Over the past few weeks, the cryptocurrency market has seen overall exchange price declines, which highlights the need to provide consumers with real added value to help stabilize the exchange price.
The price declines have led to a lot of speculation as to the cause along with when it might possibly end. The mainstream media has gone back to calling it the end for cryptocurrencies. However, the silver lining of the price declines do call attention to the difference between real and speculative value. Speculation provides an integral role in valuing new technology since it estimates the discounted future value of the product or service. However, speculation becomes bad when there is not enough real value that underlies the product or service to meet said speculation.
Many of the top cryptocurrencies have some form or fixed supply and thus can only increase in price when demand increases, based on basic laws of supply and demand. Thus, to have real increases in exchange prices rather than only speculative price increases, cryptocurrencies have to increase their user base and adoption. Thus, cryptocurrencies have to deal with constant exchange price fluctuations as speculators are constantly trying to reevaluate its discounted future value based on its present and perceived future use and adoption. An example of this can been seen with the recent concern over Litecoin dipping below its USD exchange price from five years ago.
Dash is steadily gaining real value
Instead, Dash has steadily gained value, relatively, compared to other coins due to its focus on adoption and real world usage. Since Litecoin has been trending recently, Dash Force News took a look at historical prices going back five years between Dash and Litecoin and despite price fluctuations, which is common in the cryptocurrency sector, it now costs more Litecoins to buy one Dash than it did five years ago – Dash is appreciating relative to Litecoin. The same is true for Dash relative to Bitcoin, with the exception of the major spike that occurred across the entire cryptocurrency market at the end of 2017 and the beginning of 2018.
Price of Dash in Litecoins – Solid line is spot price and dotted line is trendline.
Data for both charts are from Cryptocompare.com API and manipulated in an excel document by the author.
Price of Dash in Bitcoin – Solid line is spot price and dotted line is trendline.
Both of these charts depict Dash appreciating, relatively, to Litecoin and Bitcoin since it takes more Litecoin and Bitcoin to buy one Dash than it did a few years ago. The reason for this appreciation and relatively smaller decline in exchange price than its peers can partially be attributed to Dash’s focus on everyday transactions, which gives its exchange price more real value than speculative value. This is also supported by looking at the median transaction values on the Dash network. When compared to Bitcoin, Litecoin, and Bitcoin Cash, Dash has the smallest median transaction value, which indicates that Dash is being used for smaller everyday purchases rather than large movements of money that is most likely investment money rather than transactional money for goods and services.
The wealth distribution of Dash compared to its peers also further supports this claim. Dash has a smaller concentration of wealth among the top 1,000 addresses indicating that Dash is spread across more individuals. This is an indication that Dash is held and spent more widely as more people have access to Dash around the world rather than just a handful of investors. An interesting research topic would be to study how Dash’s wealth distribution has changed over time when compared to other coins to discover how each coin is being spent in terms of wealth classes.
Wealth Distribution from BitInfoCharts
In addition, Dash Masternodes have been steadily increasing, which further secures the Dash network and improves Dash’s unique features like InstantSend and PrivateSend. This also signals an indication that individuals remain confident in the future of Dash despite the marketwide sell-off. This is positive speculation reinforced by the everyday usage of Dash and the continued push by Dash development and community outreach teams to continuously increase the everyday usability of Dash.
Dash focuses on usability
Dash has been able to become a payments system for everyday usage by focusing on maintaining Dash’s record low transaction fees, very fast confirmation times, high security, and ease of use. Dash has median transaction fees of $0.0005 USD, which places Dash number one among its peers that can have their median transaction fees normally cost a few cents and reach multiple whole dollar amounts during periods of network congestion. The highest that Dash transaction fees have ever gone was $0.10 USD. In addition, Dash boasts an average confirmation time of 2.5 minutes, which is much fast than the sector average of 10 minutes. Using InstantSend allows confirmations within seconds for a couple pennies more, which will soon be even cheaper with the Evolution network upgrades. These features are integral for merchants that cannot force their customers to wait for confirmations, but also do not want to pay large fees nor risk possible double spends.
These attributes have all been facilitated by Dash’s Decentralized Autonomous Organization (DAO), which has allowed Dash to innovate on a couple fronts. First, the DAO Treasury enables the network to professionally pay a team of developers to consistently maintain and improve the Dash network and features. Second, the DAO Treasury has enabled community outreach professionals to increase Dash merchant and consumer adoption, which further increases the real world usage of Dash and supports its exchange price. Third, the Dash DAO has enabled the network to achieve consensus easier than other networks, which prevents forks and splintering of the community. This structure of Dash supports Dash’s ability to focus on everyday usability and adoption, which provides real world usage to support the exchange price of Dash making it continue to appreciate in value against other coins despite the recent marketwide sell-off.
