Remind yourself

[WatChe]

They inflate in dollar terms. But if your savings are in bitcoin, and bitcoin goes up as result of inflation, then how much do meat, eggs and rent inflate in comparison with your savings? Everyone who's been stacking bitcoin for some years do not have less, but more. So they have been protected.

Inflation is problem of every country because every government is continuously printing currency notes and due to this reason value of fiat is going down with time. If you are looking to counter inflation in the long run then best way is to invest in Bitcoin but for long term. Generally its seen that if you are investing in Bitcoin for at least five years then profit given by Bitcoin will easily surpass the inflation rate. The inflation rate will continue to increase in coming years also and we need to take proper measures now to counter that in coming years.  

[Donneski]

Inflation is a silent stealer, it doesn't steal by taking away your money, it quietly makes the worth of your hard-earned money a little less over time.

You work so hard to earn and save money only to check again to see that same money can no longer afford what used to. That disappointing feeling is do hide from discussing about inflation.

Bitcoin came with a different approach, those who save with it over the years seen the value of their money increase beyond they imagined. Bitcoin might not be able to solve every economic problem facing the globe but it gave the people an alternative they never imagined and sometimes, having alternatives is the first step towards financial freedom.

[JiiBs]

Bitcoin solves the world's biggest problem: inflation caused by the creation of new money out of thin air. The culprits are the banking cartel and Congress, a partnership that suits them both.

This is a duo that can’t afford to not exist. So long as we’ve got a government, we would always have a congress and would always have a system that prints money (the banking system), backed by the armed forces and there is nothing anyone can do about it.

However, while Bitcoin might solve inflation problem (in parts), I say that because, it doesn’t go without creating a unique problem of its own which is in volatility. Where in a Bitcoin functional society, we would always have issues to deal with when certain goods on the shelves where bought/produced at higher cost in BTC would have to be sold for less in the bull seasons.

The higher prices we pay at the supermarket are one consequence, but only one of many. Look closely and you'll see that whoever controls a money printer can do more than claim a large share of the supply (driving prices up). They can also decide what exists on the shelves and what is considered healthy.

Obviously, it’s a sad reality that we can’t change as these profiling that gives our societies its structure would always continue to exist, continued through the raising of dynasties or we just have others take their place and continue the cycle.

[Sammye3]

Bitcoin solves the world's biggest problem: inflation caused by the creation of new money out of thin air.

Does Bitcoin really solve the problem of inflation?

Based on my understanding, inflation is the increase in the price of items over time against the local currency which makes it less valuable, but how does Bitcoin solve that? With bitcoin's volatility, it could also pose as another inflation agent too. Consider even after an increase in the price of bitcoin, and the cost of things are off the roof, anyone holding bitcoin would not make considerable useful gains with the current cost of items. Maybe it's all in my head and I would have presented it wrongly but I'm still open for corrections.

[snowpega]

Fiat money is backed by reserves like bonds, gold or any other asset that is preserved to make the country's money stable in the international market. But the harsh reality is that we don't have any kind of transparency in the traditional system, and we, as residents of any country, can only speculate on what the government tells us it has in country reserves. Most of the country's people have no way to track what their country has in reserves because they are not very literate.

Then it is very obvious that, without evidence in the form of transparency, when the government overprints money, this will bring inflation which will become uncontrolled. As the money supply overcomes the country's reserves, its value in the market becomes lower.

This is why Bitcoin is totally contrary to the traditional finance system. I really believe that one day it will overcome the whole traditional system. In my point of view, the current traditional finance system is a big trash system that really needs much upgrading or needs a better replacement. What do you guys think about this?

[Ever-young]

The challenges faced in fiat is not even all about the drastic reduction in purchasing power, but the concept of centralization in general. The centralized power That sets no limits no boundaries in cash printing. When they always have the power to print on money at their convenience, they automatically Rob the citizens and buy power and influence in  via a corny medium. Spreading consolidation to designated sectors.

The decentralized nature of bitcoin contradicts this concept as it nullifies money printing, with its hard financial concept, individuals gain financial sovereignty, and gives room for long term wealth without governmental control.

I must say; this is a very valid reminder but then; I will not put it to everyone but most of us still use fiat. In where I come from we don’t purchase groceries with bitcoin, do we still suffer inflation maybe just to a lower extent.

So while you store wealth in bitcoin, one still has to be prepared for the day to day fiat dramas for daily survival.

[mirakal]

Since, I started buying bitcoin, my mind is at rest towards future inflation and when I see how the cost of goods and services are skyrocketing, I feel for those who cannot see that bitcion is the key to weaken the problems that comes from the endless money printing by the government.

