Topic: Why inflated countries should adopt Bitcoin to help boost their economy. (Read 676 times)

It can be a money for you but not for others. It's freedom of human to use it or don't use it as money.

Inflation is issue of a national economy and their governmental policy, Bitcoin can not help them to solve it. Bitcoin itself is a volatile currency so we can see stable coin loses its peg by backing with volatile assets. A national treasury if is backed by Bitcoin, will be volatile too and I don't deny that in long term, it will rise but in short term and mid term, it will be high volatile enough to cause very big issue for a country and its national treasury.

With this big risk, it's very impossible that central banks will add Bitcoin as their main asset in their national treasury. They can invest very small part of national treasury to Bitcoin as a risky investment.

Bitcoin is indeed the future of money.

But when we talk of a country adopting Bitcoin and trashing its own currency, I feel such a country loses its identity! I know the catch here is to eliminate the negative effects of inflation, but Bitcoin has its cyclical movements which can affect many when price is dipping which could cause panick for those that don't understand it. Perhaps allowing it to run parallel to its local currency is the best option just to allow for preservation of identity, and allow others to learn about it while they see it being used.

Otherwise going full crypto as a country had its pros and cons especially that cryptos are not centralised. Imagine a country being hacked and it's holdings of millions worth of crypto being stolen because some human error was involved....we still have a long way to go.

As long as you cannot force someone to invest or trade bitcoin, you cannot force anybody to adopt bitcoin. So it's kind of funny that you said a whole country will be forced to adopt bitcoin in the future, which you know is impossible. Did you know how long it will take for a country to shut down their fiat that they have been using for a very long period of time to accept another currency? I think you are just saying these based on your own imagination, because I totally disagree with what you said. However, you cannot fight a government, and by adopting bitcoin as legal currency, I don’t see how it will make the country's economy stable.

However, as you stated, the bull run is just coming every 4 years, if I’m not mistaken, so how do you think these will have an impact on their economy? You can see that it will not be possible, although some governments may do it, but it won’t be an easy thing to do and won’t happen the way you think. 

Now this is just wrong at least for now. Due to the blockchain being congested, we can expect that lesser and lesser transactions are being made and transaction fees are getting more expensive.

I disagree with this post. I don’t think inflation will be solved just mainly by bitcoin. Inflation is not caused by the people and bitcoin can only help the people themselves. It can improve the economic situation of a person but I don’t think it will exactly solve inflation of a fiat currency

I believe you guys do not understand how the country's economics and government investments work, that's why you often preach about this the way it is common on the forum. Bitcoin is not the world's saviour when it comes to the economy and never will it be, just treat it as an asset, and that is all. It is true that Bitcoin can enrich some citizens and governments if they can take the high risk, but can't do more than that for the economy. What helps the economy is internal, and this is why the Policies, the GDP and the Trade balance must be ensured to be positive among others. Bitcoin is just an asset and governments often have enough assets all over the world, so it mustn't be Bitcoin, while many are also being bought in the form of Bonds.

Now, you can see that it depends on the government if they would be interested in the purchase of Bitcoin or not since it is not by force, and do not forget that no government in the world lacks asset purchases, they do it periodically. You are only suggesting but many of them have enough assets that are yielding and are hedging inflation both at home and abroad. Fine, Bitcoin would have been an added advantage, nevertheless, you can't blame any government for not buying it or trusting what they do not believe in. Governments often believe in what is centralised and that can add to the economy directly, and I respect that, but Bitcoin is not that thing. Illicit flows are also a concern.

You are only thinking about the money that can be gained, but when it comes to the economy, Bitcoin can't help since it is decentralised. This is unless the transaction is passed through a centralised system like ETF, exchanges and others for proper records and accountability. Some economies are even suffering because many citizens' FX inflow can't be traceable/accountable to their country of origin due to the decentralization of Bitcoin. Is this what you say would help the economy?

This is the 1000th forum post about this topic. Can't you come up with more original ideas.
I wish I could see 10 million or 100 million people transacting with BTC buying foods and groceries on a daily basis. Why would they spend their BTC if the Bitcoin price could hit 70K or 100K USD after a week or a month? How much would the transaction fees increase if 100 million people start making small transactions on the Bitcoin blockchain on a daily basis? Wouldn't this make the blockchain congested again?
The Bitcoin adoption in El Salvador kinda failed, I don't know why people keep pointing this country as an example for successful BTC adoption.

In order for a country to develop, the leader of that country must plan for development. El Salvador is a relatively backward country, but since Nayeb Bukili took over the country's economy, the country's economy has started to grow. Bukili's move to make Bitcoin legal tender and hold Bitcoin has been opposed by many, but over time, his decision has been applauded. Today I believe that the country of El Salvador has been greatly improved by Bitcoin. The opportunity Bitcoin has created to bring money into the country by leveraging its remittance warriors will definitely see El Salvador make huge strides financially with in a few years, if properly harnessed.

We all know that the price of bitcoin is quite volatile and that it could present serious difficulties for both consumers and businesses; therefore, I guess I disagree with you, OP. Relying on a currency that is prone to extreme price fluctuations, for instance, could increase economic instability and make long-term planning more difficult in nations that already struggle with inflation. Furthermore, because not everyone is aware of bitcoin and because some governments may forbid using that form of cryptocurrency, recognizing bitcoin as legal cash without sufficient regulation could expose the economy to risks including money laundering, fraud, and tax evasion. As these are merely subjective opinions, let's consider the potential outcomes of your thoughts, OP.

Yes, when it's on a country level, every country will be at the mercy of the other countries. On a country level, it's super risky when more than one country is involved in it. In overall, a country has to withdraw coins when others put too much USD into the Bitcoin market cap and when a country manages billions of dollars, it becomes very risky, there can be a fatal crisis if things don't go as expected and predicted.

