Could the rise and popularity of cryptocurrencies be a vivid example?

[xSkylarx]

It can only be solved if Bitcoin is widely used because right now we know tons of countries are still banning it and others are in gray areas. When the price increases that is where it beats inflation but if not it is still the same. Because of how rare bitcoin will be in the future the price will increase but again this will take more time and we still don't know if there are other coins or if all the governments have banned Bitcoin to give way to their projects.

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[CryptoHeadlineNews]

Many currencies lose value as a result of inflation. Many people believe that cryptocurrency can protect them from inflation. Bitcoin puts a hard limit on the total number of coins that can ever be created. For example, as the growth of the money supply outpaces the growth of the bitcoin supply, the price of bitcoin will rise.

Investing in cryptocurrency is not what saves you from inflation, but investing in Bitcoin to be precise is what can, since we have got a variety of altcoins/shitcoins whose value not only falls in time, but also lose its worth unlike Bitcoin that is bound to appreciate with respect to demand and supply at that very period of time, and also the most use & top traded cryptocurrency with large market volume, which makes it significantly different from the rest of others.

Many other cryptocurrencies employ the same approach to limit supply and act as a protection against inflation.

That other cryptocurrency has a limited supply just like Bitcoin, it still doesn't guarantee how valuable a coin will be in the future, and as such never a criteria to look after for.

[Blitzboy]

Im interested in your basic Bitcoin inflation hedging thesis. Bitcoin's regulated supply sets it apart from fiat currencies, which may be issued indefinitely and cause inflation.

Its value depends on more than Bitcoin's finite supply. Demand, like weather, is huge and unpredictable. By rising in value, it may defend against inflation, but what about when it plummets? Never disregard this asset's significant volatility.

To diversify your investments, incorporate Bitcoin or other cryptocurrencies, but relying only on them could be like putting all your eggs in an unstable basket. Let's diversify our finances and be open to new ideas, okay?

[tjtonmoy]

We are not there yet, Bitcoin is not perfect. Yes, Bitcoin having a limited supply makes it an anti-inflation currency. But if you try to store your everything in it, you will face volatility. In some cases, you will not be able to use it completely. Why? because of the huge price dump. It could make it impossible to use your BTC when you need it. If you do, you will be at a huge loss. This scenario is not uncommon. History repeats itself.

We have taken BTC to a point where we don't see it as a P2P online transaction method. We have made it an investment asset. If you have the mindset of 1 BTC = 1 BTC and you are not bothered to use your BTC when its price will drop, then you can choose it. It will be the best option in any case. But if not, then it's still not the perfect solution. We will have to wait a long time before we can see stability in the market.

[bitcrystal]

Not all cryptocurrency can protect against inflation. One good thing about bitcoin is that it dosent follow the fiat system pattern which is one of the reason it can serve protective purpose when inflation occurs. Bitcoin decentralization makes it different and stand out as the king among other cryptocurrency especially the fact that bitcoin supply is capped with increasing demand unlike other coins that can mint at any times.

[livingfree]

When you say crypto that can protect our funds from the inflation, I guess you mean Bitcoin and since you've also posted on this section that's probably what it is.

But if you're saying that it's the entire crypto market that are what people thinking of protecting their money from inflation. You can't generalize that because with thousands of them in existence.

We all know that most of them are just shitcoins and not gonna add any value to your funds and will even decrease it because many of these are low in liquidity.

[davis196]

Many currencies lose value as a result of inflation. Many people believe that cryptocurrency can protect them from inflation. Bitcoin puts a hard limit on the total number of coins that can ever be created. For example, as the growth of the money supply outpaces the growth of the bitcoin supply, the price of bitcoin will rise. Many other cryptocurrencies employ the same approach to limit supply and act as a protection against inflation. In terms of amount, the ASCII computer file specifies only 21 million bitcoins released. As a result of increased demand, the value will rise, possibly keeping up with the market and preventing inflation in the long run.
 

OP, your thread doesn't match the question you are asking in your thread title.
A vivid example for what? Cryptocurrencies could be used as a protection against inflation? No. I don't believe that most cryptocurrencies can offer a solid protection against inflation. Bitcoin could serve as a hedge against inflation in the long term, but it definitely doesn't provide any protection against inflation in the short term. The limited 21 million supply isn't the only factor, which helps BTC to preserve high value.
Many shitcoins can also have a limited total supply. What makes Bitcoin stand out is the secure blockchain and the amount of trust among the people. There is an army of Bitcoin HODLers, who keep their BTC expecting the price to go up. They are a major factor in preserving the current price of Bitcoin.

[Dr.Bitcoin_Strange]

Obviously, if there is no limit as to the availability of a particular thing, it could become less valuable. That's exactly what affects some cryptocurrency too; if the supply is limitless and the investors are quite small, it'll therefore reduce the worth of the coin. As for how fiat money is also losing value, it's as a result of the fiat money being excessively printed. With that, the purchasing power of those currencies depreciates, which can combat inflation. Like you said, Bitcoin has a limited supply that is caped at 21 million, and every day the demand for Bitcoin is continually arising with just a limited supply, which means that the value of Bitcoin will definitely appreciate rather than depreciate and be affected by inflation.

