How can third-world countries counter inflation using bitcoin?

[Tellek Garing]

Bitcoin alongside other cryptocurrencies has aided the economic development of many countries. Bitcoin is typically used for online transaction and businesses in third world countries despite widespread poverty, this is because people can easily connect to the internet and participate in the crypto economy in many developing countries such as India and continent like Africa have high cryptocurrency adaptation rate. After purchasing bitcoin through platforms accessible to their countries, bitcoin holders in third world countries can trade Bitcoin for profits or hold onto their tokens as an investment. Inflation which is characterised by devaluation of currency alongside increasing price of goods and services, this has made people to turn to cryptocurrency like bitcoin an asset that maintain its value over time to hedge  against inflation.

[EL MOHA]

Bitcoin has played a significant role in how transactions in developing countries are conducted at international level and also aided in them having something to invest or save their money into without been worried in any way of devaluation. Before the use of bitcoin for this many of the citizens of developing countries usually save their money in top fiat currencies like dollar just to beat inflation heavily affecting their own local currencies but the amount of this international currency like dollar’s available to them is not enough and also getting then through banks is a long procedure, right now bitcoin had breech that gap. Not only about saving into bitcoin but many from this developing countries can now purchase goods or services without converting their currency to any international currencies but rather with bitcoin from platforms that accept bitcoin as payment.

or hold onto their tokens as an investment.

It should be noted that tokens shouldn’t be used as investment because most of them do not have a long retention period and as such they should be as just things that can be traded. An investment is something that can be hold for a long time and only bitcoin has that potential

[EarnOnVictor]

Bitcoin is an asset, and like other assets could be used as an investment, this is the best way I like people to view Bitcoin, not as a hedge/counter against inflation, or else it might break the heart of many during the bearish season.

Economists have now started adding the clause that asset has their gaining moments and losing moments as well, and at times, when the investor needs the money might be the bearish times, so the gain is not guaranteed. Imagine those who purchased Bitcoin with this inflation-countering mentality in 2021 and needed the money for a crucial project this year. Their lot is obvious even without saying further as they might have lost half of their money by now.

The inflation peg mentality might work in the long term (even though we're still all hoping, there is no guarantee), we should learn how to manage our risks in Bitcoin, people also lose via it.

[Poker Player]

After purchasing bitcoin through platforms accessible to their countries, bitcoin holders in third world countries can trade Bitcoin for profits or hold onto their tokens as an investment.

Are you saying that because in those countries people usually have a lot of money to invest?

Bitcoin is an asset, and like other assets could be used as an investment, this is the best way I like people to view Bitcoin, not as a hedge/counter against inflation, or else it might break the heart of many during the bearish season.

I don't know what you mean. A hedge against inflation is also an asset and an investment, like gold for example. They are not opposites.

If we talk about third world countries in general, the only way I see that they can take advantage of Bitcoin to try to beat inflation would be to legalize it as a currency, as they have done in El Salvador, to try to attract investment and have an alternative to remittances and the dollar.

On the other hand, if we are talking about people living in those countries, it will depend on the individual situation. Someone who has such a low income that he spends it all and still lacks it, the Bitcoin will not help him against inflation because as soon as he gets paid he will spend it, besides paying transactions fees and surely a fiat conversion fee to be able to spend. People in those countries that have a higher income and can save can use the Bitcoin against inflation, but as in the rest of the world.

[tabas]

Bitcoin is typically used for online transaction and businesses in third world countries despite widespread poverty, this is because people can easily connect to the internet and participate in the crypto economy in many developing countries such as India and continent like Africa have high cryptocurrency adaptation rate.

Having that high adoption rate, this also makes it more of Bitcoin as an asset or a store of value that we're having. That's the main reason why many of us are holding it and that's for investing purposes although it doesn't ignore the use case of it for being payment and that's why Bitcoin is amazing. Whether you use it as a store of value or for payment, that's how flexible Bitcoin is.

Inflation which is characterised by devaluation of currency alongside increasing price of goods and services, this has made people to turn to cryptocurrency like bitcoin an asset that maintain its value over time to hedge  against inflation.

It's because Bitcoin has a limited supply and described as a deflationary asset. In general, whether you own bitcoin or not, we have to beat inflation in any ways that we can. Extend your investments in other assets and have more source of income.