Unfortunately, a lot may have known already about bitcoin but they remain hesitant on what bitcoin can do for them while sticking to fiat that only made them suffer more because of inflation. That is why constant promotion for bitcoin is still a must, not to attract people to shift their perspective from fiat into bitcoin but to give them clear knowledge that bitcoin is the only key to stop all these money printing problems and get rid of the influence from the centralized banks and government.

[JaanusRaim]

In today's world, anyone who gains significant influence seems, sooner or later, to receive "an offer they can't refuse" from a briefcase man: a "partnership" in which you say and do X, Y and Z, and in return the group invests its cold, hard cash in you.

I love these words. They explain many things that would otherwise be a complete muddle and misunderstanding.

Especially beneficial for young people.

[Alphakilo]

They inflate in dollar terms. But if your savings are in bitcoin, and bitcoin goes up as result of inflation, then how much do meat, eggs and rent inflate in comparison with your savings? Everyone who's been stacking bitcoin for some years do not have less, but more. So they have been protected.

Inflation is problem of every country because every government is continuously printing currency notes and due to this reason value of fiat is going down with time. If you are looking to counter inflation in the long run then best way is to invest in Bitcoin but for long term. Generally its seen that if you are investing in Bitcoin for at least five years then profit given by Bitcoin will easily surpass the inflation rate. The inflation rate will continue to increase in coming years also and we need to take proper measures now to counter that in coming years.  

Inflation vs Bitcoin on a balance scale makes money available to whoever has more. The man who has more money in fiat currencies doesn't really experience inflation because they have enough and even see inflation as a tool to influence their position, policies and grow their power in the society. While on the otherhand, the man who has more Bitcoin can always refuse the influence of inflation that makes them subject to the influence of the man who has more fiat currency in millions because their Bitcoin holdings has value and may amount to nearly half or more than that fiat currency if converted.

So when I see people ignoring Bitcoin, I just think they don't understand the importance of it as a valuable currency that can bridge the gap of wealth and make inflation look like an opportunity to exercise independence and soverignty knowing that with it's fixed cap, political interference or any individual influence is overridden and it serves as a firewall against CBN control and government control.

[terrific]

Those who have believed bitcoin first should be thanked first, they were first on this fight.
And now that the world has open its doors to it, the banks cannot ignore no more.
Bitcoin = power.
So anyone who holds bitcoin has also the power, the power to avoid what the society dictates and what these powerful wealthy people can do to us.
This proves that Bitcoin truly is a hedge against inflation done by the government, world elites, and by the banks.

[Darker45]

It sounds like religious preaching to me. Bitcoin has cultish tendencies already. With it, Bitcoin might lose practicality.

With all due respect, I don't think inflation is the world's biggest problem. Secondly, I don't think Bitcoin has the ability to solve the problem of integrity that so deeply affected the sectors mentioned. As far as I know, long before fiat existed, even during the gold standard, powerful influences have already shaped healthcare, journalism, politics, and the economy.

[OsaiEmma]

From my research, this is what I found: CEXs can issue out paper Bitcoin to traders, this paper Bitcoin can be used to settle an order book transaction (carry out trades), even when they don't have the Bitcoin backing it up. And we all know CEXs order book plays a major role in Bitcoin's price discovery, right? So they can artificially increase Bitcoin's price through this method. This is what I term artificial inflation of Bitcoin.

bitcoin is bitcoin, there is no paper bitcoin but you can have things like figures which in theory represent your bitcoins in centralized exchange accounts, or Wrapped Bitcoin tokens that are tokens with pegs to Bitcoin price but those tokens are not actual bitcoins.

You will have risk of not be allowed to withdraw your bitcoins from centralized exchange accounts. If that is the situation, figures you see in your exchange accounts will turn to be scam at the end.

With Wrapped Bitcoin tokens, you have them in your non custodial wallets but those tokens can have depeg.

No. There is something you're not understanding: Bitcoin is Bitcoin; this is an undisputed fact. But these so called "paper Bitcoin" can influence the general Bitcoin price positively or negatively. That's exactly my point.

You can decide to completely not care about CEX. Heck, you might use just DEXs and OTCs, but the exchange rate is often influenced by these CEXs order book. If a CEX's price increases or decreases more than a DEX's, there are arbitrageurs who take advantage of this, they buy from one and sell to the other forcing a close gap between their prices. These arbitrage trade can produce a somewhat uniform price (minute price difference) across whatever exchange/trading platform, especially in the spot price.

Now, imagine CEXs issuing out unbacked Bitcoin (paper Bitcoin), and they are used to execute trades which influences the price in that exchange. Then the next sequence occurs which is arbitrage, this distortion will spill over to other exchanges.

So even your real Bitcoin sitting securely in your Bitcoin core wallet is still influenced by the activities in CEX.

[Multani Boy]

From my research, this is what I found: CEXs can issue out paper Bitcoin to traders, this paper Bitcoin can be used to settle an order book transaction (carry out trades), even when they don't have the Bitcoin backing it up.

