Dash cryptocurrency surges in Venezuela as hyperinflation explodes

A Dash billboard in
Venezuela.
Ryan Taylor/Dash Core
Group

• Venezuela is currently suffering from hyperinflation
  and
  the president recently devalued the currency by
  95%.
• Locals are turning to cryptocurrencies as a more stable
  store of value and means to transact.
• 200 merchants per month are signing up to accept Dash
  in Venezuela, according to the Dash Core Group, and the rate of
  adoption is accelerating.

LONDON — Cryptocurrency Dash is seeing a surge in new merchant
sign-ups and wallet downloads in Venezuela as hyperinflation in
the country runs wild.

Venezuela is forecast to see inflation of as much as 1,000,000%
this year,
with locals needing stacks and stacks of cash just to buy
food. Socialist President Nicolas Maduro last weekend
announced a series of measures aimed at stabilizing the economy,

including devaluing the bolivar by 95% and pegging it to the
state-backed cryptocurrency, the Petro.

However, another, non-state backed cryptocurrency is apparently
catching on: Dash.

“We are seeing tens of thousands of wallet downloads from the
country each month,” Ryan Taylor, the CEO of the Dash Core Group,
told Business Insider. “Earlier this year, Venezuela became our
number two market even ahead of China and Russia, which are of
course huge into cryptocurrency right now.”

The BBC reported on Wednesday that Venezuela
is “a paralyzed country” after the economic changes over the
weekend. Cash withdrawals are being restricted and there is
confusion over how exactly the new system works.

Venezuelans are turning to cryptocurrencies as a way to store
value as the Venezuelan bolivar’s exchange rate spirals out of
control.

A Dash billboard in
Venezuela.
Ryan Taylor/Dash Core
Group

Dash is an open source cryptocurrency created in 2014. It has low
fees and near-instant transactions. Dash is currently the 14th
largest cryptocurrency in the world, according to
CoinMarketCap.com, with just over $1 billion-worth in
circulation.

The Dash Core Group, which Taylor heads, is owned by the payment
network that Dash runs on. The Core Group services the network
and its funding comes from mining fees that are generated by the
network.

As well as wallet downloads, which consumers need to hold and
spend Dash, Taylor said the cryptocurrency is seeing strong
adoption with merchants too.

“It took them a long time to get the first 50, first 100
[retailers],” Taylor, who is based in Arizona, told Business
Insider on a call last week. “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.”

Brand names including Subway and Calvin Klein have signed up to
accept Dash in Venezuela, Taylor said.

“Effectively, even if I accept a credit card, three days later
when the funds hit my account, it’s worth significantly less in
Venezuela than when the authorization went through,” he told BI.
“This is a problem that cryptocurrency can solve. Our instant
transactions can solve it and the relative stability of our
cryptocurrency is better than their fiat currency.”

Responding to questions over email this week, Taylor said
adoption in Venezuela has accelerated even faster after Maduro’s
latest economic plans were announced.

He said: “We’ve seen 94 new Venezuelan merchants added to
DiscoverDash.com since last week, which is about double the
normal rate of about 50 merchants per week [over] the last couple
of months.

“We have seen the number of Dash-accepting merchant sign-ups
accelerate throughout the crisis. I believe that trend will
continue.”

DiscoverDash.com lists local businesses worldwide that accept
Dash. 5 of the 6 newest merchant signups on the website were
located in Venezuela when BI checked on Tuesday afternoon.

Why Dash?

The characteristics of Dash make it suited to act as a cash or
debit card replacement. Dash’s transaction fees are in pennies,
rather than running into dollars as bitcoin’s fees have been
known to do. Confirmation times are also in the seconds, versus
slower payment processing times for other cryptocurrencies.

However, perhaps the most crucial reason why Dash has caught on
in Venezuela is that the Core Group can finance projects on the
ground.

Most cryptocurrencies are completely open source, with no central
funding or body backing the network or the currency. Dash, on the
other hand, has the Core Group which helps to run the network and
looks after some new funds generated by the currency’s underlying
code.

Dash generates new cryptocurrency when transactions are confirmed
on the network. Most of the new cryptocurrency is paid to the
people who confirm transactions, incentivizing them to do this
job of confirming them. But around 10% of this newly generated
cryptocurrency goes into “treasury” — a pot of money that the
Core Group gives to projects and ideas looking to support and
encourage Dash adoption.

“A lot of community members came forward with proposals to do
education, hold workshops, open an office where users can come in
and sit in a small group setting and get help setting up a
wallet,” Taylor said.

The Dash Core Group has so far invested around $1 million in
Venezuela, funding everything from billboards to sales reps.

Taylor added that Dash is also seeing strong adoption in other
countries with similar dynamics to Venezuela.

“Venezuela is unique, it’s the only country in the world with
what can be called hyperinflation,” he said. “But there are other
high inflation countries. We’re seeing this with Turkey right
now. Ukraine, Argentina, these are countries with very high
inflation rates with of 20-30% or something. 20-30% we think is
enough to get people to try something new.

“We’re going to try and be successful first in Venezuela before
branching out to try this in other countries,” he concluded.