This is a transcript of the Podcast – A Discussion on Venezuela Economic Situation with Ernesto Contreras – You can listen the audio here
Nye : What is going on, everybody? What is going on? Welcome to another episode of Evolvement: The Financial Podcast, where we talk about bitcoin, cryptocurrency, and the future of our financial system.
Nye : Shout to our first sponsor, Ghost Talk. Ghost Talk is using a decentralize payments platform to reward its users of the social messaging application using a smart coin, a wallet, and a smart contract. Go learn more at ghost-talk.io.
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Nye : I’m your boy, Nye, and today, I have a very, very special guest on the line. Before we get into all of that, this is going to be the very first part in the Venezuela series. I really wanted to create a specific podcast series with four or five different guests all will revolve around Venezuela, what’s happening there in the economy, what’s happening there in the community, and in the everyday life of a Venezuelan. I wanted to pick people’s brains on how cryptocurrency, how bitcoin, how Dash, how all these digital currencies are playing a role in the reshaping of their economy.
Nye : So, today, I’ve got a really special guest on the line. I have Ernesto on the line. He is the head of business development of the Latin America section for Dash. He’s going to come join us today, chat a little bit about bitcoin, chat a little bit about cryptocurrency, and tell us a little bit more about what’s going on in Venezuela.
Nye : Ernest, how are you?
Ernesto : I’m very good. Nice talking to you. Thank you for the invitation. It’s great to be here sharing with you and your audience. Thank you.
Nye : I’m glad to have you on, man. I’m glad to have you on. I think this is going to be really interesting. I think there’s a lot of miseducation around what’s going on in Venezuela right now. I think there’s a lot of confusion in terms of the information that’s coming out of Venezuela versus the information that’s going in to Venezuela. I’m interested with you being on the front lines to hear your perspective of what’s going on, and how cryptocurrency, how bitcoin, Dash, and all of these currencies are playing a role in, like I said earlier, the reshaping in their economic systems.
Nye : Before we get into all of that, Ernesto, can you just share with us a little bit about your background. How did you get into cryptocurrency? How did you start working for Dash?
Ernesto : Yeah. Great. Thank you. I have about 14 years of experience growing business in the technology and consumer goods industry. The first half of my career I spent in Venezuela, where I’m from, working in marketing for consumer goods. On 2011, I moved to Shanghai to get an MBA. After living and working for about two years in China, I moved to Mexico, where I live now, and I’ve been doing technology ever since. Initially, I was hired to launch a mobile operator. Afterwards, I went head first into cryptocurrencies working full-time.
Ernesto : I worked as the marketing manager for one of the largest exchanges in the region. Since early last year, I’ve had the great chance to lead the growth and the adoption of Dash for Latin America. This is really good because we’re onboarding merchants and getting more wallets and places to acquire store and spend Dash, but we have a very heavy focus on real world usage. I know we’re going to talk a lot about that a lot more, but being able to put this more efficient digital cash into the hands of people for them to solve their problems, it’s great. It’s great, and I know we can make a big difference for different people. So, that’s a little bit about my story.
Ernesto : I got into crypto … When I was living in China, a friend of mine offered to buy a few mining machines. At the moment, I laughed and I told him he was crazy because this gaming coins was going nowhere. Then he laughed and he said, “Well, we’ll talk later.” Few years later, I did realize the power of bitcoin and the power of these currencies. I started reading more and more and more, and understanding how it could work.
Ernesto : I was surprised how you could move money without borders, and without time restrictions. Basically, for the first time, I felt it was your money. So, then when I had the opportunity to join a cryptocurrency exchange, I had no hesitations. It’s been a one-way ride ever since. Once you get in to this, you can never go back. So, it’s great to be doing something in the edge of the technology and, hopefully, this will grow and bring a lot more opportunities for development in emerging markets, and for financial freedom of people.
Nye : I love it, man. I love it. I mean, it’s big. It’s really big. I think that a lot of people in the industry, especially online and in the trading space, I think we forget how big this is for people in a real life spectrum, people that are actually in the middle of economic crisis within their country that are in the middle of a reshaping of an economy.
Nye : We forget that a little bit sometimes, especially for people who sit online and they trade these coins back and forth. We forget the real use case, the real value behind them is so much deeper than just trading and making money.
