Bitcoin Forum

The biggest threat to fiat money is inflation. Inflation can be cured by injecting wealth into the economy and by that rising enough belief to keep the system afloat. This can be done for instance by occupying foreign countries and by that opening up new markets to the companies that are essential to the economy. Or this can be done by loose regulations with the derivatives markets, that will create wealth out of thin air and high hopes.

Can it be that pumping of the crypto markets is just another financial shenanigan created to keep the old system afloat?
They are creating new wealth out of nothing with cryptos, just like with derivatives. The made up wealth that is created, is actually backing the value of fiat. This would make sense why regulators seem so blind on goxdollars and tether.

I don't think the link would work out, because while the crypto ecosystem does remove a lot of fiat transactions and act to combat inflation it also does the opposite, there are still so many fiat transactions attached to cryptocurrencies that would have an inflationary nature on fiat.

It is true that economic activity is created by crypto and that can stimulate GDP. That's one reason Japan, for example, is quite keen to introduce regulations that don't prohibit or prevent its use. Jumping from that to tinfoil hat conspiracies takes a very vivid imagination though. It certainly doesn't back the value of fiat and they are not creating new wealth, it is just being transferred into to new asset class and to different people. The benefit comes from all the service industries that have popped up and the money spent by early adopters that have struck it rich. The regulators are not blind and they have taken action where it is necessary, don't believe all the FUD you read.

I saw this from different point of view like people are transferring their money value into the bitcoin so the fiat money may lose its value in some years.But we are still in the early stages of adoption so it needs time to settle down and to understand what will happen.

Highly doubt the governments and nations who are in charge of fiat money decide to create a system that challenges the status quo. Sure they could be behind it, but are they really operating a decentralized system all by themselves? Are they really controlling hundreds if not thousands of people to get this objective done? I would answer no to both and because of that, it doesn't really matter if they created the system to protect fiat or not. The system is what it is now, and no one single entity or person has any control over it, Bitcoin is a system and product of the world we now live in.

Inflation is an irretrievable loss. Have you ever seen deflation in developed countries? Banks give loans to enterprises for development. Loans they give your money. Then they get that money back with more interest. You are given a minimum percentage that is leveled by inflation so that you do not have profit and could not buy more goods. On your money all have a profit except you.

i dont think crypto market and money flow in cryptocurrencies can be controlled or done for a specific reasons for spome groups. it is very unpredictable thing and hard to manage such thing using crypto currencies.

I think you got some concepts wrong, you cannot generate wealth by just printing currency that is precisely what causes inflation, you have an higher amount of currency chasing the same amount of goods and services, wealth is generated when new products and services enter in the economy, if governments did not printed more currency or at least they did at a slower pace than the real growth then you will have the opposite effect of inflation, every year you could buy more with the same amount money but that will make the population richer and they do not want that.

if it's controlled in my opinion it's quite difficult, because the market is where bitcoiners are transactions, so it's not just one transaction but a lot too, so we need to adjust everything

I think yes, but only partly. I say that because cryptocurrency is in a different playing field compared to traditional money. And so, although it mostly interplay nowadays, there are still some differences and distinctions in terms of the factors that affects and keeps it value. Money is the more stable of them two, so it would be difficult to say that cryptocurrency is the one protecting fiat money. I think the better description is their interaction leads to better gains for both of them.

bitcoin does not protect fiat money, on the contrary, bitcoin wants all transactions easier and faster, we do not need to make banknotes and coins that make it require substantial funds, all transactions and money stored in digital data, thus financial transactions will be cheaper, but our money will remain safe

What you mean is that for the economy to keep running, you need people to keep spending on something. Those who invested in bitcoin initially are now millionaires and thus have wealth created out of "thin air" because the price has been artificially pumped by goxdollars and tether.

Your first assumption is that most of the price rise is due to the Tethers being printed by bitfinex without there really being any USD behind it.
Second assumption is that all of the millionaires/ bitcoin holders are actually spending their money by converting it into Fiat and thus helping keep the economy running.
The first assumption is hard to verify or reject. The second one means that people are getting actual Fiat from someone else in exchange of the BTC. But then that takes out an equal amount of Fiat away from another person. The total in circulation remains the same because people who are buying/ selling at the exchanges are doing it with their own money. This is the benefit of bitcoin being a peer-to-peer, decentralized system.

The theory that bitcoin is enabling circulation of new fiat is pretty baseless.

So far I have not seen that, the government just cannot open itself to receive cryptocurrency. If the reason the government is reluctant to accept cryptocurrency because of inflation, it's a fatal mistake they do not know about cryptocurrency. Even, in my opinion, cryptocurrency can overcome the problem of inflation. Their simple thought is only if all societies use the payment with the money cryptos then fiat money will be leave by humans, but not as simple as that. Fiat money will continue to be used even if money cryptos exist because not all payment systems will use the money cryptos.

I agree that bitcoin is not subject to inflation. Given that the supply of bitcoins is limited, in contrast to fiat money, the only thing that can lead to inflation coming out of control is the lack of demand. And for this reason people use this crypto currency. But I'm not sure that we can say that bitcoin protects fiat money. Rather, it is an alternative to fiat money, which "lures" users.

Why do people always think that inflation is a bad thing? Remember Inflation can also be translated to demand, to make you understand deflation is when the prices of goods and services are getting cheaper as the demand is lower than the supply does giving your dollar or any fiat currency more buying power. Injecting more money into the economy does not help solve inflation as well they can also see this as an oversupply of money which can also trigger a greater inflation. Now to answer your question any investment (stocks, real estate, cryptocurrecies) is a protection to inflation as long as your returns are greater than the inflation your buying power will still be equal or even greater than what it was used to before.

you're thinking out of the box plotting to create money out of thin air alt_coin or crypto, coins have been made manage to assist by so many person with interest on their given field of knowledge talking advice to the supporter of the crypto they making, it just not being made out of the thin air and high hopes for the customization being the top one crypto, alt_coin, it is tackle sensitively before its final success. 

