Crypto is becoming the escape hatch from hyper-inflation.
Economies regulated into oblivion, suffering from excessive borrowing and hyperactive printing of currency are paying more and more attention to Bitcoin as an escape hatch.
The riddled economy of Venezuela - crushed by years of mismanagement and a bolivar worth less than the paper it's printed on - is a textbook example of why cryptocurrency is here to stay long term. In a country like Venezuela, Bitcoin is not just a fun thing to mine as a hobby or to trade for speculative thrills - it's a lifeline to buying everyday needs. One advantage of this highly centralized economy? Extremely cheap electricity. This has allowed citizens to mine cryptocurrencies on a gaming PC, enough to have a little bit of money to survive.
The same is true in countries like Zimbabwe, where the 100 trillion dollar bill is not enough to buy a loaf of bread. Ironically, the story of the trillion dollar bill has created a situation where the bills have become collectable to foreigners, thus having more value as a collectable than as a currency. Yet in Zimbabwe, if you want to trade real value, you don't trade in fiat paper. You trade in cryptocurrency - something that can be trusted to not be manipulated or printed into oblivion. While it's true that cryptocurrency can certainly be influenced by whales through pumping and dumping and other means, it can not be directly controlled through excessive currency production and central bank rate controls.
This trend - a collapse in centralized, regulated economic structures - will continue to spread throughout the world. Today, it was reported that financial instability in Italy may have contributed to the positive bounce in Bitcoin prices. To be fair, it is an over-simplification to point to any single event and suggest it is the sole cause of price movement in markets. But it does point to the fact that investors are beginning to trust Bitcoin - like gold - much more so than fiat currencies that hold no actual value and lack scarcity.
From the dawn of paper currency, government-issued money has inevitably declined in value, arriving eventually at a value of zero. This is unavoidable due to the nature of this monetary system that requires issuing money out of debt, thus rendering the money worth less than the money it was borrowed from - paying back debt with more money that has been created out of more debt. It will arrive at its unavoidable demise at some point. It is merely a question of "when", not "if".
We are in the beginning stages of a transformation in how the world uses money. As more and more countries see their fiat currencies fail under the pressure of quantitative easing and manipulation, more investors will turn to the reliability and trust of decentralized and trustless cryptocurrencies. It might not take as long as some imagine either. If a few major economies - like the European Union - struggle more, we could see a tipping point and a rapid movement into cryptocurrency as the only trustworthy form of money offered in an interconnected global economy.
*This is not professional trading advice - it's just my opinion!
If you're interested in trading cryptocurrencies, check out CoinSquare and Binance by using the link in my profile and sign up today!
source:
https://www.ccn.com/italys-economic-pain-is-the-bitcoin-prices-gain/
https://www.theguardian.com/money/2016/may/14/zimbabwe-trillion-dollar-note-hyerinflation-investment
image source:
https://keripeardon.wordpress.com/2013/06/01/wheelbarrows-of-money-and-the-weimar-republic/
What a time to be alive, watching the collapse of the corrupt financial system and power being restored to the people.
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U.S. dollars are also good to hedge against inflation in Venezuela. But not designed to be deflationary like Bitcoin. In Satoshi we trust!
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hi @xsid
Amazing piece of work. Indeed Venezuela is an great example.
I wouldnt be 100% sure about it. There will be always winners and loosers. Cannot assume that all countries will be on losing end.
What pushed you to create post about that issue?
Cheers
Piotr
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Hi again @xsid
Let me suggest something that may help your readers a lot. You should justify your posts.
The difference will be huge. Just like on picture below:
You can find it explained quite well here:
https://steemit.com/html/@dyrits/steem-it-1-how-to-justify-your-text
Post is already a bit to old to upvote :(
Till the next time :)
Yours, Piotr
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Thanks, @crypto.piotr. I'll try it.
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It was an article about Italy and the European Union boosting Bitcoin buying that got me thinking about it.
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I do feel that it could be a spreading effect - as more and more countries struggle to manage out of control debt it is highly likely that a global currency like Bitcoin will offer shelter from fiat hyper-inflation in more and more places. It is these crisis situations that will push cryptocurrency to new heights in value, in my opinion.
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