DASH (DASH) could show us how Facebook’s (NASDAQ: FB) proposed Libra cryptocurrency could work.
Facebook intends Libra to be a global digital currency you can use anywhere via smartphone. The Libra Association has set no release date for Libra.
DASH, however, has been available for several years. DASH could help us understand Libra because it works like Mark Zuckerberg intends Libra too.
Is DASH the Template for Libra?
Under the current plan, people will use a peer-to-peer (P2P) payment app to transmit Libra to acquaintances. You could also use the P2P app to payment merchants with Libra.
Interestingly, DASH (DASH) already offers such capabilities. To explain, you can download a DASH P2P App from Google Play and the App Store. In addition, you can pay with DASH at some businesses in Colombia and Venezuela.
DASH Merchant Venezuela claims over 2,400 merchants accept DASH payment in Venezuela, Forbes claims. To explain, DASH Merchant Venezuela offers point-of -ale (POS) devices that accept DASH payments.
CoinDesk’s Diana Aguilar disputes DASH Merchant’s claims. Aguilar claims only 488 businesses accept cryptocurrency in Venezuela. Hence, it is impossible to ascertain the level of DASH use.
DASH’s Cryptocurrency Adoption Strategy
DASH and Libra represent different strategies for taking cryptocurrency to a mass market.
The DASH strategy is to create the cryptoccurency and payment tools first. Then test the cryptocurrency and tools in obscure markets. In addition, DASH is promoting its cryptocurrency in places where fiat currency is failing.
Venezuela had a 3,332% inflation rate between January and September 2019, the country’s National Assembly claims. Venezuela suffered from a 23.5% inflation rate in September, Novinite.com reports.
DASH’s strategy is to introduce its cryptcourrency in areas with the least resistance. For instance, in Venezuela; where people distrust both the government and the currency.
CoinDesk claims DASH is having little success despite a large advertising campaign. However, DASH gets to test its technology in real world environment. Importantly, DASH gets real experience bringing cryptocurrency to the masses.
I think it will take DASH several years to develop a market for its cryptocurrency. On the other hand, DASH could have more data about real world cryptocurrency use than organization besides Ripple (XRP).
DASH’s Strategy vs. Libra’s Strategy
Libra’s strategy is to build the infrastructure first and the cryptocurrency second.
For instance, Zuckerberg created the Libra Association a central-bank type organization to administer Libra. In addition, Facebook recruited several large companies to participate in the Libra Association.
Several companies including; PayPal Holdings (NASDAQ: PYPL), Visa (NYSE: V), MasterCard (NYSE: MA), and Stripe have left the Libra Association, The Verge claims. The companies dropped out because of media hysteria and political pressure directed at Libra.
Unlike, DASH and Ripple; which operate under the media radar, Libra works in public. Hence, Libra makes itself a target for nationalists, journalists, politicians, technophobes, and Luddites.
Who is behind DASH?
I think a smarter strategy for Zuckerberg is to work through a smaller cryptocurrency with no clear connection to Facebook. For instance, buying DASH could make more sense than building Libra.
The Libra comparison raises the question: “who is behind DASH?” I think a fintech company like PayPal or a large bank could finance DASH. To explain, that entity can conduct research and develop and gather real-world data about cryptocurrency covertly, by working through DASH.
However, no large corporations appear to be participating in DASH.
What is DASH (DASH)?
DASH (DASH) is a simple cryptocurrency they intend only as a payment solution. Consequently, the DASH designers concentrate on real world use of their cryptocurrency.
For instance, the DASH website features a webpage showing automatic teller machines that work with DASH. In addition, DASH mentions all the commercial uses for its cryptocurrency such as bill pay.
Notably, DASH is not convertible into Ethereum (ETH). Hence, DASH is not compatible with the Ethereum blockchain or the many Ethereum Request for Comment (ERC20) cryptocurrencies they build from the Ethereum blockchain.
Incredibly, Investopedia estimates there were over 181,000 ERC20 tokens on the Ethereum blockchain on 16 April 2019. Hence, you could not use DASH in most popular blockchain ecosystems and utilities.
Consequently, DASH is trying to build a market outside the blockchain. Unfortunately, there appears to be no popular demand for it outside the blockchain.
Is DASH Scalable?
However, DASH could have some advantages. In particular, DASH claims to offer a one second transaction processing speed. Unfortunately, the DASH website does not mention how many transactions per second (TPS) DASH can handle.
The TPS is important because blockchains can crash if they try to process to many transactions per second. For instance, Bitcoin (BTC) can only process around three TPS which makes it too slow and cumbersome for mass market uses. Significantly, Ethereum (ETH) can handle between 15 and 25 TPS depending on which expert you ask.
Ethereum and Bitcoin are slow because the size of their blockchains is small. To clarify, all the security measures and encryption in blockchain can leave little room for data to move. This is the blockchain scalability problem crypto geeks love to obsess about.
Solutions like EOS (EOS) and Ripple (XRP) overcome these limitations by building sidechains. A sidechain is a less-encrypted shortcut around the blockchain. Hence, sidechains sacrifice security for speed.
DASH’s website, unfortunately, does not mention the blockchain scalability problem or a potential solution to it. Yet, DASH like Libra will need to deal with scalability to reach a mass market.
What Value Does DASH (DASH) Have?
Mr. Market gives DASH some value. For example, CoinBase gave DASH (DASH) a Coin Price of $69.35, a Market Capitalization of $631.30 million, and a 24-Market Volume of $204.9 million on 16 October 2019. CoinBase estimated there was a Circulating Supply of 9.1 million DASH on 16 October 2019.
In comparison, CoinMarketCap estimated DASH’s Coin Price at $69.72, DASH’s Market Cap at $634.476 million, and DASH’s 24-Hour Market Volume at $205.06 million on the same day. CoinMarketCap estimates there was a Circulating Supply of 9.0945 million DASH and a Maximum Supply of 18.9 million DASH on the same day. CoinMarketCap ranked DASH at the 18th most popular cryptocurrency on that day.
Thus, DASH has some value but I think the value is purely theoretical. Interestingly, I think DASH’s technology and the data it is collecting about real-world cryptocurrency use could be more valuable than DASH itself. Unfortunately, the Coin Price does not reflect those values.
Hence, I believe DASH is a cryptocurrency for speculators to watch. Its backers have some potentially lucrative capabilities, but those capabilities are unproven. Yet, DASH is a cryptocurrency that could suddenly spike in price if evidence of widespread real-world use appears.
In the final analysis, DASH seems to have a good strategy and an unproven cryptocurrency. Only time will tell if DASH’s strategy is superior to Libra’s.
Originally published at https://marketmadhouse.com on October 17, 2019.