Dash Text launched in Venezuela today, allowing users without smartphones to send and receive Dash using SMS enabled cell phones on the Movistar and Digitel networks. Dash Text was created through a partnership with BlockCypher.
Rumors have it that Dash is becoming more popular in Venezuela. I have yet to see convincing proof of that. It seems to be based on one exchange owner’s comments. That exchange only accepts Bitcoin, Litecoin and Dash, so their biases may be showing. To the contrary, there isn’t a single Dash node running in Venezuela at the time of this writing. Nevertheless, nodes don’t necessarily predate use. And Cryptocurrencies in general have a lot to offer the inflation plagued citizens of Venezuela.
In fact, the current and much-maligned President of Venezuela Nicolás Maduro, recently started the pre-sale of the Petro. The Petro is an asset backed, government run cryptocurrency, that is reportedly a copy of Dash. Perhaps because of this, the country’s other large telecomm company, the state run Movilnet, was not apart of the announcement.
Users simply text “DASH” to 22625 and then “CREAR” to create their wallet. Within a few minutes, the phone will be able to send and receive Dash.
Cryptocurrency transactions through SMS isn’t a new concept. Bitcoin and other cryptocurrencies have had that ability in certain locales for years. But Venezuela is in a unique position because there is such an obvious need for a stable currency in the country. While the U.S. Dollar is and will remain the main alternative the to the Venezuelan Bolivar, cryptocurrencies have their advantages.
For one, they are censorship resistant. So, any moves by Maduro to prevent its use will likely fall flat. Secondly, it is a lot easier to get cryptocurrencies into a country than physical notes. While there is plenty of USD to be had in open-air markets in Venezuela, that doesn’t help the people who need an influx of cash.
If a relative in the United States or another developed country wants to send money back to Venezuela, the fees of regular options could lessen its impact. Alternatively, they could send a cryptocurrency and pay a much smaller fee. And if the receiver can hold that money in any cell phone, smart or not, then it just becomes that much easier. All they need then is to find a money exchanger that will let them trade it for dollars or Bolivars.
Previous attempts to do Bitcoin by SMS weren’t focused on developing countries and didn’t have a currency inflating thousands of times over to drive adoption. Even the state backed Petro is likely to help increase awareness and credibility of other cryptocurrencies.
Ultimately, a cryptocurrency’s success or failure depends on the same things that apply to fiat currencies. The driving factors are different, but if a currency is commonly used and seen as valuable, it will be a success. If few people use it and few people value it, then it will be a failure.
It is unclear how many people are actually using cryptocurrencies and specifically Dash in Venezuela. Another statistic commonly cited as proving there are a lot of Dash users in the country is that there are supposedly over 500 merchants that accept it. But, according to the same site that put out that statistic, Discover Dash, the vast majority of them are supposedly closed, at 3pm, on a Friday. Even if they are legitimate stores, they are overwhelmingly concentrated in the city of Caracas. That leaves out a lot of the country.
Even still, the opportunity is there. Venezuelans need a currency that isn’t dropping like a rock in value. While Bitcoin, Dash and practically every other cryptocurrency are far off of their highs, they have performed infinitely better than the Bolivar. Ease of use is the highest hurdle for cryptocurrency adoption, and Dash just lowered theirs significantly. Only 40% of Venezuelan citizens use smartphones, and while that number is growing, that still leaves a lot of people that could benefit from the Dash Text option.
We will continue to monitor the adoption of cryptocurrencies in the third world.