[uneng]

That is what I expect from Bitcoin on long term. While we see our local fiat currencies losing purchasing power within time, Bitcoin keeps rising and gaining more value, as more people become adopters and supply becomes scarcer at the market. Once more people see Bitcoin working against inflation, they will also want to have access to it, maximizing BTC's potential even more. However, this process takes a long length to happen for real. Global economy still has to crash a little more until people get aware about the necessity of acquiring an asset like Bitcoin as soon as possible.

[doomloop]

For example, as the growth of the money supply outpaces the growth of the bitcoin supply, the price of bitcoin will rise.

It ain't that simple. We also need to see higher bitcoin demand for bitcoin's price to rise — because the scarcity itself is only half of the problem; the other half being demand. We can create as much scarce(or even far more scarcer) cryptocurrencies as we want but it would be pointless without demand.

That's the exact point. Bitcoin is so popular and in demand, because it was the very first cryptocurrency in the world and other cryptocurrencies were created following its success and rising popularity back in the day, and the whole thing is that it has had a very high demand for a very long time and that is the reason why it has such a high value, otherwise, any coin with a limited supply could become another Bitcoin but the demand can't match Bitcoin's demand.

Almost all the cryptocurrencies that were ever created basically aimed to become as good and famous as Bitcoin but they will always be alternative coins because Bitcoin is one and it's unique and that uniqueness is not only because it is completely decentralized but also because all other cryptocurrencies other than it are altcoins since Bitcoin was created before them all.

[BVeyron]

Many currencies lose value as a result of inflation. Many people believe that cryptocurrency can protect them from inflation. Bitcoin puts a hard limit on the total number of coins that can ever be created. For example, as the growth of the money supply outpaces the growth of the bitcoin supply, the price of bitcoin will rise. Many other cryptocurrencies employ the same approach to limit supply and act as a protection against inflation. In terms of amount, the ASCII computer file specifies only 21 million bitcoins released. As a result of increased demand, the value will rise, possibly keeping up with the market and preventing inflation in the long run.
 

The fact that the overall amount of money is limited makes btc resistant to inflation. However, only ne type of inflation can be avoided with this feature. Btc is prone to some other types of inflation, first of all, there is a risk that some whales will turn into "global banks", which would regulate the value of btc. The amount of crypto collected by whales can be so large that a small group of whales would have much more money than the rest of the world... Thats exactly what we can see in dollar financial system now: global banks and richest tycoons are able to control inflation rate just by managing their assets, in this case the overall money amount remains the same, while fiat money values can change dramatically.

[Renampun]

__SNIP__

OP I do agree that your account is brand new, still I think you have a clear idea about the basics of Bitcoin, So moving forwards the people who believe in Bitcoin that it will protect their actual value are not just because of the Significant role of the Supply as to fight against the inflation there is need of some other factors Bitcoin acquiring as well such as Future potential, growing market, Demand and Supply & Decentralization on some level the global first asset recognization (In context of the most trusted and No 1 Cryptocurrency).

Bitcoin Does provide protection against Inflation, becasue of the gains on the investment and price appreciation by the market movement. Bitcoin supports both narratives as Inflationary properties and IDflationary it really depends how you check it out.

When the Covid 19 pandemic occurred several years ago, the price of Bitcoin really fell, but now the price has gone up again (imagine if you bought some Bitcoin at that time then now the value of your money has increased sharply), The limited number of bitcoins really makes it even more attractive for investors to protect their wealth from fiat currency inflation and not only that, the decentralized nature of bitcoin also makes investors confident that buying bitcoin will never make them lose money. by increasing demand for bitcoin (while the amount remains constant) then we will definitely see bitcoin make another new ATH.

[Blitzboy]

Many currencies lose value as a result of inflation. Many people believe that cryptocurrency can protect them from inflation. Bitcoin puts a hard limit on the total number of coins that can ever be created. For example, as the growth of the money supply outpaces the growth of the bitcoin supply, the price of bitcoin will rise. Many other cryptocurrencies employ the same approach to limit supply and act as a protection against inflation. In terms of amount, the ASCII computer file specifies only 21 million bitcoins released. As a result of increased demand, the value will rise, possibly keeping up with the market and preventing inflation in the long run.
 

The fact that the overall amount of money is limited makes btc resistant to inflation. However, only ne type of inflation can be avoided with this feature. Btc is prone to some other types of inflation, first of all, there is a risk that some whales will turn into "global banks", which would regulate the value of btc. The amount of crypto collected by whales can be so large that a small group of whales would have much more money than the rest of the world... Thats exactly what we can see in dollar financial system now: global banks and richest tycoons are able to control inflation rate just by managing their assets, in this case the overall money amount remains the same, while fiat money values can change dramatically.

In fact, Bitcoin is somewhat resistant to inflation because there of the limited supply. Your points are well taken; we may be able to avoid one kind of inflation, but there are still others that are waiting to happen. People who hold a lot of Bitcoin ("whales", of course) run the risk of  manipulating Bitcoin, similar to what global banks have been doing with fiat currencies.

But the decentralized nature of Bitcoin provides a layer of protection against this. Control isnt centralised like in standard banking systems. Even though whales have a lot of money, the real power is still with the community, with users like you and me. There is a real risk that a few people will gain too much power and control Bitcoin, but its important to stay true to the decentralisation principles that Bitcoin was created on.