Nye : So, I’m excited to chat with you a little bit about Venezuela. I’m hoping that this podcast gives a little bit more education to myself about what’s going on in Venezuela, and as well as countries that are facing similar economic strife. Hopefully, it reaches the right audience and then people get to hear a lot more about it.
Ernesto : Yeah. Great. I do have to warn you that Venezuela has become a very complex topic. So, you’re going to hear a lot of different explanations for the same thing. It just comes to show how the evolution of a mix of economic problems, social issues, and regional issues are such a complex situation that you will most surely hear different explanations on the same topic. So, that is something that I want to put out there, so we have an understanding of how we might not understand each other.
Nye : No. I appreciate that. I appreciate that. That’s actually the reason why I wanted to do multiple interviews with different people, and make it a whole series about Venezuela rather than doing one interview was because I think this is a very complex issue. I’m sure that we’re going to hear multiple different perspectives. It doesn’t make one perspective right and one perspective wrong, but hopefully, it helps us all get a clear picture and a clear vision of a broader scheme of things of what’s actually going on, and how cryptocurrency can help, how blockchain can help, and how maybe we can play a role in helping as well.
Ernesto : Sure. Totally right. One factor that I didn’t mention on purpose because it deserves a little bit of a longer space is beyond the economic, social, and geopolitical part, there’s a political issue in place. So, it’s been going on in Venezuela for over 20 years. It polarizes people. So, people that support one side will say that everything on the other side is wrong, and the real interesting thing that happened is that now that the situation of Venezuela became a global awareness issue, that looking through the lens of black and white has also become global.
Ernesto : So, when you talk to people that are pro the US, they will say that everything that’s been going on recently is good, and the ones that are against the US position, they will always say that everything is wrong. That also includes some of the cryptocurrency topics that we’re going to discuss. So, it’s a very complex situation, and I’m happy to provide my point of view in it.
Nye : Awesome. Awesome. Well, to dive right in, you started to explain it a little bit right there, discussing the two different sides, but to dive right in, to the best of your ability, can you give the audience and myself a basic overview of what’s happening in Venezuela, and how did this economic crisis come in to effect?
Ernesto : Yeah. Well, it’s basically a deep economic problem. The world has become aware of it or very aware of it during the last months, I would dare to say, but this is something that has been building on for I would say 16 years, probably. So, what happened is that like most of the emerging markets and like almost all of Latin America, Venezuela is a place with a lot of income inequalities, a lot of inequalities in general.
Ernesto : So, a long time ago, a very charismatic person came in to power, and offered to change that system. In the process of changing the system, there were a lot of economic laws that were not broken. A lot of price controls were put into place. A currency control was put into place, meaning that if I wanted to as an individual go to any bank and change my bolivars for foreign currency, whether that’s dollar, euros, whatever, I had to go through some kind of government permission process.
Ernesto : During the first I would say 10 years up until maybe 2011, oil prices were at a very good level, and that allowed for this inefficiencies to not being seen. Ever since oil prices started declining, then all these problems with the market became more and more apparent, and more prominent in people’s lives. That caused prices to increase, inflation to go from single digits to double digits, to hyperinflation, and shortages on different things, and at the same time, inefficiencies with a system that took over most of the production and distribution of almost everything made way larger inefficiencies.
Ernesto : All of this has been about 15 years in the making. What we’re seeing now, the blackouts, shortages of certain things, and of course, hyperinflation, is the result of a lot of smaller and larger mistakes that were constantly made over time.
Nye : Interesting. Interesting. So, this is something that’s been building up for quite a period of time. My next questions really revolve around why is the situation so extreme and so dire compared to other companies or other countries that are in a similar state or face similar issues, but would you say it’s just because the time has been past further in terms of how long this has been going on in Venezuela? Is this just more, I want to say evolve, but is it just more … Has the issue been developing for a longer period of time? Is that why it’s so extreme compared to other countries?
Ernesto : This is a very hard question. The question will vary very much depending on who you ask. There’s been some economic problems, some corruption issues, and they’ve been building up over time. If you ask other people, they will say that the recent sanctions also magnified some of these problems. If you ask other people, they will say that Venezuelans have not found a way to get out of the problems.
Ernesto : So, I think it’s a mix of very different factors, and from my perspective, the ones that play the biggest role is the economic mistakes that have been made, the longterm they have been working on, and how the Venezuelan community has not found a way to work an agreement outside of that. I don’t even want to get in to why the Venezuelan has not been able to found a way out or if they want or if they can, but it’s a mix of all those things that you don’t see in other countries.
