Bitcoin role in controlling inflation

[laijsica]

Hmm, that is not how the economies are gonna survive, TBH buddy I'm not an economist but with the learnings of such topics what I've concluded is Bitcoin is good at a personal level to avoid the informatory impact of the economy on your savings, as Bitcoin provides good ROI in a specific cyclic timeline and Bitcoin's supply is limited by a number but the total market capital is always growing on a macro scale it works as a hedge against inflation.

And if we look from the others side then we will also see that if we do save our money on the bank then after one year we will see a inflation that will cross the rate of bank APY.
And I have previously experienced something like this. And after observing these what I understood is what ever we do with our money buy the land or gold or invest in bitcoin can make us profitable but saving on the bank mean you are loosing your assets gradually.

I never keep much money in the bank, I prefer to invest in property or gold, before I knew crypto. For now I prefer to buy bitcoin and hold it because it is more profitable than investing in property and gold. That's my opinion, even though the risk is big but bitcoin gives big profits.

The fact that you have an outstanding experience in the field of investing is certainly commendable. Keeping money in the bank means a high probability that it will be depleted periodically. Gold as a real asset is a very reliable investment which does yield high returns. Although the Bitcoin market is volatile, long term holding or accumulation can give you huge profits that are much higher than any other investment.

[Crypto Library]

The fact that you have an outstanding experience in the field of investing is certainly commendable. Keeping money in the bank means a high probability that it will be depleted periodically. Gold as a real asset is a very reliable investment which does yield high returns. Although the Bitcoin market is volatile, long term holding or accumulation can give you huge profits that are much higher than any other investment.

The bitcoin market is volatile and that is the reason I told and suggesting peoples do not depend only one source for saving your assets I think there is need of diversitation on assets source. Like we need also the fiat cash because some time we go through those kind of situation where we can't use the bitcoin or the digital currency I have face this issue few days ago when our government shutdown the internet for the 10days to suppress the student movement. That time I realized how important is the fiat cash also.
So there should ideal percentage assets divers to the various assets like the Bitcoin, Gold , Lands, Fiat currency.

[yhiaali3]

This is called central bank digital currency (CBDCs) which are seen as a hedge with the country's conventional money system which can mitigate the effects of inflation to some extent. In that case, if the widespread use of Bitcoin can be increased, it can have a positive effect as an important hedge for a country's economy and help reduce inflation.

I agree that Bitcoin is the best hedge against inflation, but I don't know where you got the idea that "CBDCs are seen as a hedge against the country's traditional money system, which could mitigate the effects of inflation" This is a fallacy in my opinion!!

CBDCs are digital money and are no different from fiat, in fact they are worse, and they cannot be a hedge against inflation because they are tied to fiat and the government can print as much of them as it wants.

[KingsDen]

This is called central bank digital currency (CBDCs) which are seen as a hedge with the country's conventional money system which can mitigate the effects of inflation to some extent. In that case, if the widespread use of Bitcoin can be increased, it can have a positive effect as an important hedge for a country's economy and help reduce inflation.

I agree that Bitcoin is the best hedge against inflation, but I don't know where you got the idea that "CBDCs are seen as a hedge against the country's traditional money system, which could mitigate the effects of inflation" This is a fallacy in my opinion!!

CBDCs are digital money and are no different from fiat, in fact they are worse, and they cannot be a hedge against inflation because they are tied to fiat and the government can print as much of them as it wants.

I wonder why people believe there's a difference between fiat of a country and the country's CBDC. It is just link Mr Bob wearing red cloth in room A and in room B he wears blue cloth. The whole system behind fiat and CBDC is the same. The difference is that one is the digital form of the other which was made to run on the blockchain but with the whole principle of the offline version.

If Government can stop printing of paper (fiat), and put fix supply of their CBDC, then your insinuation will become true.

[yhiaali3]

I wonder why people believe there's a difference between fiat of a country and the country's CBDC. It is just link Mr Bob wearing red cloth in room A and in room B he wears blue cloth. The whole system behind fiat and CBDC is the same. The difference is that one is the digital form of the other which was made to run on the blockchain but with the whole principle of the offline version.

If Government can stop printing of paper (fiat), and put fix supply of their CBDC, then your insinuation will become true.

Yes you are right they are exactly the same thing, but unfortunately it seems that some people do not know the difference between centralized digital currency and decentralized cryptocurrencies, so they may think that CBDCs are different from fiat.

Actually they are exactly the same thing with the only difference in form as you mentioned, it is just a more civilized form of fiat with more control, more centralization and easier printing.

[TomPluz]

This is called central bank digital currency (CBDCs) which are seen as a hedge with the country's conventional money system which can mitigate the effects of inflation to some extent.

Have you read about the CBDCs before? I mean the ones that have been created already. CBDCs are not more than fiat. in fact, they are fiat. They are pegged in 1:1 to the Fiat of the country that created it. So CBDCs do nothing to mitigate the effect of inflation.

