In a recent interview with Cointelegraph, Dash Core Group CEO, Ryan Taylor, discussed how central bank-issued cryptocurrencies are the “inevitable future”.
“I do think it’s inevitable. They governments all are going — through either competitors’ pressure or through their own desires — to launch their own cryptocurrencies. But I don’t think it is where the most significant innovations will occur.”
Nevertheless, Ryan added that the “free market can ultimately design the better money than the government” and that it will be consumers that “will decide what form of money they want to consume and use as part of their lives”. Ryan also predicted that regulations could start as early as 2019 in developed nations like the U.S., but that “the smaller nations will move first as the risks for them are lower”.
An example of state-backed cryptocurrencies is the Venezuelan Petro, which has been accused of being a very similar copy of Dash. Some have even used the word “plagiarism” to describe the copy. However, Ryan responded by saying that “it is an open source code and using the word ‘plagiarize’ is quite difficult to apply, but there are significant portions they have copied”.
The rise of stablecoins
Stablecoins have recently been prominent in crypto and mainstream news outlets as a potential solution to the volatility of other cryptocurrencies. Most stablecoins attempt to increase stability by pegging their value to another currency such as the USD or to a commodity such as gold. However, they have also had their legitimacy called into question, such as Tether, which is surrounded by doubt and periodically loses its 1:1 USD peg for extended periods of time.
While stablecoins do offer a tempting fruit of stability, they also highlight the dangers of centralized control and the reason for decentralized cryptocurrencies in the first place. Stablecoins, so far, have tended to be run by centralized parties and thus run risks of being shut down or prone to manipulation. Tether being an example of the latter and an example of the former being the Royal Mint’s recent announcement that their plan to launch a digital gold token is dead after the UK government denied them the privilege to list on a cryptocurrency exchange after the CME group pulled out of the deal. Nevertheless, leveraging the advantages of computer code, there is still the option of a coin that auto-adjusts supply based on pre-defined equations and inputs, such Basis, which gains inspiration from the Taylor Rule that is commonly floated around macroeconomic planning circles. The emergence of these stablecoins does create greater competition, which will provide more choices and thus better solutions for consumers, but as Ryan eluded to, much of the innovation will come from coins that are not under centralized control.
Open source and decentralized cryptocurrencies have so far been the bulk of innovation in the sector going all the way back to the creation of Bitcoin. Decentralized cryptocurrencies are permissionless and allow anyone to contribute and review code, which also allows for more competition, better solutions, and more equal access. This has inspired many to enter the space to create more sound money and fiscal/monetary independence, as seen through the innovation of many coins, rather than just a digital version of government-backed fiat currencies.
Dash strives to lower volatility through everyday usage
Dash has had its fair share of volatility just like all the other cryptocurrencies, however, Dash is constantly striving to create a cryptocurrency that can be used in everyday transactions by maintaining record low transaction fees, extremely fast confirmation speeds, great security, and wide acceptance. This allows consumers to hold Dash and not cash out into fiat right away out of fear of losing their wealth, which then further bolsters Dash stability. This is already being seen in Venezuela where the Bolivar inflation is so excessive that Dash’s volatility is relatively small and consumers are using Dash for everyday purchases as a realistic alternative.
Partly contributing to Dash’s everyday usage is its consistent innovation that sets itself apart from other cryptocurrencies such as creating one of the first and longest running DAOs, introducing the sector to Masternodes, and being able to fund its own development via the Treasury. These features are making Dash a great success and so much so that the Venezuelan government has copied it to a degree to help solve their own problems. This usage and demand will help to further create stability as consumers worry less about the price and trust the Dash network, protocol, and economic incentive structure to provide a great product and service.