Ernesto : For example, in Brazil, they had some growth around the same time that Venezuela had time, and then there was a change in the way the government was operating, and that created a pivot. So, you can say that Brazil is in a bad or whatever decision, but the realities that last year’s inflation rate for Brazil was 2% while Venezuela was 1,000%.
Ernesto : So, this comes to show that the longer you stay on the same path making the same mistakes and with the same point of view, this deepens the problem. For me, that is one of the key issues of the current problem in Venezuela.
Nye : So, you’re pretty much saying that the longer that countries go in economic strife without making a pivot or without trying to make a change or an alteration to what they’re doing, the situation is just going to get worse and worse and worse, which eventually makes it even harder to change and harder to fix, and harder to find a solution for.
Ernesto : Totally. Totally. Just to make a quick analogy. If you’re sick and you have a flu, and you got sick because you were running out in the rain, and then coming back and smoking cigarettes, and then not having a warm shower and whatever, and you keep doing that, I don’t think you’re going to get cured. So, just to put it in country’s terms, well, we need to take our medication, whether that’s not the tasty one, and we need to make changes to our health, to our habit, so we can go back to being healthy. I don’t know if that makes sense.
Nye : It definitely makes sense. It definitely makes sense. 100%. You were mentioning a little bit about some of the economic mistakes that Venezuela made that has led them to where they are today or to the situations that they’re facing economically right now. Do you have any specific examples that you can share with me and with the audience of what these mistakes are? Are we talking about the inflation of the currency? Are we talking about other things?
Ernesto : Yeah. There’s a thousand different examples I can bring to you. I’ll give two examples and one that comes from I would say maybe policies, and another one that comes from the private sector. From the policy side, for a long time, the government proposed fixed pricing. What fixed pricing does is just that it sets an amount, a margin amount of profits that someone can make. Whenever that price is set, generally for the short-term, it can work because they’re saying, “Okay. For your podcast revenue, you can only make 20%.” Maybe you can accept that in the short-term, but if you mix that with inflation and everything else is rising in prices, your 20% will decrease until it becomes a negative one.
Ernesto : So, what happened in that moment is that you stop making whatever product that is, and that causes shortages. So, that is one mistake that was done repetitively in the last years. From the private sector, I have seen that some businesses in the country do make very high margins. So, whenever you mix a rising inflation with merchants that are making higher margins, that creates a spiral.
Ernesto : So, I’m not saying that one is the cause and the other is not the cause. I’m just trying to give you two opposite sides from the same coin, so you can see how complex the situation is.
Nye : I completely understand. I see exactly what you’re sharing there. I guess the next real big question I have for you is how is cryptocurrency affecting this problem or even, is it affecting this problem? Are you seeing a lot of Venezuelans adopting bitcoin, adopting Dash, and actually utilizing them for their initial intended purposes, such as purchasing goods, and being utilized as currencies? Is this something that’s happening right now in Venezuela?
Ernesto : Yeah. Before I go into how the behavior of people has shifted or changed, I want to just give you a little bit of reference. During 2018, Venezuela had an inflation of about a million percent. The second highest inflation in Latin America was Argentina with 24%. Then there were Mexico and Uruguay with six, Guatemala about five, Brazil with 2%. What does a one million percent inflation means?
Ernesto : Last year, I was home in Venezuela during the last days of September. I bought to bring for my Mexican friends two boxes of chocolate that I love, Toronto. They’re very nice. You should try them one time. So, these two boxes costed me 1,500 bolivars. I had a conference to go about three weeks later, and somebody was going from Venezuela, and because I ate all those chocolates, I asked this person to please bring me another box of the same chocolate. So, the same box of the same brand with the same quantity costed 1,500 two weeks later. Before, I got two boxes for the same price.
Ernesto : So, within I would say three weeks, price doubled for this. So, just imagine what that can do to your budget. That’s about 85% inflation in December alone when you average because some things increase in price more and some things increase in price less.
Ernesto : So, what all this means is that when you have your hyperinflated currency, you want to get rid of it as soon as you can. If you get your paycheck today, if you get your project pay today and it’s 1,000 bolivars, you want to go out and make sure that you buy everything you need first because you need to cover your basic necessities, and then whatever is left over, you have to either buy in to something that doesn’t devaluate as much as your currency, buy something that will gain value, that’s the optimal or buy something that will be stable.