It its purest meaning the inflation is an increase of money supply. Considering the fact that we live in the world with fiat money and central banks, the only way the money supply can significantly increase is by governments swiching on printing presses. So the root of problem lies in governments which have a monopoly over money. Crypto has all chances to change the state of things.

Also, crypto doesn't create any wealth at the moment, it mostly just redistributes it.

I really don't see any correlation between the two at all, And even if that's the case OP should at least state the currency which is being protected by the cryptos since we are all not using a single universal currency.

The problem with your theory OP is that BTC isn't backing a certain fiat currency. It's being exchanged into many different ones and if you divide the market capitalization by the currencies for which it's being traded you'll end up with such a small sums compared to the GDP of each of these countries that it simply couldn't have an impact on their economy. So, IMO it just can't be protecting fiat from inflation, at least not at this stage.

Inflation describes a condition where money is printed at increasingly higher volumes. The supply of money inflates causing the individual value of the currency to decline. These inflationary circumstances carry a number of known and documented implications and if it becomes enough of a problem can achieve the opposite of injecting wealth into an economy over the long term. Examples of inflation achieving the opposite of "injecting wealth into an economy" are current era venezuela, hyperinflation of the zimbabwe dollar years ago and germany post world war II.

Occupying foreign nations via military force also typically does not "inject wealth into economies". An example of this is the united states spending more than $6.5 trillion on war in the middle east. Debt and cost liabilities associated with war are typically far higher than any purported value the US economy gained in return. War can often have a negative side effect of destroying markets, infrastructure, economies, jobs and other things which cause economic decline on a global scale. Loose regulations in derivatives markets can have negative side effects. An example of this are leveraged derivatives attached to subprime mortgage assets which played a role in economic issues in 2008.

I for one wouldn't mind if crypto were utilized in a role of helping economies, families and nations stay afloat. It wouldn't matter where it came from if it exerted a positive influence on the world, that would be great.

Are we missing something here? How can bitcoin be protecting the fiat if bitcoin itself is deflator of all time. You said few things in right way, as if the more economy sources we create the more stable fiat becomes and thus inflation is reduced. But to be honest bitcoin is something that is mostly taking value out of the fiat and putting it into the virtual world from where very little money comes back into the fiat stream and thus isn't helping the economy to grow at all.

So bitcoin is like non derivative stuff which is one way ticket where mostly money gets extracted from real world to virtual world. (On large scale)

I don't understand how bitcoin is protecting fiat currency, at all.

Bitcoin is an alternative to fiat currency, and is literally known to be that. The biggest competitor right now to fiat currency is probably BTC itself, and it doesn't make any sense that bitcoin is also protecting, instead of rivaling(which is the case) fiat currencies. Simply absurd. It may be different if bitcoin wasn't decentralized, but it is.

If a country has attractive tax rates and regulations for the crypto industry, then its economy and its total output may be positively affected. But its fiat currency, does not.

Let me concern myself with this aspect of your post as it negates what I think is true. "They (the developers) are creating new wealth" quite alright but not out of nothing as you alleged. Imaginative skill isn't something that is easily picked up on the streets. It takes superior brain work to achieve and can't be quantified in monetary terms. It isn't ubiquitous or bestowed on everyone. I mean, developing Bitcoin wouldn't have been if by stroke of imagination Satoshi or someone else didn't imagine it. Again, to prove that this imagination and creation  isn't utopia, more existing companies and start ups are queuing to adopting the blockchain tech which is crypto birthed for the ease it provides for their businesses.

I think no, both of them got a very different purpose, that is also the reasons why the government want to banned crypto, crypto actually can make the inflation become worse, and crypto was created not to save centralised system, but to create a new world, a world with financial freedom

between bitcoin and fiat currency has different goals. btc with decentralized system, where many governments do not allow this system because the government can not manage financial transactions, and this is the problem of the majority of countries today

How does people putting money into bitcoin, either for trading purposes, or for a long term investment in order to store their wealth, help out fiat currency a single bit? If bitcoin actually goes mainstream, then it would actually mean that a lot of the reasons why people use fiat (mostly because it's their only choice) are now non-existent, and that would mean that bitcoin would pose as a legitimate globally accepted form of money.

The money that is invested into crypto now, doesn't come from nowhere. It comes from other investments, or just fiat currency itself.

Plus, your theory doesn't really make sense, since injecting wealth into the economy to cure inflation simply doesn't work, or perhaps I'm misunderstanding. Either way, I don't really get how something that is genuinely potentially going to be an alternative, if not a popular replacement of fiat is going to help it at all in the long term.

This is an interesting idea.
Actually, in order to keep the economy healthy, without changing the system altogether, the inflation should be a 1-3% above the rise of the real value in the economy. Fiat money is not real value, it is just a tool made to enforce the trading (as opposed to the barter system where a lot of trading would simply be impossible or would take forever, hence slowing down the development). The inflation should always have a higher rate, not because it is some safety factor, but because, unfortunately, the complicated mathematical formulas and synergy effects inside the economic ecosystems don't allow the ideal 1:1 situation.

Now, when we've put that behind us - it is the question what cryptocurrencies are. They should be a) assets like stocks (providing the partial ownership of the project/company), b) assets like money - for providing payments. Currently, they are mostly a). This makes them only a financial derivative that the traders can use to speculate and increase their wealth. With the increase of financial derivatives in the economy, we have the increase of a financial balloon which is dangerous if nothing "real" is backing it up. Now the question is- is it. Has the cryptocurrency created enough real goods and services that are covered by all the tokens and coins that are created? Probably not at this moment.