Yes, that is right. CBDC is just fiat in digital form and one that can be another tool for the government to gain more control on the economy and the people. That is a big fact we should be aware of. Personally, I am not very much against CBDC because with the way things are this is actually inevitable and with the way many governments are heading to this can be their next step of things. There may not be bad CBDC but there can be bad people who are in power and they can be interested on how CBDC can further their goals. And since there is no cap to how much CBDC the central bank can generate, this is not an effective tool actually to combat inflation but can even balloon the problem. Now, I can be wrong since I am just a simple human being expressing this opinion but it is good to be forewarned.

[bitterguy28]

If you come to think of it , discussions of these nature wouldn't come up if bitcoin didn't become the Top crypto currency in the market. Fact is bitcoin actually wasn't created for the purpose of investment which in turn can be used to combat inflation for the investor, rather the reason Satoshi created it was for the purpose of a simple  digital P2P cash system without third parties or government involved.

exactly why some people are not that open to central banks participating with crypto because it beats the purpose of cryptocurrencies being decentralized when it is being controlled by a third party but of course some people are still going to use it these people know the potential and benefits of crypto but are too anxious to separate from the traditional banking

[laijsica]

If you come to think of it , discussions of these nature wouldn't come up if bitcoin didn't become the Top crypto currency in the market. Fact is bitcoin actually wasn't created for the purpose of investment which in turn can be used to combat inflation for the investor, rather the reason Satoshi created it was for the purpose of a simple  digital P2P cash system without third parties or government involved.
Yes bitcoin can be used as an investment because of it's volatility and returns over time. However for you to be able to combat inflation, you would have HODL your coins for a longer period of time.

Although Bitcoin was not created as an investment medium, it has developed in the past and present within this system and investors are trading and holding for higher profits. I think Bitcoin can play a role in combating inflation in the world if we can ensure its widespread use. If a country's government can separate ptop cash transactions for buying and selling goods, Bitcoin can be linked to that country's economy, helping to raise taxes and benefit greatly financially.

Holding Bitcoin for the long term is definitely a positive aspect that can give investors huge profits but it is a question of how much it will help against inflation due to the volatile price.

[Mia Chloe]

Although Bitcoin was not created as an investment medium, it has developed in the past and present within this system and investors are trading and holding for higher profits. I think Bitcoin can play a role in combating inflation in the world if we can ensure its widespread use. If a country's government can separate ptop cash transactions for buying and selling goods, Bitcoin can be linked to that country's economy, helping to raise taxes and benefit greatly financially.

Holding Bitcoin for the long term is definitely a positive aspect that can give investors huge profits but it is a question of how much it will help against inflation due to the volatile price.

Yes of course I get your point of view. Bitcoin obviously wasn't an inflation combater created by SATOSHI , rather it was a simple P2P currency which later grew in both adoption and likewise in price. The fact is bitcoin is even being used by some countries in the world currently to reduce the general and net effect of inflation on their economy. Some countries out there have bitcoin reserves both in form of Hodlings of the citizens and also Hodlings of the Government.
The whole concept is simply based on the idea that the inflation combating aspect of bitcoin wasn't the initial plan for its creation.

[Jating]

If you come to think of it , discussions of these nature wouldn't come up if bitcoin didn't become the Top crypto currency in the market. Fact is bitcoin actually wasn't created for the purpose of investment which in turn can be used to combat inflation for the investor, rather the reason Satoshi created it was for the purpose of a simple  digital P2P cash system without third parties or government involved.

exactly why some people are not that open to central banks participating with crypto because it beats the purpose of cryptocurrencies being decentralized when it is being controlled by a third party but of course some people are still going to use it these people know the potential and benefits of crypto but are too anxious to separate from the traditional banking

If you are really hardcore, yes, this could be the mindset of some OG crypto enthusiast. However, we should understand that the ecosystem has revolved so much in the last 7 years. Some crypto projects are working with banks or central banks, established Central Bank Digital Currency (CBDC). And then other  crypto as specially design to be bankers crypto for all we know. So we can't get allow with traditional banking + crypto and I think this will be the trend in the next 10 years whether we like it or not.

[SamReomo]

Holding Bitcoin for the long term is definitely a positive aspect that can give investors huge profits but it is a question of how much it will help against inflation due to the volatile price.

Well, I agree that Bitcoin is a volatile asset and its price can drop anytime, and most of us have seen that in recent weeks Bitcoin dropped below $50k but that's still going to be helpful to fight inflation because after dropping to that low values not Bitcoin is again over $61k.

The fiat currencies when lose their value won't be able to recover their buying power as soon as Bitcoin does and that's why the ones who invest in Bitcoin will surely be safe from the inflation because there are going to be limited number of Bitcoin available and thus its value will grow overtime.

[Mia Chloe]

Well, I agree that Bitcoin is a volatile asset and its price can drop anytime, and most of us have seen that in recent weeks Bitcoin dropped below $50k but that's still going to be helpful to fight inflation because after dropping to that low values not Bitcoin is again over $61k.

