Bitcoin As A Pressure Release Valve


As small-cap currencies inflate, Bitcoin gains adoption.

Bitcoin is the first fully sovereign digital currency. This means that anyone in the world with an internet connection and a computer can download the protocol and start running it. Maybe they want to invest in the technology, maybe they want to store their wealth, or maybe they are using it as a form of payment. Whatever the reason, Bitcoin doesn’t discriminate on the basis of race, creed, or nationality.

This is especially attractive for people in countries with a history of inflation or even hyperinflation. What is hyperinflation? It is when a country’s government or central bank, by printing more and more money to supplement their needs, increases the supply of the currency at a rapid and excessive pace. When the supply of money increases more rapidly than the demand, the price of goods nominally rises. A good example of this has occurred during the last year: food prices have risen dramatically, in part due to the monetary expansion of the world’s currency supplies.

Price increases of bitcoin in fiat terms can also be seen when the supply of fiat currency expands. Extreme increases in national currency supplies cause the prices of everyday goods to rise. Two recent examples of this are Venezuela and Zimbabwe: prices have risen so dramatically that Zimbabwe is now printing 100 trillion dollar bills and even using paper bills in more utilitarian ways, such as using them as fire starters.




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