The Role Of Cryptocurrency In Hyperinflationary Economies

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Introduction

Inflation can be said to be the increase in the quantity or amount of money in circulation and as a result leads to the decrease in the value of existing money, then we can say that hyperinflation can be said to be a very high scale or type of inflation with extremely high impact on the value of money.

In cases like this, where there is not only inflation but an inflation that is constantly accelerating, nobody is safe in fact, it is going to have a very devastating impact on the economy and the only we to reduce the impact or effects individually is to keep money in forms of assets with very stable value like gold or cryptocurrency.

In this post of mine, I will be explaining and discussing some of the important and significant roles in which cryptocurrency will play or has to play when it comes to and economy suffering or plagued with hyperinflation.

• As A Store Of Value

So basically in the event of an inflation or hyperinflation, the first thing you notice is that there is an increase in the pump of new minted money or currency into the circulation of that countries economy and then what happens next is that as a result of this increased money in circulation the value of the existing money decreases.

Like I mentioned earlier in an economy suffering from or going through hyperinflation, the best thing for people or individuals to do is to find a safe haven to store their money, I mean to store their money in a form or in a way that it is not affected or suceceptible to devaluation.

In economies undergoing hyperinflation, cryptocurrency is the best store of value, take for example Bitcoin which is basically the best cryptocurrency in terms of fighting inflation, the bitcoin was created in such a way that its supply is restricted and fixed as a result making it to have a stable value which can serve as a safe haven from the effects of hyperinflation.

• As A Medium Of Exchange

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I don't think many of us reading this post have ever experienced or lived in the time of an economy that is suffering from or undergoing hyperinflation, I believe if we have we will be able to testify that in times like that money loses it's ability to serve or function as a medium of exchange.

In an economy undergoing hyperinflation, if you go to the market to buy something at one very high price, then go back to buy the same thing the price has gone even higher and throughout the period of the hyperinflation that is what occurs, so using money as a medium of exchange will lead to the constant increase and change in prices.

However if cryptocurrency is introduced and accepted into the economy, it will stabilize the prices of goods and services and even when making cross border transactions, cryptocurrency helps facilitate faster payments by eliminating the need of converting from one local currency to the other.

• Financial Inclusion

In the event of an hyperinflation economy many financial institutions are affected most especially banks, banks shuts down and are unable to function as a result, causing or leading those individuals who depend on these banks for financial services to be unable to execute or facilitate transactions.

This is where cryptocurrency comes in, by basically helping these individuals who have lost their banks and ability to facilitate and execute financial transaction to once again be able to take part in it, and also become introduced to a pool of more advanced financial services.

Cryptocurrency offers very superior and advanced financial services, it also offers certain features such as; decentralization, increased privacy, transparency, efficiency and security, it is also very easy to use all you need is your smartphone and mobile data for you to tap in and be able to engage in transactions with people worldwide.

• Provided Access To Global Market

Cryptocurrencies if implemented or adopted in or by any type of economy including the hyperinflationary economy, has the potential and the ability to help individuals in that economy to partake and have access to a larger scale of market, a global market.

The value of cryptocurrency is the same all over the world and globe and it also easily accessible therefore, allowing anyone who uses or make transactions in or with cryptocurrency to become a potential customer who can help you grow your market and make financial transactions together.

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Additionally no economy in it's right senses will want to have any financial dealings with an economy suffering from hyperinflation because the value of their currency is in a constant state of change and increase but if the financial transaction where to be executed with the use of cryptocurrency then any economy globally we have no issue taking part.

Conclusion

I would like to say a very big thank to everyone who made the effort to read and go through this post which I have made, and I hope that you have been able to learn something new as I have explained and discussed the significant role in which cryptocurrency plays in an hyperinflationary economy.

Some of these significant roles that the cryptocurrency plays in an economy undergoing hyper inflation include; increasing financial inclusion, serving as a store of value, providing access to global market and serving as a medium of exchange.