Bitcoin can fight inflation? | Bitcointalksearch.org

gunhell16

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Quote from: Flyingjack123 on June 25, 2022, 01:53:48 PM

The rising inflation is becoming a big problem and macroeconomic conditions are worsening.
I want to know if bitcoin can in help us to fight inflation
I came across this article, which says that the decentralised nature of bitcoin and the limited supply of bitcoin can actually help it to retain its value over longer time and thus it can actually help us mitigate inflation .

Can someone help me to understand this further

Link to the article:
https://guardian.ng/features/how-bitcoin-can-mitigate-inflation/

First of all, when we read or hear the word Bitcoin, it is not easy to understand because it is a very technical term, in terms of inflation, a hundred years have passed and there is no bitcoin.

This means that inflation can rise and fall suddenly depending on the situation facing a country. I can't imagine how Bitcoin can help inflation. But in the economy of every country that accepts bitcoin, maybe BitcoinBTCcan still help increase it.

Trapezium

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I don’t know exactly about cryptos helping to fight inflation. But surely it can help as it helped Ukraine during the time of crisis,

asimi.io

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Bitcoin is a successful inflation hedge, but investors need to be careful right now. I think yes bitcoin can fight inflation. It may take some time but surely will help us to fight inflation.

Clochaard

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The main reason apart from making transactions easy and without the involvement of third parties, why the Bitcoin and cryptocurrencies were created is to fight and help in survival during inflation.

justdimin

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Quote from: m2017 on June 27, 2022, 05:04:00 AM

The question of inflation is painful and to answer it, you need to consider a specific country of residence + related conditions, such as local conflicts or pandemics. As you again accurately noted, the inflation rate is different everywhere. In some countries, investing in bitcoin will be better at offsetting inflation, in others it will be worse. But in general, it seems to me that in the long run, bitcoin still allows you to outperform inflation and allows you to save your funds better than some other financial instruments.

Why do people feel like they are not willing to wait a few years to make a profit though? I mean what is the point of that? I get that it is not a great deal and I get it, but it shouldn't really be something that creates a bit of a chaos with everyone right? It should be something that everyone could accept very easily because if they knew what would happen if they just could, they would take it but they are unsure and that is the only reason why they decline it.

The point here is that, if you tell someone "buy bitcoin now and wait 3 years and make a huge profit" they will argue against that, but if you tell people "you forgot some coins from 3-4 years ago and now you are rich" they would be super excited. That's the problem.

darkv0rt3x

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Quote from: hatshepsut93 on June 25, 2022, 04:48:02 PM

Inflation is the increase of prices. Even if we imagine the most impossible scenario that everyone, including governments, switched to Bitcoin, inflation could still happen. Things like food or gas could still go up in price as a reaction to global events. Government and banks could still inflate supply of Bitcoin by creating debt and using some Bitcoin IOU tokens instead of real Bitcoin transactions, including LN.

Inflation is not an increase of prices. That's what we are told by our polititians. Increase of prices is a consequence of money printing and consequente loss of value of a currency.
Once more I suggest people to watch these 2 videos to have a better understanding of some of these basic concepts. These are 2 very good videos on what is going on uner the hoods of our economies!

The Great Reset
https://www.youtube.com/watch?v=MOm_QmnRBSs

How The System Keeps YOU POOR! (Money Myths That Keep You Broke) | Jaspreet Singh on Impact Theory
https://www.youtube.com/watch?v=42k9vH3OXI0

aoluain

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Quote from: Lucius on June 28, 2022, 07:25:44 AM

Quote from: ChrisPop on June 28, 2022, 06:53:37 AM

~snip~
Doing the math Bitcoin could still multiply 28 times from current price just to match Gold's market cap. Not bad at all if you ask me.
$20k x 28 = $560,000
As you said Lucius, 50 times is a little bit out of the range, but anything can happened with this inflation.

I wouldn't even say that the problem is that Bitcoin can't reach some value measured in fiat, but due to its speculative-volatile nature it will always be a problem how to keep that value - which leads us to the problems with trust that people have in Bitcoin long term. People are usually unable to bear to have their investment lose more than 50% in a matter of few months, or in less than 48 hours if we remember what happened in March 2020.

That will always be a problem with Bitcoins volatility especially with the +50%
drops. Newcomers dont necessarily realise not to sell low, although I really believe that
people dont realise that. Of course for seasoned Bitcoiners its not an issue,
just opportunity.