Ernesto : What’s happening is that all this means that bolivars had become an unwanted currency for everyone in Venezuela. So, you get your payment, you buy whatever you need, you go to the shop, you pay your bills, and whatever is left over and you want to run and get it into something that will help you keep your value. Cryptocurrency has become one of the ways that people use to maintain their value.
Ernesto : Of course, everyone wants to get dollars and euros because they’re accepted everywhere, and you can save them and you will know that if you compare it to the million percent inflation, that they have zero devaluation even though some of my friends from other places will think that there’s some problems, but we won’t get in to that today.
Ernesto : Number one option, you want to buy well-known currencies, I would say, but since that is not available for anyone or everyone, remember I told you you cannot go to the bank and buy dollars, then what would I do with these bolivars that I have sitting in my pocket and that will lose 85% of value one month from now? Well, then I turn in to one of these place where I can buy cryptocurrency, and that is why we have seen such high volumes on local bitcoin and growing volumes on anyone that is doing Dash transactions in Venezuela.
Nye : Interesting. So, this is much different than I had personally perceived what was going on. Mind you, I’m not highly educated on the subject. So, this is really, really good to hear from you what’s going on. You’re pretty much saying that Venezuelans are utilizing Dash and bitcoin and cryptocurrencies to make sure that their value stays stable or increases over a period of time rather than being victim to inflation, but they’re not necessarily utilizing these as forms of payment at grocery stores to buy their food or things like that. Am I correct on that?
Ernesto : Well, I would say that the main use case that I saw and I’m seeing is that people are trying to keep their value. Imagine that your paycheck comes and you change everything you have back in to cryptocurrency, and I will go in to four of the types of behavior that I’ve seen in crypto later, but you go and you change everything because you don’t want to lose your value. Then if you need something down the line, then there is the opportunity that you might use some of that for purchasing.
Ernesto : That is why we at Dash have seen such a big spike into merchant adoption because merchants understand this situation and they say, “Well, I need to be ready when people are going to come to my store, to my restaurant or to my basic goods place for them to pay with something else because not everyone wants to keep bolivars.” So, in short, I would say that the highest demand up until now has been people that want to get rid of bolivars, and then as a consequence of that or as a result of that, we’re also seeing the interest in merchants and stores and places to utilize cryptos as a form of payment.
Ernesto : There is another point that I haven’t spoken about. Remember how I told you that my box of chocolates was two for 1,500 and then it increased in price for 1,500? What happened is that the financial infrastructure cannot keep up the pace with the inflation. Let me double click into that.
Ernesto : Whenever you have a debit card or a credit card, it has an upper limit. Generally, in places that are operating without high inflation, you don’t see it because it’s so high that for normal purchases, you will not reach it. Something that I saw in Venezuela is that the limits were read by the prices of things before they could be updated by the banks. I don’t know if that makes sense.
Nye : Yeah. I think that makes sense. Can you state that one more time?
Ernesto : Sure. Imagine that you have a limit of 10,000 bolivars in your debit card, and that is the most you can spend due to security reasons. Today, 10,000 bolivars buys you 10 boxes of these chocolates that I mentioned. Then prices keep increasing, and three months down the line, one box of chocolate buys you the same 10,000 bolivars. So, your debit card will only be good for you to buy one box of chocolate because of hyperinflation.
Ernesto : So, another result that I saw and that cryptocurrency solve in, cryptocurrency has no limits. So, if the 10,000 bolivars is good enough for one purchase with your debit card, you can pay 10, 20, 30, 40, 50,000 bolivars with crypto, and that is, for example, one very interesting use case that I saw in a store that sells refrigerators and appliances in Caracas.
Ernesto : If you wanted to buy a fridge, you needed to bring maybe 10 or 15 debit cards in order to add up to the amount of the cost of the fridge, but this guy implemented bitcoin, Dash, and Ethereum, and people can just make a simple transaction, and he will be able to sell and serve that customer because of the freedom that cryptocurrency bring.
Ernesto : So, cryptocurrency is being two things from my perspective as of now in Venezuela. It’s helping people store value, and it’s helping merchants and commerce to work around the current limitations that the broken financial system of a hyperinflated country has.