The next step is to determine whether this increases the inflation. Is the new fiat money created when new tokens/coins are created? At the moment - no. Once when cryptocurrencies will be a legal tender and considered money, just like fiat money - then yes. At the moment the money is just being diverted into the cryptocurrency community from some other areas of the economy. Is this good or not? Probably good for cryptocurrencies but not so good for that other area that are losing their investments, being it traditional stocks or simple trading (public or consumer spending).

So, this is currently not the issue of money creation but money distribution and, hence, cryptocurrencies are not creating inflation, at least not directly (what happens inside the economy when the money moves around is another, and much more complicated, thing).

The only new wealth that is being created is only a "shift" of wealth through the shifting of the money, not the actual new wealth. No new money is being "printed" (we don't print the money anymore in the traditional sense that much, as most of the money is digital, but we can still use that term). This also means that some people are getting poorer at the same time....

I think bitcoin and Fiat are not antagonistic. From bitcoin development, maybe bitcoin has a protective effect on Fiat. We all know that Fiat often inflation, and bitcoin can control this very well. The continuous development of the encrypted community will promote the Fiat system to be healthier.

this one I believed so, because in the near future fiat currency could possibly be disappear, because there are some other country practicing the crypto currency to adopt it and use it as payment now electronically. Imagine nowadays we have now using debit card or credit card they can buy crypto, in some other country.

Fiat won't be going anywhere. Governments will tokenize the fiat system to step up their game and directly to obtain more control over money flows and whatnot. In reality people won't even be noticing that much of a difference because of how they conduct nearly all their transactions digitally through apps already. I haven't touched any physical fiat in ages, and probably won't have to anymore. Every place here accepts wireless payments.

All merchants accepting wireless payments can also integrate a payment processor that will allow people to pay with Bitcoin. The main infrastructure is present already, it just needs merchants to set up applications and ready they are. Mark my words, Lighning Network + NFC is a killer combination capable of taking over rapidly. Merchants will be able to get rid of around 2% in CC fees and reward customers using Lightning with a 2% discount on their purchase. Future looks bright.

I think your links and the entire process you mention is quite complex and cause and effect relationships are highly indirect. To me all of this appears quite forceful. One thing is very clear that crypto transactions are limiting or reducing the number of fiat transactions. But the crypt market has no intention of going against or replacing fiat because government will never let that happen.

People think that inflation is a bad thing because historically that has been the case, a limited level of inflation is good for the economy because it is stimulates the economy and people are forced to not store their money for an indefinite amount of time, but what we see is that governments always abuse the power of printing currency, I really do not think that I need to give too many examples because they are everywhere, in fact the US dollar has been printed massively and the only reason it's not going down dramatically compared to other currencies is because other currencies have been printed in an even more massive way.

First, the whole marketcap of all cryptocurrencies is too insignificant when compared to fiat economy, so it has no effect on it. This alone is enough to counter the argument that cryptocurrencies are somehow helping the fiat economy. Also, you can't just create wealth out of thin air, Bitcoin is valuable because of it's technology, but altcoins are not, they are copycats and vaporware, so this theoretical scheme of boosting fiat economy with crypto's won't work. And overall it sounds like some conspiracy theoiry, while the explanation is simple - people are making money on bullish, volatile market, prices are increasing because people expect them to increase further, but it can reverse, because the market is very speculative and only few coins have strong fundamentals.

I personally don't see the connection between the  two. The fiat currency and cryptocurrency;  bitcoin particularly. Though, in some way, you may feel that the present of the cryptocurrency is prevents inflation just because the adopted the use of cryptocurrency. But you should bear in mind that the two are totally different because speaking of the usage of cryptocurrency, most people hold for a while while people just spends fait currency.

I can not actual see the part where fiat is protected by cryptocurrencies. In fact fiat keeps cryptocurrencies alive and valued until today. Due to investments and other projects Bitcoins and othe coins aree being valued.
In my opinion, fiat is fiat and it can not be harmed because there will never be a time that traditional money will disappear. Cryptocurrencies are like credit cards, it is convenient way of payment and could probably more acknowledged in the future but as I said fiat will never be neglected.

The main reason the mass printing isn't severely effecting economies is that the US dollar is a base currency, just like what Bitcoin is in the crypto market. That significance is giving the US dollar a great deal of value.

It's enough to somewhat undo the damage of mass printing, and that's all because of how governments around the world consider the US dollar to be worthy of being a base currency.

Basically everything in the world is tied to that currency. If the US dollar didn't had that global backing, things would be completely different and the US economy would likely have imploded already. We gave the US dollar that value.

I think your links and the entire process you mention is quite complex and cause and effect relationships are highly indirect. To me all of this appears quite forceful. One thing is very clear that crypto transactions are limiting or reducing the number of fiat transactions. But the crypt market has no intention of going against or replacing fiat because government will never let that happen.

Bitcoin has a good chance to protect its users from fiat currency inflation but one should not hedge against inflation with bitcoin and hope to become rich in the overnight process. It's plausible that Bitcoin price would appreciate over time but it will take many years to happen. Right now buying Bitcoins as a hedge against inflation could be risky but that risk isn't greater than risk of buying any other asset or making investments. :)

Bitcoin is no doubt one of the best thing and that there are so many people whose lives have been significantly changed because of bitcoin and that there are continuously investing their money into these crypto coins and are changing their lives. After this evolution of the crypto currencies, there will be no such need of the paper money and that people will avoid using it in near future.

this is actually a good notion. if you think about it, to buy coins you still need fiats and you actually convert crypto currencies to fiat so there is a direct correlation to the two. but then again, our goal is to have crypto currency used around the globe in exchange for goods and services. cutting off the middleman (fiat) with projects and business that accept crypto currencies will be the downfall of fiat in the future.

I personally don't support those conspiracy theories implying that the whole world is controlled by an evil (capitalist?) government and that whatever is happening it's happening with their consent. What do you mean by "to keep the system afloat"? Which system? And what can you counterpose? Communism? Anarchy?

