Is there devaluation in cryptocurrencies?

Inflation is a monetary phenomenon whereby the costs of consumer goods rise as a result of a loss in the cost of currency. Currently, people are talking about a viable uptick in inflation. Conventionally investors have saved themselves from this phenomenon by investing in gold, silver, or real estate. But then is Bitcoin a viable alternative to safeguard against inflation?

 What causes inflation?

The increase in the proportion of circulating money is the root cause of inflation, even though it can occur through other mechanisms in the economy. Monetary authorities such as the European Central Bank or the US Federal Reserve can increase the proportion of money by printing new currency, thus legally lowering the cost of legal tender.

Does inflation produced by central banks hurt cryptocurrencies?

major of 21 million, not one more and not one less. This is known as the “Programmed Scarcity”, which gives the BTC an issuance path that has been stipulated for 11 years and is managed until the year 2140 when it will stop generating new Bitcoins for the rest of its life.

The creation of bitcoins is halved every 4 years (Halving). Today 900 BTC are created or mined daily. And in 2 more years, in the year 2024, this number will be halved again. Finally, what is happening is decreasing inflation in Bitcoin, as its supply is tending to shrink. But, simultaneously, we have growing demand, concluding in costs that tend to increase in the era. Bitcoin (BTC) currently has an inflation rate of only 1.8% per year; almost half the inflation rate of Chile and Colombia, let alone Argentina.

This programmed scarcity, and halving, makes the cryptocurrency have one of the lowest annual inflation rates in the world, and every few years it will be even lower.