I completely agree with you, macroeconomics is very different from individual finances and it's impossible to compare them to each other but it's still funny to discuss. Btw I started talking about it because El Salvador is the only country that has been trying something like this.

And could you also imagine what happens to that country if the price of Bitcoin retreats by 75%, like it did only 18 months ago?

You are talking about putting your country's assets on a roulette wheel here.

You're right to a point though, there's no win win in Bitcoin due to it's volatility, but with the current bull run and the upcoming halving, if inflated African countries could adopt it's use for transactions there's or investments, there's a probability that it could serve as an inflation hedge an help reduce the level of poverty as well as strengthen their economy to an extent.
 Well let's take for instance, El Salvador that invested in bitcoin during the bear market, I put it to you that the countries is now reaping a lot of profits currently, they owned about 2848 worth of BTC and with the current surge of the price of BTC above 60k, El Salvador's assets in Bitcoin has passed $60 Million USD, now if they could get that figure with BTC just a little above 60k  you could imagine how much they'll be worth if Bitcoin reaches ATH.

I don't believe that the scarcity is going to be the only factor as to why bitcoin when used as a currency (optional or mandatory) will combat inflation, remember that what needs to happen is the value of the country's currency to go down not adopt a new form of currency, it's a headache for the people if they suddenly switch.
Well, transaction fees are expensive too, and they don't vary on how much money is being moved, it's just the payment currently at the network to have your transaction prioritized.
That depends on how much you're paying for transaction because if you're at low priority, it might take a while before the other party might receive their payments and if you want it to be fast then you're going to be paying premium if not the current average.
This I can agree but the problem with this one is that people are going to be paying taxes besides the transaction fees. It can be influenced by corrupt officials, they can just conspire to criminalize it's use or remove it's legality in the country and bitcoin would be gone from that country.
The reason is that bitcoin is decentralized and the government is centralized as it can already be, that's the opposite of them so they're going to be resisting the potential to adopt because they aren't just compatible.

From my little knowledge I believe Bitcoin was never created to handle the mainstream transaction of a country, it was created as an alternative currency or payment method. it works Viz vice with the fiat of a nation.

there are little things that most be considered if it's going to be a country's standard payment method like goods that are worth less than a dollar etc. and it's transaction fee for such kind of goods. its probably not going to work in this current generation maybe another generation.

I don't live in America so I don't know how smart Americans are. But I know that to become president you need the support and votes of the people and if Trump is stupid and corrupt. Why did Americans support and nominate him as president? So who is the bigger fool in this case? Furthermore, stupid means not knowing anything, but why can one become a billionaire or president?

If being stupid could become a billionaire or lead the country, I think none of us would refuse. And why are we smarter than them but we are nothing in this world? As far as I know, all leaders of companies, organizations, and countries are talented people, I've never heard a story about someone stupid enough to become a leader.


I think on the contrary, I think negative articles and information about bitcoin are mostly spread by those politicians and no one else. They are the ones holding the media, if they don't spread the word then who can? As for why they spread negativity about bitcoin, I think you understand and I don't need to explain.

While I'm not an expert in economics, I don't think that Bitcoin will directly influence a country's economy. It's true that the economy will boom in the bull run since numbers go up but what happens in a prolonged bear market? Everything go kaboom? Bitcoin was built as a p2p solution and whether or not the government of any country adopts it for their economy is none of our business. As long as we have access to, and use bitcoin for what it was originally created for, we should be good. OP also mentioned transaction cost. Until we can scale and have cheap tx cost, we don't need that kind of adoption. It's not everywhere that can pay $20 for a $30 transaction.

Legal tender just means you can use it to pay off debts and taxes. Cool, but it doesn't guarantee a complete economic overhaul. Even if Bitcoin isn't legal tender in a country, people can still use it for stuff like online shopping or sending money overseas. It's like having an extra tool in your financial toolbox, even if it's not the only one.

Now, replacing regular money with Bitcoin completely? That's a bit of a stretch. Bitcoin's supply is limited, and with the world's population constantly growing, it wouldn't be enough for everyone to use it for everyday stuff, like buying groceries. Plus, its value can jump around more than a kangaroo on a trampoline, making it a bit risky for everyday transactions.

So, what's the real deal with Bitcoin then? Well, it's more about offering an alternative way to handle your money, outside the traditional bank system. It's like a peer-to-peer network, cutting out the middleman and giving you more control over your dough. Plus, everything is transparent, like an open book, so you can see where your money goes.

El Salvador, for example, decided to adopt Bitcoin as legal tender. Did their economy instantly boom? Not exactly. But it's still early days, and the long-term effects are yet to be seen.

Theory, when it comes to practice not so much! Just as you have devalued your currency buy buying usd and bitcoin, the moment you sell your bitcoins for usd and using that to import stuff you're tilting the balance in the opposite way, increasing the parity of your coins against the dollar and against bitcoin and slowly removing all the effects. But the more important thing is that to do this on a scale that it would matter you would basically be at the mercy of the other countries, since for your investment to grow you need others to also buy, and when you sell you need others to buy your coins and obviously not dump a shitload exactly one day before you have your loan payments

But long story short, nobody managed that with gold, nobody will be able to do it with Bitcoin.
Again, if eveything at macro level would be as easy as individual finances!


So, then why did you say that adoption will magically change eveything when adoption with a minuscule minority is not possible?

bolded part....is that a serious question?? lol. I mean in America we just had Trump as president a few years ago (and he's actually running again! which is insane), and he is far more stupid, and far more corrupt, than the average american. Being stupid is not a barrier to leading a country.


