INFLATION, DEFLATION,DISINFLATION, HYPERINFLATION:WHERE ARE CRYPTO IN ALL OF THESE?
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When you analyze all these terms and you cross them with the financial world, you will find a country, a block of countries surviving or thriving to stay ahead with any of them. I am not going to spend much time with hyperinflation since it is inflation in high speed during a short time. Quick example in that case right now pertain to Venezuela with the Bolivar in free fall. Other countries in the past fell to that predicament and the end result always stir to a change of system. From any of these attributes, a change will implement for a fix to maintain a balance.
Understanding each metaphor with crypto require the basis for the existence of this crypto. For example #Bitcoin even though should be a peer to peer agent for transaction, is aligned lately with the arrangement of an asset class. Now you could ask yourself why El Salvador established BTC as legal tender. It has to do with the need of the moment. A sense of divergence to liberate the country from the dollar. The country does not have its own currency per se. It made sense for them to find a way to stay in the horizon with crypto.
Since there is no state or centralized platform in charge of BTC, it has become apparent El Salvador is building something for the future. Hard to sell this strategy today to any other countries. I know more will jump in a case to case basis. By encouraging the country to adopt BTC, they can fight the inflation that is rampant in South America. It is not really a need to transact with crypto that is the matter. It is the final objective to elevate folks to save in crypto. Having BTC around will bring Salvadorians to migrate to other cryptos where the inflation can help them in other course of life.
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At first inflation could smell trouble when it is not controlled properly. IF you take Hive token for example, The blockchain to keep up with Hive power delivers an APR of 3.07% on your stacked token. You could say it is not fair for some. Actually it makes sense to stimulate the blockchain. If you see your voting power diminish due to the next guy having more Hive, you will do the same. It is healthy for Hive cause it helps with decentralization. More folks with Hive power secure the blockchain, build enough trust where you can see account with million worth of dollar. Proper inflation is common sense economy.
It has become to comprehend the growth of Hive is related to the demand of Hive in the market to maintain proper liquidity. After a year going strong to a second year, Hive just begin its rise into the marketplace. While inflation can lower the value of a token with no set of action, deflation is the contrary while there is no active valuation for the market while the such token will gain value.
In a short term it may sound great but it is really damaging in long term and cause big issue that will render the economy stagnant.
Since you and I cannot control the timing of transaction, within a token you will get all aspect of these genres that can give the impression of inflation one time and deflation another time. While BTC is a deflationary currency due to the limited number of token, many feel the need to hold BTC has passed. Hive on the other side is an inflationary token. Holding Hive requires effort to grow your pile otherwise your voting power will reduce quick.
Having an idea about these terms will help the holders to decide the right course of action. Diversification for long term growth help in the middle. One key point, as long you hold and understand the ramification of the tokens, you will be ahead in the course of wealth.
You are important for the fight to reduce unwanted inflation.
Keep vesting in yourself.
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Great admonition. At first I struggled a lot to understand inflation in crypto. But as time went on, I began to grasp the idea behind it and how it could benefit the ecosystem.
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Understand inflation with Hive
was a little troublesome, making me thinking
it is all bad.
After reading quite a few posts in Leofinance
I do see the reverberation all across the crypto
system. It needs to be understand in order to process
the implication
!BEER
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This is the most important thing.. Understanding the aim of holding and that is where knowledge comes into play.
I think holding a mix of both deflationary and an inflationary token would go a long way tho.
The gamification of hive is so beautiful, although its complex
Bitcoin will be more stable at 30k .El salvadore has taken decision by legalising crypto .hopefully in next 20 yrs , who knows El Salvadore would be a richest country in the world. only the matured one understand the real value of crypto and sooner or later mass adoption could be knocking the door..
You've totally said it all. For example, Nigeria is almost suffering the same rate of inflation like Venezuela and imagine, making BTC a legal tender will actually remedy this, El Salvador is obviously building for the future like you said, I feel many countries aren't really for a future where they wouldn't have to control finances, monetary policies and schemes and all.
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