DASH replacing Fiat money in Venezuela

Summary

DASH has emerged as a significant alternative to the failing fiat currency in Venezuela, gaining widespread adoption due to its low transaction fees, fast processing, and privacy features, supported by active promotion and funding from the DASH Core group.

Abstract

Venezuela's hyperinflation crisis has led to a dramatic shift towards cryptocurrencies, with DASH standing out as a preferred digital asset for daily transactions. The Venezuelan bolivar's devaluation and the government's unsuccessful attempt to stabilize it with the oil-backed Petro cryptocurrency have pushed citizens to seek alternative stores of value. DASH, with its privacy-centric origins as Darkcoin, has rebranded into a practical currency with low fees and instant transactions. Its adoption in Venezuela is attributed to its utility and the DASH Core group's strategic investments in local market development, resulting in a surge of merchant acceptance and making Venezuela the second-largest market for DASH after the US. The cryptocurrency's success in Venezuela exemplifies the potential for digital currencies to replace traditional fiat money in countries facing economic turmoil.

Opinions

The author suggests that Venezuela's economic situation is dire, with hyperinflation expected to reach 1,000,000% and the national currency becoming virtually worthless.
Cryptocurrencies, particularly DASH, are seen as a viable solution to the economic crisis, offering a stable and practical alternative to the bolivar for everyday transactions.
The DASH Core group's funding of local projects and merchant adoption initiatives is considered crucial to the cryptocurrency's success in Venezuela.
The article implies that the rise of DASH in Venezuela could be a precursor to broader cryptocurrency adoption in other countries facing economic sanctions or currency devaluation, such as Iran, Turkey, South Africa, and Argentina.
The author posits that the growing use of DASH in Venezuela supports the idea that cryptocurrencies could eventually replace fiat money, challenging financial and regulatory authorities to consider the implications of this shift.

Cryptos are a preferred choice of money as the national currency is rendered worthless with hyperinflation

Venezuela’s inflation problem seems to worsen by the day with the recent devaluation of their official Bolivar currency by another 95% & linking it to their national oil-backed cryptocurrency Petro hasn’t helped stem the hyperinflation which is bound to hit a 1,000,000% this year.

This has created a crisis-like situation in the Latin American country where people are having trouble even meeting their daily dietary needs. The poverty rates have hit alarming proportions compelling people to either flee the country (2.3 million) or turn to another source for survival — Cryptocurrencies!

And while Venezuela is a prime example of how Cryptocurrencies have literally replaced the traditional fiat-based monetary system other countries like Iran plagued by economic sanctions & emerging markets like Turkey, South Africa & Argentina are seeing soaring interest in the digital assets as their national currencies flounder.

The peer-to-peer local crypto exchange in Venezuela shows a spike in transaction volume depicting the same exponential trajectory as the inflation. It is pretty evident that a growing number of people in the country are moving towards digital assets as a store of value & means of transaction.

Bitcoin is the most preferred choice of digital money around the world but Venezuela has seen quite a few Cryptos occupy the monetary space. NANO community came forward earlier this year to help feed the hungry with online donations through a Reddit campaign.

EatBCH is another such initiative that is helping feed the hungry in South Sudan & Venezuela using the Crypto coin BitcoinCash. But the true savior came in the form of DASH — the 11th most popular cryptocurrency by marketcap.

A brief introduction here would probably be helpful for those of you who don’t know much about the digital asset. DASH emerged as an open privacy-centric cryptocurrency in 2014. Originally known as the Darkcoin with a promise of anonymous transactions, it has re-branded itself to the current form of a utility-driven, low transaction fee ($0.08 at the time of writing) & instant approval digital asset which has come as a savior to the people of Venezuela where the volume traded in Dash is even higher than Bitcoin.

Venezuela has become the second biggest market for DASH after the United States, ever since it was added to the Caracas-based Cryptobuyer exchange as a tradable digital coin in 2016. The CEO of South American cryptocurrency exchange recently commented:

“Cryptobuyer was the first platform in Latin America to integrate Dash in early 2017, as well as the first to offer it in Venezuela. Every month, we see how Bitcoin and Dash fight for the top volume in our operations, but as for the largest number of transactions, Dash is winning at this time.”

So how did DASH end up being so popular in Venezuela? I mean apart from the features already discussed like low transaction fees (in pennies), fast processing & the privacy features. Keep in mind that Scalability issues have been one of the major hurdles in the adoption of Cryptocurrencies.

But for DASH one of the biggest reasons for the mass scale adoption of the Crypto in Venezuela has been the funding of ground-level projects by the DASH Core group which owns the digital coin.

DASH is distinct this way, while most Cryptocurrencies have no sustainable way for developing the market for themselves, it maintains a pool of funds (10%) from every transaction processed, which eventually goes towards supporting DASH adoption in different markets.

The encouragement of merchant adoption by the DASH core group has led to its biggest growth in Venezuela with more businesses accepting the cryptocurrency as a means of monetary transactions than ever before. At the current time, almost 1,000 vendors in the country are accepting DASH with more being added every day.

In fact, according to Discover Dash, an online business directory for DASH, reported the week before that 94 more merchants added their support for the Crypto. Pretty evident that the adoption is picking up the pace & gaining widespread traction.

And while the fate of Cryptocurrencies hangs in balance with the current bloodbath they are facing in the tradable markets, the dream of Crypto enthusiasts of digital coins one day replacing the fiat-based currencies is increasingly becoming a real possibility with a use case like Venezuela. Time for the financial & regulatory authorities to debate the merits & demerits of Cryptocurrencies is running out.

Originally published at www.datadriveninvestor.com on September 8, 2018.