This is a 100 trillion dollar bill from Zimbabwe. It’s worth around right now. I got it as a reminder of what can happen when governments and banks make reckless and irresponsible financial decisions. $0.40 US Back in 1980, one Zimbabwean dollar was worth roughly one US dollar. But after tanking the economy, the government started printing money in a desperate attempt to save it. This led to a vicious spiral of hyperinflation. In 2009, , compared to an average of 3.5% worldwide. Zimbabwe’s inflation was 231,150,888.87% Think about the people who worked hard their entire life maybe to save $100,000. Then, in just a few years, they saw their government flood the market with $100,000,000,000 notes that couldn’t even buy them a meal. These people saw the value of their lifelong earnings turn into nothing, and they couldn’t do anything about it. Zimbabwe is the worst case of hyperinflation, but this is happening in many other countries such as Venezuela, Argentina, Brazil and even in the US. The USD Printing Machine The US dollar hasn’t been backed by gold or anything else . Currently, private banks create money out of thin air by Since 2008, the government printed over , effectively quadrupling the total amount of US dollars in circulation. Thankfully, the government managed to keep inflation under control, but this situation is very worrisome to some economists. since 1971 lending up to 10 times the money they don’t have. 4 trillion dollars Total USD in circulation since 1980. Today, we’re at about 3.9 trillion. In a debt-based economy, it is somewhat beneficial for governments to print money, because . However, this also wrecks everyone trying to save money. A 2% inflation rate might seem like nothing, but it essentially means that in 20 years, . lowering the value of the currency also lowers their debt half your savings will be lost This is where Bitcoin comes in You might have heard of Bitcoin. It’s a new form of digital currency. Bitcoin has many features that make it extremely interesting for the people in countries like Zimbabwe. First, it’s outside the reach and control of any governments. Because it’s global, it’s also unaffected by local markets and policies. But more importantly: you can’t print Bitcoin. By code, there will only ever be . 21 million Bitcoin ever created Why 21 million? No particular reasons. It is an arbitrary number chosen by . The goal is to emulate features found in natural currencies such as gold. Just like there is a limited quantity of gold on Earth; there’s a limited quantity of Bitcoins on the Blockchain. Bitcoin’s mysterious creator This limited supply makes Bitcoin a , meaning compared to fiat money, it gains value over time. For people in countries like Zimbabwe, this is a blessing, because what happened to the Zimbabwean dollar could never happen in the Bitcoin ecosystem. deflationary currency Some people will say that Bitcoin isn’t a great store of value because it’s price is too volatile. Others will say that an economy running entirely on a deflationary currency like Bitcoin wouldn’t be sustainable, because no one would spend their money. These people are right, but they are missing the entire point. Because despite all of this, Bitcoin still brings something extremely valuable to the table: competition. Voice & Exit As tells us, when it comes to changing things, there are two fundamental forms of power that comes to people: voice and exit. Albert O. Hirschman When governments become reckless, you can gather around, create banners, and march the streets to voice your complaints. However, as you know, this is usually suppressed and rarely lead to changes. So when voice doesn’t work, you get to the second most important form of power. . Exit Leaders might not care enough to listen when people voice their complaints. But when people start leaving in drove, then they care. Because you can’t be in power when everyone has left. Exit scares the shit out of those in power. A Financial Exit Door Thanks to Bitcoin, for the first time in history, governments don’t have the monopoly on money anymore. Today, people who have lost faith in their governments can choose to move their fund out of their national economy, and into the digital economy. Governments can try to build walls and borders all they want to prevent this, but Bitcoin is borderless by design. All you need is a smartphone and an Internet connection, and you’ve got yourself an entire bank on your phone, with instant access to the global economy. In the end, Bitcoin and other cryptocurrencies are healthy check against the tyranny of corrupt and fiscally irresponsible governments. Because nobody wants to be the leader of an economy everyone is trying to leave. Don’t know anything about crypto? Learn the fundamentals of blockchain technology here 👇 _Crypto Kitties is about so much more than cats._medium.com People are spending $millions on digital cats and here’s why it makes sense Want to invest in crypto but don’t know where to start? Read my beginner’s guide to buying Bitcoin and other cryptocurrencies! 👇 _The complete guide to buying Bitcoin, Ethereum, Litecoin and other cryptocurrencies._medium.com How to Buy Bitcoin and Other CryptoCurrencies _Read writing about Cryptocurrency in Hacker Noon. how hackers start their afternoons._hackernoon.com Cryptocurrency - Hacker Noon Please hit 👏 if you enjoyed or learned from this. This is an excerpt of a talk I just gave at WAQ18.👉 👈 Watch the video with English CC