Nye : Very interesting. So, it sounds to be like Venezuelans have, they either have it or they are building faith and trust within the system of cryptocurrency, and it’s helping them move through or at least create some form of stability in these challenging financial times. How is the government reacting to things like this? Is the government … I can’t imagine they’re pro-cryptocurrency. Is this something that is legal? Is this something that’s being done under the table? How does this function in terms of regulations and laws in Venezuela?
Ernesto : I’m sure you saw there were a bunch of pictures that became viral on the internet a few months ago I would say, where there was a huge stack of bolivars next to a chicken or next to a piece of toilet paper, meaning that that much bolivars would buy you whatever product. So, the reality is that hyperinflation minimized the possibility of people to buy things with cash.
Ernesto : So, taking the cash aside and then understanding or repeating what I told you about the limits of amounts of money you can pay with debit card, that also limits the possibility for you to pay with the regular cards.
Ernesto : So, having hyperinflation causing all of these problems and crypto being one of the solutions, the government recently allowed or put out a law that permits people to use cryptocurrency. One year and a half ago or a year ago, it was completely legal, and people were being put to jail because of being minors and stuff, but the government realized that that was a way out of some of the financial problems the country was having, and the government itself was having, and made a law that was permitting transactions in crypto. So, as of today, and I’m just talking 22nd of March, 11:34 my time in Venezuela, it is legal to deal with crypto.
Nye : Awesome. Very interesting. Very interesting. I love that. How did Dash begin to take a step into Venezuela? What was the vision for Dash? How did you guys see this was an issue? Maybe not even how did you see this was an issue, but how did you see that Dash could be provided as a potential solution to the situation that’s occurring in Venezuela, and how did you start to make your move into the position that you as a currency and as an essential store of value for these people, how did you begin to implement that, and share this and create awareness around this solution?
Ernesto : Yeah. This is a very interesting question. Thank you for asking. I like to take a step back and first remind your audience how Dash works. Dash is a fork of bitcoin, and after starting the network, the Dash founders realized that there were some missing parts in the way the rewards were distributed. So, Dash created a system where there’s the mining reward, which is 45% of the revenue or the mining reward. Then there’s a second layer that is called Masternodes, and they provide a bunch of services to the network.
Ernesto : One of the services is to allow for instants in transactions, which take about a second, and they allow for payment at point of sale. The second layer takes another 45% of the rewards from mining. The last 10% is put into something that is called a treasury. This treasury allows for anyone around the world to submit a proposal for Dash, and these almost 5,000 Masternodes vote on whether that’s going to be a proposal that will help Dash increase adoption or if they don’t think it’s going to help Dash, they vote no.
Ernesto : So, what happens is that you have this system where anyone regardless if they have one Dash or no can come to the network, put up a proposal, and then if they get accepted, they get funds. So, this is very different from let’s say the bitcoin way of operating, where you have a lot of people either working for free or asking for support from bigger wells. This allows for the network to make their own decisions.
Ernesto : The reason why I’m saying all of this is that about I think it was May 2017, some Venezuelan entrepreneurs learned about Dash, and leaving all these problems that I described, they said, “Well, Dash can help us solve some of these problems,” and then they started making proposals for meetups, then those meetups became conferences, then those conferences became merchant acquisition programs, and some of them became even technology projects for growing adoption at points of sale. That created an organic footprint that started growing in Venezuela. That went from the first meetup for 60 people to about 30 different communities that operate in Venezuela alone. There’s programs that are creating points of sale system for Venezuelan.
Ernesto : Remember what I told you about the currency exchange? So, they needed to make some of the adjustments. Recently, there was a very nice program called Dash Takes Charity, which allows for kids in school to receive Dash directly into their phones, which then they can spend for buying breakfast.
Ernesto : So, all of this started organically, and I work for one entity called DCG, Dash Core Group, which is one of the many entities that serve the network. Well, we’re the creators of the software, and we also have a team that does business development. seeing this, we understood that from the real use cases that we could find in the world and in Latin America, hyperinflation was one of the places where we could do the most.
Ernesto : So, seeing this organic growth, we also put our focus and our efforts in Venezuela, and we’ve worked alongside some of the communities, and that’s why we’ve managed to bring more exchanges into the country that went into winter. For example, last year, we partnered with CoinCola to open trading in Venezuela. Later during the year, we worked with one of the communities onboard, the Church’s Chicken, at a franchise level, at a central office level. So, we launched all the stores in Venezuela for Church’s Chicken. That’s the way we’ve partnered and grown in Venezuela.
