The Cryptocurrency Dream, Revived
To the outsider looking in, the cryptocurrency world may appear to be a geek version of the movie Wall Street. Crypto-traders obsessing about minute fluctuations in price, newbies dreaming of Lambos, and shills hyping their worthless coins to the naïve are the order of the day. The whole thing doesn’t come across as very noble, to be sure. However, like many earlier adopters of Bitcoin, I initially embraced cryptocurrency not because I dreamed of personal wealth, but because I dreamed it could literally make the world a better place. Call me idealistic. Guilty as charged.
At the time most of my friends scoffed at my lofty dreams. Here in the developed world where I live, most people accept that our economic situation is essentially stable. If people put their money in the bank, they have confidence that it will stay there, and that it will be worth about the same when they withdraw as when they deposit. Yes, inflation causes a devaluation of their funds, but to most people it’s just a slow drip of annoyance rather than a real issue of importance. Further, none of us ever encounter real problems with purchasing goods and services with our credit and debit cards. The fees and occasional fraud might cause annoyance, but again not so much that we lose any sleep over it. So, my friends asked, why bother with cryptocurrency? What problem is it really solving?
A Solution in Search of a Problem
I insisted at the time that a truly free currency was superior to government-issued currencies and government-regulated (or controlled) banking systems. Although I believe this to be true everywhere, the superiority of free currency can be felt more clearly in the developing world. How? The ability to acquire, save, and spend money in many parts of the world is far more difficult than most of us in the developed world can comprehend. Due to corrupt governments who only allow cronies to accumulate wealth or incompetent governments who erect incessant barriers to success, the average person in many parts of the world is unable to escape the unnecessary economic bonds placed on him.
Here’s where I saw cryptocurrency as the solution. Years ago I dreamed that one day soon Bitcoin would be used in shops and restaurants and other places of business throughout the developing world. I saw money flowing freely and cheaply from the developed world to the developing world via easy and cheap remittences. I pictured the poor truly “being their own bank,” and not having their hard-earned savings stolen via corruption or currency devaluation.
Yet I had no examples to point to, no real-world situations in which cryptocurrency actually did those things on a significant level. And to be honest, I thought I’d see at least significant progress towards these things by now. But it hadn’t happened.
Instead, I’ve witnessed incessant in-fighting as to the purpose of Bitcoin. I’ve seen little progress in making Bitcoin a usable currency in the real world. I’ve seen a flood of people enter the cryptocurrency space, not to change the world, but hoping to catch a wave and get rich quick. I’ve had flashbacks of my dot-com days as everyone and their step-son starts up a new coin and gets crazy market valuations. Of course, people are free to be involved for whatever reason they want, but I admit I became disappointed and even disillusioned. My dreams of changing the world through cryptocurrency were struggling for air.
However, recently these dreams have started to revive, as a cryptocurrency has begun to address a real-world problem, one in desperate need of a solution.
A Problem In Need of a Solution
As most people know, the people of Venezuela have endured a great deal of man-made hardships at the hands of their government in recent years. The value of their national currency, the bolívar, has disintegrated, with hyperinflation making it virtually worthless. For those of us in the developed world, with relatively stable currencies, such a scenario is hard to imagine. Picture your life savings being drained, not like a leaky faucet, but like a bursting pipe, washing away your years of labor. Imagine not knowing how much your groceries will set you back when you go out in the morning. Envision the largest paper denomination of your currency being worth less than five cents. How do you even carry enough paper money to the store just to buy a magazine?
This is exactly the type of situation that I originally believed Bitcoin was best suited to solve. And in some ways Bitcoin can help. Although many in the developed world consider Bitcoin’s price unstable, its value is already much more secure than some currencies, including the bolívar. So a Venezuelan who holds Bitcoin greatly reduces his chances of losing everything. Yet Bitcoin in many ways is impractical in a country like Venezuela, due to Bitcoin’s slow transaction times and transaction fees that can reach over $1 per transaction (not an insignificant sum in that country, where the minimum wage is less than a $1/day). After all, not only is a currency that holds its value needed, but one that can actually replace the failing bolívar in day-to-day use.
Yet where Bitcoin falls short, another cryptocurrency has stepped into the void. From its beginning, the cryptocurrency Dash was created to be “digital cash;” i.e., to be used in day-to-day transactions. This means transactions that happen instantaneously and with a median fee under a penny. These features make Dash uniquely suited to help the average Venezuelan escape from the troubles of the bolívar and secure economic freedom. And beginning last year, over twenty separate Venezuelan-based groups, many funded by the Dash Budget System, have launched a concerted effort to introduce Dash to the Venezuelan population, with astonishing success. Their efforts have included educational conferences, a live help center (the first such cryptocurrency help center in the world), a program to attract youth, and a push at merchant adoption, including a customized point-of-sale system. And their work has found a receptive audience. At the beginning of the year, less than fifty merchants in Venezuela accepted Dash, but today that number is over 1,000 and rapidly increasing.
These efforts are only accelerating. Just this week it was announced that an under-$100 smart phone preloaded with Dash would be released in Venezuela, and the phones are already available. In addition, a proposal to encourage remittances to Venezuela using Dash is in the works, in an effort to increase the liquidity of Dash in the country. The drive to make Venezuela Dash-friendly is a comprehensive effort — decentralized over multiple, independent teams — to create a true Dash-based ecosystem in the country. Although now it’s still necessary to exchange Dash for bolívars for many products and services, the goal is nothing less than making Dash the de facto currency of Venezuela, with no need to interact with government-based currencies like the bolívar.
If this happens, then average Venezuelans no longer need be subject to hyperinflation destroying their savings, since Dash, like most cryptocurrencies, has a fixed money supply. Further, replacing bolívars with Dash frees the average Venezuelan from the strictures of the traditional banking system, where sometimes you can’t even withdraw your own money. With a Dash-based ecosystem, merchants and consumers can experience economic freedom, which inevitably leads to economic prosperity.
Is such a dream possible? I’d like to think so. And with what’s begun this year to adopt Dash in Venezuela, it might be happening right before our eyes. Watch this development closely — I predict Dash will be the dominant currency in Venezuela by 2021. If that happens, then my initial dreams of changing the world through cryptocurrency will have become a reality, at least in one part of the world.
Full Disclosure: I currently hold both Bitcoin and Dash.