But to answer the question that you asked the other person, most politicians indeed don't know much about Bitcoin. I'm sure they have heard of it, but that doesn't mean they are well informed about it. Most politicians probably know nothing more about Bitcoin than what they read in the headlines, which are usually negative, like Bitcoin "wastes" tons of electricity, is used by hackers, is stolen from exchanges, etc. I very much doubt there are many politicians that understand all the hugely beneficial things Bitcoin provides, and how it helps power grids by using cheap unused electricity and can solve some power imbalance issues in various places in the world. The average politician is old, and is not a bitcoiner, and therefore does not know much about Bitcoin, just like the average member of the public doesn't know much about Bitcoin, regardless of their age.

How do you know your country's leaders know nothing about bitcoin? If they are truly stupider than the average person, how can they become leaders of a country? They do not accept bitcoin for their own reasons, they understand it too well and they feel it is not beneficial to their power so they do not want to accept it. Like China, the country with the world's second largest economy also banned bitcoin many years ago. How can a country become a great power without wise leaders?

I understand how we feel living in a country with leaders who only know corruption and disregard for people's lives, but that doesn't mean they are idiots who don't know anything about bitcoin.

I strongly believe that too. We've a few countries that have tried such as examples and we know how badly they've faired in that regard. I think it's better not to make Bitcoin a national currency but allow citizens to indulge in its trade without restrictions. That way, even those who aren't employed by the government or private sector will be independent on their own. They won't be dependent on anyone but can trade and earn income for themselves. This is what Bitcoin has been able to do for many of us. To make a volatile asset like Bitcoin a national currency won't be a right move.

I ask you again, is your country friendly to Bitcoin so far and accepts it as legal payment? Because to pursue your statement, of course it has to be realised, or is it just being open and not taking the hard line to fully adopt it, then the country is considered to have lost? as you mentioned. The fact is that it is not like that and countries that do not adopt Bitcoin do not mean they do not want to provide freedom and progress from an economic perspective. Because even without adopting Bitcoin, they can still manage their resources and play on the world market by collaborating with other countries. Adopting Bitcoin is just a matter of choice, not the only option as an economic solution. There are so many ways depending on which benefit aspect is used as a reference.

El Salvador is a country with a relatively small territory, so managing it is not as complicated as countries with large territories, various beaches, islands, etc. This also needs to be considered because to withdraw the total fiat currency and implement new payment options there needs to be a big meeting, a joint agreement, have a target far in advance and I think the process is not an easy one.

Yep, I agree that Bitcoin is a unique cryptocurrency with many characteristics that can benefit a country's economy, especially amid inflation. We all understand Bitcoin has enormous potential to change the global financial system and become the future of money. But to achieve this, there needs to be cooperation from countries and organizations in regulating and managing Bitcoin effectively.

I always share with people that bitcoin is still very new, because my journey in the space realized that only a small number of people had any real attachment to it and most just came for a drive and left when they get good/bad results. So it is advisable to research Bitcoin and take advantage of the many opportunities, as well as minimize the risks that they coexist with.

We calculate Bitcoin's value in USD, so when a country buys a Bitcoin with its worthless fiat and stores it, waits for the price to rise and then sells it, isn't it going to help them economically? If they buy it at 20K USD and sell at 40K USD, they are doing 2x profit. The profit in USD matters the most for countries with high inflation because they depend on USD for import and export and their national currency is tied to USD because people value real estate, cars and other things in USD when they buy and sell it.

That's true, daily Bitcoin transactions on Bitcoin Blockchain are impossible at a country level where millions of people have to use it daily, Bitcoin wasn't meant for that pressure and can't deal with it right now. The more people use it for transactions, the more expensive it becomes and completely destroys the idea of improving economy when people have to pay huge price for transactions.

Bitcoin is a highly volatile digital asset, it's not even safe for beginners as they will need to do some strong research first before they invest or try to buy Bitcoin, now if a country is going to use Bitcoin as a means of escaping poverty and also boost their economy, they must consist of smart leaders, who knows and understand technology.

The problem here with my own country for example is that all our leaders have no clue what bitcoin is, they don't know what its capable of, they don't understand how they can use it to the benefit of the country, instead they prefer to go against it.

Most countries in Africa has greedy leaderships, I doubt they will even use Bitcoin for the sake of the country, I believe they will be able to do as they like with Bitcoin and still continue their embezzlement acts like they used to do.

Let me ask, how will bitcoin improve the economies of African countries? Because according to my understanding, if a country wants to develop its economy, it needs good foreign policy...creating abundant jobs for people and thereby helping people have a stable income. Meanwhile, bitcoin is a highly volatile investment and investing in it does not guarantee 100% returns. Bitcoin is a financial market and there will be winners and losers, there is no win-win financial market. So how will bitcoin help the national economy?

I believe it is fair to conclude that only a small minority of Africans can afford to pay the existing transaction fees for daily purchases. Bitcoin is still in its early stages, and there are numerous hurdles that must be overcome before it can become a viable option for daily transactions in Africa. It's worth noting that, even if the average transaction fee falls in the future, other barriers to adoption remain, such as a lack of internet connection and the exorbitant cost of smartphones in many parts of Africa.
Regarding your question about my personal use of Bitcoin, I use Bitcoin as often as I can for payment,

It is true that african countries are very underdeveloped and if they adopt bitcoin their economy can improve as well as their economy, but it will depend on the government. Africa has many economic problems but it is difficult for governments to deal with them. Government adoption of bitcoin is good for the economy if people learn about the use of bitcoin and become proficient.

Less Control: Cryptos work without a central authority, so they can be more reliable in unstable economies.

For Everyone: Cryptos can provide financial services to people who don't have access to regular banks.

Save Money: Some cryptocurrencies, like Bitcoin, are seen as a way to protect savings when the local currency loses value quickly.

Global Transactions: Cryptos make it easy to do business with other countries, helping trade and money transfers.

Less Corruption: The technology behind cryptos can make financial systems more transparent and reduce corruption.

New Funding: Cryptos can be used for innovative ways to get money, like Initial Coin Offerings (ICOs).

Move Money Easily: Cryptos let people move money across borders without restrictions, important during economic troubles.

