Imagine heading down to the local grocery store and instead of your reusable bags in your hand (this is how we roll in California) you are instead pushing a wheelbarrow that is filled to the brim with paper $100 USD notes. Inflation has skyrocketed and now a loaf of bread costs $10,000 so this wheelbarrow of cash is just enough to buy the basics (if there are even any left at the store to buy). Interest rates are at world record highs, food & basic items are in high demand and short supply, and millions of people have had to leave the United States in a mass exodus...
This sounds like something that many in the US think could never happen to them, but this same thing is happening in other countries around the world right this moment.
Coming Soon Now Showing
In the hypothetical example I opened with, I use the US dollar, but just replace that with the Bolivar and you pretty much have a real life situation happening right before our eyes. Over that last year or so the people of Venezuela have experienced hyperinflation not seen since World War II. People are making bags and purses out of the native Bolivar currency as inflation is so bad the paper is more profitable selling as a novelty item. Bartering has become more and more common as financial regulations put pressure on everyday life according to this Washington Post article I recommend about a restaurant owner in Venezuela.
Inflation is expected to be 1,000,000% by years end (no that is not a typo, see this article). Recently, president Nicolás Maduro threw even more gasoline on the economic fire by introducing the "Sovereign Bolivar" which drops a few zeros from the entrenched Bolivar and is backed by the Petro cryptocurrency (a crypto issued by the government and backed by Venezuela's oil reserves).
Not too far behind is Argentina, who's native currency the Argentinian Peso has fallen 55% this year according to this Bloomberg article. They are actively taking steps to try to reduce this including cutting down on the amount of pesos in circulation. Once again, this means that the citizens are bearing the brunt of the economic woes while the government tries to rectify the situation with iterations of failed monetary polices.
This is where cryptocurrency takes hold and empowers the people.
The Deflationary Power Of Crypto
In both of the above situations (and a few other around the globe), average citizens are left holding the bag for the bad financial decisions of their leaders. Their native currencies are in sharp decline and many are looking to cryptocurrencies like Dash & Bitcoin as a way to store value and transact with each other. In particular, Venezuelans are restricted from buying the US Dollar locally so there are very few options when epic hyperinflation hits.
Cryptocurrency is the next best solution to solve the need that every day life still has in these countries. Dash has become the go-to crypto in Venezuela which everything from bus rides to sandwiches as it is easy to setup and transact with. According to this article, over 1,000 businesses accept Dash for good & services now and the interest in the top 20 crypto has soared over the past few months.
This is a stark contrast to the response to the government backed Petro cryptocurrency that held a sketchy looking ICO earlier this year. Comparing it to Dash, a decentralized currency not controlled by a government, the Petro has red flags all over the place. Once again, you have a government trying to keep it's people under their thumb of control by choosing the less effective option that maintains the status quo.
Lesson Learned; Blockchain Recorded
So what lesson does all this add up to? In my opinion, it speaks to the antiquated methods we use to keep financial stability in just about any type of society. With blockchain technology and forward thinking alternatives to fiat like Dash, the inevitable rise of cryptocurrencies and decline of fiat currencies is inevitable. In times of great financial recession in the past, there has been no real asset common people could use to hedge against a declining fiat and now there is.
Cryptocurrency is a game changer, and is JUST being tested for the first time in these emerging markets. Don't think this can't happen to the US Dollar and here in a major market like the United States. If any lesson is to be learned, this could happen anywhere and as we can see, it happens quickly. How fast would we see those that called cryptocurrencies a "scam" or a "bubble" jumping on the Bitcoin bandwagon to save their wealth if hyperinflation hit the US? How quickly would people be able to learn how to use a crypto wallet so they could accept Dash if this happened to them?
I think we are on the brink of major change and while it may not happen over night, our current debit-heavy way of doing things just can't last forever. As we see from examples of Venezuela & Argentina, when the going gets tough, the smart turn to crypto.
'Stache That Crypto Friends!