This has actually happened before in this market, with FTX and Mt. Gox being examples.

Also, GBTC traded at massive premium over the value of the BTC it actually held for years, sometimes at 20-40%+ premium to NAV, as it was one of the easiest ways to gain regulated exposure to crypto when there were no spot ETFs available.

So some market distortion due to supply and demand for certain product does not necessarily mean exchanges are issuing unbacked BTC. Some people just wanted that GBTC wrapper badly enough that they were willing to pay way more for it.

bitcoin is bitcoin, there is no paper bitcoin but you can have things like figures which in theory represent your bitcoins in centralized exchange accounts, or Wrapped Bitcoin tokens that are tokens with pegs to Bitcoin price but those tokens are not actual bitcoins.

To expand on what OsaiEmma was saying, it does not even necessarily have to be shady CEX BTC. You could also argue that futures and derivatives markets like CME BTC futures can have large effect on BTC spot price. No actual BTC needs to change hands in such trades and cash settled futures contracts do not require BTC delivery. Nonetheless, through arbitrage and hedging opportunities, research has shown that derivatives exchanges contribute nontrivial amount to BTC price discovery, with leadership switching back and forth between spot and futures markets under different market conditions.

So BTC price is influenced by financial products that do not even claim ownership of BTC, regardless of fractional reserve risk posed by CEXs. So I guess this extends his argument somewhat.

[AYOBA]

Bitcoin came with a different approach, those who save with it over the years seen the value of their money increase beyond they imagined. Bitcoin might not be able to solve every economic problem facing the globe but it gave the people an alternative they never imagined and sometimes, having alternatives is the first step towards financial freedom.

The truth about life is that no matter any amount’s he/she is earning in a months or weeks and doesn’t have any alternatives that will generate more income, that means the person never ready to make his future bright. Because nobody knows tomorrow so depend on just one source’s of income is not the best idea, Bitcoin has become one of the best alternatives that can make our financial system better and more efficient in terms of the economy.

There’s some people who seeing Bitcoin as not the best alternatives since is a long time investments and that’s why some didn’t consider it as what can solve our problems, unknowing that anyone who’s able to hold the Bitcoin to a higher level it can take us out of situations that could cause us a loss of confidence and solves problem facing at that moment.

[OsaiEmma]

From my research, this is what I found: CEXs can issue out paper Bitcoin to traders, this paper Bitcoin can be used to settle an order book transaction (carry out trades), even when they don't have the Bitcoin backing it up.

This has actually happened before in this market, with FTX and Mt. Gox being examples.

Also, GBTC traded at massive premium over the value of the BTC it actually held for years, sometimes at 20-40%+ premium to NAV, as it was one of the easiest ways to gain regulated exposure to crypto when there were no spot ETFs available.

So some market distortion due to supply and demand for certain product does not necessarily mean exchanges are issuing unbacked BTC. Some people just wanted that GBTC wrapper badly enough that they were willing to pay way more for it.

bitcoin is bitcoin, there is no paper bitcoin but you can have things like figures which in theory represent your bitcoins in centralized exchange accounts, or Wrapped Bitcoin tokens that are tokens with pegs to Bitcoin price but those tokens are not actual bitcoins.

To expand on what OsaiEmma was saying, it does not even necessarily have to be shady CEX BTC. You could also argue that futures and derivatives markets like CME BTC futures can have large effect on BTC spot price. No actual BTC needs to change hands in such trades and cash settled futures contracts do not require BTC delivery. Nonetheless, through arbitrage and hedging opportunities, research has shown that derivatives exchanges contribute nontrivial amount to BTC price discovery, with leadership switching back and forth between spot and futures markets under different market conditions.

So BTC price is influenced by financial products that do not even claim ownership of BTC, regardless of fractional reserve risk posed by CEXs. So I guess this extends his argument somewhat.

Exactly, that's the point I was trying to raise, and it is pretty messed up. We are all in a crusade against CEX, meanwhile it seems they have a major voice in the most influential aspect of bitcoin—I am talking about bitcoin's price.

Could you clarify what you mean by “paper Bitcoin” here? Your reply mentions exchange balances, fund shares and futures. Are you using the term for all three, or specifically for claims that lack the backing promised to customers?

Paper Bitcoins are refers to custodial IOUs, or written agreement that holds a promise of bitcoin settlement to the bearer. For example: with custodian institutions, after purchasing "Bitcoin" through their platform, they issue you a bitcoin balance to your account; that balance is not actually bitcoin but a symbol of how much bitcoin they owe you—what you are promised to have once you request a withdrawal. Meanwhile, the real bitcoin is sitting in their hot/warm wallet—depending on their infrastructure or model. This is what i refer to as "paper Bitcoin".