Godfrey Bloom bought the first Bitcoin, an alternative to anti-inflation?
Inflation refers to the prices of goods and services in the economic system that continue to rise for a period of time, and at the same time, the amount of currency increases rapidly, leading to a continuous decline in value. For instance, you could buy Mcdonald meal for 23 dollars last year, but now it costs 24 dollars. The price increases every year.
Reason behind inflation
First, the supply and demand of commodities are no longer balanced. The quantity supplied remains the same, but the demand increases. For instance, At the beginning of the year, the epidemic broke out in Hong Kong. The sudden outbreak caused many Hong Kong people to rush to pharmacies for buying masks, however it was during the Chinese New Year, many factories were closed, resulting in a serious shortage of supplies. The price of masks rose sharply from RMB $50/per 65 to RMB 400 /per 20. Although the supply has returned to normal now, because masks have become a daily necessity, even if their prices have not been speculated to unreasonable levels, it cannot go back to the period before the outbreak.
Second, the government increased the issuance of currency, which led to currency devaluation. In order to revitalize the economy during the epidemic, countries issued currenies in an attempt to stimulate consumption. Take Hong Kong as an example. The government announced that it would distribute 10,000 dollars to the entire population as a relief measure. However, this measures did not benefit Hong Kong people. Everyone’s account was increased by 10,000 dollars, making this 10,000 dollars no longer worth “10,000 dollars”.
The unemployment rate in the world continues to rise. The national unemployment rate in the United States rose sharply from 3.5% in February to 14.7% in April. According to the Census and Statistics Department, the seasonally adjusted unemployment rate in Hong Kong from April to June was 6.2%, a new high throughout these 15 years. Under the epidemic, no country can stay aloof. Therefore, in the long run, at least until the end of the epidemic, countries will not stop printing money to rescue the market to prevent a decline in economic activity due to rising unemployment.
Godfrey Bloom, a British politician, posted a tweet on 1 October,
“I make my first purchases of bitcoin this week. Gold & silver have I plenty.”
He publicly criticized the government’s monetary policy in 2011. Bloom believesd that politicians and the central bank borrowed money to stimulate the economy, but then printed a lot of money in order to repay the debt, causing the currency price to fall. Such a vicious circle continued, the entire country’s finances were on the verge of bankruptcy and a debt crisis appeared.
Cryptocurrency, take Bitcoin as an example. It has a limited and fixed total supply. Its total supply is 21 million coins. It is not affected by any institution, bank, or country. its value will not be interfered by a third party. Its uniqueness makes investing in cryptocurrency a way for everyone to avoid inflation.
Which cryptocurrency should I invest in?
Bitcoin (BTC) was officially issued in 2009 and has a history of more than 10 years. It is also the most valuable on the market today. As of today, Bitcoin worths 198 billion U.S. dollars, and its unit price is as high as 10,745 U.S. dollars. Due to its long history, it has attracted many investors, basically 90% All cryptocurrency exchanges can conduct Bitcoin transactions. However, his entry barrier is too high, not everyone can afford it.
Ether (ETH) was launched in 2015. It is a cryptocurrency circulating in Ethereum. Ethereum is a public blockchain platform with smart contract technology and decentralized application functions. Any program developer can develop blockchain applications and smart contracts, and users need to pay Ether to be able to create or use applications on the platform. Ether has a higher applicability than Bitcoin. Its current total market capitalization is $39 billion, making it the second largest cryptocurrency.
It once rose to 1,200 US dollars, but now it has fallen to about 350 US dollars. To get it back to the $1,200 price level, it needs to rise by more than 300%, which is extremely difficult.
Filecoin (FIL) was founded by Juan Benet in 2017 and promised to go online on 15 October this year. It is another practical cryptocurrency after Ethereum. Filecoin is a by-product of the IPFS network, used to encourage miners to help store data, and users need to pay Filecoin to miners in exchange for storage services. Although it has not yet been issued, its value is beyond doubt. It has always been a hot topic on the Internet. Some well-known cryptocurrency trading platforms such as Gate.io have also listed the estimated value of Filecoin, which is around 19–20 US dollars.
Just imagine, on the day he was released, what price could its price rise to?