I tend to think that people either in the banks or in governments are people like me and you. They try to do what they think is better for the country and for them of course. If they think crypto is dangerous, they ban it. If they see that it is not that bad and that it's definitely here to stay, they go along with it. And if crypto can help to patch the economy, so be it, I don't see anything wrong with that.

I don't think he is talking about any kind of conspiracy but talking about how the economic system works, and the "system" he meant was what I said, the economical system. He is basically questioning how the creation of wealth out of nothing (which is cryptocurrencies) can affect their economy particularly the inflation late. To my basic understanding with economics if cryptocurrencies' value is based from fiat and a lot of crypto millionaires liquidate their crypto to fiat then the creation of millionaires will in itself create inflation, it will just basically depreciate the value of fiat. But I might be wrong their are other factors that will be involve like the participation of companies into the market.

This is to be understood that cryptocurrencies can neither replace fiat currency nor they can affect the performance of fiat nor they can protect them. The thing is, these two things are different and they have got different pros and cons. We have been seeing these two working with one another for 9 years and they are doing amazing. They both can do fantastic while separately they are nothing.

I am with you, man. The question seemed to me very odd. HOW can Bitcoin become a protector of traditional money? It is a digital currency - BTC cannot do it.

Bitcoin creation is not the way that it could wipe out fiat currency or just protecting it, instead it could just an option for the community which currency we have to used in a certain transactions. May we think that due to the fast growth of bitcoin may the reason of killing fiat but it won't happen since some of us still in used of fiat currency.

I don't think so. Bitcoin has no effect on fiat money I guess it is the people who will decide what will they mostly use everyday it is like partnership but it doesn't mean that if of those currency will be popular the other currency which is fiat money will just disappear or will not notice by people.

I am not sure but I think that it plays its role. I have read the opinion of several experts and some of them think that bitcoin is really powerful and it protects fiat money. However, it is difficult to say for 100%

I believe that the creation of crypto is not designed to protect traditional but instead to compete in the market like what happened today.

As far as I know bitcoin helps money to grow and not protecting it. Bitcoin is a digital currency while money is an actual uses day by day by the people in the market place. Once bitcoin protect the money then money is more valuable than bitcoin.

yes that crypto is an alternative that is used so that people have many choices in every financial transaction. in essence crypto offers the ease and speed in sending the money we want, whenever and wherever we can do it easily. theoretically that crypto will not damage the fiat system, crypto will only side by side and continue to facilitate the variation. let us use fiat and crypto as well as possible, we can find many advantages possessed by each financial media.

Well, I can't say that I'm 100% certain about what he meant, but from my perspective the OP's question:


implies that the old system is bad. Since we are discussing economy here, I think you are right and he meant economic system most likely, but, as we all know, economic system is in close relation to system of government (or, in other words, political system) and normally when people criticize capitalist economic system they mean that there is a better political system with better economy.

Of course I may be wrong and then we have to wait for Jacques_Bittard's elaboration on what he meant.

If that mean bitcoin is protecting our asset from inflation, maybe its true. Bitcoin is like gold that more resistance on inflation and I think bitcoin can show us how bad monetary system right now.
Bitcoin show us that monetary system right now depending on inflation to boost economic growth but make peoples asset decrease
Thats just my opinion

I don’t really think so, there isnt such connection between them both. Just like someone here. Said, it does  remove some. Fiat transactions and it also acts to combat inflation and does the opposite too.. So if you think that the pumping of the crypto market is another way of keeping the old system afloat, I don’t think you’re right.

I don't know but from what I understand, if we create more money using bitcoin and probably help others to buy things that they wanted, it would actually promote inflation. I'm not sure since I'm no economics expert.

Bitcoin at the moment is never controlled by any of the government, so I doubt that it could affect fiat. However, it feels good seeing local currencies crosses over one another without their government knowing it because it went out via cryptosphere and goes to another country (well, theoretically speaking of course). That probably could affect the forex price.

Excellent idea,  this concept should be explain to paranoid and ignorant nations who banned bitcoin in their country infear of crashing its fiat. Crypto is actually a great addition to every countrie's payment system.

I don’t know for sure, but it might be true. If inflation is taking place, it doesn’t happen in everywhere, just some places. It might be that Bitcoin was made to support fiat currency, but we are not really sure of that, cause based on the introduction it doesn’t state that Bitcoin was meant for such purpose, there are other purposes in which it was made than that. And also, some people seems to be misunderstanding Bitcoin and they believe that the reason it was made is to replace fiat.

I don't think it is protecting the fiat money because many people are scared about bitcoin that they will kill their fiat money.But there is something that crypto currencies are used by most of the people to make money so we need to cashout our money when we got profits so it may keep fiat from getting into inflation and if people want to save them from inflation buy crypto currencies.

i am also wondering about that thing, since we cannot really avoid the issues, and just what if the government will get involve about this? For me it will be too scary to think from it. we all know how the government play their cards, and if possible i guess they will use every means to get their hands into crypto.

To be honest bitcoin is not paid by fiat to guard and secure fiat safetiness. Bitcoin is not slave to fiat in order to protect it. I am not convince about bitcoin protecting fiat. Sorry to say but fiat and bitcoin goes together in our time. You can't eat bitcoin seems to money. You can't drink bitcoin seems to money. But you can be able to change your fiat to bitcoin in order to have virtual currency. Also you can exchange your bitcoin to fiat in order to have foods and drinks. So to protect fiat is not bitcoin business.

