Earlier this week, ZIMBOCASH – a local decentralised cryptocurrency- listed their token ZASH on Bithumb Global (a cryptocurrency exchange headquartered in South Korea).
In marketing material, ZIMBOCASH is marketing the ZASH token as a replacement to Zimbabwe’s flailing Zimbabwe Dollar. A total of 4.5 billion ZASH tokens have been created with 950 million currently in circulation.
The Zimbabwe dollar was already collapsing with 500% inflation, before this crisis dealt a debilitating blow. We believe that ZIMBOCASH is perfectly positioned to solve this problem by fixing the amount of money in the country using blockchain technology. Our aim is to provide sound-money.
Philip Haslam, Head of Communications at ZIMBOCASH
I believe Philip’s comments about ZIMBOCASH being perfectly positioned to solve the Zimbabwe’s economic turmoil are a bit premature. We reached out to ZIMBOCASH to understand where Zimbos in possession of the ZASH token will be able to use it and Philip explained to me that they are developing that network and expect “organic use of the ZASH network to grow as the currency environment deteriorates in the country.”
A concern I had after going through ZIMBOCASH’s marketing material was how they were going to communicate the concept of digital currencies to the ordinary Zimbabwean – something they’ll have to do if ZASH is to replace the Zim dollar.
Philip explained that they have been doing some work on that front but believes ultimately “the pain that people experience in a collapsing monetary system will cause people to naturally find alternatives that work.”
Right now the clearest incentive to get the token is the fact upon signing up for the token you’ll get 3125 tokens. The issue with that is the value of those tokens will depend largely on the network in which you can use them. If there’s nowhere to use them 3 or 4 months down the line – are they valuable?
The elephant in the crypto-shaped room has been regulation or lack thereof. Interested parties would want to know what guarantees there are that the tokens would be safe. If they get the token, will ZIMBOCASH turn out to be another Golix? Well, probably not since they don’t control the exchange.
It is important to note however that Bithumb the exchange in question has been hacked a number of times;
- In June 2017 hackers stole user information from a Bithumb employee’s personal computer.
- In June 2018 about $32 million of cryptocurrency was stolen from Bithumb in a hack.
- On March 29, 2019, Bithumb said that it was hacked. It pointed its fingers at insiders. Nearly $20 million worth of EOS and Ripple tokens were estimated to have been stolen.
That has been one of the biggest knocks when it comes to cryptocurrencies. The lack of centralisation seems to come at the price of security and accountability when things go wrong.
At the time of writing ZASH is being distributed solely via internet channels (Bithumb and the ZIMBOCASH website). If ZIMBOCASH is to realize their dream of dethroning the ZW$ as the local currency that’s another aspect they’ll have to improve to ensure that the Zimbabweans who aren’t on the internet are also included among those who can transact.