Quote from: Lucius on June 28, 2022, 07:25:44 AM

Quote from: ChrisPop on June 28, 2022, 06:53:37 AM

~snip~
Doing the math Bitcoin could still multiply 28 times from current price just to match Gold's market cap. Not bad at all if you ask me.
$20k x 28 = $560,000
As you said Lucius, 50 times is a little bit out of the range, but anything can happened with this inflation.

From personal experience, more and more people are looking for some new coins that will bring them x50 or x100 or even higher profits because they perceive Bitcoin as something that is no longer so profitable. Although gold and Bitcoin have some common features, they are still two different worlds and therefore I think that gold will remain a far more accepted asset than Bitcoin for a very long time. Not only because gold is better (although it also has its drawbacks), but for the average person it is far more understandable than Bitcoin and has many more applications if we consider only jewelry making and application in electronics making.

Yes, raw proof is the DOGE craze we saw not so long ago and the traction it got. Total
newbies got sucked in and probably got spat out too.

Gold for sure is still far more accepted purely because it is far more stable. I wonder if many
"traditional" investors holding Bitcoin liquidated into Gold?

Lucius

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Quote from: ChrisPop on June 28, 2022, 06:53:37 AM

~snip~
Doing the math Bitcoin could still multiply 28 times from current price just to match Gold's market cap. Not bad at all if you ask me.
$20k x 28 = $560,000
As you said Lucius, 50 times is a little bit out of the range, but anything can happened with this inflation.

I wouldn't even say that the problem is that Bitcoin can't reach some value measured in fiat, but due to its speculative-volatile nature it will always be a problem how to keep that value - which leads us to the problems with trust that people have in Bitcoin long term. People are usually unable to bear to have their investment lose more than 50% in a matter of few months, or in less than 48 hours if we remember what happened in March 2020.

From personal experience, more and more people are looking for some new coins that will bring them x50 or x100 or even higher profits because they perceive Bitcoin as something that is no longer so profitable. Although gold and Bitcoin have some common features, they are still two different worlds and therefore I think that gold will remain a far more accepted asset than Bitcoin for a very long time. Not only because gold is better (although it also has its drawbacks), but for the average person it is far more understandable than Bitcoin and has many more applications if we consider only jewelry making and application in electronics making.

ChrisPop

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Quote from: Lucius on June 28, 2022, 04:53:21 AM

The facts speak for themselves, and those who have been on this forum since the time when 1 BTC was worth only a few hundred $ know how smart it was to invest in the same, money or your time, in the end, didn’t even matter from today’s perspective. Bitcoin has proven to be an excellent investment in the long run, so although past results do not guarantee future results, I am of the opinion that Bitcoin is still a good investment, although it is not realistic to expect it to be worth 50 times more in 5 years than today.

Yes, this is something similar to the law of diminishing returns. I like to refer to Bitcoin's market cap in comparison to other assets in order to assess the potential in the medium to long-term. I like comparing with Gold's market cap as it is the most similar asset in terms of its use, but yet so different in its properties.

Gold = $11.5 trillion dollars
Bitcoin = $405 billion dollars

Doing the math Bitcoin could still multiply 28 times from current price just to match Gold's market cap. Not bad at all if you ask me.
$20k x 28 = $560,000

As you said Lucius, 50 times is a little bit out of the range, but anything can happened with this inflation.

aoluain

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Quote from: edgycorner on June 25, 2022, 03:24:44 PM

The article in your post is garbage(no offense to you ofc). It tries to convince us that Bitcoin is a good investment to mitigate inflation, but it doesn't talk about its volatility even once.

It's trying to say that Bitcoin is a good investment because it's immune to inflation, but in the same breath, it admits that Bitcoin's prices swing up and down based on people's opinions Huh

.
So if you're thinking about investing in it to save yourself from "inflation", you'd better be prepared to ride the roller coaster lol

The simple fact that FIAT is devaluing, our FIAT is no longer able to buy the same goods
it was able to 12+ months ago should be enough for people to look elsewhere and protecting
their savings/wealth.

Michael Saylor started talking about this about 18months ago referring to the "block of ice"
melting in front of your eyes.

If you can look past Bitcoins market movements and consider it long term, its the best
safe haven for wealth/savings preservation.

Unfortunately too many focus on what Bitcoin is doing NOW.

Thara20

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No bitcoin cannot fight inflation as the hype surrounding bitcoin is fluctuating. As crypto itself is a volatile market , bitcoin cannot sustain people out of a global crisis. Bitcoin cannot help fight inflation but can help those people who own it , take a softer blow. As many factors come into play when it comes to inflation like regions , price of gold and silver etc. Inflation is connected to global events and things like fuel , food can increase but bitcoin isn’t adopted at mass levels. So it technically cannot be a solution for inflation.