Exaggerated statements if the reason a country forbids bitcoin just for fear of inflation. As everyone knows, any country that is reluctant to accept cryptocurrency just because they fear inflation and make their fiat money is worthless. But after searching for more information on the effects of cryptocurrency on the economy of the country I do not see any impact on inflation, and even cryptocurrency can be used as a shield for every country to avoid the threat of inflation, everybody can use cryptocurrency as a place of investment. As is known by investment the threat of inflation will be avoided. This is just a boasting FUD spreader who does not like the development of cryptocurrency.

the most dangerous game of the devil is to make people believe that it doesn`t exist. So also this may be the case with the recent crisis , inflation and the wish of absolute control, the decentralization may just be another step to the full centralization. 

Fiat's money is money. Fiat's money is government-backed, and money can be backed up by the different things you have. Bitcoin is protected by ffiat.

maybe if the government will create crypto that can be fully controlled by the government I think that's what can be said can protect fiat money. but different from bitcoin because of course bitcoin is a decentralized virtual currency so I do not think it can be said that bitcoin can protect fiat money.

do not protect fiat money, on the other hand, bitcoin wants all transactions easier and faster, we do not need to make paper money and coins that make it require big funds, all transactions and money are stored in digital data, so the financial transaction will be cheaper, but our money will remain safe

bitcoin is not protecting FIAT,
BTC is making an easy process with FIAT, it is supporting FIAT.
but will replace it in the near future.

All inflation of price of fiat money are actually because of the high price value of some foreign goods that import to the certain country y=that actually affected of inflation of price. But when you say Bitcoin can protected to money by inflation of price I think that is big NO!.

Bitcoin do not have any concern with fiat, bitcoin is a totally different type of currency which  is only exist online, it do not have any physical existance but it can be use just like fiat for purchasing things and for so many other purposes, currency people are using bitcoin as an optional but in future we cane expect that bitcoin will using by the people as their first choice.

You can "inject" wealth into an economy. You can inject liquidity, for example, but wealth is created by economic activity which is determined by economic demand and you cannot artificially create that. Loose regulations can aide economic activity be decreasing the cost of operating a business, but it doesn't directly create any new wealth.

And no, pumping cryptos is not a financial shenanigan created to keep the old system afloat. That's a crazy conspiracy theory. There's nothing centralized about Bitcoin. It's a mass delusion that the masses perpetrate on themselves. The new "wealth" created comes from somewhere, it didn't come from nowhere. It comes from new people buying cryptos from people who already own them. Eventually the pool of buyers will run low because there will be nobody new to sell to, so no way for them to realize any gains. That's what has been happening to Bitcoin over the last 6 months. There's not enough new buyers coming in for the old holders to realize gains because they got in so late, so they cut their losses. This is self-inflicted damage for believing in a fairy tale, not some evil plot by anyone in particular.

bitcoin does not protect fiat money, on the other hand, bitcoin wants all transactions easier and faster, we do not need to make paper money and coins that make it require big funds, all transactions and money are stored in digital data, so the financial transaction will be cheaper.

The relationship between BTC and fiat currency is antagonistic!
The legal currency is the currency issued by the national credit guarantee. BTC has achieved financial decentralization through the Internet!
The fiat currency will cause inflation due to the increase, and the Bitcoin world cannot create inflation!

I don’t think that bitcoin is ever protecting Fiat currency, on the contrary , all the crypto currencies are threat to Fiat currency. All the Fiat currency exists in physical form and they are more prone to get stolen easily by anyone but it is not with any of the crypto currency, they are in virtual or in digital form and there is least risk of get stolen so they are more liked by people and the days are not away when these virtual currency will replace this Fiat currency.

Cryptocurrency like bitcoin is new economy system. Current economy system is very vulnerable on crisis because government always to improve growth by inflation.

Yes it will because using fiat have a limitition to make. So that by using bitcoin we cant use fiat to buy things beside we can use bitcoin. It save more money and also effort to the maker.

IMO, its showing the flaws of fiat currency. its the end of fiat currency in simple terms or rather, the future of it. as with every technology, the beginning is usually cumbersome and not efficient but over time, a more efficient system would be formed

To say fiat money protection bitcoin does not seem to fit. But each has its own characteristics and strengths to serve life. The fiat money has for years served for direct transactions with human life. Electronic money is applied to the digital age and is carried out on machinery and equipment.

There is nothing that BTC protect fiat, fiat protection BTC is easier to listen. In my opinion, it is more difficult to hold a penny to buy goods or services than fiat. In my opinion, we should not take crypto instead of cash.

In my own opinion, if the government will be manipulating cryptocurrency prices then people will not use crypto anymore and the value of bitcoins will just decrease.

I don't think that bitcoin protecting fiat money, which is both opposites. Right now you can see clearly the government don't like about crypto stuff and Bitcoin, the center of the storm it is the recipient of the most hit.

It is true that the money that comes in crypto has the intention to acquire digital assets. However, we can compare it with the time and skills of the labour. In both the cases, the product is invisible and intangible but still, it has some value of it. On the other hand, the relation of it with the Fiat currency is a little bit complicated and that might be the reason of high volatility and high returns at the same time. I don't think that crypto is protecting the Fiat money but it is definitely giving some sort of relief to the users.

According to me it not only protecting but it helps us to use our money in good way, as if we will use it investing in bitcoin it will increase, so it protects our money from getting waste, with time everything gets better but we should use wise investing strategies like buying at low price and then selling at higher price.

Bitcoin isn't protecting money and it has nothing to di with it.It might have some affects when it regards to some conflicts

but I don't see a major thing about this matter.It do exist for an another sole purpose on which the creator been targeting on.

I think it's not only Bitcoin but all the coins in crypto market. Though it's too complicated to explain it all, but as we can see crypto has been made as option to earn and help minimize the momentum of inflation is ones country.

Using bitcoin is have a big advantage compared to fiat money. As we look at first, they are just the same knowing the fact that it is considered as a currency also but somehow, people using it as an investment to generate more gains rather than of using it to pay bills or in buying some stuff. By taking this advantage, a lot of individuals jumping on it while leaving fiat money behind. 

