Fiat in trouble

[Majestic-milf]

 Inflation is a term virtually everyone is associated with and in one case or the other, is battling with in their economy as the cost of living a comfortable life is now looking like an illusion. According to statistics, a total of 95 countries are battling this scourge and with government policies not helping and the fiat failing woefully, it would be common sense to turn to Bitcoin.

 
 A fiat currency such as the dollar, euro, pound or even the yen is a trusted medium of exchange or legal tender issued by a government or recognized authority.
 As it is, the value of the fiat is collapsing and as it's not linked to a physical reserve and has no intrinsic value unlike gold and silver, it has the tendency to disappoint.

At present, Europe is the most hit by this storm and although, there are countries who are Bitcoin tolerant, its not enough. Fiat money looks to be the primary cause of inflation and countries who introduce CBDCs in my opinion are only worsening the situation. It's in times like this Bitcoin is needed as it has proven severally to be a hedge against inflation.
"Digital Assets will replace govt issued currencies within a decade or at least present a solid alternative to them"- Business Insider, Aug 2021.

 https://www.statista.com/statistics/225698/monthly-inflation-rate-in-eu-countries/
https://www.investopedia.com/ask/answers/041515/fiat-money-more-prone-inflation-commodity-money.asp

[jackg]

Inflation compared with bitcoin over the last year would be nearing 100%. It's easy enough to say it'll act as a hedge in these situations but what if it doesn't? Most of the inflation now is because people are forced to pay those higher prices and fairly willing to do it to not change their lifestyle (you did include the Netherlands in your list). Inflation can make people panic spend in cases where they expect it to go higher too, which would drive down the price of bitcoin quite dramatically if it were implemented as a full fiat currency and the only method of exchange (I don't think governments or people are going to leave fiat alone for a long time because they have some levels of protection and value as determined by those trading in it).

Governments are "helping" by throwing more money at the problem imo instead of doing as some are going to do with electricity and offering loans to suppliers if their costs go higher (as a pay as you normally do and we'll cover the rest - which is what should really be done in these circumstances and wouldn't be too expensive to do).

[Die_empty]

Inflation is a term virtually everyone is associated with and in one case or the other, is battling with in their economy as the cost of living a comfortable life is now looking like an illusion. According to statistics, a total of 95 countries are battling this scourge and with government policies not helping and the fiat failing woefully, it would be common sense to turn to Bitcoin.

Bitcoin might be helpful during inflation or currency depreciation when it is seen as a form of investment. Hodling bitcoin until the bullish market emerges wouldn't be a bad investment in this global world economic crisis. But currently most people are not considering investments or alternative currencies, their main focus is survival. People are faced with high prices or goods and services which is reducing their purchasing power. Only few people that have extra cash can afford to invest in bitcoin 

Inflation compared with bitcoin over the last year would be nearing 100%. It's easy enough to say it'll act as a hedge in these situations but what if it doesn't? 

Bitcoin can be considered a viable hedge against inflation in most developing countries. Most of these nations suffer from hyperinflation that makes their currency worthless. Bitcoin might have lost some good grounds but there is still hope that the price would soon rise. But most of these nations never recover from the inflation they suffer.   

[zasad@]

CBDC is a new trend that needs to be integrated to keep up with other countries. Skillfully managed CBDC will allow you to more effectively manage, track financial flows and fight inflation.
Inflation is a consequence of the fact that most countries lived in abundance, because they sold their debts to other countries in the form of bonds and so on. And now there are many times more debts than all the values on the planet.

[hugeblack]

Money supply or the increase in the monetary supply is not the only one responsible for inflation, but there are many factors that can be controlled or uncontrollable and may lead to inflation.
Thus, high or uncontrolled inflation is what makes the economy in a state of chaos, and it is a symptom of several economic diseases, but inflation in itself is not a problem.

Also, comparing the inflation rate between countries gives a wrong measure of the difference in the method of calculation and the impact on citizens and the extent to which the state protects its residents.

[Darker45]

Bitcoin's role as a hedge against inflation has actually been in question. This is primarily because for the past recent months or even years, its correlation with the traditional market like the S&P500 and Nasdaq has not only risen but even hit an all-time high. Below are a couple of charts I recycled from one of my older posts. Apparently, while there is fluctuation in terms of Bitcoin's correlation with these markets, it is high during the time when the inflation rate has gone through the roof.

Bitcoin-S&P 500 Correlation

https://www.newsbtc.com/news/bitcoin/bitcoin-correlation-stock-market-new-all-time-high/

Bitcoin-Nasdaq Correlation

https://www.bloomberg.com/news/articles/2022-04-11/bitcoin-s-correlation-with-big-tech-increases-to-record-chart

Anyway, I don't agree with Business Insider that "digital assets will replace govt issued currencies." That's next to impossible.

