Satoshi Nakamoto the creator of Bitcoin had a clear intention of taking away financial control from the banks and governments and hand it over to the people through decentralisation which was made possible by blockchain which is now powering no less than 2000 applications.
This is hence, the reason why some cryptocurrency enthusiasts are buying Bitcoin at the moment.
The question then is but why not gold?
Especially if we see that at the moment central banks are buying gold faster than anytime since World War II.
Maybe we should ask Why?
The answer is to protect themselves against the mess they have created.
I choose to buy bitcoin instead.
In the event of an economic meltdown, (that is likely to happen here in South Africa and I will explain why I say so a bit later in this post) Bitcoin can provide the cover most people need and save their wealth against the wrong decisions central banks and political leaders are making.
So I’m looking at Cryptos from a risk point of view.
So governments and central banks pose a risk and one of the tools they use to legally “steal” your money is through inflation.
This is very easy for them to do… they just print more money.
Now for some great news.
Nakamoto also designed Bitcoin to be deflationary.
This implies that the purchasing power of Cryptocurrency will be increasing over time.
One of the functions of gold is to hedge against inflation.
But there is a far better way because Cryptocurrencies are designed to ultimately make it a better store of value since it is scarcer than Gold.
Economists have since concluded that it is an excellent store of value thanks to Lindy’s effect and Network Effect that would take it global.
Besides, it is not hard to see why the 21 million maximum cap of Bitcoin makes it an even better store of value than Gold.
Today Bitcoin inflation rate stands at 3.79%
Considering its architecture, it would continue dropping until it reaches zero.
The same can not be said for any FIAT currency like the Rand, Dollar or Pound.
Just take the case of Venezuela whose inflation rate by 2018 was an estimated 80,000%
This was nothing compared to the Hyperinflation in Zimbabwe that began in the late 1990s shortly after the confiscation of private farms from landowners.
During the height of inflation from 2008 to 2009, it was difficult to measure Zimbabwe’s hyperinflation because the government of Zimbabwe stopped filing official inflation statistics.
However, Zimbabwe’s peak month of inflation is estimated at 179.6 BILLION percent in mid-November 2008.
You can watch the video below that I made on How to protect yourself against hyperinflation with Bitcoin on Youtube… https://youtu.be/LmBlZO0iwwM
OK I know that some of you will say “but this will never happens here in South Africa…
And I was one of those who believed this up to 1 August 2018 when Cyril Ramaposa announced that the government is going to change the constitution to make provision for the expropriation of land without compensation. (Think of what started hyper inflation in Zimbabwe.)
This to me – as a capitalist – is a serious risk as it directly affects me and my family who build our financial future based on property and land.
Now I think that this was done by the ANC to rebuild their image before the elections, which has led to big election promises regarding land reform.
The problem is that now they now have no other choice but to implement it.
This however is not my biggest concern.
The bigger risk lies in their long-term goals: the implementation of socialism and communism.
If I look at the bigger picture, it can only have a negative impact on South Africa, and the markets will react on that just like in Zimbabwe and Venezuela.
If the ANC succeeds in negatively affecting private property rights, (and they have no choice but to do so) our country will soon be part of the disaster we see elsewhere in Africa, and this is why I referred to what happened in Zimbabwe earlier.
Now what about gold as a way to secure yourself like what the reserve banks are doing?
Well do you think for one moment when a country is in financial ruins that it is not going to try to confiscate gold or even cash like what has happened in several countries over the last couple of years?
So while banks are buying more gold to protect themselves from economic instability…
And with the possibility of Hyperinflation for us on the horizon…
And a government that is becoming more and more socialistic…
…Cryptocurrency enthusiasts like myself are protecting ourselves through a better, global, valuable, scarce and a better store of value in Bitcoin and Cryptocurrencies.
Regards
Hannes
P.S. If you invest according to the Dreyer Crypto Strategy since Jan 2017 your growth would have been 1824% – for more info go to http://dreyercryptostrategy.com/ and do our free Course on investing in Cryptos or phone the office during office hours 012 542 4560 to help you to get access.
P.P.S. On Dec 7, 2018 I publish this video on YouTube – My Psychological FEAR Indicator is at 98% – time to BUY Cryptos https://youtu.be/VZaL1NlZgOo
The growth on that portfolio over the last 147 days was 54,69%. For more info go to http://dreyercryptostrategy.com/ and do our free Course on investing in Cryptos or phone the office during office hours 012 542 4560 to help you to get access.