The fiat currencies when lose their value won't be able to recover their buying power as soon as Bitcoin does and that's why the ones who invest in Bitcoin will surely be safe from the inflation because there are going to be limited number of Bitcoin available and thus its value will grow overtime.

One of the main reasons why bitcoin is able to hold up a nice value and combat inflation is because bitcoin has a fixed supply unlike regular fiat which can be printed on and on and on. Let's not forget that when excess money is in circulation, the value of that currency gradually begins to drop. It's just the simple economics of demand and supply.
Bitcoin on the other hand has a supply cap of just 21 Million coins which  is the maximum value that can be pumped out into circulation. And therefore for this reason, since new bitcoin ls can't be created once the 21million supply cap is hit the value begins to increase so as to be able to cover the amount of money needed in circulation. Of course this will only be possible as long as adoption doesn't drop.

[satpol_PP]

Well, I agree that Bitcoin is a volatile asset and its price can drop anytime, and most of us have seen that in recent weeks Bitcoin dropped below $50k but that's still going to be helpful to fight inflation because after dropping to that low values not Bitcoin is again over $61k.

The fiat currencies when lose their value won't be able to recover their buying power as soon as Bitcoin does and that's why the ones who invest in Bitcoin will surely be safe from the inflation because there are going to be limited number of Bitcoin available and thus its value will grow overtime.

One of the main reasons why bitcoin is able to hold up a nice value and combat inflation is because bitcoin has a fixed supply unlike regular fiat which can be printed on and on and on. Let's not forget that when excess money is in circulation, the value of that currency gradually begins to drop. It's just the simple economics of demand and supply.
Bitcoin on the other hand has a supply cap of just 21 Million coins which  is the maximum value that can be pumped out into circulation. And therefore for this reason, since new bitcoin ls can't be created once the 21million supply cap is hit the value begins to increase so as to be able to cover the amount of money needed in circulation. Of course this will only be possible as long as adoption doesn't drop.

limited supply of bitcoin, that's what makes the price of bitcoin expensive because the demand for bitcoin increases day by day. While FIAT is always affected by inflation, this is the reason I prefer to store my assets in bitcoin rather than FIAT, before knowing bitcoin I preferred to store in the form of gold.

[Legion]

Well, I agree that Bitcoin is a volatile asset and its price can drop anytime, and most of us have seen that in recent weeks Bitcoin dropped below $50k but that's still going to be helpful to fight inflation because after dropping to that low values not Bitcoin is again over $61k.

The fiat currencies when lose their value won't be able to recover their buying power as soon as Bitcoin does and that's why the ones who invest in Bitcoin will surely be safe from the inflation because there are going to be limited number of Bitcoin available and thus its value will grow overtime.

One of the main reasons why bitcoin is able to hold up a nice value and combat inflation is because bitcoin has a fixed supply unlike regular fiat which can be printed on and on and on. Let's not forget that when excess money is in circulation, the value of that currency gradually begins to drop. It's just the simple economics of demand and supply.
Bitcoin on the other hand has a supply cap of just 21 Million coins which  is the maximum value that can be pumped out into circulation. And therefore for this reason, since new bitcoin ls can't be created once the 21million supply cap is hit the value begins to increase so as to be able to cover the amount of money needed in circulation. Of course this will only be possible as long as adoption doesn't drop.

limited supply of bitcoin, that's what makes the price of bitcoin expensive because the demand for bitcoin increases day by day. While FIAT is always affected by inflation, this is the reason I prefer to store my assets in bitcoin rather than FIAT, before knowing bitcoin I preferred to store in the form of gold.

You’re absolutely right. Part and parcel of their high demand, a limited number of bitcoins are in circulation and this fuels its value. In contrast to fiat currencies, which can be diluted by inflation, the work of Bitcoin can provide a kind of shield against such economical problems. The matter is that holding the assets in Bitcoin instead of fiat or even gold is beneficial for those who are looking for inflation-proofing and long-term, stable investments. What is important to note however is that one should keep abreast and with market fluctuations as they pertain to investments.

[Mia Chloe]

You’re absolutely right. Part and parcel of their high demand, a limited number of bitcoins are in circulation and this fuels its value. In contrast to fiat currencies, which can be diluted by inflation, the work of Bitcoin can provide a kind of shield against such economical problems. The matter is that holding the assets in Bitcoin instead of fiat or even gold is beneficial for those who are looking for inflation-proofing and long-term, stable investments. What is important to note however is that one should keep abreast and with market fluctuations as they pertain to investments.

Based on my knowledge of simple economics, money or rather a suitable currency is supposed to have some key properties of which one of them is supply. For a currency to be able to appreciate rather than depreciate to inflation over time,  it should be of limited availability and supply as this would assist alot in value increment. Bitcoin has this in it's protocol and that is where bitcoin halving has a key role to play in the price of bitcoin. To slower the rate at which new bitcoins are pumped into circulation, the higher the chances of price progression.

On the other hand if mining were to remain fixed and all the coins mined too soon, chances have it that price will likely drop or consolidate a little downwards. Majority of these things including adoption are key factors that keeps bitcoin at the top of all other crypto currencies.