I recently caught up with the head of a “DASH Caracas”, Eugenia Sucre. DASH is a cryptocurrency like Bitcoin which is an alternative to money. We discuss how recent years of financial mismanagement and sanctions in Venezuela have only served to make life more difficult for the people. Now many of them are switching to cryptocurrencies like DASH as a more solid and anti inflationary monetary system that they can trust.
Inflating the money supply is pricing the people out of their lives
On a daily basis the amount of money that the banking press prints in Venezuela increases which inflates the money supply. Increasing a country’s money supply out of nothing is common practice across the world its just that Venezuela is doing it at a faster rate and for longer. For Venezuelans this inflation means the prices of the goods are also rising rapidly but the salaries of the people are not. Imagine the price of a loaf of bread goes up 50% tomorrow!
Much like when the supply of oil increases its value decreases, the same is happening to the Venezuelan Bolivar. I remember standing at a bus stop in Colombia and chatting to a guy from Venezuela. He handed me a 20,000 Bolivar note, I asked him how much it was worth and he replied “nada”!
Sanctions against Venezuela hurting the people
On top of the inflated economy, other countries have decided to place sanctions on Venezuela. The usual suspects including USA, EU member states, NZ, Canada etc are doing this and probably because Venezuela has a lot of oil and they are not playing the game those countries want her to. Of course sanctions hurt the people most as they cannot get hold of essential supplies. I’ve heard many stories of Venezuelans relying on their families abroad to smuggle in medicines for them.
How are Cryptocurrencies solving Venezuela’s problem?
It’s actually a really simple problem to solve. Remove the banks from the equation and allow the people to trade directly with each other using cryptocurrencies. Most people in Venezuela have smartphones which they can install a free wallet application on. Using the wallet they can buy and sell using cryptocurrencies simply by scanning a barcode and the transaction is instant.
If cryptocurrencies are new to you, I’ve written a guide “Demystifying Cryptocurrencies”.
My experience travelling South American countries is that everyone prefers to use cash and buy and sell directly rather than rely on a bank to process their card transactions. With Cryptocurrencies this tradition can continue and the trusted relationships remain intact.
Unlike how it can cost between 3 and 10% to use your bank card to pay or withdraw cash, cryptocurrencies have a fraction of a percent charge. I recently worked out that if I used cryptocurrencies in Argentina instead of money it would be 1000% cheaper!!
Cryptocurrencies are Anti Inflationary
The supply of cryptocurrencies like DASH are limited in supply and only 21 million can ever be created. Powerful computers that anyone can own called miners follow computer code and can only create new DASH by strictly adhering to the rules. Also over time time the difficulty for creating new DASH increases so the supply slows down over time.
If you would like to find out more about how Cryptocurrencies are created, read my guide.
How is DASH helping the Venezuelan People?
10% of all new DASH that are created go into a treasury and the people that hold DASH vote on proposals to use this fund. This is how Eugina who I interviewed got the funding for “Dash Caracas”. Her organisation is targeting and educating the small business sector – the business owners who are used to trading directly with customers and who can easily make the shift to using Cryptocurrencies like DASH. In turn these businesses are educating their clients and suppliers slowly building up a new payment network.
Cryptocurrencies – a lifeline to the Venezuelan People
Cryptocurrencies like DASH help the people to be more independent and not so reliant on a banking system that is literally stealing money from them on a daily basis. During my travels across south america I see this inflationary pattern starting to occur so will we see more nations turning to cryptocurrencies instead?
How I can help you?
My background is in technology and training and for over 10 years I have provided IT Support to home and small business users through my IT company ithound.co.uk. In recent years I have added Cryptocurrencies to my product offering with cryptohound.me.
Whether you are a business wanting to accept cryptocurrencies or an individual interested in investing in them, I will help you get started and provide training and support to give you confidence using them.
I regularly write blogs both on my website and the Steemit platform so be sure to connect with me there. If you would like to support my work please check out my affiliate links below which help finance the articles and videos I make:
- Mine Bitcoin and earn passive income with the Elevate Group
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Carl Hughes, The Crypto Hound
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