Despite bouts of volatility that tend to scare away risk-averse investors, cryptocurrency is more popular than ever, with millennials hoping to cash in on its explosive growth. While legacy coins such as Bitcoin and Ethereum are still the most popular currencies in the world of crypto, other emerging altcoins are gaining momentum and popularity. If you have been living under a rock and have no idea where to get started in your crypto journey, keep reading to find four steps to get started: 1. Pay Attention to What You're Investing In In addition to having your finances in order, when investing in crypto, be mindful that, unlike stocks, most cryptocurrencies are not backed by any … [Read more...]
Is Bitcoin a Better Inflation Hedge Than Gold?
Proponents of the digital cryptocurrency Bitcoin are touting it as the latest Inflation hedge... perhaps better than gold... but is it? Although gold may fluctuate significantly in the short run, this precious metal has fared relatively well as a hedge against inflation over the long term. One of gold's significant benefits is that it is a commodity that if held in physical form is neither paper, nor government-controlled, nor another person's liability. Gold's other major advantage is its limited supply (i.e., requiring quite a bit of effort and energy to mine). Recently, Bitcoin has arrived on the scene and become a "digital commodity" independent of the government, which has gained … [Read more...]
How has Venezuela’s Bitcoin experiment Fared?
In early 2018, in an effort to fight a collapsing economy and hyperinflationary currency Venezuela decided to jump on the BitCoin bandwagon and create its own cryptocurrency called the Petro. On December 3rd 2017, Venezuelan president Nicolás Maduro announced the petro in a televised address, stating that it would be backed by Venezuela's reserves of oil, gasoline, gold, and diamonds. Other reports claimed that the initial issue price would be based on the price of oil i.e. 1 Petro = 1 Barrel of Venezuelan oil. On 5 January 2018, Maduro announced that Venezuela would issue 100 million tokens of the petro, for a total value of just over $6 billion. The government stated the pre-sale raised … [Read more...]
How High Inflation Drives Countries Towards Crypto
What is CryptoCurrency? A cryptocurrency (aka. Crypto), is an alternative form of payment created electronically rather than through government fiat (decree). The idea behind it is that an algorithm creates a limited amount of currency that is available to individuals to use instead of cash, checks or credit cards. The technology behind it allows you to send it directly to others without going through a 3rd party like a bank. Initially, the untraceable nature of cryptocurrency led governments to suspect that it was being used for nefarious purposes. And some notable cases of purchases on the "dark web" were prosecuted like the "Silk Road" case which operated from 2011-2013. Since then … [Read more...]
Cryptocurrencies and Inflation
The current fascination with "Crypto" has led to questions about how cryptocurrencies and inflation relate. In our article, What is the Real Definition of Inflation? we explained that there is a major difference between the cause and the effect of Inflation and unfortunately both are loosely called "Inflation". More accurately the cause is "monetary inflation" i.e. an increase in the money supply and the effect is "Price Inflation" i.e. an increase in the cost of goods and services. Can Cryptocurrencies "Cure" Inflation Since the dawn of money, there has been a fear of debasement. In the early years, when gold and silver were the primary forms of currency it was possible that another … [Read more...]