I think the advantage of using bitcoin as a currency for now is not yet visible. nowadays people tend to use it as an asset, because of its fluctuating nature. plus many people believe that bitcoin will be accepted in all countries later

So they could be reversible, that si why we need to by more cryptos, because it is supported by the government. If they are backing each other then the more reason to engage on crypto, then how come people still sometimes believe it is still a bubble in fact the bigger industries and companies are behind it all.

Keeping inflation in a certain rate is a difficult job with the global crisis and other scenario inflation can't be avoid, crypto was created as the currency it never intended for control inflation or help the country's economic, it could help an individual to preserve wealth but not for country

Yes, it is currently protecting investors' money, not protecting the value of fiat money. Those who are smart will know how to use their money to buy BTC or ETH and altcoins with burning function to fight inflation.
Bitcoin is currently considered a great solution for the economic downturn. So Nakatomo Satoshi's wish was successful and we will see the price of BTC increase in the coming years. when everyone recognizes the value and potential of cryptocurrency and especially BTC.

No i dont think bitcoin is protecting fiat money. I do consider bitcoin as an investments and also as the way to earn money via trading. But i do agree that by investing in bitcoin it could help you to avoid fluctuation cause i believe bitcoin investments is a good choices and we are still in early stages which is full of surprises of development of blockchain technology.

when you use bitcoin you are helping to preserve fiat money ,so bitcoin is actually protecting the fiat .


bitcoin doesnt protect the investors money but there is actually a chance that an investors money could decline becuase bitcoin is not stable  .  only stable coins like usdt/tether can protect the money of the investors from decreasing . there is no make sense at all to protect the value of fiat money because its not volatile just like crypto .

Bitcoin and fiat are interconnected at some point. This is where bitcoin also get used same as fiat though it varies with lot of features that are unique with fiat. For this reason we can't say bitcoin is protecting fiat and vice versa. The volatility with the cryptocurrency market will continue forever unlike the market trend, which is a good under my view.

It will help individual indeed, there's nothing crypto can do with the economic problem as it's been created to be one of the form of currency
and every currency can't avoid any government crisis so not even crypto can help anything aside from individual benefits.

It is not even the duty of bitcoin to protect fiat, we invest to increase our money and this is being done very well by bitcoin. when we have money it will not beneficial for our future but investing our money in bitcoin is really profitable, we can use bitcoin as fiat but we cannot use fiat as bitcoin, that’s why I think bitcoin is gradually taking place as money in our life.

Yes it is only a small part of the equation in terms of use or transaction, but cryptocurrency has a far better advantage in terms of usage and transactions, therefore I feel that in this case there is no connection with any protection between the two, because the different functions make fiat and bitcoin is opposite each other.

Not many people believes that Bitcoin growth of value is a bubble, people you see saying it genuinely are few why other are just simply saying what they have no idea of, they don’t even know what bubble is and they simply just say it to make a trend or belong to a trend.

Any financial economist or an analyst will really attest to it that Bitcoin growth is simply because we have some major companies who have seen the need for it and are using it for their businesses from time to time, though that does mean we don’t have people who are using the market to play games but 75% are genuine increase from large firms.

You are not creating a new wealth out of nothing, people actually spend money on bitcoin and unless you actually cash out you are holding nothing you can use. So if the economy is going to go higher thanks to bitcoin going up that means you need to spend that bitcoin to grow the economy and we do not have that type of major purchases with bitcoin just yet.

You can buy bitcoin which would require you to spend your own hard earn cash but you can also profit from it, however that profit didn't came out of thin air since someone else requires to buy that from you and that means you are just exchanging money from person A to person B.

Crypto is the least of fiats supporters between, crypto came out to stop the banks and governments doing exactly what you think crypto helps meanwhile still helping out the people.

only laws of demand and supply apply to world economy. More demand than supply, prices goes up. More supply than demand, price falls.

it makes sense if it is considered as an alternative maneuver to prevent inflation, especially seeing the potential of technology that will indeed move in that direction. Many short-term fuds have actually been made possible as martyrs of strategies to prepare everything, we can see how they only delay and even ban things that are only temporary cumulative, but there is always another intention behind that.

Bitcoin was created to harness financial transactions and payment systems within companies, among individuals, firms, businesses etc under well decentralized platform. Fiat and Bitcoin share common features when it comes to payment of goods and services.

The popularity of bitcoin signifies that fiat and crypto are still related to each other, many people around the world involve in bitcoin transaction with mostly one common goal and that is to gain fiat money through bitcoin and there are some rumors that crypto currency will dominate in the near future and it is possible because the world are escalating its technology year by year.

bitcoin may subconsciously have a protective function for fiat, but both have complementing characters and are walking hand in hand. bitcoin have a tendency of acceptance than fiat in the nearest future. and may be preferred to fiat by many. the presence of bitcoin alternates fiat and this is a protective function.

well my opini fiat and crypto is not kill each other, its can be side by side, so i think even if crypto will famous in the future or will more demand on it. fiat still be there and not gone.
because many people still using fiat for small transaction, even we know the weakness is inflation, but doesn't mean fiat will not interested anymore than crypto.
crypto will not ruin fiat, it will be another way to avoid inflation.

It is true that one of the main motivations to invest in bitcoin is to gain more fiat but that is because the fiat system is still dominant, if this begins to change then we will being to see people that will care only about their bitcoin holdings, in a way this is already happening since there are many whales which have as their only purpose to get more bitcoin, after all what it is the point of selling your bitcoin now for a price close to 10k if bitcoin will be worth many times that in a few years?

I do not see here any sense: how can Bitcoin protect fiat? Bitcoin is virtual money, and it does not relate to traditional currencies. probably, those, who work with crypto, use fiat not so often and save it?

