The pandemic in 2020 affected consumer spending patterns in part due to lockdown policies globally. It raised concerns from economists about the accuracy of inflation measures in capturing price changes. Since inflation is a constant threat to the value of fiat currencies, people tend to protect their assets by investing in gold or other assets that can hold their weight over time. Consumer price inflation in Russia hit its six-year high in February, mainly due to rising food prices. Data released by the Rosstat agency showed that the annual rate was 9.15%. Bitcoin, the best cryptocurrency by market capitalization, is a deflationary asset. Hence, citizens around the world are increasingly using it to protect themselves from rising prices and hyperinflation. With cryptography, interest rates and money printing cannot be changed as quickly as with fiat. Furthermore, the supply of Bitcoin will never exceed 21 million, making it a stable and inflation-resistant store of value. However, the volatility of the cryptocurrency market remains a topic of debate despite the popularity of Bitcoin over the past year. Bitcoin and other cryptocurrencies are durable, easily interchangeable, safe and rare. It is also more portable, transportable and, in some ways, more decentralized. As a result, anyone anywhere globally can store and secure their Bitcoins.
Bitcoin's blockchain technology has real-world applications. Bitcoin has little practical use in rich countries with relatively stable fiat currencies. However, Bitcoin is a superior form of exchange in nations prone to hyperinflation and political turmoil. Stablecoins are becoming more popular with people in hyperinflationary economies. Stablecoins are an excellent option as more and more retailers and stores begin accepting cryptocurrency as a payment. BUSD and other fiat-backed stablecoins are becoming increasingly popular in unstable markets. Forex trading and various fiat currencies are a popular method of fighting inflation. Unlike traditional currency exchanges, stablecoins can be purchased 1: 1 with USD via bank transfer. Other stablecoins, such as BUSD, USDT, USDC, and TUSD, can also be converted and received at no cost. This isn't the first time people have turned to cryptocurrencies to support a country in crisis. But it seems like the first time that cryptography has become the main topic of discussion in an international conflict. For example, Nadya Tolokonnikova, co-founder of the punk band Pussy Riot, organized a crowdfunding campaign to support the Ukrainian people. Vitalik Buterin, the Russian-born founder of ethereum, encouraged people to donate for humanitarian efforts in the country with encryption. Although digital currencies have the potential to help people flee war zones, it is still unclear how they will shape international conflicts. Regardless of their effects on society, cryptocurrencies are becoming part of global economies. They are helping people to work outside of banks and financial institutions. Critics believe that the rise of cryptocurrencies in terms of value is the main reason for the influx of institutional money into the market. For example, despite the decline in July, Bitcoin still managed to gain 2% during the year. However, after Bitcoin's drastic 45% drop in May, many investors turned their attention to gold. Bitcoin has been viewed as an immature sector and has yet to prove itself as a stable asset class or a safe haven store of value. On the other hand, gold has a long history of stability and trust.
COMMENT. Remember that the block-chain system is a system of false democracy. There are equal conditions between the nodes, but it is like arguing that the Knights Templar were democratic because they shared food and property. Now mining is reserved for a few supercomputer owners. The common citizen who buys cryptocurrencies has infinite possibilities of being scammed, from the Ponzi method to the theft of badly invested money. Combining an anarchist system with a state system is impossible. This is demonstrated by Meta (Facebook) who has given up on launching its cryptocurrency. So we hope that the world will realize the validity of the proposed exhibition of digital currency that respects the canons of the CBDC.
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