Inflation is no fun for the average person. Although we are going through complex economic times, there are several ways to use cryptocurrencies to fight inflation.
Currently, various markets internationally are in decline. Inflation is one of the economic consequences of the current crisis. In other words, the increase in the prices of goods and services over a given period.
As we well know, inflation generates a strong loss of economic capacity for traditional users. Various countries and regions such as the USA, UAE, Europe and Asia, among others, expect even higher inflation levels in the coming months.
So how can we get around this?
The crypto market has given high returns from the start of the pandemic until 2021. But could cryptocurrencies be a possible solution to the international inflation problem?
The crypto market could effectively provide two potential solutions to inflation. This contrasts with the traditional economic system.
The first is a deflationary economic model based on the BTC emission system. (Issue means the creation and release of cryptocurrencies.)
And secondly, an answer could be seen in stable virtual assets or stablecoins.
A deflationary issuance model based on Bitcoin
Bitcoin is a model of deflationary issuance system. This is different from traditional issuing systems, which are regulated by centralized monetary systems, also called central banks. In contrast, the Bitcoin issuance model is a decentralized monetary issuance system.
While the amount of fiat currency issuance increases infinitely, the BTC issuance system is an issuance system with a fixed issuance maximum.
Virtual assets or stablecoins
When the user decides to save in currencies like dollars or yuan, they create a store of value. Yet thanks to central banks printing more money – quantitative easing – to “solve” economic problems. So it is not a good idea to save in foreign currency. Through quantitative easing, fiat currencies can depreciate.
The crypto market offers the opportunity to save in stablecoins. Stablecoins are virtual assets that usually have a direct backing to a real asset such as dollars or gold.
Inflation: finding better assets
There are various markets and opportunities for the user to find well-known stablecoins and be able to beat inflation.
Paxful is one such exchange. Users can access stablecoins through their peer-to-peer system. Phemex is another example: it has a community of over 2 million users. These users can find over 250 different types of cryptocurrencies within the exchange. Binance is the largest exchange in the world, it has over 22 million users worldwide.
Users of these exchanges will be able to find various stablecoins, altcoins and will also have the opportunity to invest on their Launchpool.
A launch pool allows users to deposit tokens into a pool of funds. They can then farm (or earn) new ones at no cost.
You don’t have to sit and watch your savings slowly lose value in a bank account. Hit a cryptocurrency exchange and find out how to get around inflation.
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