Venezuela’s currency crisis has provided a unique use case for real-world cryptocurrency adoption. Well more than half of the 3,000-plus merchants worldwide who accept dash (DASH) are in Venezuela, and an additional 200 join the network every week, says Bradley Zastrow, global head of business development for the Dash Core Group, which provides services to the network supporting the cryptocurrency.
Last week, Dash Core announced Dash Text, a Venezuela-based technology partnership that allows users without smartphones to conduct cryptocurrency transactions through SMS text messaging on simple cellphones. “Venezuela can be a great laboratory on how we make it easier from a product point of view, from a communication point of view,” Zastrow says.
Zastrow spoke with ThirtyK about the challenges of mainstream adoption, the value of decentralized decision-making in developing solutions (the Dash network is a decentralized autonomous organization, or DAO), and how lessons learned in Venezuela could help spur crypto use in both the developing and developed world. Before joining Dash Core, Zastrow served in a variety of partnership and finance roles at American Express.
ThirtyK: How does Venezuela fit into the broader story of crypto use worldwide?
Zastrow: Even though we [recently] celebrated the 10th anniversary of Satoshi’s white paper, it’s only been in the last year or so that proper use cases and solutions are being developed.
“the volatility of crypto is a disincentive in a lot of developed countries. In Venezuela, the paradigm is switched on its head because it’s the fiat currency that’s more volatile.”
From Dash’s side of things, I’d argue that 2018 is when the yardstick begins. That’s when we started to see Venezuela hit the radar. We noticed that it was the second largest [source] of website visits, behind the United States. If your currency is broken, every payment type is clearly broken.
ThirtyK: How did users on the ground in Venezuela help support cryptocurrency adoption?
Zastrow: What the community has done is [to start] building the value proposition. They created help desks. One of the biggest friction points with crypto is helping people use it. They created a Dash merchant acquisition team. [This happened] organically on the ground. It’s a perfect example of the power of the Dash DAO. The community in Venezuela is creating [solutions] every day. They proposed multiple proposals to the network: Dash Text, the Dash merchant team, Dash Help Me and Dash Caracas, and all have been funded through the proposal system.
About 2,200 merchants in Venezuela are accepting dash, most at the franchise level but [companies] like Subway and Calvin Klein as well.
ThirtyK: With these organic efforts spurring adoption, what is Dash Core doing to build on the community’s efforts?
Zastrow: We’re approaching that market as a vertical and finding ways to plug in dash by understanding the value proposition for users: merchants as well as individuals.
In August, Dash Core launched a partnership with Kripto Mobile, a low-cost smartphone handset in Venezuela and Central America [with] a micro but complete dash ecosystem. You have to be able to acquire, store and transact with dash easily, and you have to hit all three pillars to gain momentum.
[Adoption] included a paper wallet like a lottery-like scratch-off to get a QR code and a little bit of dash so new users could not only become part of the dash family, but also get used to the user experience of QR scanning and how the wallet’s set up. Of all the noise in the crypto universe, it was one package where you could get on board in an easy way in a form factor they’re comfortable with.
One learning we’re going to continue to focus on is that you just have to make it easy for people. It’s not about “build it and they will come,” it’s build it and understand how to communicate with a more heterogenous group of people who don’t necessarily share the same DNA that crypto was born from.
Trading Crypto With Dumb Phones
ThirtyK: How does Dash Text build on these efforts?
Zastrow: Dash Text is showing you don’t even need Internet access. You can do this across a cellular network. It’s a way to get involved in crypto without having to invest in a smartphone [and] bring crypto to a larger population who otherwise can’t afford to play right now.
[In less than a week] already more than 200 SMS wallets have been set up. At this point, understanding our customers will be the most important part to refine the value proposition. Dash Text is focusing on Venezuela to understand how customers are using it and get at the broader implications.
ThirtyK: What are broader implications for Dash Text’s use in the developing world?
Zastrow: We know anecdotally that smartphone penetration has increased, and that it’s used as a primary internet device in a lot of developing nations. [But] there are still a lot of dumb phones, for lack of a better word, being used.
Like Venezuela, where the currency is a problem, there are a lot of [other] countries out there: Argentina, Turkey, Iran, Africa. We’re slowly building rings around Venezuela for Latin America and understanding where we can improve, where the value proposition succeeded [and] where it didn’t, and export it to broader reach.
ThirtyK: Two of the countries you mention, Venezuela and Iran, are developing state-backed cryptocurrencies. How does that impact Dash and other decentralized cryptocurrencies?
Zastrow: The short answer is that I see no reason why they can’t co-exist … because there will be different use cases. It’s the same thing with the broader crypto industry …, which has thousands of coins and tokens, some with great use cases and some with less than stellar ones.
In terms of long-term success for any crypto, it will be just like today’s payment industry. There are different companies for remittances, credit cards, and it will be about whether you provide a unique value proposition for users. A centralized cryptocurrency from a federal government has a value proposition that many in the industry would not agree with – the centralization aspect. That creates an opportunity for dash and bitcoin (BTC) or others.
Where Fiat Currency Is More Volatile Than Crypto
ThirtyK: What are the implications of Dash’s work in Venezuela for developed countries like the United States and Europe?
Zastrow: One is that crypto is hard to use today around the world, whether in a western or developing country. Finding the right levers to pull within Venezuela in terms of getting more mainstream people involved in crypto, while there will always be unique cultural differences, will help find the right way to make it easier for the world at large.
The other unique aspect is that the volatility of crypto is a disincentive in a lot of developed countries. In Venezuela, the paradigm is switched on its head because it’s the fiat currency that’s more volatile. By not having to address the volatility question as much as in a developed nation, you can focus on the most critical elements from a user experience: Can you store it, transact with it? It’s a cleaner way to eliminate the noise and get to the core value proposition: What do customers need and want?