Protection from Inflation: Cryptos, especially those with a fixed supply, can be a way for people to protect their money from losing value in times of inflation.

You think? How many bitcoin users do you know from North Korea?
Bitcoin has never seen a truly heavily enforced ban yet, and hopeful we won't, but to think that all would be ok with one it's just really day dreaming.
How many times would you piss yourself if bitcoin ownership would come with a life sentence in your country and you would hear  knock at the door at 2 am?


How many Africans would afford to pay a tx, right now 63 sat/vB $5.57 for daily purchases?
How many Africans would be able to use Bitcoin since we're talking about a max of 400-500k transactions a day?
Oh, let's make it simpler, how many times have you used bitcoin yourself lately in RL?  

Again people, there some serious differences between personal finances and a nation's economy!

You're right, African countries have been rather slow when it comes to bitcoin adoption, Bitcoin adoption in Africa could turn the state of the continue around. Many African countries are dealing with hyperinflation and other economic issues and there's no doubt that Bitcoin adoption could provide a much better alternative to the failing traditional financial system in the country.

because bitcoin does not have a fixed value, it always goes up and down, it will be difficult for bitcoin to become a valid payment, I think,
and also bitcoin cannot be used as a tool to improve the economy of one country because each country has different problems, and the exchange rate between bitcoin-usdt-local currency will be very influential,
However, for new people, it can provide long-term benefits by investing and making a profit if there is enough of the target

Yeah Bitcoin's like the superhero of money, especially when it comes to fighting inflation. With only 21 million coins ever, it's like a fortress against economic ups and downs plus it's quick and cheap for transactions, making it a dream for businesses and traders. Some countries might be skeptical but look at El Salvador took the plunge and it seems to be working out. Bitcoin might still have some wild swings but it's becoming the cool kid on the global economic block. Countries resisting might want to think twice before missing out on the crypto party that seems to be getting louder

Inflation is one of the most serious problems of a country especially inflation is more or less in all countries but in my Bangladesh inflation is so intense that the purchasing power of common people in our country is out of control due to inflation. Inflation in Bangladesh is not easy to control because the inflation in this country did not happen suddenly but inflation has become so intense due to various incidental reasons that it is not possible to control inflation in this country even by adopting Bitcoin. If there is no change or control in the political environment of Bangladesh and if the foreign remittances are not increased and the foreign debt is not paid then our Bangladesh inflation will be more intense in the future. However, Bitcoin adoption in unique countries in the world is able to reduce Bitcoin inflation, but no matter how much Bitcoin adoption is done in my country, control will never be possible.

I agree. Bitcoin does not have to a legal tender in any jurisdiction. It does not matter whether a nation/country bans BTC. Bitcoin is censorship-resistant to all such old school tactics.

I think African countries should adopt the use of crypto currencies to help boost their economy more. Rather than fighting against the use of bitcoin.

 It is a great privilege to experience the explicit and dynamics of the currency innovation in our local and global markets, transaction platforms and businesses in the day to day life. In one word bitcoin is "REVOLUTIONAL".

Inflation is very difficult to prevent most of the countries in the world are full of inflation today changes interest rates to control inflation. Although governments can help fight inflation through fiscal policy it is possible if the government can cut spending and raise taxes as a way to help reduce inflation. Also in the budget the government takes in more money than it puts into the economy as a result, the overall demand and price level in the economy declines and helps to combat the inflationary situation. It will depend on the government policy to adopt bitcoin. In the country where I live bitcoin is not legal yet. It is not possible to boost the economy by adopting bitcoin.

As that thread repeated, over and over, "legal tender" is not the same as "legal".

The word, "legal tender" has a very specific meaning derived from the US Constitution, and it absolutely means forcing people to accept Bitcoin as a form of payment even if they don't want to accept Bitcoin.

Bitcoin is unsuitable as a mainstream means of payment because transactions can take 30 minutes and cost 30 dollars. This is not a conspiracy by "the government", it's a simple technical limitation of the blockchain architecture and it's not going to be solved. Bitcoin works just fine for what people actually use it for, which is a speculation instrument.

Using the government to force Bitcoin down people's throats won't accomplish anything except making people hate Bitcoin. (And why especially should Bitcoin have this special status? Why not Ethereum? Why not Dogecoin? Why not Haypenny currencies?).



I made the same point above as well: deflation is far, far more dangerous than inflation. No country in the world has based their economy on a static commodity in the last 100 years for good reason. If your primary currency appreciates in value, then you are incentivized to not spend it, which contracts the economy, which deflates it even further, and so on into a depression.

Legal tender doesn't mean that you are forced to use that said currency. It just means that it isn't illegal to use the same and said currency will be accepted and taxed, which goes to the government for the betterment of the public(if used correctly). Lets say for my country India. Bitcoin isn't legal tender but it isn't illegal either. If government legalises and accepts taxes in Bitcoin, more people will be open to the idea of using Bitcoin as a mode of transaction, while also letting India acquire Bitcoins through public, which could be kept as reserves. We can track where the funds are allocated, when used and it would lead to overall transparency of the government.

Regarding the OP's topic. Inflation isn't bad for the economy up to a point, stagnation or deflation could honestly be much worse.  Just that more governments should be held accountable for the endless money printing they are doing without any instant consequence. US as an example, if the currency stronghold falters(which seems more and more possible as countries are becoming less reliant on USD for trade, as years go by. However, US is keeping up with improved trade relations to Europe as most of the energy and military trade EU was doing with Russia has been diverted to US and Arab world. If there wasn't an energy and military reliance for Europe on USA, there was a high probability that US might have gone into inflation leading to recession sooner than later.

