Most economic crises are caused more or less the same thing. Supply and Demand. Too much supply of debt, not enough demand. Too much demand for repayment of debt, not enough supply of money. Too much physical cash, not enough demand to sustain its value. In each case, the outcome is more or less the same, a small group of individuals in charge of the central banks or federal reserve get in a room and decide which parameter of the economy to tweak. Print more money, or raise or lower the interest rates. In the case of 2008 and the 2020 covid crash, the solution was to print more money. Ultimately this leads to the inflation of the money supply, and the tax payers pay that bill.
How Can Cryptocurrency Save Us From Economic Crisis?
Cryptocurrencies are built with the idea in mind that humans are imperfect. Regardless of whether or not the administrators of our financial system have the best intentions, they will inevitably end up making a mistake, leading to unintended side effects. Whether that is hyperinflation, or the overextension of credit to consumers, or both. Cryptocurrency can remove some of the human interaction from our economic systems, and allow us to work inside a more closed set of parameters. Take bitcoin for example. There are only 21 million bitcoin, and a supply that gradually leaks into circulation. These rigid parameters force us to work inside the paradigm, rather than print more bitcoin at will to solve our issues. The printing of money in both 2008 and 2020 is a bit like passing the buck to the future generations. This will eventually lead us into a bigger and bigger financial crisis down the road. Cryptocurrency is the exit strategy for anyone not wishing to experience hyperinflation or the collapse of their national currency. (See Lebanon, Zimbabwe, Venezuela).
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Episode 8 of Go Full Crypto
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