Nye : I love that. I love that. It sounds like you guys have been doing a lot of work there, but it also sounds like adoption has been very organic. It’s not something that you guys forced, although I’m not taking away from the impact that you’ve had. It seems like you’ve done a lot of work, and it seems like the work has had a very big impact, but what I’m getting at is it also sounds like the people of Venezuela when you introduced this concept to them and when you introduced this innovation to them, they looked at it, and they said, “Wow! We really need this.” Then some of the Venezuelan entrepreneurs and creatives even took it a step further and said, “We can implement it here, and we can do this here because of your unique consensus mechanisms and how the governance model functions, and things like that. They could see the potential of what you guys have built. Am I on the right lines there?
Ernesto : Totally. Totally. 100%. Imagine you’re in a store in Venezuela, and you wanted to buy this fridge, and you invite me and nine other friends, so everyone can swipe their card for the top limit, which is 10,000 bolivars, and then you see a person come next to you pull up their smartphone, make a tap on their screen, and boom, they already pay.
Ernesto : So, what’s probably going to happen is that you’re going to say, “Hey, man. What’s that?”
Ernesto : Then they’re going to say, “Well, it’s this thing called Dash. You just need to download the wallet here. You can acquire your Dash this way or you can work and get paid in Dash if you find a way to do so.”
Ernesto : You’re going to be interested in it and you’re going to try to change because that is solving a big problem that you have now. That is one huge difference that I’m seeing between Venezuela and other countries that do not have hyperinflation problems. People do not find the incentives to start using crypto unless you’re solving a problem. I live in Mexico. The economy here is doing all right, even though we’re at about 6% inflation rate per year, but that’s not a huge incentive for the general audience to be interested into changing into something else.
Ernesto : So, whenever the cryptocurrency projects and this applies for bitcoin, for Dash, and for anyone else that wants to really grow adoption, you need to see what is the problem you’re solving for people. In the case of Venezuela, it was store value, and it was solving for some of the broken financial system. So, whenever you put a solution out there, people will be interested and interested.
Ernesto : This doesn’t mean that we have massive adoption in Venezuela yet, but it means that the awareness has grown, and that people are willing to listen, and that’s why we’ve gotten this initial traction.
Nye : I mean, that’s super interesting. It’s really, really interesting because I was actually just in Thailand last week, and I was sitting down with a very successful entrepreneur, and he was … I asked him. I was like, “Be honest with me, man. What do you think about this whole bitcoin? What do you think about this cryptocurrency stuff?”
Nye : He’s like, “Well, I don’t think that people are going to really adopt it until they see the need to adopt it, and the only way they’re going to see the need to adopt it is when their country or a country has such a financial crisis that the use case becomes evident and obvious to the people in the situation, and to people who are observing the situation.”
Nye : That’s what we’re seeing here with Venezuela, I think at least in the very introductory phases is, at least from my understanding as well, please correct me if I’m wrong, but what I’m seeing is that it’s become such a dire need when chicken can be double the price within 30 days in the local currency that it’s becoming such a need to have the store value and to have this other form of currency that is forcing people to use it.
Ernesto : Yeah, yeah. People are faced with these huge problems, and when you offer cryptocurrency as a solution, and you see that it’s available to them, they will at least give it a try because it’s a necessity they have. It’s not something to be cool or to try it out because you support and believe this will be the future. For many of the people in these broken economies, this is a solution that they need now, and that is why we’re seeing all of this adoption.
Ernesto : You were in Thailand, and probably you went to some of the markets like Sampeng or Chatuchak. You will see that in many of these stores, the small store owners, they sell typical Thai products, and many of them do not take credit cards. So, we’re talking to one of the amazing Dash communities that is in Thailand, and we’re saying, “Well, maybe that’s the opportunity to solve some of the problems there because …” This applies also to other emerging markets.
Ernesto : A lot of the people in the bottom of the pyramid are on bank because of whatever reason. So, what I believe and that is something that Dash truly believes or Dash Core Group believes at the organization level that whenever we find the greatest need where Dash can have the greatest fit is an opportunity to grow. That is what we are seeing in Venezuela as a very good example of adoption.
