Steemit Crypto Academy Contest / S9W3 - STEEM Inflation

I am really confused and happy to share my first post in @steemitcryptoacademy community of #steemit . Because I have no good idea about crypto and it's related stuff. Through this Engagement Challenge S9W3 , Through access of all good entries, I came to know some knowledge and importance of steem and crypto in future as well. Here's with going to share my participation. Hopefully it will meet the requirements of engagement challenge.

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Use your own words to explain the concept of inflation in general and does it affect cryptocurrencies?

The word Inflation is used as a economic term which defines as the rate or prices of goods and services increase with respect to last prices. When the inflation is high then it's really difficult for everyone to adjust the budget accordingly to on going high prices to meet he basic needs of family support in all aspects.

For easy understanding the term of inflation we can put the simple example used in our daily routine like as Milk If we buy Milk one bottle of Milk in $1 price, but In 100 years late we need $5 or $10 to buy same quantity of Milk bottle. It's means the inflation highly impact the price of our daily basic needs as well.

In the concept of cryptocurrencies, The demand of goods rise higher then before with respect of consumers and the supply of currencies also slow down in the market in the term of cryptocurrencies like Bitcoin value effects badly due higher inflation rate.

The impact of inflation on cryptocurrencies depends upon the supply of Fiat money (Sort of currency which is not backed by tangible asset like dollar , pond, gold or silver etc.) changes over the year. That's why they have direct relationship with each other's to adverse effect on cryptocurrencies.

Explain the difference between deflationary and inflationary cryptocurrencies? And clarify what is the strategy followed by the Steem token and show how it works?

Both have inverse relationship with each other's. We can elaborate in simple terms along with basic economic examples like as

Inflation Cryptocurrencies	Deflation Cryptocurrencies
These are flexible coins in term of cryptocurrencies that there purchasing power decrease over the year with respect to increase its supply. Ethereum is the best example to understand the inflation Cryptocurrencies it's really adverse impact on market as well.	This is fixed coins in terms of cryptocurrencies that there purchasing power increased over the year with respect to increase its supply as well. Bitcoin is the best example of deflation that's impact badly on the supply of cryptocurrencies to the consumers.

Strategies to Follow by Steem Token

After understanding the concept of inflation and Deflation of cryptocurrencies, It's easy to acknowledge about what strategies should be follow by Steem token.

Steemit it's self have Decentralized Application (DApp) well organized in Steem Blockchain gives the rewards to the Steemit users sharing posts on based of quality contents. Steemit users get the rewards in form of tokens by commenting, voting and sharing their quality contents in different well known communities of Steemit.

Because of scarcity of these tokens in the crypto market then it's price will be increased again. For continue working on Steemit , Follow the well defined rules on Steemit should be follow like power up, joins clubs , Maintain it's balance to get support and #burnsteem25 as well.

In short , Steemit also face inflation and Deflation due to changing values of cryptocurrencies in market. We have to need keep balance to continue working with having clubs on Steemit.

Calculate the Current Inflation Rate (the day of preparation for publication),

I am grateful to our guider @kouba01 for sharing valuable guidelines to share our understanding by following Link to calculate current inflation rate . For this purpose, I move on my steemworld.org very informative and useful tool to for productive purpose.

^@uzma4882

Here is Head -block value 74,433369 is an flexible quantity and other values are fixed. Using by organized formula we can calculate current inflation rate.

Inflation rate= 978

Head Block= 74,433,369/250,000

Percentage= 100

Implemented Formula
= 978-(74,433,369/250,000 ) /100
= 978-297.733476 /100
680.266524/100
= 6.80

Recent Inflation Rate = 6.8%

By tracking the rate of inflation for the next few years, interpret how easy or difficult it will be to earn STEEM rewards, and would that push you to build your SP right now?

In order to check the rate of inflation for the next years , we will use and interpret the an other formula through we can be motivated our self to continue our working on Steemit by financial support to pir family. Through this we again visit to our steemworld.org very informative and useful tool to for productive purpose.

^@uzma4882

Here are the steps to access on Virtual Supply to use quantitative value 481,649,470.294 STEEM This is changeable value in every second. We will calculate inflation rate upcoming 3 years respectively.

Number of blocks per year =365243600/3= 10,512,000

• Virtual Supply= 481,649,470.294
• Inflation Rate = 6.8
• No of Blocks per year = 10,512,000

New Steem = Virtual Supply * Inflation Rate / No of Blocks per year

Put all the values in formula

New Steem= 481,649,470.294 * 6.8 / 10,512,000

New Steem = 3.11

As I mentioned above, The value of virtual Supply changes in every 3 second. That's why the inflation rate is gradually decrease 0.01% per 250,000 block unit. So further calculation will be as

3 Seconds= 1 Block
750,000 Seconds = 250,000

Day = 750,000/(606024)
= 750,000/84,400
= 8.61

For calculating 3 years inflation rate as decreasing rate is 0.01% , as new value we get as

1 year inflation rate= 365/8.61*0.01

1 year inflation rate= 42.04*0.01

1 year inflation rate= 0.42

1 year inflation rate will be multiple by 3 to get 3 years inflation rate

3 years inflation rate= 0.42 * 3 = 1.27

And if we want to know the difference between 3 years inflation rate and current on going value then we will minus both values. And come to know exact difference. Like this

Difference = Current Value - 3 years inflation rate

Difference= 6.8%- 1.27% = 5.53 %

So, We can concluded that the rate of 3 years inflation will be decreased 5.53% as compare to current inflation rate which is on 6.8% in cryptocurrencies. With decrease of inflation rate the Steem tokes will be also decreased and it's difficult for us to get rewards. But in other side , it's good for us to increase and sustain it's value to continue our earning on Steemit.

Building Steem Power Should be our first priority

For becoming good reputation on Steemit and develop strong bonding with Steemit, we should carry on power up and joins clubs to build effective Steem power to strong pir Steemit wallet as well. I am trying hard to get support from great Steemit mentors @steemcurator01 and @steemcurator02. Hopefully they will consider my quality publications and hard work on Steemit.

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I would like to invite my Steemit Fellows
@ashkhan @suboohi @steemdoctor1 @lirvic @goodybest @pelon53 and @drhira. Thanks for Appreciation and Support

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Regards

@uzma4882