Hyperinflation - Will it lead Countries to Adopt Bitcoin?

[The Sceptical Chymist]

Analysts emphasized that people still accept the local currency because there is a working banking system in the country which means that Gold, Silver, and Bitcoin, will only work when there is already no financial system that is working. This sounds like chaos already. If you are to prepare for what is to come would you wait for the chaos to start?

Gold & silver are not going to be used in any sort of hyperinflation setting, nor is bitcoin--at least not widely.  There have been recent examples of hyperinflation in a few countries (over the past few years), and if a country's currency suddenly becomes worthless people will try to get access to and use another stable fiat currency.  That makes a hell of a lot more sense to people than using gold/silver, which they might not have and don't have money to buy or bitcoin, which also has to be purchased on an exchange that the typical citizen might not be familiar with (or familiar with bitcoin for that matter) or have the patience to figure out. 

Everyone is comfortable with fiat currency.  Much fewer people are comfortable using an alternative like bitcoin, which carries an extremely high volatility risk, not to mention network fees that can be costly and the fact that you really have to know how to get it and use it and keep it secure, which might frustrate some folks who are in the midst of an economic crisis.

This topic has been discussed quite a few times over the years, btw.

[Bananington]

I have hope that hyperinflation will get to a certain extent whereby many countries will have nothing left for them as an alternative to perfect their economy than in adopting for bitcoin use in the country, because over several years, the fiat system and government couldn't help in the situation of the economic challenge than to create a sustained inflation towards the economy and in which the people are the ones being affected the most.

there are a few options to do but some of those options are not for the fainted hearts. but as long as their central banks can print money, it's going to be tragic for the lives of the people. BTC would have been good if they tried adopting when the price had taken a nose dive to $17k. but i think it's still not too late if they start now.

a few months ago Melei was trying to adopt USD. i guess he also realized that all currencies are devalued.

I sometime ago learnt of the Argentine president trying to adopt the dollar as a currency for Argentina following the recent economic situation the country is facing and this thought of making the economy better has seen several new policies made to reform the Argentine Central Bank operations, just as the old policies were abandoned citing them as outdated and a tool that is exploited by those in power to their gains.
Corruption is mainly responsible for the Argentine situation and although the president hinted on adopting cryptocurrency, I doubt even BRICS or dollar adoption would help the country just yet, until the reforms is well implemented and accepted.

[btc78]

there are a few options to do but some of those options are not for the fainted hearts. but as long as their central banks can print money, it's going to be tragic for the lives of the people. BTC would have been good if they tried adopting when the price had taken a nose dive to $17k. but i think it's still not too late if they start now.

Yes indeed it’s a shame to have not invested during that time for those who maybe found about bitcoin late or was just simply not ready and equipped with the money and knowledge however you should not be discouraged and still should keep investing.

Bitcoin still has plenty of room to grow still so even if you invest now I ak not hesitant to say that you’d still find some good profits.

[TheUltraElite]

The question is whether the hyperinflation is caused by some correctable factors which bitcoin can help in or not?

Bitcoin will not always solve hyperinflation, the condition of El Salvador should not be used to draw conclusions, South American countries are well known with inflation, bad living conditions and poverty that have sustained due to corruption, governments and many more reasons.

If they do adopt bitcoin, they should have a roadmap of how to solve the problem using bitcoin, which most governments would fail at.

[pooya87]

a few months ago Melei was trying to adopt USD. i guess he also realized that all currencies are devalued.

He may still be on the path to doing that. In fact the recent crashes of Peso could be the initial steps to replacing Peso with Dollar. Think about it, the Argentinian government  doesn't have enough dollar for the whole country. They also can't print dollar (US can) to cover the deficit.
But when they want to swap Peso for Dollar for each citizen, it is easier to swap every 1000 or 10000 Peso for 1 Dollar than it is to swap 40 Peso for 1 dollar. So they crash Peso...

[bitgolden]

Definitely a good enough reason to adapt bitcoin. I know that when people think of hyperinflation they think about Zimbabwe, like going from a few dollars to trillions, that is definitely a huge problem and definitely a mistake they did, they are trying their best to recover to be fair, not really good but at least not as bad as fifteen years ago. In the end, I believe that we are going to end up with something that will do better, and that means we are going to see the situation change eventually.

What I believe we will have is lower, something like 50% is still hyperinflation and we have that in a few countries, and if all the people in those countries start saving in bitcoin instead of their own currency, we will do quite well.

[Ultegra134]

The question is whether the hyperinflation is caused by some correctable factors which bitcoin can help in or not?

Bitcoin will not always solve hyperinflation, the condition of El Salvador should not be used to draw conclusions, South American countries are well known with inflation, bad living conditions and poverty that have sustained due to corruption, governments and many more reasons.

