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How Cryptocurrency Can Save the World from the Adverse Effect of Hyperinflation

Feb 18, 2018 Posted /  4924 Views

How Cryptocurrency Can Save the World from the Adverse Effect of Hyperinflation

What Causes Inflation?

Very many economist overtime have given their ideas on the possible causes of inflation and tried to device measures on how it’s effect can be reduced. In a layman, language inflation is when there's more money in circulation than the available goods and commodities that the money can buy. The phenomenon always results in hiking of prices to abnormal levels thus rendering the currency of the country useless.

Diving back a little to history inflation is caused generally when the economy starts performing poorly. Historically Economies perform poorly because if a wide range of factors, ranging from political instabilities to Natural disasters.

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currently, there are some few countries engulfed deeply in the pits of inflation. These include Venezuela in South America and Zimbabwe in Africa. Todate inflation still remains a major threat to economic stability and prosperity in many countries across the world. The government spends billions of dollars annually in attempts to cut inflation or reduce its effect. This report by the International Monetary Fund, IMF indicates the rate of inflation in different countries of the world.

How cryptocurrency can save us from the Effects of Inflation

With this clear problem statement I have given you above, let's explore the attempts that have so far been deployed to combat inflation and how much effect they have caused in solving the problem.

Many countries always adopt the fastest option in trying to offset the effects of inflation from their economies that shifting to another currency usually the American dollar. Although this could be an economic proven approach we have seen in fail very many countries Zimbabwe being among them.

Cryptocurrencies, on the other hand, can provide a safe haven for people during periods of inflation. This is because if you keep in wealth in a cryptocurrency like ethereum, the price variation of the crypto does less effect compared to hyperinflation.

Having a portfolio in a cryptocurrency can help during inflationary periods because your money will actually never lose value as it is not affected by the conditions causing the inflation into the economy. Basically, cryptocurrencies keep on increasing in prices meaning at a certain point your money increases more than its value when it was first deposited.

Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .

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Tags: Inflation currency Economies perform Ethereum cryptocurrency

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