Poor Millionaire

If you are reading this post you are probably knowledgeable about cryptocurrencies, many think of them as a serious investment, others as a fad.

You are maybe familiar with the concept of fiat money, which is a promise of payment. Money with no value, money not attached to a good, precious metal or anything with accepted value, it’s just paper.

Fiat money value depends on supply and demand, and when central banks increase supply with no control, surpassing the needs of the market produces inflation.

Inflation is a problem that some countries in the world suffer at this moment. It was a common problem in the past. There are classic examples of hyperinflation like Germany under the Weimar Republic and China during the 1930's and 1940's.

During hyperinflation the value of your work is lost and prices rise rapidly. People holding money become poorer and poorer.

Nowadays these countries are economic superpowers. But are those problems long gone? Money supply depends on central banks and credit creation by commercial banks; and these institutions can be influenced by politicians and their agendas.

Picture yourself looking at your bank statement and realizing you have 1,250,000.00.

Nice, isn't it?

Not really, if you can only buy groceries at your local store with that money.

Are cryptocurrencies the solution to inflation?

Venezuelan Exchange Rate 2007 $1 = 4.9Bs; ---------- 2017 $1=12,163.68Bs