[pinball_wizard]

Agree 100%

This is one of the most severe probelm in bitcoin history, his correlation to fiat money.

[Ucy]

..A fiat currency such as the dollar, euro, pound or even the yen is a trusted medium of exchange or legal tender issued by a government or recognized authority.
 As it is, the value of the fiat is collapsing and as it's not linked to a physical reserve and has no intrinsic value unlike gold and silver, it has the tendency to disappoint.
...

Intresting irony.
The simple truth is that they should not be trusted because they will always fail. You only trust something that cannot fail or wrong you. Fiat currencies would have to be perfect in order not to fail you but they are not perfect hence must not be trusted

 Their collapse is a proof why they should not be trusted.

[Frankolala]

Bitcoin has so many advantage over fiat currency,it might also be a good hedge against inflation as fiat value is depreciating as time goes. I don't think it will be possible to scrap the fiat currency totally,since it has been in existence for a long time. Moreover not everyone has the knowledge of bitcoin and its benefits. In the next 20yrs bitcoin will overcome the fiat currency

Inflation is natural but it becomes a problem when it continues rising without stopping just like this one we are experiencing presently. Fiat currency is facing so many challenges because inflation is hitting it hard.
 

[electronicash]

governments will soon be revising policies to maneuver this crisis and since this is a like a snowball rolling from the top, its gonna be harder to stop it which they will need to print more fiat bills if they chose not to invade another country's resources.

we may not hear it from the news but people from European countries are already protesting. Moldova alone recently have a big one.
crimes will rises as well. Pelosi's husband just hours ago was hammered.

[gantez]

it would be common sense to turn to Bitcoin.

The time we are now globally is different from the past and very difficult with inflation but not many countries will turn to Bitcoin for solution. The example of country turn to bitcoin is El Salvador but no much have been done in the economy since adopting bitcoin, maybe it is gradually but bitcoin is operating different from fiat. I think the inflation can be a result of the challenge that the world is coming down with like increase expenses in the effect of global warming, talking care of refugee camp, war , disaster management.

[Fortify]

Inflation is a term virtually everyone is associated with and in one case or the other, is battling with in their economy as the cost of living a comfortable life is now looking like an illusion. According to statistics, a total of 95 countries are battling this scourge and with government policies not helping and the fiat failing woefully, it would be common sense to turn to Bitcoin.

 A fiat currency such as the dollar, euro, pound or even the yen is a trusted medium of exchange or legal tender issued by a government or recognized authority.
 As it is, the value of the fiat is collapsing and as it's not linked to a physical reserve and has no intrinsic value unlike gold and silver, it has the tendency to disappoint.

At present, Europe is the most hit by this storm and although, there are countries who are Bitcoin tolerant, its not enough. Fiat money looks to be the primary cause of inflation and countries who introduce CBDCs in my opinion are only worsening the situation. It's in times like this Bitcoin is needed as it has proven severally to be a hedge against inflation.
"Digital Assets will replace govt issued currencies within a decade or at least present a solid alternative to them"- Business Insider, Aug 2021.

Unlike what many people in the crypto world like to think, it is also tied in intrinsically with the fate of fiat currencies as people are moving money around and still classify it as a very high risk asset to hold. People are trading goods in fiat currency, which means everything you need for day to day living is regulated by this - no matter if you hold money in crypto which at some point you need to gauge against a fiat currency and convert it back to a comparative value that the majority of people are using in the world today. Inflation can infect cryptocurrency in just the same way, where traded prices will end up pushed out with many more decimal points instead.

[BIT-BENDER]

Fiat is in such a big trouble I believe in many years ti come the power value of fiat would drop greatly, every country is having their own fair share of the inflation and economic issues.
I believe in a world where Fiat exist and also crypto-currency exist as well and it's the option of people to either choose with they want, but as the situation of Fiat continues to deteriorate the safer option people would have would be crypto-currency.

Their is no sound statistics to this but the more inflation last the more the crypto-currency adoption continues to grow.

[Cryptomultiplier]

This is simply true as regards the massive adoption of bitcoin. Inflation is only creating avenues for cryptocurrency to be explored because why pay higher price when I can get it at a cheap rate on any exchange network. Future cities are being developed in recent times to encourage the use of only cryptocurrency. The fait is definitely in trouble if this standing inflation does not pass.

[Solosanz]

CBDC is a new trend that needs to be integrated to keep up with other countries. Skillfully managed CBDC will allow you to more effectively manage, track financial flows and fight inflation.
Inflation is a consequence of the fact that most countries lived in abundance, because they sold their debts to other countries in the form of bonds and so on. And now there are many times more debts than all the values on the planet.