[348Judah]

Bitcoin alongside other cryptocurrencies has aided the economic development of many countries.

I disagree with this, how csn you include other cryptocurrencies together with bitcoin when what the people really want is bitcoin, how can you as well compare bitcoin with other cryptocurrencies when bitcoin is the only recognized digital currency in cryptocurrency, lastly why should you equate bitcoin with other cryptocurrencies that constitute shitcoins that have scammed other people before, we only recognized one digital currency, which is bitcoin.

Bitcoin is typically used for online transaction and businesses in third world countries despite widespread poverty, this is because people can easily connect to the internet and participate in the crypto economy in many developing countries such as India and continent like Africa have high cryptocurrency adaptation rate.

There are many opportunities that comes with bitcoin adoption, we can't mention all but those who are after learning and adopting bitcoin knows the relevance it gives through it adoption, since the target with bitcoin is to give the people privacy and financial control in the way they handles their personal lives and the economy, which the youth are tge major targets.

[bayu7adi]

Is Bitcoin currently being used more for transactions than speculation? I don't think so. To date, there are still many speculators who are primarily interested in capitalizing on Bitcoin's inherent volatility. This fluctuation in price is eagerly anticipated to yield profits for those who invest in Bitcoin.

Nevertheless, I still come across its primary function as a means of payment. Not in abundance, but it serves as a simpler alternative to traditional bank payments.

[jrrsparkles]

Bitcoin alongside other cryptocurrencies has aided the economic development of many countries. Bitcoin is typically used for online transaction and businesses in third world countries despite widespread poverty, this is because people can easily connect to the internet and participate in the crypto economy in many developing countries such as India and continent like Africa have high cryptocurrency adaptation rate. After purchasing bitcoin through platforms accessible to their countries, bitcoin holders in third world countries can trade Bitcoin for profits or hold onto their tokens as an investment. Inflation which is characterised by devaluation of currency alongside increasing price of goods and services, this has made people to turn to cryptocurrency like bitcoin an asset that maintain its value over time to hedge  against inflation.

People use bitcoin as a tool to counter inflation all over the world not just from India and Africa. I don't think most people are really using Bitcoin to make any change in their economic level but many individuals are taking this opportunity especially where the fiat value is highly unstable.

What you are proposing is nothing but basic knowledge about investment so anyone who understands that the value of fiat depreciates due to inflation and has money to invest can make money usually middle class may have the knowledge but won't have money to invest which is not the same with bitcoin because here people can invest even very small amount every month so over the period of few years the growth and returns will be too big.

[pinggoki]

Bitcoin is an asset, and like other assets could be used as an investment, this is the best way I like people to view Bitcoin, not as a hedge/counter against inflation, or else it might break the heart of many during the bearish season.

Economists have now started adding the clause that asset has their gaining moments and losing moments as well, and at times, when the investor needs the money might be the bearish times, so the gain is not guaranteed. Imagine those who purchased Bitcoin with this inflation-countering mentality in 2021 and needed the money for a crucial project this year. Their lot is obvious even without saying further as they might have lost half of their money by now.

The inflation peg mentality might work in the long term (even though we're still all hoping, there is no guarantee), we should learn how to manage our risks in Bitcoin, people also lose via it.

Bitcoin is mostly associated to the dollar, if the price of bitcoin increases, you don't look at it in your local currency because you immediately look at it's value in dollar and local currency is mostly pegged to dollar and it's the likely currency that you want to have if you want to grow what you own in local currency so I think in a way, bitcoin is a hedge to inflation although it's not a good idea to use it when you're trying to solve inflation on a nation scale, pretty sure that only few people are going to benefit from doing that thing so steer clear.

In regards to how bitcoin can solve inflation in a third-world country, I think that bitcoin wouldn't make any difference or significant change to that problem because most third-world country that's experiencing high and uncontrollable inflation are countries that have incompetent leaders and officials, if you root out corruption and place competent and smart people on the important seats in the government, you can easily see changes but given that not a lot of people has done this in these countries, I am not entirely that purging the corruption might be the solution.

[Fiatless]

Bitcoin alongside other cryptocurrencies has aided the economic development of many countries.

This point is highly debated this is because there is no fact to prove that Bitcoin has led to the economic advancement of any country. El Salvador is still at the infant stage of its Bitcoin investment so we cannot conclude that Bitcoin has contributed to the growth of its economy. However there have been reports that making Bitcoin a legal tender has helped the nation to gain from tourism.