My country is full of inflation but my country's inflation cannot be eliminated by Bitcoin adaptation. Inflation in our country is politically created, so if it is to be eliminated, a major change in politics should be made. Moreover, there is no acceptance of Bitcoin in my country, so no matter how much we talk positively about the adoption of Bitcoin, it will never be possible to accept Bitcoin in the context of my country. But if the politics change in our country like other countries and the government and central bank of the country attach importance to the acceptance of Bitcoin then only the inflation in our country can be reduced to a great extent. Other countries of the world have been successful in solving various social and economic problems of that country by approving the acceptance of Bitcoin, but our country still does not think positively about the acceptance of Bitcoin.

They should at least try to use every opportunity to save their country's economy since bitcoins offer another chance to make their country prosper and attract some investors to operate in their country like huge numbers of miners and local crypto exchanges. This will only be possible if they promise them security and low taxes when it comes to building and operating in their countries. Other countries are also offering this but if they have innovative strategies to attract these businessmen because they implemented bitcoins, then they will gonna surely have some chance to slightly increase their economy first and when others see the good result from it, they will also become their business partner as well.

But I will say that bitcoin is a speculative financial instrument used to make a profit on the difference between buying and selling. This is what primarily attracts all respondents (and non-respondents).

Will everyone accept bitcoin as legal tender? That is the question. Most countries will probably allow it to be used as an investment instrument, but as a means of payment, many are preparing CBDC. I expect to see few countries with legalized bitcoin as a means of payment (countries with weak economies).

In the future there will be no paper money. From the word. At all. Only digital surrogates, like CBDC, will be used.

The economy of any country can be positively influenced only by production (of something in demand) or raw materials. If the country has a weak economy, then bitcoin will not save from inflation.

But bitcoin's volatility within countries will have an even worse impact on the economy than inflation.

You got all those points right, Bitcoin could really be the solution for countries that are still currently fighting inflation. But I think there is another issue, first is the infrastructure, Bitcoin needs internet connection and at the very least a phone, and as far as I know many of the countries who are currently undergoing inflation is poor/3rd world countries and they might not have the required infrastructures to encourage their people to use Bitcoin. And the second issue is the people themselves, I know that most of the people who live in those country and especially the consumer is young people, but I think there are many business owners are seniors, for those seniors who never heard of Bitcoin or Crypto it would be difficult for them to move on, even if the want to, and before that they also need to be convinced that Bitcoin is safe to use.

Inflation happens in all nations, just better or worse, but it is everywhere.

Governments and central banks are not able to solve inflation of their fiat currencies. They print money, tighten interest rate later but after all they can not control inflation, just sometimes speed it up, sometimes reduce the inflation rate but generally the trend of inflation is up.

It causes terrible decreases of their fiat currencies' purchasing powers.

Purchasing Power of the U.S. Dollar Over Time.

Only Bitcoin investors will be happy to receive Bitcoin as their payments for salary, customer purchase. If they are not investors, they surely feel inconvenient with Bitcoin payment, transaction fee, price volatility.

Inflation is really normal because it's what been expected by the government, inflation means there are many people spend their money and this make the economy circulation works. But high inflation rate is a problem, deflation i.e. the declines in goods and services prices, is actually bad for the government because many people tend to hold their money instead of spend it.

Accepting Bitcoin as legal tender isn't a solution since vast majority are prefer to use fiat (take a look to El Salvador).

While I understand why we should root for Bitcoin being accepted and even embraced for the population of countries which experiment high inflation, in reality things are not as ideal as we could assume. I have lived in a highly inflated economy for a long time, actually this country went through hyperinflation for some years, starting in the 2015 and while it is true many adopted Bitcoin to protect their money, most of people here adopted to save their money in stablecoins, soon as they got popularized in exchanges like Binance and Coinbase.
In the time being, it is possible here in this country to walk into a store and pay ones purchases using stablecoins, through centralized wallets like the one implemented on Binance (Binance Pay) or even though on-chain transactions. On the other hand, Bitcoin is not used as often as a way to transmit value, but rather as a way to invest and especulate in the long term.
Maybe, if in the future people get more educated about the benefits of Bitcoin second layer solutions like the lightning network, it will be possible for us as a commercial country/society to start replacing Fiat backed tokens with micro-transactions using satoshis, until now that is how things are and we must face it.

At least, it is a better alternative than seeing one's savings going down the drain because the reckless decisions of the central bank and the dumb but powerful demagogs in the presidency.

OP, how many countries has even adopted Bitcoin as a legal tender talk more of using it as inflation hedge, does bitcoin act as hedge of inflation on a large scale, this digital asset is very much volatile in nature making it almost impossible to combat inflation on high side, another fact you need to put into consideration is that most of this inflated country government are not ready to even think of allowing bitcoin to be adopted fully by institution on a large scale because of their selfish interest, they can only allow this presumptions to take place if they have control over this currency which we know that it is not possible for now, bitcoin despite being an inflation hedge has a limited preference to which it act, in an economical settings inflation is being tackle by more local productions and effective fiscal planning.

Nope! No! Not! Niet!

The moment a country  that suffers from high inflation will try to buy Bitcoins with it's worthless inflated fiat for which there will be no demand it will just trigger higher inflation, then higher inflation, till their banknotes will be so useless they won't be able to pay with 100 trucks of it for the fee of a tx!
Read into this first:
https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic


Nope! Not! Niet!
You haven't made a transaction lately, haven't you  ?

Stop treating Bitcoin as a solution for a global or even national economy, Bitcoin works great for individual purposes, at macro levels it loses a shit ton of its advantages as those are simply not applicable anymore!

I agree, it doesn't mean that if a country fully adopts the technology of crypto currency, or bitcoin to be specific, the country or its people will prosper in life or the country will become more powerful in terms of economy. The thing is, if a country fully adopts and implements crypto currency into their system without proper preparation and discussion about crypto currency, they might experience problems, especially since not all people could be expected to understand a complex thing as crypto currency. Do you think all people will have the patience and will to learn bitcoin despite their capabilities? What I can say is that yes, bitcoin or crypto could help a country if adopted, but it will take a long time before it does because, for sure, there will be a lot of trials and errors in implementing that technology. Maybe for now, bitcoin or crypto currency could boost those individuals who are involved in crypto currency.

