Contest 2|| THE EFFECTS OF INFLATION ON FIAT AND THE IMPORTANCE OF BUILDING WEALTH ON STEEMIT

Hello, my fellow Steemians, I am poised and eager to participate in my first contest of this wonderful Community in which I will be debating in favour of an opinion that supports that there are huge benefits in building wealth in Steemit despite the rising inflation rates of the present day. Investing in Steemit can as well be influenced by a good number of external factors ranging from the natural forces of the convectional market, to external stimulants of exchange rate and inflation on local FIATs.
Inflation effects on FIAT, being the very focal attention of this contest, will be discussed first by buttressing the highpoints of the key words of the contest title, which are FIAT and Inflation before delving into the main subject.

What Is Fiat Money?

"Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. Fiat valuation is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it as is the case for commodity money.

"Most modern paper currencies are fiat currencies, including the U.S. dollar, the euro, and other major global currencies."

Some critical points to bear in mind about FIAT are:

• It is money or currency issued by government without the backing of any valuable commodity.
• The central bank of a given country has greater control over the economy because they can control how much of the FIAT money is printed.
• The paper currencies of the present day such as the U.S. dollar, are fiat currencies.
• FIAT money value can be endangered when the government in power prints too much of it, the consequence will be hyperinflation.

Inflation

Inflation can simply be defined to be a measure of the rate of rising selling prices of goods and services in a given economy. When the prices increase as a result of rising production costs either due to scarcity or rising cost of raw materials or due to rising wages. A spike in demand for products and services can also cause inflation. Under such circumstance as this, the consumers are determined to pay more for the product in high demand.
The high points of inflation are as follows:

• It measures the rising price rate of goods and services in an economy.
• Any increase in production cost can cause inflation to occur.
• A spike in demand for products and services naturally stimulates inflation because consumers under this circumstance will pay more to have their product.
• Inflation can benefit an outfit especially when there is a high demand for their products .
• Inflation can be stimulated by rising cost, surging demand, expansionary fiscal policies.

What are the different factors that causes inflation rate in the conventional financial system?

Some critical factors of inflation that should be borne in mind as the causes of inflation in a convectional financial system can be highlighted to be;

1. Cost-Push Inflation - this is when the cost of production or providing services increases as a result of highcost of raw materials or the increasing wages of the service providers. In this scenario, demand doesn't really increase, rather the supply reduces because of the added costs of production are passed onto consumers due to the higher prices of the finished goods.
   One of the indicators of possible cost-push inflation include, rising commodity prices of oil and metal, the major production inputs.

2. Demand-Pull Inflation - This occurs when the supply of money and credit is overly higher than normal. The abnormal increase in money and credit supply stimulates overall demand for goods and services in an economy to increase more rapidly than the economy's production capacity. This is the main cause of price rises.
   When people have so much money available to them, they are poised to be insensitive with their rate of spending, and this increased demand pulls prices higher which creates a demand-supply gaps. There will be higher demand and less flexible supply. Prices naturally increase under this condition.

3. Built-In Inflation - This is the instinctive behavioural pattern of both skilled and unskilled Labourers. They project the possibility of inflation rates to continue in future. So, as the price of goods and services go higher, they expect that the trend will continue in future at a similar rate. When workers worry about their economic survival in future, they demand more costs/wages to maintain their standard of living. Their increased wages result in higher cost of goods and services provided by their companies, in order to meet up with their demands, and this wage-price spiral continues as one factor induces the other and vice-versa.

Tell us why its important to invest in the Steemit platform considering the dwindling economic and inflation rates?

"The STEEM cryptocurrency is based on the social media and content-focused Steem blockchain and is used to power the Steemit social media platform by incentivising individuals to write content."

Source

Steemit platform is powered by a cryptocurrency, known as STEEMIT. It is different from other cryptocurrencies because it is earned and not mined. The users on Steemit earn their STEEM by contributing to the Steemit network with quality content of their own to enable them power their user accounts and be able to continue contributing to the platform.

The reward for participating in Steemit is STEEM and this cryptocurrency can be exchanged it for the fiat currency of their choice.

The social media platform, Steemit, is similar to Facebook and Twitter in a way which is allowing them to share and post contents, but the uniqueness of Steemit is that users gain STEEM tokens for all their activities.

This strategy allows the media platform to stay popular with its tech-savvy user base.

The benefits of investing on Steemit amidst of the dwindling economy and rising inflation rates are so much but not limited to these few points;

• As an investor, you have an absolute economic power when you exchange your STEEM to any Currency of your choice irrespective of the status of the convectional economy.
• Investing in Steemit allows for privacy on an individual dealings. The Bank for example, doesn't guarantee full anonymity, but STEEM can help investors to have their data and user details encrypted to ensure that no one can find out the identity of an account owner. Privacy encourages more investment cos the investor has the full assurance that his critical data is not in the open.
• The Steemit platform is decentralised. It is not owned or controlled by any centralised organisation, meaning that no third party can actually tamper with your investment unless with your consent and access. For example, if there is money in a bank account, it is subject to being targeted and frozen but investments into a cryptocurrency such as STEEM is completely hidden from third parties cos blockchain technology is decentralised, the only person who can access your funds is you.
• The STEEM cryptocurrency is widely acceptable, it is legal and regulated in many major countries. The blockchain network is still legal, many countries today, are pursuing the regulation of STEEM and similar cryptocurrencies. Therefore, the legality of the STEEM in many countries is another benefit of investing in it because users can freely exchange their STEEM for the local fiat currency

What are your possible achievements by investing in the Steemit platform.

Apart from earning The STEEM cryptocurrency can be gained through my author contributions to the platform, I can also invest in Steemit platform by acquiring more STEEM coins in my user account wallet and I can use this cryptocurrency to my greater advantage.
If I choose to, I can use my STEEM to make better decisions on the platform. I can achieve fast payment transactions with my STEEM coin also, on the platform.
Despite how anyone views it, investing in this platform remains beneficial and I will say that crypto-currencies are the way forward.

Conclusion

I will conclude my participation in this contest by expressing my sincere appreciation to the organisers of this insightful contest of this fast growing Community, @xkool24 and @kinkyamiee. It is indeed a powerful topic that led me to dig dit and know more about the Steemit platform and other underlying benefits. Thank you and keep up the good work.

I am also inviting other fellow Steemians especially @val123, to give this contest a try, it will worth the experience for you.

With regards,

@barna.uzoigwe