DASH Adoption in Inflation-Prone Venezuela Provides Validity for Cryptocurrency
DASH (DASH)–Despite an otherwise bearish year for cryptocurrency, several different coins across the market have been experiencing a price revival. Throughout last week, NANO leapt from under $1 to above $3, posting a 300 percent gain in the span of days. DASH, another popular currency for transactions, has benefited from a 24-hour price gain of 20 percent, which brought the coin close to $200 as of writing. While there are a number of reasons for the boost in price, from a small bump in crypto valuation across the board to a general price rebound in altcoins after the bloodbath experienced over the last two weeks, DASH has also been the target of Venezuelan citizens looking to move from government controlled fiat to cryptocurrency.
As the Venezuelan bolivar approaches absurd levels of inflation to the tune of six-figures (with an expected one million percent inflation rate by year’s end), citizens of the beleaguered country have been turning to cryptocurrency in droves in an attempt to flee the erosion of government fiat. While most of the narrative surrounding cryptocurrency, particularly for Westernized investors and the frame of Wall Street, has centered on price volatility, citizens of countries with irresponsible fiscal policy and rampant inflation see a digital asset that provides the functionality of money with the security of relative price stability.
The Venezuelan government’s response to the rising inflation rate has been the creation of their own “cryptocurrency”, dubbed the Petro, which is supposed to be backed by the country’s oil supply. However, given the mismanagement of the current bolivar by the very same government, in addition to concerns over how a fully centralized cryptocurrency would function (the reality is the currency is more digital fiat than crypto), has led to Venezuelans abandoning the project in droves before it was even able to take off.
Bitcoin has been a popular choice for those looking to escape fiat for a stable and secure cryptocurrency asset. However, given that the bolivar has become unusable and is on pace to erode the net worth of anyone who holds it, Venezuelans need more than just a digital safe haven for their wealth: they need a currency that will function for transactions. While Bitcoin has been lauded for its high profile and widely recognized brand name, it does fall behind other top 20 currencies in terms of usability as money. Compared to the aforementioned NANO and DASH, BTC mining fees for transactions, in addition to the increased confirmation times, has led to a fair portion of the country exploring cryptocurrencies that provide the most utility in terms of transactions.
Enter DASH, a cryptocurrency that has fluctuated in the top 10 by market capitalization (currently sitting at 13), which averages two and a half minutes in transaction time thanks to the technology’s master node network and Instant send service. While some have pointed to other cryptocurrencies that provide even faster transaction times, DASH has managed to capitalize on the market share by portraying its currency as a strong alternative for those looking to a digital form of money.
DASH has been at the forefront of growing its brand through transactional appeal, with an average of 200 new vendors signing up for the service each month. In an article with Business Insider published last week, DASH Core Group CEO Ryan Taylor expounded upon the massive growth being driven through the Venezuela market,
“We are seeing tens of thousands of wallet downloads from the country each month. Earlier this year, Venezuela became our No. 2 market, even ahead of China and Russia, which are, of course, huge into cryptocurrency right now…It took them a long time to get the first 50, first 100, but at the beginning of July, the number was around 400, and we’re already at 800. We’re at this point signing up more than 200 a month.”
In an interesting juxtaposition, while U.S. investors get hung up on S.E.C. approval for a Bitcoin Exchange-traded Fund, thereby signaling the possibility of institutional investors entering the market, Venezuelans turning to cryptocurrency to fill their need for digital transactions is the greatest proof of validity for the growing industry–one that provides an alternative to sole-reliance on government fiat.