This, there are some countries out there facing a challenging situation when it comes to their economies, but this cannot be fixed so easily, if that was the case then I would expect economists on the country figuring out sooner or later the way to solve their issues in that particular way, and while bitcoin is without a good tool for the individual investor to deal with the high inflation they are suffering in their country, it is not possible for a government to do the same.

Honestly you are misunderstanding some things there. The idea that deflation is disastrous comes from the fact that deflation happens BECAUSE OF economic collapse. If there is an economic collapse that means people don't have money to spend, so they spend less, so there is less demand for things, so prices go down (and therefore the value of the currency goes up in relation to consumer goods) and you get deflation. But its the result of an economic collapse, not the cause.


Also, to point out the obvious, the reason money being linked to gold is called a "gold standard" is because many nations did this! You act like it never happened. The gold standard ended, which means it used to literally be the standard. It never caused economic collapses simply by existing, otherwise it never would have become the standard. The reason why no country in the world is on a gold standard ANY MORE is because politicians realized they have far more control and power when they are literally in charge of the monetary supply. I'm not saying I know what would happen economically if say countries started adopting a bitcoin standard (and I don't think that is something that will ever actually happen), but the idea that using a hard currency rather than a weak inflationary currency would cause economic collapse is honestly just modern monetary propaganda to make people think having a weak currency that gives govt/central bank tons of extra power is the only sort of monetary standard that could work. When obviously history shows that claim to be a complete lie.


There are some things that are better about being on a hard currency standard (like all nations used to be), and some things that are better about being on a weak currency standard (like all nations are today). It's not that one is good and one is bad. They each have good parts and bad parts. I think the main problem is that since the gold standard was abandoned the world hasn't had a hard currency to use as an outlet for the good things it provides. Once Bitcoin becomes massively widespread globally so anyone can save and spend it with ease that's essentially, as someone people have called it, an escape hatch that people can choose to get away from weak currencies.


There would be bad economic consequences if either inflation or deflation got out of control. But while hyperinflation occurs due to horrible monetary policy by the politicans and central bankers who just keep printing money because they have to in order to stay ahead of their debt, I believe a deflationary spiral would only happen if an economy fell into a depression that it just couldn't get out of. Because think about it, the only reason people are going to not buy goods is if they literally can't because they don't have jobs. People having jobs is going to balance out a deflationary currency because people want to buy things and they are not just going to stop buying things when they have the money to buy things. So it isn't deflation at all that is the problem. It is economic collapse that is the problem. Whether a currency is weak (fiat) or strong (bitcoin) people are going to spend money they have. I think the main difference is that with fiat currency the economy is debt driven because printing money and handing it out as debt is how the economy grows, while with a hard currency the money is limited so there is slower growth because its much riskier to take out debt when the currency is strong.

I'm no expert in these things but it seems to me inflationary currency leads to high growth but very unstable economies, the must eventually collapse because govts are by human nature going to print more money and continuously wrack up more and more debt until its unsustainable and the economy reaches a break point (which is what a lot of people are afraid is going to happen in the coming decades, which I beleive people refer to as the "great monetary reset"). While being on a deflationary currency standard would mean less growth but a much more stable economy. People taking far fewer risks, so slower growth, but also much fewer monetary-related problems because the base monetary unit increases in value so saving is possible without taking on risk, and things can actually stay affordable rather than being destined to become more and more unaffordable.

That's my take, which may or may not be totally right. But for sure your statement that a deflationary currency would automatically cause economic collapse is totally wrong, as explained at the top of this comment.

You have said what I feel is the reality that many Bitcoin lovers have not understood. Bitcoin might seem so nice for countries to adopt but in reality, it has its peculiarities and challenges especially when put to test  as payment solution to the ordinary citizens who may not have the knowledge to use Bitcoin and also protect themselves from theft. Think about the aged, the children and the disabled, fiat will be far easier for them than Bitcoin. This is why I think adopting Bitcoin by countries will be feasible if it work side by side with fiat payment systems. This way, it will become a thing of preference for the citizen and also make it more democratic.

I would only agree about being an individual investor and seeing it as a good hedge against inflation. But if it's about the government leaning towards it as their hedge against inflation, I don't think that most of them are going to thrive. Especially that you've tackling this with countries that are have high numbers of inflation, it's not going to solve their problems with it. Yes, it's easy to say that Bitcoin is a deflationary asset but they just can't put their country's wealth into this asset and wait until it pumps and sell. That's not how it goes for a government for it to benefit from investing in Bitcoin. Actually with what the El Salvador is a commendable thing even if Bukele has seen that there will be a lot of backlashes and they seem not yet prepared for it. Look at the Central African Republic, I think they've declared Bitcoin as a legal tender but then later on reverted that decision, IIRC.

Exactly I think OP is mistaken when he actually said a country in inflation can be saved by using bitcoin as legal tender yes bitcoin is an hedge against inflation but only on one aspect which is to curb excess supply of the fiat currency which usually leads to the devaluation of the currency Bitcoin fixed supply can definitely safe that. But there are many ways that get countries into inflation like the high demand of products and goods or low supply or manufacturing capacity by commpanies due to raw materials shortages. This are definitely not a legal tender problem that bitcoin can solve

Things are not so simple to be on the same page as adoption; on the other hand, inflation is not an exclusive issue for poor countries; the American example is the best.

On the other hand, it is not necessary for what exists to disappear, in reference to the current financial system, what is needed is for the laws to be fair with bitcoin and there is no attempt to govern its use to the classist interests of the old financial system.

