Bitcoin Is Extremely Useful In These Problematic Countries

Bitcoin Is Extremely Useful In These Problematic Countries

In many countries, there are emerging monetary crises as local currencies lose value. Local governments or central banks are unwilling or unable to solve inflation, and that's a key chapter in the story of Bitcoin. The late economist Milton Friedman, a Nobel Prize winner, said people should only look to one reason why long-term inflation exists: The above institutions keep printing cash out of thin air which debases the local currency. That makes Bitcoin and other reliable cryptocurrencies an attractive solution in places that operate on shaky or desperate economic ground. High-Inflation Countries So in which countries is Bitcoin most useful? To start, nations with hyper-inflation have citizens who are desperate to preserve their purchasing power and protect their wealth. These countries have the highest annual inflation in 2017, according to World Bank:

  • Venezuela: 652%
  • South Sudan: 182%
  • Congo: 41%
  • Libya: 32%
  • Angola: 30%

and Argentina have seen their local currencies nosedive over the past few months, and it's problematic that both countries have large U.S. dollar-denominated debt. In such cases, the amount you have to pay back — in dollars — increases as the value of your local currency plummets. The Turkish Lira has lost 44% against the U.S. dollar; Argentine Peso, -50%; Angolan Kwanza, -48%; Brazilian Real, -20%; Liberian Dollar, -18%; Iranian Rial, -14%; Indian Rupee, -10%. You get the idea. (The above data is derived from Pension Partners.) Inflation can increase a nation's debt which can then cause more inflation as the government prints more (devaluing) cash to make interest and balance payments. Drastic expansion of the local money supply is harsh for fixed-income recipients like senior citizens. Imagine saving all your life only to find out the paper cash you accumulated has become worthless Monopoly notes. There's a saying, "Savers are losers." It's better to be an investor. Rise In Gold Imports Citizens in above countries are looking to park their money in reliable assets that have sustainable value: gold, silver, real estate, Bitcoin and other reliable cryptos. For younger investors, Bitcoin is an escape hatch — a trustless technology for tens of millions who have lost faith in monetary institutions and stumping politicians. According to 2018 World Gold Survey, Turkey tripled its gold imports in the last seven months of 2017 as investors looked to the precious metal for safety. And it imported 153 tons (a large quantity) from January to May 2018, according to Borsa Istanbul. In the U.S., four out of five Americans (79%) are aware of at least one type of cryptocurrency, according to research firm YouGov Omnibus. But many who live outside North America and Europe love Bitcoin. Venezuela is actually fourth all-time in bitcoin trading volume (11.2%) and Nigeria is seventh all-time (4%). Not surprisingly, these countries have unstable economies to say the least. These are cities that have the most Bitcoin-accepting merchants in the world, per Forbes using CoinMap data.

  1. Prague, Czech Republic (147)
  2. Buenos Aires, Argentina (141)
  3. San Francisco, USA (117)
  4. Madrid, Spain (101)
  5. New York City, USA (101)
  6. Amsterdam, Netherlands (88)
  7. Bogota, Colombia (87)
  8. Vancouver, Canada (86)
  9. London, UK (85)
  10. Paris, France (82)
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