Actually what you say is correlated, that indeed between bitcoin and fiat need each other and reinforce each other. precisely with well-made rules about bitcoin, it will help many who want to invest in the bitcoin field and will increase transactions between the two and complement each other.

in this case, I don't really know, but I think bitcoin supports the development of fiat. however, bitcoin is always associated with fiat. this helps someone's economy, or company. maybe if we think about it, bitcoin does support the development of fiat, because in the end, bitcoin is always associated with fiat.

still now the connection between the normal currency and the bit kind is not possible but maybe the future will be like that to protect the normal currency with the help of Bitcoin is definitely needed at that situation the statement will really true.

I think unintentional is the right term for it, I mean we still can't prove it with data, its not something we can just calculate and put it on a database and show people like "this is how bitcoin protects fiat money" so these are all assumptions and not a provable point.

Moreover, even if we could have provide proof for it and showed people that bitcoin protected fiat, it still wouldn't be direct and would most probably be more like indirect ways of protecting it without actually working towards it. You can't just blame bitcoin for what people do with it, people use dollars or euros to do bad things as well and dollar is not blamed for that person doing something bad with it, bitcoin should not be blamed for protecting fiat because it is not trying to do that but people may use it for that.

I think It is a good analogy but unfortunately not everyone owns Bitcoins.
It is more likely the choice of ones who are actually well educated , young , believes in taking chances and at the same time it's taking fiat out of the market.
Inflation , to cure it one should remember the hat they need to strike right at the weakest point that is , poor people.
Millions sleep hungry everyday and don't even have enough to go on a regular basis .
It is strengthening the economy , but might not be fighting inflation.

I don't understand.

You see Bitcoin has no intrinsic value that is why Bitcoin is always connected or associated with fiats, without fiats, Bitcoin has no value. This helps someone's "economy" if they've invested in this crypto and I don't think it supports the development of fiat. We sell our BTCs for fiat, and they said that if that continues the value of fiat will be affected but I don't think so.

How can you say that Bitcoin (BTC) protects FIAT currencies? some countries prohibit Bitcoin because they do not want to adopt Bitcoin in their country because they are afraid of having an impact on their country's economy.

Don't think so but inflation on the fiat makes bitcoin to be much better year by year because the price of bitcoin will keep increase at the rate of inflation along with the actual increase in the demand.

people, you should pay attention to the fact that we have a very low percentage of humanity’s education.  What kind of full replacement of fiat currency cryptocurrency can we talk about?  Today cryptocurrency is considered primarily as a means to generate income, and this income is transferred to Fiat.  There are very few cryptocurrency user enthusiasts who only think about projects and high technologies.

i think its not , that really doesnt matter about cryptoccurrency protecting fiat, as i know maybe shift usage of fiat money for right now

Some people or institutions already recognize that bitcoin is a digital asset. It's like gold, this is to protect the value of our assets from inflation and I think bitcoin is a store of value

I don't believe that also, fiat inflation has nothing to do with bitcoin, if fiat doesn't inflate it certainly isn't help from bitcoin itself.
bitcoin is not completely protecting fiat, even the existence of bitcoin makes fiat use decrease right?

Yes, bitcoin is not related to inflation. Bitcoin is running by its own network, and it's not connected to the fiat. But bitcoin can be connected to the fiat when we exchange bitcoin to the fiat. But I don't know if bitcoin is protecting fiat money because that is the economist jobs to find the other bitcoin function ;D

No, because fiat is created by a centralized government, bitcoin is not, it's created to give freedom out from the control of the government so most likely it's the opposite will happen when the adoption of crypto will go mainstream.

The objective is really for them to work hand in hand, and not to compete with one another, the more cryptocurrency a user is able to acquire, and the more fiats that will be stored in the local ban and vice versa. There will always be need for both of them at one point in time.

without fiat, I don’t think any of us can be able to hold the cryptocurrency that we are holding today, and with the cryptocurrency, we will have lots of people that will trade with it in which when they need to spend it, they will still change it to fiat since we have less merchants now that are accepting cryptocurrency.

This is why I feel some government are not even threatened yet by crypto because they now any crypto holder will still eventually change it to fiat, it is only banks that are having issues, knowing that people may not store up their money in the banks again.

There fear they are having for Bitcoin is baseless, Because there is no way that Bitcoin can affect the fiat negatively. Let’s be truthful to ourselves, there is no way Bitcoin can be accumulated without first having some fiat to change to it, and the same way we still have to convert Bitcoin to fiat before we can spend it even if Bitcoin is programmed to be internet base, but it is not everyone that can use internet, we still have so many people that would rather prefer to make physical cash payment than online payment, and this is why Bitcoin was written to be an alternative payment to Fiat not to override Fiat payment function.

It seems to me that Bitcoin very much attracts those who really plan to make good money using Bitcoin volatility.  To any state should have some kind of stability and confidence not only in tomorrow, And if Bitcoin is introduced into the economy of the state and if Bitcoin starts to shoot again in price as it was in 2018, then the country's economy may be in jeopardy.  First of all, it is necessary to increase the stability of Bitcoin.

I think the Bitcoin will not protecting the any other normal currency but the possibility in the future is also available with the help of Bitcoin the normal currency can be economically more powerful that's why I think it important for the future but right now I don't think like that.

Even it have market inflation but it is not the reason that it wipe out fiat and also with crypto. We are holding the market and of course nobody could let it happen because if this so called inflation.

Will agreed with you. I don't know why people think of it besides, having crypto in our side is just an option to take of what we used.

The number of people like that is bound to increase, as the economy deteriorates and governments lose control of the chaotic system they have created people will begin to open their eyes and look for answers and solutions for their problems elsewhere and bitcoin will be there to offer them a solution to their problems as it is already doing in countries in which inflation is out of control thanks to the government and their policies, if we see something similar happening in a global scale I am sure you will see many people that will stop to care about fiat and they will care only about precious metals and cryptocurrencies.

