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How Does CryptoCounter Inflation Respond To Inflation?

[1/8] Crypto vs. Inflation

Deep dive into "how does Crypto counter Inflation" - A thread 🧵 How does Crypto counter Inflation? How does Bitcoin counter inflation?

And more questions to be answered...

[2/8] Inflation usually happens for different reasons: increase in production costs, worker shortage, supply chain disruption, etc. Currently, due to the War in Ukraine, and market decline in a post COVID era, inflation is a big problem. But how does crypto solve this?

[3/8] Inflation occurs when money is printed more than it's used. A very good example of this is when a Government prints more money to pay off its debts; the massive amount of money that is printed is not entirely utilized in the market, causing the money to lose value.

[4/8] This is exactly where Bitcoin maxis point their fingers to. When a programmed money such as BTC has a predefined maximum supply, there's never going to be a problem with BTC being minted more than it is used. This of course is a counter to the current Inflation problem.

[5/8] But then the question becomes: How do other cryptocurrencies counter the inflation issue?

Many other crypto assets on the market do use the same exact mechanism as Bitcoin to fight the inflation problem. (Like BNB).

The others, work in a different ways:

[6/8] Take Ethereum for example: Ethereum does not have a maximum supply, however, to counter the Inflation problem, ETH has a yearly max supply. Additionally, in many cases the ETH that's burned over a period of time is more than the amount that's minted to resist inflation.

[7/8] To clear things up, crypto is not an ultimate solution to inflation, however, the programmable magic money we call cryptocurrency provides answers to many issues to counter the worldwide inflation problem.

[8/8] To sum it up, there's no control over the events that make money less valuable. The war in Ukraine or the post COVID market is nothing Bitcoin can fix. However, the issues that fiat money has can be fixed by crypto. Retweet this thread to help mass adoption. Invest safe!

This post is based on this twitter thread.


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