If they do adopt bitcoin, they should have a roadmap of how to solve the problem using bitcoin, which most governments would fail at.

That's correct. How can Bitcoin be beneficial against hyperinflation, and how can it be implemented in our daily lives to tackle that? I personally don't see how; perhaps it could work as an individual, but not nationwide. El Salvador's Bitcoin adoption wasn't really a huge success either, at least in terms of adoption by the public. Has the government earned money through its investments? Probably, especially with current prices, which may fund the public sector, such as schools, hospitals, and general infrastructure. We should also note that El Salvador managed to do exactly what you mentioned: tackle corruption and gang wars, which are ruining living conditions and the country's economy, and this is where most countries facing hyperinflation suffer.

[wiss19]

The short answer to your question is NO. Bitcoin is a volatile financial asset and a store of value. It's like asking the question "Will the country adopt gold in order to replace a hyperinflated fiat national currency?" Of course not. You have to remind yourself about the Thomas Gresham's law that states "bad money always pushes good money out of circulation". It's better to spend worthless Argentinian pesos for goods and services, rather than spending BTC or gold. The Argentinian pesos might lose value tomorrow, while BTC and gold will most likely increase their value in the future.

I am not entirely sure if that is right. I mean I do not disagree that it is volatile and the fact that it is a long term investment, but the fact is that we are going to probably see a lot of people who will approach bitcoin as a great method when there is hyperinflation, which they did during the pandemic period.

Why do you think that we broke the record and reached a new all time high, and even ETF's got accepted after that? Because people realized that hyperinflation was a serious threat and that is why we are seeing what we are seeing right now. A lot of people realized that they need to make their money one way or another, and because of that we are seeing the changes in the price eventually, bitcoin could be a solution to it.

I think the main reason on why we broke the records this year, is not because of the Hyperinflation but it is because of the Bitcoin halving. I also think that Hyperinflation has nothing to do with the acceptance of Bitcoin as an ETF. The proposal for it is already there ever since but it only got cancelled a lot of times.

The long wait is finally over though. Bitcoin is now more popular and I admit that because of Bitcoin, my understanding about money got wider like I now know what is inflation and its effects, and how can we combat it. I also found out that Bitcoin can be a great solution to it. I think many who got involved in Bitcoin are also like this.

[electronicash]

a few months ago Melei was trying to adopt USD. i guess he also realized that all currencies are devalued.

He may still be on the path to doing that. In fact the recent crashes of Peso could be the initial steps to replacing Peso with Dollar. Think about it, the Argentinian government  doesn't have enough dollar for the whole country. They also can't print dollar (US can) to cover the deficit.
But when they want to swap Peso for Dollar for each citizen, it is easier to swap every 1000 or 10000 Peso for 1 Dollar than it is to swap 40 Peso for 1 dollar. So they crash Peso...

you're saying he intentionally did this. it's not so bad of a plan after all it's going to happen anyway. it simply made them ahead of their time.

so they are still going to be using their Peso and it will still be advantageous for someone from Central and South America who works in US soil. they all will be living great if they send their skilled worker to US and the country will run heavily by remittance. Darien Gap is the key!

[batang_bitcoin]

I know that when people think of hyperinflation they think about Zimbabwe, like going from a few dollars to trillions, that is definitely a huge problem and definitely a mistake they did, they are trying their best to recover to be fair, not really good but at least not as bad as fifteen years ago.

It is the same with Venezuela.

In the end, I believe that we are going to end up with something that will do better, and that means we are going to see the situation change eventually.

For those countries, they need a strong leader and citizens should cooperate with the initiative of the government. But if the government is corrupt, citizens won't be able to help to change the situation.

What I believe we will have is lower, something like 50% is still hyperinflation and we have that in a few countries, and if all the people in those countries start saving in bitcoin instead of their own currency, we will do quite well.

A single digit of inflation is already hurting and going with 50%, that's certainly a lot and hyperinflation. That's why many of their people are doing things to survive and one of it is getting involved into bitcoin and other cryptos to earn.

[dezoel]

People of those nations? Yes, definitely. Governments of those nations? Absolutely not. We have seen nations like Turkey and Argentina who had 100%+ inflation yearly, back to back years, for a while, and governments not only did not turn to crypto to figure out a way, but they nearly banned it, thankfully they didn't but it was close, instead they tax the profits you make highly so that they could fix their own mistakes.

All in all I believe that we should consider what we can do with this, and that should not be an issue all that much, we could probably do better. I think it's clear that the world needs a lot more crypto adoption so that we could live a better life, but unfortunately most of them do not go down that route, I think governments just fear it.

[pooya87]

so they are still going to be using their Peso and it will still be advantageous for someone from Central and South America who works in US soil. they all will be living great if they send their skilled worker to US and the country will run heavily by remittance. Darien Gap is the key!

