One of the greatest attributes of cryptocurrencies is their ability to be deflationary. There are a growing number of countries in the world that are experiencing high rates of inflation, while a select few have seen this to an extreme extent.
Inflation rate refers to the relative value of a nation’s currency. For example, in 2017 you can buy 100 tacos for $100. In 2018, after experiencing a 3% rate of inflation, you can buy 97 tacos for $100. As currencies succumb to inflation, they hold less relative value.
The beauty of cryptocurrencies is that depending on their structure, they can have a fixed supply. There is no governing body deciding to create more BTC, and make each worth less in the process. Rather, with a fixed supply, as usage increases so does scarcity. This means that over time, each BTC (or any other fixed cap cryptocurrency) will increase in value, rather than decrease like FIAT.
In North America we are typically subjected to annual inflation rates ranging from 2-3 %. At current averages, this equates to prices essentially doubling every twenty years. What makes this troublesome is that wages do not increase at this same rate. This is why past generations were able to buy a home, support their family, and live well, all from a young age.
Despite the obvious hardship that the situation brings, North America experiences very tame rates of inflation compared to many countries around the world. Due to this, the deflationary nature of cryptocurrency may not be a main driving factor in its adoption here. It is the nations that are seeking a stable currency that yearn for a better offering such as cryptocurrencies.
One coin that is making inroads into nations suffering from a state of hyperinflation is DASH. We have seen the rise to prominence in nations such as Venezuela, and Zimbabwe.
In Venezuela we have seen full government adoption of cryptocurrency, to the point that they have created their very own. Dubbed the PETRO, this is a national digital coin that is backed by the country’s main resource – oil. No doubt with the government-friendly stance towards cryptocurrencies, the public at large is openly embracing them as well. The nation experienced an inflation rate of over 4,000% during 2017. This event essentially made their FIAT worthless. Due to this, we are seeing massive adoption of coins such as DASH. More than most, DASH has marketed itself towards these nations in states of hyperinflation. DASH has recently reported that Venezuela has now become their second largest market in the world.
One of the only countries in the world in an even worse situation is Zimbabwe. Also making inroads here is again DASH. In an informative and close look at the situation, Frame 48 released a video short detailing the state of affairs, and the role that DASH can play.
While many are in crypto due to the potential profits that can be made, the technology truly can help the world. It has the ability to provide impoverished and struggling nations with stable currencies. The secret is out, and thankfully adoption is being seen in these areas of the world.