{"id":70700,"date":"2020-01-10T21:17:01","date_gmt":"2020-01-10T21:17:01","guid":{"rendered":"https:\/\/www.dash.org\/uncategorized\/venezuelan-crypto-adoption-will-surpass-10-of-stores-in-2020\/"},"modified":"2021-09-29T11:13:35","modified_gmt":"2021-09-29T11:13:35","slug":"venezuelan-crypto-adoption-will-surpass-10-of-stores-in-2020","status":"publish","type":"post","link":"https:\/\/www.dash.org\/blog\/venezuelan-crypto-adoption-will-surpass-10-of-stores-in-2020\/","title":{"rendered":"Venezuelan crypto adoption will surpass 10% of stores in 2020"},"content":{"rendered":"

Venezuela is the leading market for crypto adoption in the world today. There are now over a thousand locations accepting cryptocurrency payments, hundreds of thousands of wallets downloaded by Venezuelans, dozens of teams working on education and adoption activities, and a network of crypto companies and organizations focused on the Venezuela market.<\/p>\n

During last December, the largest pharmacy chain in Venezuela<\/a> shared their ongoing process to add crypto payments to their options, and Burger King started<\/a> accepting crypto payments. This progress is indicative of how cryptocurrency payments are progressing toward the mainstream in Venezuela.<\/p>\n

While a thousand merchants represent less than 1% of total stores in the country, this is a level of adoption and usage not seen anywhere else. That is why Venezuela is so relevant for evaluating the global state of cryptocurrency usage and what will come next for the space.<\/p>\n

During the time I have been involved and studying cryptocurrency use and adoption, I have identified four stages that progressively expand the use cases for crypto. These stages are correlated to the health of the local currency, where troubled economies create stronger incentives for ordinary people to search for alternative finance options to protect their assets and solve payment problems. This creates an entry point for cryptocurrency.<\/p>\n

Below is the four-stage progression in the use and adoption of cryptocurrencies:<\/p>\n

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A broken economy creates incentives for users to try crypto as a way to avoid Fear of Losing Savings (FOLSA), after understanding the benefits, the use as peer-to-peer electronic cash to make daily payments can follow.<\/figcaption><\/figure>\n
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  1. Trading and speculation<\/strong>: Especially in developed markets, people first view cryptocurrencies as a speculative investment. Seen in all financial markets, \u201cstable\u201d or not, investors take a chance to increase wealth by \u201chodling\u201d cryptocurrencies and speculating on them.<\/li>\n
  2. Bitcoin as a capital controls safe haven<\/strong>: Troubled economies create incentives that drive peer to peer Bitcoin trading. This can be correlated to crises in Greece in 2015, Argentina in 2014<\/a> and 2019, and Venezuela since 2015. This use case seems to thrive in gray systems, where OTCs, wealthy individuals and companies drive high-volume transactions.<\/li>\n
  3. Crypto as peer-to-peer electronic cash <\/strong>Once tech-savvy people in distorted economies use Bitcoin for the first time to safeguard money, they understand the benefits of decentralized digital cash, and some feel interested in using it directly for transactions. A digital cash ecosystem emerges when a sufficient number of users try to use it for everyday transactions, resulting in exposure outside of their initial groups of influence, awareness and more growth.<\/li>\n
  4. Killer app usage <\/strong>This is further down the line, and I have not personally seen a compelling solution for a use case that will drive crypto adoption the way social media did for the internet. We can reach this, once more developers, investors and business people are introduced to the capital control and peer-to-peer digital cash stages of crypto usage.<\/li>\n<\/ol>\n

    Crypto in Venezuela: A Unique Ecosystem<\/h2>\n

    In Venezuela, the stages of capital control and digital cash from the adoption cycle have grown constantly for the past couple of years. And while the capital control use case gets most of the attention due to LocalBitcoin\u2019s high volume<\/a> records, the peer-to-peer use case has steadily grown and is creating a unique and very interesting ecosystem not seen anywhere else in the world, which supports the claim of Venezuela having the most extensive crypto ecosystem globally.<\/p>\n

    Some of the components that make Venezuela\u2019s ecosystem unique, and the most advanced crypto region in the world include:<\/p>\n