Bitcoin is typically used for online transaction and businesses in third world countries despite widespread poverty, this is because people can easily connect to the internet and participate in the crypto economy in many developing countries such as India and continent like Africa have high cryptocurrency adaptation rate. After purchasing bitcoin through platforms accessible to their countries, bitcoin holders in third world countries can trade Bitcoin for profits or hold onto their tokens as an investment. Inflation which is characterised by devaluation of currency alongside increasing price of goods and services, this has made people to turn to cryptocurrency like bitcoin an asset that maintain its value over time to hedge  against inflation.

Bitcoin can assist a nation in engaging in unrestricted international trade. The country can also save money from transaction fees and expenses incurred from sourcing for dollars. It can add to the financial status of individuals when they trade or hodl Bitcoin. Citizens can use it as a hedge against inflation. However, some citizens in developing nations are not taking advantage of these opportunities due to poverty and infrastructural deficits.

[pooya87]

"Countries" can not do that, individuals may.
On bigger scales bitcoin can not help much both because it still has a small market and also its price is too volatile. For example Turkey as a country with huge inflation (80%+) and a negative foreign reserve that is in tens of billions of dollars needs to print a billion dollar a day these days to cover the expenses. Nobody can make that much profit from bitcoin to help do that!

[Baofeng]

Bitcoin alongside other cryptocurrencies has aided the economic development of many countries. Bitcoin is typically used for online transaction and businesses in third world countries despite widespread poverty, this is because people can easily connect to the internet and participate in the crypto economy in many developing countries such as India and continent like Africa have high cryptocurrency adaptation rate.

I guess it's more on those people who are unbank, and using bitcoin to make transactions, either as a micro payment scheme as it should be. Or like in the last 5-6 years or so, specially after the bull run of 2017, many people thinks that bitcoin is a great asset to invest and it really us, but I don't think that it will just help those 3rd world countries to counter inflation in just a snap of a finger. Maybe some of their population who knows this, but for the government or the whole nation itself? I don't think that bitcoin will be the solution. The government will still have to put a program to get our of their financial issues, and not just rely solely on bitcoin.

[Plaguedeath]

It's really risky for third world countries to hedge against inflation through Bitcoin, it's better to invest in gold where the volatility is less than Bitcoin.

Bitcoin is really good to hedge against inflation when we're talk about individuals people who've make some good amount of money. Trading isn't easy, better to increase your salary rather than think you will make side income through trading.

[Beerwizzard]

"Countries" can not do that, individuals may.

Actually, they can. The point is that in 3rd world countries usually there is no banking system at all and it is very complicated and expensive for them to create one from scratch, especially when the monetary system is bad. Therefore, it may be way easier for them to make a crypto friendly financial infrastructure from the very beginning while all other countries gonna have to adopt crypto into their existing system which takes way more efforts.

[stompix]

Bitcoin alongside other cryptocurrencies has aided the economic development of many countries.

Name one!

Bitcoin has played a significant role in how transactions in developing countries are conducted at international level and also aided in them having something to invest or save their money into without been worried in any way of devaluation.

Name a second one!

We're still stuck on having this kind of topics and people really don't realize how complicated the situation is and why a country facing inflation and devaluation can't find refuge in Bitcoin!

There are two situations:
- the individual, he uses his money he buys Bitcoin he has now put a bit of his wealth in safety against inflation and devaluation
- the country, far more complicated as poor country that face inflation also faces devaluation of their currency. Buying bitcoin at a large scale won't solve the problem it will actually make it worse!!!
Why? Simple, the Weimar Republic!
The country would have to spend its own currency on buying hard currency in this case Bitcoin, but nobody wants crap coins like Argentinian pesos or Russian rubles or iranian rials, so by them trying to buy Bitcoin they devaluate furthermore their crappy curency, so ending worse and worse and making inflation also worse.

Bitcoin won't save a country, gold didn't save countries in economic peril in thousands of years of gold standard, so neither will a bunch of code that wasn't really designed for that.

Now if you don't believe the theory how about this:

Over 50% of Turkey’s Population Invests In Crypto
https://beincrypto.com/turkey-crypto-adoption-bitcoin-dominates/
vs

Argentina and Turkey are currently experiencing the highest inflation rates in the G20. In January 2023, Turkey’s rate was 57.7%

You have half of the population investing in crypto and you still have one of the highest inflation in the world, so how exactly did buying crypto help the country?

