash was around before Bitcoin Cash, but its focus on being “digital cash” means that it shares a lot of BCH’s aims. However, there are some salient differences between Dash and BCH - let’s review some of the biggest ones:
Self-Governing, Self-Funding
This phrase refers to Dash’s “masternode” system. Like many more advanced cryptocurrencies, Dash flirts with being a PoS (proof of stake) coin rather than a proof of work coin like Bitcoin. However, in reality, it occupies a space somewhere between the two. A masternode is someone with at least 1,000 Dash; they are rewarded with Dash coins in return for providing certain services to the network, such as keeping an updated copy of the blockchain and assisting with InstantSend and PrivateSend functionalities which I will explain in a bit.
It is still possible to mine Dash, although it uses a different hashing algorithm than Bitcoin - which means that specialized Bitcoin miners cannot effectively mine it. Only 45% of mining rewards actually go to the miners, though - the other 45% is given to the masternodes, and 10% is put into a special fund which the DAO (decentralized autonomous organization) uses to invest in projects. It’s worth noting that some of these projects have failed spectacularly despite enormous funding; the most famous example is probably Charlie Shrem’s DASHPayCard. This was an attempt to create a debit card that could be loaded with DASH. As far as I can tell, this is total vaporware and never came to fruition. Uh oh!
InstantSend
In traditional cryptocurrencies like Bitcoin, transactions are not irreversible until they’ve been included in a block - and a transaction is considered to be “confirmed” once a number of blocks have passed since the one that included it. This is a little technical, but the long story short of it is that this process can take several minutes - this is one reason why traditional Bitcoin transactions are no longer particularly viable for things like purchasing a coffee in a person-to-person transaction.
Dash gets around this problem with a mechanism called InstantSend. Without getting deep into the technicalities of it, masternodes work to allow a certain number of transactions to get priority for “confirmation” in seconds rather than minute. This sort of thing is crucial to a coin that wants to effectively act as digital cash.
PrivateSend
Like John Mcafee, I believe that there will always be a place for cryptocurrencies which place a high value on privacy. For better or for worse, one of the largest uses of Bitcoin in the early years was people illicitly purchasing things on Silk Road. Even so, there are plenty of legitimate reasons a cryptocurrency user might value their privacy and I’ve discussed them at length in other articles. As a result, my interest was immediately piqued when I read that Dash had something called “PrivateSend.”
After doing a little more research, I found out that Dash used to be called “Darkcoin” and was almost entirely focused on privacy when it was created in 2014. This focus has evolved into a mechanism called PrivateSend which, like InstantSend, is facilitated by the masternodes. Remember that blockchains are typically extremely public - as a “public” ledger, one can see the entire transaction chain stretching back to the beginning. This means that if you know someone’s public addresses, you can see what people are doing with their coins! Not so good.
PrivateSend allows for fungibility by quietly swapping coins amongst users so that tracing transaction histories is more difficult. Fungibility is a concept I talk about at length in my Monero (XMR) article - basically, it’s the idea that one “unit” of a cryptocurrency will always be worth the same as another unit of the same cryptocurrency. Thus, particular coins cannot be blacklisted because they were once used for, say, online gambling. This is hugely important and I think that the Dash developers were smart to include this. With that said, if privacy is your main goal, you’d probably be more interested in a dedicated privacy coin like XMR or Verge.
Price Thoughts
With the current bear market - and the outright massacre of altcoin market caps - Dash has at least held onto a high position in the rankings on coinmarketcap. Its lifetime graph also looks suspiciously like Bitcoin’s:
For a long time, I have been preaching that - once the dust has settled - the world of cryptocurrency is going to look a lot like the dot com bubble of the 1990s. Like those dot com era companies, many cryptocurrencies will die and never come back. A select few will rise to prominence. Dash, due to its strong fundamentals and focus on merchant adoption, seems like a strong contender to be one of the survivors.
At the time of this writing, Dash is worth $90 - a far cry from its all-time-high of about $1,500! Of course, as I mentioned before, we are in very dark times for altcoins. If you believe that Bitcoin will rise back to its lofty highs at some point, it seems reasonable to assume that Dash will as well. If that were to happen, buying in now would lead to a 1670% gain on your investment.
This isn’t even the best-case scenario. Remember that Dash seeks to fill a fundamental “digital cash” role in the crypto world, and this is something which Bitcoin is unlikely to fill without a robust and well-used Lightning Network. As a result, it’s worth making a comparison between the two. Even at today’s depressed prices, if Dash were to have Bitcoin’s market capitalization at the time of this writing, Dash would be worth over $8,500. That’s almost a hundred times the current price!