Ah!!, Just because bitcoin is deflationary does not mean that it is "medicine" for economies that suffer from inflation. (Imho)

I feel as though I should point out an important point about macroeconomics here.

Inflation is really bad for the economy. It makes it hard for business to predict the prices they should charge, and puts the squeeze on average workers when their salaries don't keep up with inflation. Periods of high inflation are associated with economic instability and political unrest.

But as bad as inflation is for the economy, there is something far worse than inflation: deflation.

Deflation, in short, is a total disaster for an economy because every consumer will suddenly be incentivized to stop spending any money, leading the a massive contraction in GDP.

This is why no country in the world is on any sort of "gold standard" or anything equivalent.

And I get that we're just talking theoretically here when discussing replacing sovereign currencies with Bitcoin (because I think we all know it would never happen for a number of reasons), but if by some miracle a country tried it, they would instantly wreck their economy.

Now, lets be clear: most people don't envision replacing a sovereign currency with a digital one, but rather they usually mean to use a digital currency as a more streamlined means of transacting in their sovereign currency. (For the Haypenny system, we actually just let people trade in "USDE" or "USD equivalent" to make it easier for them to work with).

But make no mistake, if a country switched to Bitcoin to replace their own currency, it would be an absolute disaster.

As crypto enthusiasts, we love Bitcoin and want to see it as a legal tender. But we always consider Bitcoin as a currency, and a few also consider it an asset. I agree with both; primarily, it's a currency, and when we store it, we may also consider it an asset since it has a store value. In this perspective, I don't think Bitcoin could play a role in reducing the inflation of a country. Most of the inflation happens due to corruption. So Bitcoin won't stop the corruption or war. Bitcoin could just serve as a currency, even if it becomes legal tender. Trading Bitcoin will be easier, but due to the high transaction fees, merchants will face difficulties accepting Bitcoin. However, we want Bitcoin to become legal tender so we can use it everywhere. 

I also don't really see that happening and whether there is possibility of it happening , it will not be anytime soon. We cannot foresight what Bitcoin will look like in the next 100 years however following the decentralized technology in which the bitcoin is designed , it will be very difficult for it to replace the centralized system since it can also function effectively as an alternative.


I also don't think having bitcoin as a legal tender is enough to change the economic hardships bedeviling any country, rather it can bring about succor to the worsened financial crisis of the country which will sort of be a short-term plans to lessen the inflation and depreciation in the local 'fiat' currency of such country. The country can also decide to use the equivalent of the Bitcoin for his forex market in the sense that any money coming in and out of the country will be valued by the Bitcoin exchange rates whereas transactions and businesses done within the domestic market will be carried out by the local 'fiat' currencies.

I have some thoughts on Bitcoin and inflation. I agree that Bitcoin should be legal, so that people can avoid losing their savings to inflation by investing in Bitcoin if they choose to do so. But I also understand why some countries can be especially vulnerable when they are hit by inflation, and they might introduce restrictive policies to help stabilize their local fiat. It can be reasonable and very important because salaries, taxes (and thus the budget for all sorts of essential services) are usually in fiat, so if inflation gets too high and doesn't stabilize, lots of people and the economy get hurt.
Bitcoin, in the meantime, can grow a lot, but if a lot of people start using it, it can create a congestion, with the fees spiking and transactions getting stuck. For a country that's already struggling economically, such complications can be an even bigger nightmare than inflation.

I totally agree Bitcoin can be helpful for a country's economy when adopted as public long term investment by the government. However, not as the sole investment, neither as official main currency. Look the example of El Salvador: they did the adoption in the right format.

Even though the digital currency is legal tender there, Bitcoin didn't replace dollar, which remained as the main currency of the country. At same time, they took advantage of the best Bitcoin could offer to the country. They have been buying the dip, that is, investing considerable amounts of money from the public vaults in BTC along past years and now that we are approaching a new bull run, they are ready to profit from their investments.

Of course they risked money, but it was done in a calculated way, what means it wasn't going to completely compromise the country's economy if something went wrong. On the other hand, if they had adopted Bitcoin as the exclusive currency of the country, I fear it could end really badly, because Bitcoin is heavily volatile and prone to manipulation by whales. It's crazyness for a country to put all their tickets in BTC, even if it's done with a good intention of fighting inflation back.

I disagree to the points raised by OP. Bitcoin is not built to boost any country's economy. It is not built to handle mass transactions. It is also not built to replace the mainstream economy. Bitcoin is a currency that thrives in parallel economy. Its purpose will be ruined if Bitcoin is adopted by centralised entities and forces people to use it. Bitcoin honestly cannot handle a mainstream transaction volume. It will just jam the network and push the transaction fees to an an unacceptable level where the existing users will also suffer.

@op your point number 2 and 3 is actually a lie in times when the bitcoin network become congested and the transaction fees rises up to the roof, just as we all saw and experienced it do in the last couple of months, in times like that, a country that adopted bitcoin to boost their economy would still have to turn back to their fiat to continue transacting normally as before.

And besides, I do not think a country will have to adopt bitcoin and make it a legal tender before it serves as a source of improvement in that country's economy, countries simply converting their foreign reserves to bitcoin rather than continue with the depreciating fiat could as well do the magic.

And for a fact, I do not think we have come to the point where bitcoin can totally and completely replace fiat, not everyone is savvy with how to carry out transactions on the internet, not to talk of doing it with and through bitcoin, most especially, if we go to the villages and remote places, people there know nothing about bitcoin or how to transact in it, and most won't be able to learn it because they are not educated, so, this is idea of bitcoin completely replacing fiat should not be discussed when ever a topic like this comes up.

The government of El Salvador has made some profit from their Investment in Bitcoin but I doubt if only the gains made from Bitcoin will help the nation reduce inflation. Investing in Bitcoin should be part of the measures to diversify the economy of the nation in a bid to reduce inflation. There is no proof or data that proves that Bitcoin has helped El Salvador to come out of inflation. The view or belief that Bitcoin is the savior of a nation's economy is a utopian one.

