Cryptocurrency Proves its Value in Struggling Economies
The concept of crypto’s value has significantly changed to a more positive outlook after a Venezuelan citizen received donations in cryptocurrencies. These donations have proved that cryptocurrencies hold more intrinsic value than government-valued currencies (fiat currencies).
Hector, a Venezuelan citizen, received a month’s salary equivalent to 1.20 USD. This enticed the crypto community to send out donations in their currency (NANO) and he has received a total of five thousand dollars’ worth of donations, which enables him to buy around nine thousand kilograms of food from a vendor that accepts NANO.
Hector decided to save his donations in NANO and not in his local currency. This experience shows how cryptocurrency performs better than a devalued currency, and gives NANO a stronger value in the crypto market.
Because of Venezuela’s continuous printing of their own currency (the bolívar), it is now suffering from hyperinflation with an annual inflation rate of almost 15.66 percent, and a monthly inflation rate of 167 percent. This lowers the intrinsic value of its local currency and makes it difficult for its citizens to use it in even buying their basic daily supplies of food.
According to a 2017 analysis by JP Morgan, if Venezuela’s citizens had been using cryptocurrency instead of their local currency, the government wouldn’t have made such efforts in printing money and their currency would stabilize; therefore, eliminating hyperinflation.
Experts Advise Donating More Crypto
EatBCH is trying to feed Venezuelans and South Sudanese (who also suffer from hyperinflation) by using Bitcoin Cash (BCH) donations. So far, the EatBCH has managed to collect donations equivalent to 22.8K USD and provided food equivalent to 5.8K USD.
The CSIS Americas Program that encourages discussions of the current Western Hemisphere affairs has mentioned that EatBCH’s efforts to feed countries struck by hyperinflation through the use of bitcoin cash is an innovative approach that has affected Venezuelan citizens positively. It is also looking to encourage these kinds of initiatives in delivering humanitarian aid from other countries.