Now that you know a bit about Dash, let’s learn how to buy some:
Buying DASH: Basic Strategy
To date I’ve had no problems with the following basic strategy:
- Create and sign into a Coinbase account. I recommend Coinbase because they are the most straightforward exchange.
- Purchase some ETH. At the time of this writing, this currency transfers the fastest and cheapest out of anything Coinbase offers. Litecoin competes here, but will cause hiccups later in the process - more on that later.
- Create and sign in to a Binance account. If you are American, Binance is currently not accepting new American clients - use KuCoin instead. I recommend Binance because they have been reliable and convenient for me and they offer many different lesser-known cryptocurrencies with trading pairs on both ETH and BTC. An added bonus is that you can withdraw up to 2 BTC/day worth of funds with no verification at all.
- Move your ETH to Binance. Once it has confirmed, you can now easily use the ETH/DASH trading pair to buy as much or as little Dash as you want. More on trading pairs later.
- Send your coins from Binance to a safe DASH wallet for long term storage if you intend to hold for awhile. This is not strictly necessary but it is considered a safer option than keeping ANY coin on ANY exchange long term. I personally believe Coinomi to be the safest and most convenient wallet for many cryptocurrencies. In addition to Coinomi, it is possible to use other wallets to store DASH - including hardware wallets such as a Ledger Nano S, or a Trezor.
Now, if you’re a power user or someone with some existing familiarity with cryptocurrency, you can probably stop here. The rest of this guide is just going to be a more in-depth description of the preceding steps. If you’re completely new to cryptocurrencies, you might be a little lost - that’s fine! You won’t be by the time you finish this guide. I’ll go step by step:
Starting Out On Coinbase
This is arguably the most trusted exchange currently on the market. You can think of them as the PayPal of the cryptocurrency world, with all the good and bad connotations that come along with that. There are some countries where this is not the case! For example, in Canada, one would probably want to use QuadrigaCX instead. Unfortunately, that’s outside the scope of this guide, but I do have a country-by-country guide which may help you if Coinbase doesn’t work in your area.
All you have to do here is go to Coinbase’s website and create an account. Security is incredibly important here - remember, in cryptocurrencies you are your own bank and so it is absolutely crucial that you follow good security practices. This means your password should be strong - and it should be a password you aren’t using anywhere else (including other exchanges). Google has a pretty good guide with some tips on choosing strong passwords. Keeping security in mind, it would also behoove you to turn on two-factor authentication once your account is created.
Once you are up and running there are a number of options when it comes to actually paying for coins via Coinbase. It is possible to link your bank account to Coinbase but actually transferring coins out of Coinbase will be impossible for a few days while the funds are clearing. This is obviously not ideal if you want to move quickly, as you would now have to wait several days to move your coins to an exchange where you can trade them for DASH (or any other coin).
Instead, I would recommend you link a credit or debit card to Coinbase. This will allow you to purchase some amount of coins immediately, and then immediately send them off wherever you want - your wallet, another exchange, etc. At the time of this writing Coinbase offers three coins: Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC).
What to Buy First?
In my opinion if you intend to buy lesser-known coins like DASH, ETH is the best choice to buy here. Why? Well, with regards to LTC, the reason is clear: other exchanges like Binance offer direct trading pairs for BTC and ETH, but not LTC or any other currency. What this means is that you could directly exchange your ETH for DASH, or your BTC for DASH, but you’d have to perform another step if you wanted to trade your LTC for DASH (and that means more fees!). Obviously we don’t want to waste even one cent if we can avoid it, so LTC is out.
With regards to BTC, at the time of this writing there have been a lot of rumblings about high transaction fees, slow transaction times, etc. Exchanges often overpay these fees as well, and that means that you are again risking missing out on more money than you need to.
ETH is therefore currently the best choice for our purposes by default - fastest transaction speed, lowest transaction cost. So, to review: create a Coinbase account, link your credit or debit card, and purchase ETH.
I Bought ETH: What Now?
Now is the time for you to make your Binance account. Follow the link and create an account using a strong password (this should be different than the one you used for Coinbase!). There are other places where you may be able to buy DASH (Changelly and Kucoin are two reputable examples). There are other reputable exchanges as well, but be careful about using lesser known exchanges - scams do exist! This guide focuses on Binance because my experience there has been 100% positive - I have transferred coins in and out of their system many times with no problems.
Once your account is made, you should set up two-factor authentication here via Google Authenticator. It’s safer, and you will need it to transfer coins out of Binance anyway. More on this later.
