When people tell me that cryptocurrencies don’t have any “real-world” use, I point them to Venezuela. Venezuela is in the grips of unstoppable inflation – one of the worst in modern history, according to the International Monetary Fund (IMF).
While the astronomical numbers can make the crisis seem distant and unapproachable, it’s devastatingly real for those who live there. Stores are empty. Buying toilet roll is a seven-day struggle. And many are accepting eggs as wages because the currency is worthless. Children are quite literally starving to death.
With the economy in tatters, some are turning to cryptocurrency. And no, not Venezuelan government’s sketchy state cryptocurrency Petro.
They’re turning to bitcoin and, according to many reports, dash.
This is why cryptocurrency matters. It gives power to the people when their governments let them down. I’m curious to learn more about how dash is being used in Venezuela, so I reached out to Dash Core Group’s CEO, Ryan Taylor, to find out more.
Some Background on Dash
Originally known as Darkcoin, the cryptocurrency was born to address privacy and anonymity. It has since been renamed Dash, and adopted a new vision to build a global, digital cash system.
In Taylor’s words, “Dash is an open source, decentralized cryptocurrency focused on providing users a better way to pay and get paid. We aim to address usability, by making digital currency simple and efficient for the consumer, through instant transactions, low fees, and familiar interfaces.”
2,235 Venezuelan Merchants Accept Dash
Moving onto the topic of Venezuela, Taylor tells me over email that “more than 2,235 [Venezuelan] merchants accept Dash as a payment option. Since Venezuelans cannot rely on their national currency, we are seeing a huge demand for Dash in Venezuela.”
“People are looking for an alternate and more effective way to store, spend, and share their money and Dash’s low-cost transactions fees and InstantSend technology are unmatched.”
Dash recently upgraded its InstantSend technology in a bid to streamline payments and address the ever-present scaling issue in cryptocurrencies like bitcoin.
“Because most transactions are face-to-face, instant transactions are critical for users,” Taylor says. “Because of its speed, Dash truly is the most practical option for point-of-sale transactions.”
On the Ground
Dash is taking a proactive approach to adoption in Latin America, with a team of passionate users on the ground educating communities and small vendors about the cryptocurrency.
Taylor explains, “Many members of our community have been active in emerging countries, forming new entities to serve the needs of local economies. In the case of Venezuela, local teams offer support and education services for merchants and users. We’re really excited about the long-term potential of these grassroots, community-driven efforts, as they continue maturing into well-organized firms to serve individual markets.”
Admittedly, it’s a slow process. One community member, Eugenia Alcalá Sucre said, “Not everyone at first agreed to [sell goods and services with Dash], but in time, more entrepreneurs and merchants have learned how to use Dash as a payment method.”
They’re taking a one-by-one approach, growing slowly and steadily among communities.
No Public Figures to Confirm
We should point out, of course, that there are no objective or public figures to measure dash volume or transactions in Venezuela to back up the claims. And not everyone is convinced. One Venezuelan called Dash “snake oil,” and pointed to the fact that just because Dash is accepted by vendors doesn’t mean anyone is using it.
Three Million (Test) Transactions in 24 hours
One thing that can be quantified, however, is Dash’s speed. Dash recently performed a stress test on the system, successfully processing three million Dash transactions in a 24-hour period – a record for a Bitcoin-based blockchain.
What gives Dash this high-speed transaction while other blockchain-based cryptocurrencies struggle with congestion?
“The Dash network is fast, high-throughput, and reliable because the network actually pays the server operators of our network,” says Taylor. “These operators are paid only if their servers provide reliable services to the network.
It’s a model that has drawn some criticism, not least because it utilizes “privileged” master nodes that requires a 1,000 dash collateral to run (about $61,000 at today’s prices). However, Taylor maintains that the system provides better results.
“Other cryptocurrency networks rely on volunteers for these nodes, which tends to result in slow unreliable computers on residential internet connections. In essence, these networks get what they pay for.”
What About Centralization?
As impressive as it sounds, I can’t help but feel skeptical about super fast blockchain transactions. Most networks compromise some aspects of decentralization to achieve high speeds.
I put the question to Taylor. Does Dash compromise centralization to achieve its high speed?
“The best part is that paid nodes actually encourages decentralization. As other networks grow in size – and hosting a node becomes more expensive to accommodate the increased data traffic – the number of volunteer nodes tends to drop and increase the centralization of the network.
“In contrast, as transactions grow on Dash, payments to our operators increase and that attracts more operators to provide infrastructure to our network – thus driving decentralization.”
A sort of decentralized capitalism, then. By paying network operators directly, it encourages a sort of free market.
The PayPal of Cryptocurrencies?
The next stage in Dash’s evolution will focus on improving user experience. In short, they are working on taking crypto payments mainstream, using an interface as familiar as PayPal or Venmo.
“Dash Evolution is our landmark release aiming to make Dash easier than ever to use, by providing a platform that enables many new capabilities, including new apps capable of providing a Venmo or PayPal-like experience to users. We believe Evolution will be the payments system of the future to provide millions of users around the world with the ability to carry out instant, secure, and near fee-free transactions.”
Forget clunky interfaces and lengthy cryptographic addresses. The next generation of Dash will introduce a slick software:
“It will be every bit as relevant and familiar to our users as a Venmo or Paypal in which a user can send and receive money from his or her contact list. Evolution will allow users to create a network username… Users will pay and get paid from other usernames, as opposed to being forced to enter long cryptographic addresses.”
“Our goal in this is to make using cryptocurrency on a daily basis more accessible for both users and merchants.”
It’s a lofty goal, but early adoption in Venezuela and Latin America may be the first proof of concept.
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