Nye : That’s awesome, man. I absolutely love it. I have one interesting question for you here. In terms of sentiment around cryptocurrency from the people of Venezuela, obviously, this hasn’t fully hit on the full massive scale yet, and it’s still something that is in the process of adoption, but is there any negative sentiment? Obviously, the situation in terms of financial and economic crisis is negative, but is there a negative sentiment toward cryptocurrency by any part of the population there? Is this something that maybe a group of people are against or is this something that a large majority or at least the people that are aware of it can see the value and are positive with the value of?
Ernesto : Yeah. When you have a huge problem that is causing pain for a lot of the people and in this case is broken financial system and hyperinflation, solutions are always welcome. So, what I saw is that people see these as one of the potential solutions for the problems now, and they get interested. I was there, and of course, the last time I went, I went with some of the Dash projects. So, I was inside a cryptocurrency bubble. The interest I saw from everyone that was not directly involved in Dash is something that really surprised me.
Ernesto : I had about, I don’t know, in five days, I had about seven interviews in radio and TV. Reporters and business people were saying, “Well, what is this Dash thing that can solve some of my problems?”
Ernesto : When we were doing tests sending Dash back and forth, and paying in stores, and telling them that there’s no limitation, no one can tell you that you can only spend your Dash until 6:00 PM and then come back on Monday, they were excited to see that this could solve some of the problems they have. They were also looking forward.
Ernesto : I remember one reporter from a radio station, he was asking and asking more questions, and then when we finished the interview, the guy said, “Well, I’m starting a tourism aggregator for Venezuela, and this is a perfect solution because people want to pay me in dollars, and I don’t know how to cash out the dollars or how to move them to my other account. So, please explain to me how we can do that.”
Ernesto : So, people see the possibilities to solve their problems, and the overall sentiment is good. The downside I would say, and there’s always a downside is that it’s still not very easy to use for everyone. If I want to ask you to pay me something in bitcoin, I have to send you this long address, and then I have to wait for one or two confirmations, and if I do it with Dash, it’s still this long address, and even though it’s fast, it’s not very easy for it to hit mainstream.
Ernesto : So, what I believe is that once some of the entrepreneurs and projects start doing things that make it grandmother easy for the user experience, and I have nothing against grandmothers, I love my granny, but I mean just something that will not be only for young tech savvy people, that’s when I believe it can take off in the places where it’s solving a big problem such as Venezuela.
Nye : I 100% agree, man. I 100% agree. I think that’s our biggest barrier to adoption right now is simplicity. There has to be solutions that are created that are simpler than our current solutions, that are easier to use in our current solutions. Once we have something like that in place, we’ll see a lot more adoption. As we get close to the end of the interview here, I really got two more main questions for you. This is the one main question I have, and it’s not a question that’s definite. I want the audience to understand that. I don’t think that anyone has the definite answer on what I’m about to ask, but I’m very, very curious about your perspective on this, Ernesto.
Nye : What do you think is going to happen next? Is this a situation that you believe is remediable or savable in terms of fixing the financial system and the way it’s been created? Can Venezuela back pedal and unwind the damage that it’s done or do you believe that we’re going to see a whole new financial system for Venezuela arise out of, sadly to say, devastation? What’s your opinion on this?
Ernesto : Well, if I have the right answer, I would probably make a great move and do a lot of good, and make a lot of money in a way. The problem with countries is that as suppose to living being, countries never die or countries never touch bottom. So, a country can always get worse, and can always get better. So, that just means that the two options are on the table. If there are some big changes in the way the economy is managed, Venezuela has the possibility to recover from these problems. It’s not going to be an immediate recovery, but it’s possible.
Ernesto : I’ll give you an example that I know and I studied for a long time, and that I’m very fascinated with. On the ’70s, China was in a very bad economic situation. There were lots of reports of inflation and shortages of food and everything, but on 1970, Deng Xiaoping started making some of these heavy economic changes. Well, look at all the economic development that has happened in China during the last 30 years. Now, they’re the second largest economy in the world.
Ernesto : Of course, there’s people that like it, people that don’t like it, but I’m just saying economies can recover. On the other hand, you have some of the economies in the Sub-Saharan continent that have not made the necessary changes and that continues paralleling down. As a Venezuelan and as someone that is working with cryptocurrencies to try to open these possibility, I hope we take the right approach and we can solve some of these problems. I’m sure that cryptocurrencies can provide an outlet and a solution both for solving the problems now and creating opportunities for the future. That is one of the reasons that make me very passionate and bring me a lot of emotions when I wake up every day and start doing things with Dash.