After your Binance account is made, click “Funds” at the top right, then “Deposits Withdrawals” beneath it. Find Ethereum in the list and click the “Deposit” button on the far right. You should end up with something that looks like this:
Unlike the picture, there will be an “ETH Deposit Address” listed in the box at the bottom left. This is a very long series of letters and numbers, and is the fundamental basis of most if not all cryptocurrencies. An “address” is simply the destination for funds - think of it like the account and routing numbers at the bottom of your checks. For many cryptocurrencies such as Bitcoin it is possible to have multiple “receiving addresses” which point towards the same wallet.
The address listed here is Binance’s “receiving address” for your Ethereum. To the right of it is a “copy address” button - use it to put the address into your copy/paste buffer. Then, in your Coinbase account, navigate to the Accounts tab and then to your ETH Wallet. Paste in your address. You should double check that the pasted address is the same one you saw on the deposits page in Binance - you can never be too sure when it comes to security! Once you’re sure you’re sending to the right place, input the amount of ETH you’d like to send (if you just want to buy some DASH, you should send all of it) and click “Send.”
Optional Trick: Using GDAX To Save Money On Fees
GDAX, or “The Global Digital Asset Exchange,” is the actual exchange which backs Coinbase. You can use it to save a lot of money on fees if you’re willing to spend a few extra minutes getting verified. Follow this link and click “DEPOSIT.” Click “Coinbase Account” at the top and deposit all your ETH from Coinbase into GDAX.
Once you’ve done this, you can click “WITHDRAW” in GDAX and send your funds from GDAX to Binance. Fees are significantly reduced with this method!
I Sent ETH to Binance - Now What?
Once you click Send, you will need to wait a little while. Without getting too technical about it, exchanges want to be as secure as possible. Thus, when you make a deposit, they wait for multiple “confirmations” from the network before allowing you access to your funds. You can view the progress in your Binance account by clicking Funds and then History. Do not be alarmed if nothing shows up at first! There are many reasons there might be a slight delay. In general you should see the transaction show up within a few minutes, with the current number of “confirmations” next to the number of required “confirmations” next to it. Be patient - your DASH is nearly in hand!
Once you have the required number of confirmations, it’s time to trade your ETH to DASH. This is blessedly simple. In the front page of Binance, click “ETH Markets.” Search for “DASH/ETH” in this list, and click it. Now you are on the trading page. In the bottom left under “Buy DASH”, click “100%” below the “Amount” field.
This indicates to Binance that you’d like to trade all of your ETH for a commensurate amount of DASH for no more than the price listed above. The price field is automatically listed based on the current market. If you like, you can change it to a different price, but like any market it’s not guaranteed that someone will buy at the price you’d like. Your order will remain open until it’s been fully filled or you cancel it. There are several options here such as Stop-Limit orders, etc., but this is outside the scope of this guide. In this case, you are simply placing a “Limit” order for some DASH.
I Placed My Order! Am I Done?
If you want to be done now, you can be - but there are more steps if you want to be security-conscious. You may want to check under the “Orders” and “Order History” tabs that the order went through - if you placed a Limit order at the default price, it probably did. Once you have your DASH in your Binance account, you can see them under “Funds” → “Deposits Withdrawals.” You can click “Hide 0 Balances” at the top to clean up the screen of coins you don’t own, and you can see an estimate of the overall converted BTC and USD value of your account at the top right.
For maximum security, I wouldn’t leave your coins in the exchange. I like and trust Binance, but ANY site can be hacked or experience downtime - even massively established trusted sites like PayPal. You want to have full control of your coins.
How Do I Move My Coins to a Private Wallet?
In Binance, go into the “Deposits & Withdrawals” tab, then click “Withdrawal” to the far right of the “DASH” row. By now it should be clear what you’re looking at - fields that let you input the address to send the coins to, and how many coins to send. For your convenience, there is a “Max” button to the right of the Amount field. Note that once you click “Submit,” you will need to use your two-factor authentication via Google Authenticator, an Android app. I recommend you do not use your actual day-to-day phone for this purpose. These days you can get an inexpensive Android phone for around 30 dollars - this is an investment worth making for security purposes. You can keep the battery removed from the phone when you’re not using it, and connect it to a network only for cryptocurrency purposes. As a bonus, if you’d like, you can use this phone for the Coinomi wallet.
Be advised that the information here only scratches the surface on Dash and cryptocurrencies in general. I recommend you read as much as possible. Cryptocurrencies are the future, and if you’re reading this guide you are already lightyears ahead of the curve.
Come back soon because more content like this is always coming! If my work helped you or gave you something to think about, share it with others:
Sharing helps more people find my articles, and I’d love to be able to assist as many people as possible with cryptocurrencies. Also, if you have any ideas for future articles or specific questions, I’d love to hear them. One last thing: if you’d like to chat with me in real time, check out my Discord!
Posted: Dec 7, 2018
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