US national debt continues to increase, leaving Dash as an important hedge against financial collapse.
The Federal Reserve bank is poised to increase interest rates after years of low rates. The national debt already sits at about $20 trillion, and could very well double over the next 20 years. That figure may very well be higher, according to US Senator Ben Sasse, as it does not account for entitlement obligations:
“What our debt levels are — we often talk about this number, $19 trillion of debt. That’s not the real number because all of your entitlement spending is kept off book on a different ledger. The real number is more like 70 to 75 trillion dollars — and so when you set that up against U.S. GDP, the only time we ever had a debt-to-GDP ratio like this was on the eve of the Great Depression.”
This ever-growing and unsustainable debt burden could trigger a financial collapse, leaving holders of the US dollar in a bad spot.
Dash offers a sound money alternative
In a scenario where a mismanaged US financial system leads to a dollar collapse, well-governed digital assets such as Dash serve as a sound alternative to fiat currency. In contrast with the dollar, Dash is protected against runaway inflation, with a maximum coin supply for the entire currency hard capped at 22 million, although because of several factors including unused treasury funds, that actual limit is likely closer to 18 million. This means that the coin’s inflation will continue to drop over time, producing a deflationary effect and driving up the price. Additionally, because of Dash’s governance system, major stakeholders (masternodes) have the final say in developmental decisions, and as such will protect the value of their investments against poor choices for the currency. That protected value will positively affect the rest of the network.
Because of these factors, the value of Dash has continued to rise against the dollar over time. May 1st of 2014, one Dash was worth about $1.50. By the same time next year it had risen to about $2.70, and by last year the value had increased to $6.80. At time of writing, Dash has risen over tenfold since the previous year, settling in a stable lower $70s, corrected from an all-time high of $120.
Increased savings and purchasing power for the people
While savvy and well-off investors will retain, and increase, the value of their holdings over time, the common man has no such luxury. The poor and middle class often live paycheck to paycheck, and especially older generations tend not to have significant emergency cash reserves. While an inflated dollar causes the average family to see its purchasing power decline, a Dash economy would give the common person savings that grows in value without the need for investment savvy.