CBDC is just a digital form of fiat, there's nothing different either CBDC and fiat, both of them will suffer inflation since it's centralized. In fiat they're print money that would lead inflation, while CBDC they're create the token out of thin air that would lead inflation too. If they want to stop inflation, they need to stop create CBDC and print money, if they have debt or want to pay their expenditure, they need to be effective to use their money.

[Majestic-milf]

Anyway, I don't agree with Business Insider that "digital assets will replace govt issued currencies." That's next to impossible.

Well, there's a scenario in which digital currency could replace fiat. With more more and more people getting to know and use Bitcoin, its value increases and in turn it affects the growth of the economy and as such, the society can embrace crypto to the point that the country's fiat would slowly fizzle out or  like the US were there are over 46m users and roughly 22% of the adult population own a share of Bitcoin, there can still be a number of digital assets and the Fiat currency but the govt would recognize both of them.
 
 It may seem like a fairy tale to think Bitcoin could replace fiat due to it's high volatility rate, but I believe it can be used as a solid alternative to the fiat.
 

[Darker45]

Anyway, I don't agree with Business Insider that "digital assets will replace govt issued currencies." That's next to impossible.

Well, there's a scenario in which digital currency could replace fiat. With more more and more people getting to know and use Bitcoin, its value increases and in turn it affects the growth of the economy and as such, the society can embrace crypto to the point that the country's fiat would slowly fizzle out or  like the US were there are over 46m users and roughly 22% of the adult population own a share of Bitcoin, there can still be a number of digital assets and the Fiat currency but the govt would recognize both of them.
 
 It may seem like a fairy tale to think Bitcoin could replace fiat due to it's high volatility rate, but I believe it can be used as a solid alternative to the fiat.

Replace is one thing; alternative is another. I can hardly imagine that there will ever come a time when a country's currency is issued by somebody else private, completely replacing the one issued by the central bank. That's too much power and control being let go by the government. Of course, there is El Salvador and the Central African Republic that are using Bitcoin as a legal tender, but even in their case Bitcoin isn't replacing fiat.

[Inwestour]

Bitcoin has so many advantage over fiat currency,it might also be a good hedge against inflation as fiat value is depreciating as time goes. I don't think it will be possible to scrap the fiat currency totally,since it has been in existence for a long time. Moreover not everyone has the knowledge of bitcoin and its benefits. In the next 20yrs bitcoin will overcome the fiat currency

Inflation is natural but it becomes a problem when it continues rising without stopping just like this one we are experiencing presently. Fiat currency is facing so many challenges because inflation is hitting it hard.
 

I sometimes see that they write that bitcoin is not a very good instrument against inflation, due to the fact that it has fallen very much in price. But it seems obvious to me that bitcoin is an excellent tool that can protect against inflation, look 10 years ago how many dollars one coffee cost and what the price was in bitcoins, and look at this difference now. The answer seems obvious to me, fiat currencies are significantly inferior to bitcoin.

[Lucius]

FIAT is always in trouble, now the only additional problem is inflation, which surprised many with its numbers, and now everything looks much worse than 2-3 years ago. The problem that the OP and many others have is that they think that countries should be even more tolerant towards Bitcoin, especially if they are referring to the EU, which so far has not caused problems for anyone who wanted to use Bitcoin in one way or another.

Bitcoin is only an alternative currency that cannot be a solution to the problem, even if the entire EU declares it legal tender - the problem still remains. The system is rotten, no doubt about it, but to change it, it would have to completely crash and reset. But if it were to happen, many would wish it had never happened considering the consequences it would cause.

...like the US were there are over 46m users and roughly 22% of the adult population own a share of Bitcoin, there can still be a number of digital assets and the Fiat currency but the govt would recognize both of them.

Do you think these data are correct? Who published them - the IRS, the state statistics office or perhaps some CEX? To me, that seems overblown, just like the numbers coming from Nigeria or India. When you add up all those millions around the world, it turns out that 20% or more of the world's population owns Bitcoin or cryptocurrencies, and that brings us to 1.6 billion people, which cannot possibly be correct.

[348Judah]

Inflation is a term virtually everyone is associated with and in one case or the other, is battling with in their economy as the cost of living a comfortable life is now looking like an illusion

I want tl believe that by now things have gone so bad beyond the reach if fiat to ameliorate them back to normalcy, fiat itself cannot fix things back as were before and that's why many have been looking for various alternatives with bitcoin in cryptocurrency, we must adopt am economy that is free from inflation, invest and retain the value of our asset than with fiat which diminishes in value with time and not until we begin to source for a means of survival outside fiat then there may not be any visible changes to come.