Printing fiat is good for crypto

in #crypto6 years ago (edited)

money-paper-finance-47344.jpg

I have always held the firm belief that printing more currency has a terrible effect on economies. That philosophy has just decided to take an immediate u-turn. First, let me explain how it hurts economies and then I will go on and explain to you what this is doing for steem and other cryptocurrencies.

When more money is printed, it devalues the rest of the money that is held. I will give you an example. This is the story of a person named Fluffy. Let's say Fluffy has $100,000 in their bank account. Fluffy is going to use that $100,000 to purchase a house. Fluffy already has a house picked out . After Fluffy goes to look at the house a large amount of money is printed, like governments do around the world every day. When that money is printed it devalues the rest of the money already in circulation. Let's say this large amount of money devalued the currency in circulation by 100%. What this means is that the house Fluffy had in mind is now a $200,000 house. Fluffy doesn't have $200,000 so Fluffy now must start looking at smaller houses. This was just a basic example of how the currency was devalued. It doesn't actually happen overnight like that in most situations.
Now I would like to explain the effect that that same $100,000 had on cryptocurrency. This person's name is going to be Floppy. Floppy has $100,000 in cryptocurrency rather than fiat currency. That $100,000 in cryptocurrency is now worth $200,000. It is not that the cryptocurrency went up in value. What happened is the fiat currency went down in value as more was being printed.

FLOPPY WINS!!!

These two examples are not meant to give you investment advice or say that cryptocurrency is safer in any way. I'm also not saying that cryptocurrency doesn't grow on its own. It does grow and it does go up in value. I am just trying to explain the effect that fiat currency has on cryptocurrency. Especially when it is devalued. Therefore the devaluation of fiat currency is now becoming a good thing. Before now I have always held the firm belief that devaluation harms everyone. Cryptocurrency allows you to become immune to that harm. In the end, if you hold cryptocurrency then you are kind of like Superman.

Sort:  

Good post. I wish more people realized it or were more educated in economics.

I just wanted to let everyone know that a blog post from @cryptomedics inspired me to write this blog. He has some very interesting blogs on crypto. Please go check him out

You are saying and doing wonderfully well @big.ock. Your post is well written, but you might need to structure it well.

  • Give enough paragraphs
  • Give headlines
  • Task yourself into writing more than 500 words per post
  • Follow great steemians like @jerrybanfield , @teemsteem , @ackza ,@bania and every other persons you will soon discover on steemit
  • Come to discord...
  • Join these channels on discord:

    1. STEEM SCHOOL
    2. Jerrybanfield and friends
    3. MINNOW BOOSTER

    Have upvoted and resteemed :)

    Thank you. I upvoted your comment and followed you as well. I appreciate the support. I always support those who support me

    Me too we need to support each other and the community :)))

    Thanks for using @echowhale bot service . Swimming by with your upvote

    Coin Marketplace

    STEEM 0.26
    TRX 0.11
    JST 0.032
    BTC 64615.49
    ETH 3112.63
    USDT 1.00
    SBD 3.84