Not sure if it is protecting fiat money or destroying/limiting its usage (in a good way though). But, yeah it can help develop the total economy in a broader way. And care to explain how it is actually helping to stop inflation? People selling their coins when the price is higher mean more money is being flown in the system which in turn will cause expansion of the economy at higher rate, resulting in more inflation (its the same thing as open market operation where the government starts to buy securities).

Definitely, we must understand that the state is afraid of cryptocurrency because of its instability.  In some countries, governments went mad because banks collapsed, and citizens suffered from it.  What will the government do when citizens suffer from cryptocurrency?  It seems to me that this should be solved in a legislative manner, in the first place to make legalization of cryptocurrency.

Bitcoin most likely protects the fiat funds of its owners.  No one knows how much Bitcoin I have.  The government cannot impose its greedy paws on these funds, and I can use Bitcoin at any time for my personal purposes, without paying taxes or income.

I think bitcoin has a long way to go before it can be that successful and it can affect the world like that, unfortunately for not there is not that many people involved, bitcoin is a global currency and there are 8 billion people in the world right now give or take which means there is going to be a lot of time and a lot of work to reach every single one of them.

However, bitcoin is on the way and we are getting stronger and stronger everyday, not just in price because we are just above 10 thousand recently but we have seen over 20 thousand before so its not even that important but there are more and more companies built around bitcoin and crypto that is making ton of profits and getting bigger which is the important part. Eventually bitcoin may protect fiat but not for a long while.

You can't inject wealth into the economy.
You can inject currency into the economy.
That create inflation.
The idea that injecting currency into the economy create wealth is wrong.
On the long run, it only unsettles the currency.


Inflation can be cured by stopping the creation of currency out of thin air, by keystrokes.
This is Bitcoin's superiority vs. fiat money: its quantity cannot get increased arbitrarily

The value of fiat money depends on the natural rate, which we will not cook, because everyone knows everything.  But if we say that the increase in paper money provokes inflation, then this process has real leverage to avoid bankruptcy by the country.  But what will happen if the state completely switches from Fiat to Bitcoin, which can fall in price by 90% within a year?  Of course, Bitcoin has a limited amount, but its price is unstable.

Agree it is really good saving which can be saved as long as we want, but those who never share about their investment will not have to face any problem, when you have so much amount of money robbers will keep eyes on you at the same time you will have to pay huge taxes for it, but crypto currency is all time safe from these kind of acts, as it is the most anonymous investment.

Because fiat still handle all payment. that all people still calculate them cryptocurrecny into fiat.
For the next future, maybe when fiat replace by gold or bitcoin, it will be hold them assets use system gold investment. and then alot of merchants can be accept only cyrptocurrency like fiat value.

The opposite is true: the increase in paper money provokes the bankruptcy of a country, as it destroys confidence in its national currency.

Huge inflation leads to hyperinflation - and we can see that in Zimbabwe or Venezuela. Heard that there had been even a bank robbery in Venezuela, where thieves left worthless money in the bank vaults but took all the computers because they have a real physical value.

It must be the government who actually protects the fiat currency. Bitcoin is also a currency but a digital one. It is also a medium of exchange. Printing too much money can lead to hyperinflation. Small-cap stocks can be prone to price manipulation based on trading volume. But, at sufficient volumes, cryptocurrencies with a fixed supply are practically immune to these tactics.

I remember that news as well and it is a perfect example of what happens when the citizens of a country let a government to do whatever they want without any kind of control, there are some economist that argue that since governments own the printing machine they cannot go broke and they make this argument so they can print as much money as they like but what they do not understand is that eventually people will stop using that fiat as it lacks one of the most basic characteristics of money, which is to be a store of value, and eventually that fiat will get replaced by fiat from other countries, crypto or even precious metals.

As well, what is worth noting - the fiat currencies lost this basic feature in order to fund their military (starting point - the Great War).

Yeah you are right it is not money protector but it is being use to increase our money, when you keep your money for long them it does not give you profit as you want from it but when you invest it in bitcoin it increases and gives your profit even more than double, so I can say bitcoin is money savvier for in forum of investment.

So in other words bitcoin is actually indeed able to protect fiat money and if it is done then there will be more value to be obtained, therefore investing in bitcoin is very profitable. But on the other hand there is still a risk that allows your money to be lost even though it is only stored in bitcoin, many hacking cases occur and basically no one protects your money in bitcoin, the only thing that can protect your money is only good security which you can apply at any time.

I dunno. This perfectly sounds like the conspiracy theories nerds are concocting every time they do not have anything to do with their busy lives. Well, as for me, the banks and the central governments are struggling in the battle that is waged by the world of cryptocurrency. They cannot be so stupid enough to make such problems by themselves. Crypto is a serious threat to the value of fiat.

No, I do not think that the cryptocurrency was created by the states to protect their paper money from inflation. States can not control the location of capital, which is invested in cryptocurrency, in their country. Because of this, the Chinese government stated that the cryptocurrency harms the country's economy because it contributes to the uncontrolled withdrawal of funds from the state.

Usually I don't care about hearsays, but in this case I'm almost ready to believe it, as it would make sense (if the computers were easy to get moved and not of the cheap kind  :) )

Most countries wanted to be out of the gold standard anyway and they just used the war as the perfect excuse, they tried to cheat gold and then they suffered the consequences of having their economies sustain even more damage after the war since they did not had sound money, what it worries me is that for the first time in history all currencies are fiat, and the damage the economy can suffer if they all crash is immense so I keep most of my money in bitcoin and gold.

These are facts but people are not actually interested in facts, they like consiracy theories much more. Amd one of them is that cryptocurrency are made to protect fiat money from inflation, which to me perfectly makes no sense at all but many are obviously willing to believe that.