Lucius

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Quote from: ChrisPop on June 27, 2022, 04:55:05 AM

Let's look at the facts. I have pulled the historical annual returns of Bitcoin since 2011 and the inflation rate of the US dollar.

The facts speak for themselves, and those who have been on this forum since the time when 1 BTC was worth only a few hundred $ know how smart it was to invest in the same, money or your time, in the end, didn’t even matter from today’s perspective. Bitcoin has proven to be an excellent investment in the long run, so although past results do not guarantee future results, I am of the opinion that Bitcoin is still a good investment, although it is not realistic to expect it to be worth 50 times more in 5 years than today.

Quote from: m2017 on June 27, 2022, 05:04:00 AM

But in general, it seems to me that in the long run, bitcoin still allows you to outperform inflation and allows you to save your funds better than some other financial instruments.

I agree, although I would always stress that we should be careful not to put all our eggs in the same basket - because although Bitcoin has great potential, it still depends on the availability of the Internet, and even more on how the world's most influential governments treat it. Any ban on trading through CEX globally or even treating possession as a criminal offense would have a detrimental effect on the price.

dansus021

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Quote from: Smack That Ace on June 27, 2022, 11:50:30 AM

Bitcoin has a limited supply and is seen as an anti-inflation tool, but maybe that will only be true if we buy and hold it for the next 5 or 10 years, over time fiat will depreciate because the government will continuously printing money and bitcoin is only 21 million dong, bitcoin will increase in price.

Currently, bitcoin is considered as a highly volatile asset class so it is unlikely to become an inflation hedge for the time being, so don't get too excited and overvalued bitcoin in this situation.

this is what I am gonna to say.

government is same like eth did and other coin with unlimited supply but the main difference is the gov don't have a burning mechanism that transparent too see and we don't know how much really are the money in circulation. the bitcoin show in the past that can fight again inflation like gold did but the high volatile is become our largest enemy right know

Smack That Ace

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Bitcoin has a limited supply and is seen as an anti-inflation tool, but maybe that will only be true if we buy and hold it for the next 5 or 10 years, over time fiat will depreciate because the government will continuously printing money and bitcoin is only 21 million dong, bitcoin will increase in price.

Currently, bitcoin is considered as a highly volatile asset class so it is unlikely to become an inflation hedge for the time being, so don't get too excited and overvalued bitcoin in this situation.

JohnBitCo

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Quote from: Flyingjack123 on June 25, 2022, 01:53:48 PM

The rising inflation is becoming a big problem and macroeconomic conditions are worsening.
I want to know if bitcoin can in help us to fight inflation
I came across this article, which says that the decentralised nature of bitcoin and the limited supply of bitcoin can actually help it to retain its value over longer time and thus it can actually help us mitigate inflation .

Can someone help me to understand this further

Yes, bitcoin is a hedge against inflation as it is limited in supply and can be a perfect alternative to the fiat currency.

However, the current economic pressure and increase in global inflation haven't been a deciding factor for people to invest in bitcoin. People are yet to recognize bitcoin's potential. Soon people will recognize the importance of bitcoin when they see their paper money constantly losing its value.

virasisog

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Quote from: DeathAngel on June 26, 2022, 09:33:31 AM

Bitcoin will fight inflation to an extent. If you buy bitcoin now & check the price in 20 years your likely profit will be far bigger than the inflation that will take place over that time. Because of COVID & the war in Ukraine the world economy is on its ass, inflation is around 10% but that won’t continue. Once everything settles annual inflation will revert to normal like 4% per annum, maybe 3%.

Money in bitcoin long term will beat inflation.

The inflation is out of cryptocurrencies' control and it can't stop its continuous rise. There are lots of factors that affect the current inflation rate and Bitcoin as a currency can't solve the problem but it will help us ordinary people who invest in it survive the inflation crisis through the profit that we could get on it and the opportunities that the crypto world offers. This inflation is a global economic crisis and since there are still lots of people that don't use or invest in Bitcoin, BTC could no way solve this inflation issue.

m2017

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Quote from: Lucius on June 27, 2022, 04:41:26 AM

Quote from: DeathAngel on June 26, 2022, 09:33:31 AM

Bitcoin will fight inflation to an extent. If you buy bitcoin now & check the price in 20 years your likely profit will be far bigger than the inflation that will take place over that time. Because of COVID & the war in Ukraine the world economy is on its ass, inflation is around 10% but that won’t continue. Once everything settles annual inflation will revert to normal like 4% per annum, maybe 3%.