That would hurt Argentina itself a lot more. After all you are talking about work force being "exported"! That would create a deficit domestically. Production lines would die and that would kill the economy even more.
In the long run the migration of the younger generation would have even further negative consequences on the society and the economy both.

[MusaMohamed]

Gold & silver are not going to be used in any sort of hyperinflation setting, nor is bitcoin--at least not widely.  There have been recent examples of hyperinflation in a few countries (over the past few years), and if a country's currency suddenly becomes worthless people will try to get access to and use another stable fiat currency.

Maps for gold reserves, inflation, and debt clock by countries.
https://wisevoter.com/country-rankings/inflation-by-country/
https://wisevoter.com/country-rankings/gold-reserves-by-country/#map
https://www.usdebtclock.org/world-debt-clock.html

That makes a hell of a lot more sense to people than using gold/silver, which they might not have and don't have money to buy or bitcoin, which also has to be purchased on an exchange that the typical citizen might not be familiar with (or familiar with bitcoin for that matter) or have the patience to figure out.  

Precious metals like gold and silver can be used as storage of assets but people especially not the rich will not prefer these ones as their means of daily spending. Because if they want to buy a cup of coffee or even things with higher cost, they will have to sell gold or silver. It is firstly inconvenient and secondly it can cause them problems with tax. Governments can tax their sales on gold or silver, it's painful for the poor.

Everyone is comfortable with fiat currency.

Less issue with tax when people do their spending in fiat currency and in cash method.

That would hurt Argentina itself a lot more. After all you are talking about work force being "exported"! That would create a deficit domestically. Production lines would die and that would kill the economy even more.

Argentina is at top of the World Debt Clock list even their Economic size is not too big.
https://www.usdebtclock.org/world-debt-clock.html

[harapan]

I think there is no better option for countries that are greatly affected by inflation but to adopt what makes them earn money with so little investment and put their resources to use. The unused energy they have shall be used to make money just like the geothermal of El Salvador. If a country has falls that can produce energy, that might just be saving their economy too than adding more debt by printing.

The truth is that cryptocurrency are viewed as high volatile in some regions of the world and they hesitate to apply the necessary actions that'll interrelate with the severe instability of their country.Whereas,some citizens consider bitcoin as a safe haven for them and the right tool to secure a safe adventure.

Unstable hyperinflation disrupts the value of people's savings and undermine economic activities.One of the claims from Bitcoin maximalists is that Bitcoin will be a hedge against inflation.The key point here is that while some HYP may last many years,its potentially a good hedge against that but that doesn’t make it a good investment at the time of such emergence.
Emerging unfavorable markets are adopting are causing people to adopt cryptocurrencies at a rapid pace.

[Wind_FURY]

so they are still going to be using their Peso and it will still be advantageous for someone from Central and South America who works in US soil. they all will be living great if they send their skilled worker to US and the country will run heavily by remittance. Darien Gap is the key!

That would hurt Argentina itself a lot more. After all you are talking about work force being "exported"! That would create a deficit domestically. Production lines would die and that would kill the economy even more.
In the long run the migration of the younger generation would have even further negative consequences on the society and the economy both.

Although true, it's merely a a matter efficiency and incentivization. Those young workers, if they decide not to be "exported" and earn Dollars, would continue to either be non-productive or under-paid. It would be better for them to migrate, be more productive, and remit U.S. Dollar back to their country. I believe that model is already in use by some financially-challenged nations. It helps with the supply of their country's foreign reserves.

[N.O]

I think there is no better option for countries that are greatly affected by inflation but to adopt what makes them earn money with so little investment and put their resources to use. The unused energy they have shall be used to make money just like the geothermal of El Salvador. If a country has falls that can produce energy, that might just be saving their economy too than adding more debt by printing.

The truth is that cryptocurrency are viewed as high volatile in some regions of the world and they hesitate to apply the necessary actions that'll interrelate with the severe instability of their country.Whereas,some citizens consider bitcoin as a safe haven for them and the right tool to secure a safe adventure.

Unstable hyperinflation disrupts the value of people's savings and undermine economic activities.One of the claims from Bitcoin maximalists is that Bitcoin will be a hedge against inflation.The key point here is that while some HYP may last many years,its potentially a good hedge against that but that doesn’t make it a good investment at the time of such emergence.
Emerging unfavorable markets are adopting are causing people to adopt cryptocurrencies at a rapid pace.

Yes ,I agree. Cryptocurrency is very  very beneficial for the teenagers and people should invest in cryptocurrency for the long term and also for the short term. The future of cryptocurrency is bright than stock market and any other business. If one research the whole project and he calculate the all facts and  figures and he research the company which is handling the project,he can get success by investing in cryptocurrency but if any person enters in cryptocurrency and at the start he did not get the knowledge of cryptocurrency and he only surrounded by greed  he will lose all the money investing in this. Recently I see the post where man written that he lose  thousands of dollars in cryptocurrency on the advice of his friend . Without knowledge cryptocurrency is dangerous and with knowledge cryptocurrency is king.

