Could Cryptocurrencies Be The Solution To Inflation?

It is no news that there is currently a rise in inflation in our economy and with the current rise, it is important to find a solution that could boost the economy before it gets out of hand.

Recently, there has been news that says that there will be an increment in the prices of bread to about 50% which shows how bad things could get in the coming months of 2️022.

While the governments are currently looking for a solution in every other thing but cryptocurrencies, it is wise to explore the option that cryptocurrencies could be the solution to inflation.

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Well, before moving on, it is vital to explain what inflation means for those who do not know; inflation is a process whereby the decrease of the value of a currency leads to an increase in prices.

For better understanding, inflation is caused by the government printing more money than what is needed which in most cases leads to the fiat currency becoming undervalued.

IS INFLATION NECESSARY FOR THE ECONOMIC?

While most people may consider inflation a bad thing, it can also be good in terms of boosting the economy and creating jobs if the government uses it properly.

A low inflation rate could help improve investment, spending, and lending but when it goes out of control like it is right now, it could lead to a lot of problems.

COULD CRYPTOCURRENCIES BE THE SOLUTION TO INFLATION?

Since inflation is a threat to the value placed in fiat currencies, one solution to helping the problem could be through investments in cryptocurrencies.

Unlike fiat which can be manipulated by the government and other external factors, cryptocurrencies cannot be manipulated to an extent by factors like the printing of “too much of it” which reduces its volatility of it.

Even though certain factors could cause a major drop in the prices of cryptocurrencies, looking at its comparison to fiat shows a whole more potential as a solution to inflation.

Also, there is another advantage to investing in crypto which is the availability of stable coins that do not get as affected.

IN CONCLUSION

Cryptocurrencies are a solution to a lot of things affecting our economy and even though the government has chosen to ban them instead of looking into them for help, we need to realize the potential that it has in aiding certain issues in our economy and society.