Nye : I love it, man. That’s beautiful. That’s absolutely beautiful. Well, Ernesto, I want to thank you so much for coming on, man. I really appreciate you coming here sharing your perspective, sharing your knowledge and your wisdom on the subject. This is something that I find extremely valuable. This is something that I wanted to learn more about, and I learned a lot about in the last 50 minutes here. I think the audience is really going to appreciate that.
Nye : Before we get off here, before we move on, can you share with the audience a little bit about where they can learn more about Dash and Dash’s initiative in Venezuela and where they can support Venezuela if there’s any specific spots that you believe in that they can support?
Ernesto : Sure. For learning about Dash in general, you can go to Dash.org. We just have a brand new website that is much friendlier and very easy to navigate for individuals and businesses. You can see some of the resources and things we’ve done. For specific help or looking into Venezuelan projects, there’s recently new that I mentioned. It’s Dash Text. That is DashText.io. They created this system where you can send cryptocurrencies to a feature phone. They’re working on getting a platform where let’s say you send $100 worth of Dash, and that $100 reaches their node, and gets distributed into 100 kids that will each get $1 for having breakfast. So, that is something that I’m very excited about because it’s helping people directly, and it’s helping kids. So, that touches my heart so much.
Ernesto : In general, if you Google and you go to Facebook groups, you will see Dash Venezuela. You will see Dash Text, and you will see Dash Valencia and other communities that each one is doing something different. Some are doing larger projects and others are doing smaller projects. I think, in general, what I always ask when people say, “Hey, how can I help Venezuela?” I say, “Well, look if there’s any NGO,” especially in our case, crypto NGOs that are working there. Oh, there’s also some bitcoin community and bitcoin cash that are doing eat bitcoin cash, and I think it’s BTCVen that they’re also accepting donations, and they’re preparing food for the needy people.
Ernesto : So, what I always tell people is if you want to help, go to some of these communities. Don’t make a bit, but also, if you cannot donate, Venezuelans have flown all over the world. If you just go and eat [inaudible 00:53:14] in a restaurant close by, I’m sure you’re helping someone that will, in its case, send some money back home and help. So, there’s many ways to help from donating to having a little bit of our food wherever you are. We just appreciate very much that people are taking care of us, and looking out for us, and would really help to go over this bump, so we can be a nice happy country like we have been before, and that people like you can come and see by yourself all the great things that we still have, and that we will always have for giving to the world. So, thank you for the opportunity, Michael.
Nye : Thank you so much for coming on, Ernesto. Thank you so much. Yeah, this has been really powerful, man. This has been really educational. I’m really excited to get this podcast out to people. I think this series is, hopefully, going to educate people a lot on what’s going on with Venezuela, and even beyond that, I think it’s going to educate people a lot on the actual use case, the actual real need for cryptocurrency beyond speculation and beyond all of the luxuries that we may be able to use it for in the US and Europe and Asia, things like that, and to see what it was really built for. This is what it was really built for. This is the real meaning behind why bitcoin was created was to create actual change for countries and for people that are struggling economically. I think it’s a beautiful thing.
Nye : So, again, Ernesto, thank you so much for coming on, man. I really appreciate you sharing your knowledge. I really appreciate you sharing all the positive things that you guys are doing with Dash down in Venezuela. I hope to have you on the show again some time soon.
Ernesto : Yeah, yeah. It’s been my pleasure. Like you’re saying, empowering financial freedom is one of the reasons why all this movement was started, and seeing it firsthand, it’s really great. So, if you want to find out more about Dash, you can also go to our Instagram page, @DashPay. Our Twitter handle, @DashPay. You can also go to mine. I’m always sharing news. Mine is @ErnestoContrer. So, really happy to be here, really happy to share all of these news and updates. I hope this was interesting for you and your audience, and really open to talking again. Thank you, Michael.
Nye : Thank you so much, man. I appreciate it. As always, guys, this is your boy, Nye, with another episode of the Evolvement Podcast. This has been the very first part of our Venezuela series. I hope you guys enjoyed it. Stay tuned for part two coming up very soon. Again, catch you on the next episode. Peace.
Male: This has been the Evolvement Podcast with your boy, Nye. Thanks for tuning in. Head over to Evolvement.io for updates, and join us next week for an all new episode. Peace.