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This blog explores the possibility of Cryptocurrencies as a solution to hyperinflation, if you haven’t read the previous blog on the Introduction to Hyperinflation , please do so. The invention of cryptocurrency has added a whole new dimension to the digitization of the global economy. It offers an alternative to conventional forms of central bank money or ‘fiat’ currency. It also offers new approaches to setting monetary policy, free from political interference and the damaging consequences of hyperinflation.  Fiat currency is money that is not backed by an underlying asset or commodity but is given the status of legal tender by law. Legal tender is something that a business is obligated to accept as a means of payment. But the fiat itself is inherently worthless. Its value is based on users’ faith that a given nominal amount of currency - the face value - will entitle them to a certain amount of goods or services in exchange. Put differently, money enables indivi...

Introduction Hyperinflation is a term to define rapid, extreme, and out-of-control price upsurges in an economy. While inflation is a measure of the pace of rising prices for goods and services, hyperinflation is swiftly intensifying inflation. Although hyperinflation is a rare event for developed economies, it has occurred many times throughout history in countries such as China, Germany, Russia, Hungary, and Argentina. Hyperinflation occurs when prices have risen by more than 50% per month over a period of time. For comparative purposes, the U.S. inflation rate as measured by the Consumer Price Index (CPI) is typically less than 2% per year, according to the Bureau of Labor Statistics. The CPI is merely an index of the prices for a selected basket of goods and services. Hyperinflation causes consumers and businesses to need more money to buy products due to higher prices. Whereas normal inflation is measured in terms of monthly price inc...