[pooya87]

Although true, it's merely a a matter efficiency and incentivization. Those young workers, if they decide not to be "exported" and earn Dollars, would continue to either be non-productive or under-paid. It would be better for them to migrate, be more productive, and remit U.S. Dollar back to their country. I believe that model is already in use by some financially-challenged nations. It helps with the supply of their country's foreign reserves.

That would not help the country and the people left in it though. After all you need a population, specially young generation, to handle different jobs in your own country. If the majority of them are migrating, a lot of things could halt domestically.

It could even lead to more inflation. It's a simple matter of supply and demand.
Take truck drivers for example. If majority of them migrate for a better pay, locally there will be a deficit and the supply chain will be disrupted. The remaining drivers would demand a much higher paycheck to deliver goods like groceries to the grocery stores. So the price of what the end user has to pay for skyrockets too.
We saw something similar to this (supply chain disruption due to lack of truck drivers) in UK after Brexit.

In such a scenario it won't matter how much foreign reserve the government owns...

[Wind_FURY]

Although true, it's merely a a matter efficiency and incentivization. Those young workers, if they decide not to be "exported" and earn Dollars, would continue to either be non-productive or under-paid. It would be better for them to migrate, be more productive, and remit U.S. Dollar back to their country. I believe that model is already in use by some financially-challenged nations. It helps with the supply of their country's foreign reserves.

That would not help the country and the people left in it though. After all you need a population, specially young generation, to handle different jobs in your own country. If the majority of them are migrating, a lot of things could halt domestically.

It could even lead to more inflation. It's a simple matter of supply and demand.
Take truck drivers for example. If majority of them migrate for a better pay, locally there will be a deficit and the supply chain will be disrupted. The remaining drivers would demand a much higher paycheck to deliver goods like groceries to the grocery stores. So the price of what the end user has to pay for skyrockets too.
We saw something similar to this (supply chain disruption due to lack of truck drivers) in UK after Brexit.

In such a scenario it won't matter how much foreign reserve the government owns...

But it still wouldn't help their country if they stay at home and be unproductive or under-productive. Plus if they don't get paid enough in form of salaries for the labor, then their country probably has too much supply of cheap labor, no? It's better to have those people go through a specialized training program, then be "exported" to a developed nation to become "earners" of U.S. Dollars or Euros that could sent back to their countries.

[electronicash]

Although true, it's merely a a matter efficiency and incentivization. Those young workers, if they decide not to be "exported" and earn Dollars, would continue to either be non-productive or under-paid. It would be better for them to migrate, be more productive, and remit U.S. Dollar back to their country. I believe that model is already in use by some financially-challenged nations. It helps with the supply of their country's foreign reserves.

That would not help the country and the people left in it though. After all you need a population, specially young generation, to handle different jobs in your own country. If the majority of them are migrating, a lot of things could halt domestically.

It could even lead to more inflation. It's a simple matter of supply and demand.
Take truck drivers for example. If majority of them migrate for a better pay, locally there will be a deficit and the supply chain will be disrupted. The remaining drivers would demand a much higher paycheck to deliver goods like groceries to the grocery stores. So the price of what the end user has to pay for skyrockets too.
We saw something similar to this (supply chain disruption due to lack of truck drivers) in UK after Brexit.

In such a scenario it won't matter how much foreign reserve the government owns...

But it still wouldn't help their country if they stay at home and be unproductive or under-productive. Plus if they don't get paid enough in form of salaries for the labor, then their country probably has too much supply of cheap labor, no? It's better to have those people go through a specialized training program, then be "exported" to a developed nation to become "earners" of U.S. Dollars or Euros that could sent back to their countries.

my country is one example of this. According to the data, our overseas workers contribute cash remittances of up to US$33.5 billion, which is 8.5 percent of the country's GDP.  we travel to every corner of the world, especially in the US. that's why even if USD crashes up, the remittances will still be one of the biggest economic contributors.

Melei may not look like a competent president but he is an economist afaik. if US is adopting BTC, why shouldn't he not do the same?

[btc78]

I have hope that hyperinflation will get to a certain extent whereby many countries will have nothing left for them as an alternative to perfect their economy than in adopting for bitcoin use in the country, because over several years, the fiat system and government couldn't help in the situation of the economic challenge than to create a sustained inflation towards the economy and in which the people are the ones being affected the most.

I do not hope for that lol.

I am hoping that countries allow bitcoin adoption even without their country going into a whole crisis. I don’t want to have to suffer first before being helped. If they only decide last minute that bitcoin could help with hyperinflation, too much damage would have been made and they would have a much harder time to try and fix their economic problems.