People keep saying how Bitcoin and some other cryptocurrencies are hedge against inflation.

But yesterday I thought about what happens if it becomes a legal currency and it struck me- if it does it will In fact create massive Inflation bigger than anything the government could print

Here is an example :

Say a house costs 100k cash. If a miner mints one bitcoin , he can sell it for 100k and buy the house .

Meanwhile the guy with 100k gets one bitcoin . This seems fair but what if bitcoin becomes an official medium of exchange

Now the guy who bought the bitcoin can also go and buy a 100 000$ house without someone paying him back the 100k, he just exchanges it for a house

But this way the 100 000$ ends up buying 2 houses instead of 1 as minting a new bitcoin pretty much adds up to the overall inflation by the amount the bitcoin is worth

So at 1 000 000$ every new bitcoin adds 1 000 000$ to the total inflation in the form of extra buying power

And same goes to every crypto that gets legitimized Especially stable coins who no one knows of they are really backed up by anything

By making any crypto legal way of paying without having to sell/ cash out first ,you are essentially adding that market cap on top of the government printed money which can add trillions of dollars to the economy and adds huge amounts of inflation.

Please feel free to correct me if I am wrong here

submitted by /u/Victorvnv [link] [comments]r/CryptoCurrencyRead More

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