Money in bitcoin long term will beat inflation.

So how many people will find that they are willing to wait 20 years to profit from their investment? Even if it is 10 years it is still a small percentage of people who are willing to make long-term investments. If you tell a man today to invest the amount of x in Bitcoin, and that in 2-3 years he will make a potential profit of at least x5, will he listen to you? The fact is that most still do not buy during the bear market, and will only buy when the price goes up.

You raise interesting questions in this thread and rightly point out that most people are not willing to wait a few years to make a profit. Everyone wants mountains of gold right here and right now, and the thirst for profit wakes up only in a bull market.

Quote from: Lucius on June 27, 2022, 04:41:26 AM

Inflation is around 10% in some countries, but close to 20% in others, while some countries such as Turkey and Argentina exceed 60% or even 70%. The question is how long it will take for the situation to return to normal, but it will certainly not be quick - it will probably take at least a few years and will depend on whether we have a virus outbreak again in a few months (the EU already has a big jump in some countries) and whether the war in Eastern Europe will continue for another 3 months or 3 years.

The question of inflation is painful and to answer it, you need to consider a specific country of residence + related conditions, such as local conflicts or pandemics. As you again accurately noted, the inflation rate is different everywhere. In some countries, investing in bitcoin will be better at offsetting inflation, in others it will be worse. But in general, it seems to me that in the long run, bitcoin still allows you to outperform inflation and allows you to save your funds better than some other financial instruments.

ChrisPop

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Quote from: Lucius on June 27, 2022, 04:41:26 AM

So how many people will find that they are willing to wait 20 years to profit from their investment? Even if it is 10 years it is still a small percentage of people who are willing to make long-term investments. If you tell a man today to invest the amount of x in Bitcoin, and that in 2-3 years he will make a potential profit of at least x5, will he listen to you? The fact is that most still do not buy during the bear market, and will only buy when the price goes up.

Inflation is around 10% in some countries, but close to 20% in others, while some countries such as Turkey and Argentina exceed 60% or even 70%. The question is how long it will take for the situation to return to normal, but it will certainly not be quick - it will probably take at least a few years and will depend on whether we have a virus outbreak again in a few months (the EU already has a big jump in some countries) and whether the war in Eastern Europe will continue for another 3 months or 3 years.

Let's look at the facts. I have pulled the historical annual returns of Bitcoin since 2011 and the inflation rate of the US dollar.

I don't think there is anything to add. There is no doubt that the returns Bitcoin offers on the medium to long term are way above inflation. Even if the dollar collapses and we have an inflation of 50%, The BTC returns still massively outweigh the inflation historically. Just keep in mind that past results are not indicative of future results. Wink

Lucius

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Quote from: DeathAngel on June 26, 2022, 09:33:31 AM

Bitcoin will fight inflation to an extent. If you buy bitcoin now & check the price in 20 years your likely profit will be far bigger than the inflation that will take place over that time. Because of COVID & the war in Ukraine the world economy is on its ass, inflation is around 10% but that won’t continue. Once everything settles annual inflation will revert to normal like 4% per annum, maybe 3%.

Money in bitcoin long term will beat inflation.

So how many people will find that they are willing to wait 20 years to profit from their investment? Even if it is 10 years it is still a small percentage of people who are willing to make long-term investments. If you tell a man today to invest the amount of x in Bitcoin, and that in 2-3 years he will make a potential profit of at least x5, will he listen to you? The fact is that most still do not buy during the bear market, and will only buy when the price goes up.

Inflation is around 10% in some countries, but close to 20% in others, while some countries such as Turkey and Argentina exceed 60% or even 70%. The question is how long it will take for the situation to return to normal, but it will certainly not be quick - it will probably take at least a few years and will depend on whether we have a virus outbreak again in a few months (the EU already has a big jump in some countries) and whether the war in Eastern Europe will continue for another 3 months or 3 years.

348Judah

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Quote from: Flyingjack123 on June 25, 2022, 01:53:48 PM

The rising inflation is becoming a big problem and macroeconomic conditions are worsening.
I want to know if bitcoin can in help us to fight inflation

One of the benefits in dealing with bitcoin is in its ability to work against inflation and one of the means in which this happen is by having an investment in bitcoin, this is a digital currency that has a great potential to rise and give room for realizing profits, any currency that can appreciate with time and be use as a good source for a store of value and asset is a good example of the coin that fight inflation and its impading influence, bitcoin is a good and best available option of an investment that work against inflation.

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