Countries with poor economy and also other infrastructures like politics, laws will need to resolve those problems first.

Bitcoin can not, never be able to help such countries to boost their economy and it was not created and designed to do this. In reality, after many years since 2009, even Bitcoin already is no longer a baby, matured enough, got better adoption, at the moment it does not have that power to fix national economical, financial problems. It will not have that power in future too, forget about it.

Countries suffering from poor economy development can adopt bitcoin as a legal tender, but before they can do so, they have to sit and plan for the possible means they can make their best achievement in this, there must be a proper plan on ground that could be of help to the people and this can only be possible when the leaders are interested in the peoples welfare, growth and development than their own selfish interest, then they could be able to present something nice like bitcoin adoption to its people, just as in the case of El-Salvador, Nayib Bukele have put in more efforts in seeing that the bitcoin adoption turns into a testimony today and we can see from how he has been moving the country forward from one aspect to another in the development of the economy through same bitcoin adoption.

I disagree.
For starters bitcoin is too volatile to act as a good hedge. It is a hedge on a small scale and for individuals, but not on a bigger scale for the whole country and its economy. You are also forgetting the bear periods where it continues going down like 2018 (price went from $20k down to $3k in a year). You can't shut down the entire country's economy because bitcoin is on a downtrend for a whole year and a massive downtrend at that (85% drop).

Additionally using bitcoin to solve economic problems including inflation is like sweeping the problem under the rug. It is not going to solve it, at best it may only alleviate it in short term before it shows itself again.
Solving such issues should start by first finding why the issue exists (like why is there inflation) then fixing that root problem. For example in a lot of cases inflation exists because the government refuses to reduce its expenses and faces a big budget deficit which then in order to solve it they print money hence create inflation! To solve this example (although I'm simplifying things) you should fix the budget, eliminate extra expenses, where money is being wasted, etc. and as budget deficit shrinks so does their money printing and consequently the inflation.

El Salvador is an excellent example for this ONLY IF it is studied correctly not based on some news titles you read. This means the economic situation of this tiny country didn't improve because they adopted bitcoin as legal tender, it started improving because a million different things their government did over the past couple of years (attracting foreign investors, improving tourism economy, fixing the budget, battling corruption, crime and gangs, etc.).

It may not really help the economy of the country especially  when we have incompetent leaders but I think bitcoin can help individuals in some countries that their currency is losing value steadily. I know of a country that is having serious problems with their currency, depreciating everyday. If I'm to be in a country like that I don't think I will keep my money in the bank    because doing this after sometime you will notice that the money won't have value due to inflation. I will prefer to convert my money to bitcoin, l the price of bitcoin is increasing which is going to add some value to the money I already have than keeping it bank and I won't be able to solve my problem due to inflation.  

Countries having serious economic Challenge right now, bitcoin can serve as a store of value right now because we are in a season the market is going up.

Accepting bitcoin as a legal tender wouldn't change the economy state of a country. Moreover, bitcoin must not be a legal tender before citizens will benefit from it, as long as bitcoin is not banned in a country, and it is legal to use it, then it will still serve its purpose. You should also note that it will be impossible for bitcoin to replace fiat in future, because it is limited in supply and cannot be used daily by everyone with the large number of population in the world.

Bitcoin was created to be an alternative payment method to fiat, which is that purpose that it will serve. El Salvador adopted bitcoin as a legal tender, it has not change their economy, but it will do that in the long run, since the have the country's fiat reserve in bitcoin. Bitcoin is a hedge to inflation, but you should also think about the high volatile nature of bitcoin. Bitcoin is still facing a challenge of high transaction fee that do happens from those garbage that uses bitcoin blockchain, that will be the worst for bitcoin users when those token pop up again.

Please see this thread for a discussion about whether Bitcoin enthusiasts should be asking for the central government's help in forcing people to adopt Bitcoin.

 If you interview a lot of people about Bitcoin, some would tell you it's a crypto currency used for digital transactions, some could also say it's a digital currency that operates independent of the central bank. You could also here others say it's a digital currency that could serve as an alternative to fiat currency, well they're all right in their different perspective of description. However I also think Bitcoin could be refered to as the future of money. It is the mother of all crypto currency, and has inspired the birth of a lot of other crypto currencies. Well it might take a while before everyone accepts it as a legal tender, but it has the potential of replacing fiat money in the future.
  Bitcoin have a lot of benefits and could affect a countries economy positively due to it's transparency and inflation hedge, however my major point of focus is on inflation. Alot of countries are undergoing inflation currently especially in countries with bad governance, high crime rates and war. Sometimes it's takes a long while for some countries to get out of inflation. But Bitcoin is known for it's volatility and can serve as an inflation hedge to their  economy if only they could adopt it's use for transactions or as an Alternative to fiat. It could be beneficial in several ways because.
1. It is the fastest way to combat inflation, due to it's limited supply, making it more scarce and costlier, which could help strengthen a countries economy.
2. Bitcoin has a transaction cost making it easier for financial industries and traders to carry out transactions without worrying about high cost of transaction fees.
3. It's transaction rate is quicker and can help, business men, traders and individuals transact very quickly.
4. If a government accepts Bitcoin as a alternative to fiat
it could make currency exchange effortlessly and it cannot be influenced by corrupt governments officials.
5. I've seen no reason why some countries would be fighting against Bitcoin instead of adopting it into their system, I think any country doing that is fighting a lost fight and would be forced to accept it on the long run.
 Other countries should use see El Salvador that invested in it and adopted it for transactions as an example of how Bitcoin could affect an economy positively. It's helped  them to improve their enocomy by reducing the rate on inflation in their country, though it didn't occur as fastly as speculated, but in the bull season when the halfing fully comes as speculated their economy could become very robust, since it's adopted over there.