Bitcoin News Today – The global economy is threatened by talks of a potential recession. Many analysts have debated the role of Bitcoin and other cryptocurrencies in the event of a recession. Some have even categorized Bitcoin as a hedge or a digital precious metal that can store value despite debasement of fiat or inflation.
Bitcoin and other cryptocurrencies are more than just a store of value in case of inflation. They also protect citizens against bad governments as well as bad governance.
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Bitcoin is built to be free from the control of central authorities. The main goal of cryptocurrencies is decentralization. Node runners do not govern, neither do miners. They all support a growing ecosystem. This shows that distributed governance is effective in the creation of trust and economic value. Also, it proves that this can be achieved without governments or central authorities.
In the same vein, pseudo-anonymity of cryptocurrencies such as Bitcoin allows individuals to make financial choices without revealing their identity. This makes it difficult for the government to censor individuals. One good example of this is Wikileaks.
Bitcoin Serves as A Way Out When Other Currencies Depreciate
Bitcoin also serves as a means to prevent assets from depreciating. If currencies depreciate under failing governments, a hedge is the first option for citizens. This is what happened in countries like Hong Kong and Venezuela. Usually, gold and silver are the go-to hedges in times of economic distress. Some opt for the USD which is also tied to a central government.
Bitcoin is not tied to any authority and this gives it an edge over fiat. In a severe economic crisis, cryptocurrencies can be a store of value rather than fiat which is still controlled by central governments.
Lastly, cryptocurrencies help promote newer forms of government and remove the need for central governments. Concepts such as quadratic voting and liquid democracy were introduced by the crypto community and allows individuals to play a larger role in governance.
When it comes to protecting individuals against inflation, bitcoin plays the role of a hedge. It protects users from the cause of inflation – bad governance and bad government and not just inflation. At a time where political leadership has grown by ten folds and become more centralized, Bitcoin and altcoins can play the role of a hedge.