[romero121]

People from these countries can benefit holding bitcoin and overcome the prevailing inflation. As a country it Is really tough to manage the inflation through bitcoin. Just think of a situation, country holding good volume of bitcoin as reserve and the country is facing worst economic situation and inflation at its high. What can the reserve bitcoin do, it'll be a small percentage to the entire economy. In other way the same can make the situation even worse, if the bitcoin market is found at its low when the country is in need of the reserve to be used.

[tranthidung]

Bitcoin alongside other cryptocurrencies has aided the economic development of many countries.

Bitcoin does not aid anyone or any country because the times for faucets with good value is no longer there. If you or a nation want to have Bitcoin, use your money to buy it. So aiding is not relevant term to use here.

Bitcoin is typically used for online transaction and businesses in third world countries despite widespread poverty, this is because people can easily connect to the internet and participate in the crypto economy in many developing countries such as India and continent like Africa have high cryptocurrency adaptation rate. After purchasing bitcoin through platforms accessible to their countries, bitcoin holders in third world countries can trade Bitcoin for profits or hold onto their tokens as an investment.

It is not different too much than bank transfer or VISA transfer, Paypal, etc. You can do it similarly like with Bitcoin but you forgot most important technical strength of Bitcoin transaction, no censorship, no charge back and its network is strongly decentralized, hardly to be attacked and roll back the blockchain.

Bitcoin is a good option for underbanked, unbanked people. If they are unable to access services from banks, they can use Bitcoin blockchain.

How many Bitcoin confirmations is enough?

Inflation which is characterised by devaluation of currency alongside increasing price of goods and services, this has made people to turn to cryptocurrency like bitcoin an asset that maintain its value over time to hedge  against inflation.

Individually, you can get rich with Bitcoin and it is more easily to make your investment decision. It is personal decision and personal taste to accept risk to chase profit and wealth.

Nationally, it's harder to accept Bitcoin because of volatility and even a nation accept it, it won't make that nation richer. Many things in society must be changed by many sectors and initiatives. Only Bitcoin can not solve all those things, never can do that.

[Blitzboy]

The passion with which emerging nations have embraced cryptocurrencies, particularly Bitcoin, is not by chance. You ever wonder why? These nations are susceptible to inflation and economic instability because the global financial system has frequently been rigged against them. However, Bitcoin appears, upending the existing quo and giving the "underdogs" more influence. Online transactions are simply one aspect of the uprising against a broken system. Many in the West applaud Bitcoin's decentralized nature, but in nations like India and parts of Africa, its more than just decentralization; its a lifeline. It provides a means of escaping a historically unjust economic structure. The ruling class wont admit it because they like to maintain power. But the reality is that people are deciding their own economic futures, and Bitcoin is the tool they are employing.

[kryptqnick]

How accurate is the information that op presents? I mean, it makes sense that countries with small economies (I'm phrasing it this way because the term 'third world' doesn't really apply to today's political and economic climate) would use Bitcoin more to escape the downfalls of their fiat and local economies.
There are different lists of countries by Bitcoin adoption, but I'll rely on the most recent one, which seems reputable to me.
Here's a list from most (by percentage of the total population) to least, a top-10:
1. Vietnam
2. Ukraine
3. USA
4. Thailand
5. India
6. Brazil
7. Pakistan
8. Russia
9. Philippines
10. Nigeria
India, Brazil, & the USA have very high GDP. Russia, Vietnam, Nigeria, Pakistan, Thailand, and the Philippines are middle-tier. Ukraine is significantly lower. So it doesn't really seem that it's poor developing countries using Bitcoin, there are clearly countries with strong, medium, and pretty low-level economies there.

[moneystery]

let me give you my opinion. bitcoin does not significantly help the economy of any country, it only helps individual economies. even making bitcoin an asset to fight inflation is not enough because bitcoin does not have the ability to suppress inflation at the national level. suppressing inflation can only be done by government decisions through their economic policies.

i know it is true that bitcoin is an innovation that helps many people, but in this matter there is no need to overestimate bitcoin because bitcoin is not like bread from heaven that solves hunger, bitcoin is not like that, bitcoin only helps individuals and only just that.