The consultant highlights that Bitcoin and Monero defend the theory that they are sound money. He portrays how the economic consequences of the pandemic will affect the world in the coming years.
In recent days, Daniel Kim, an independent cryptocurrency project consultant, delved into the strengths and weaknesses of Bitcoin, the US dollar, and Monero amid the global economic crisis that the coronavirus has caused.
Daniel Kim showed the reality about how the economic consequences of the pandemic will affect the world in the coming years. This new scenario, in which the US dollar is losing value, leads him to consider that it is the right time for citizens to seek new independent sources of scarcity, such as Bitcoin and Monero.
Since the coronavirus pandemic started to affect the world, governments have demonstrated that they can print as much money as they want, and nothing seems to stop them, according to Kim. This situation, as well as high public spending, will cause hyperinflation, as reflected in the book “Monetary Regimes and Inflation”, which he recommends.
“This book concludes that the trigger of inflation in 25 of 29 cases was the creation of money to finance the public deficit. This makes it evident that the printing of money will not lead us in the right direction,” said Kim.
Seeking to demonstrate that the US dollar is losing value, the consultant added that the money supply in the United States has grown by an average of about USD 300 million per hour. He considers that this accelerated rate of monetary creation is showing that money can lose so much value that it unreliable; as a consequence, people must spend it before its reflected value disappears.
Kim said that people have historically turned to classic systems of scarcity, such as gold or silver, to protect themselves from hyperinflation. However, he noted that the world is now discovering a digital way to protect itself, such as the scarcity of Bitcoin and Monero.
Bitcoin and Monero: Safe Money
Daniel Kim showed the terrifying situation that the huge supply of US dollars has caused in the world. Then he presented graphs that show that Bitcoin and Monero are reaching a new area of scarcity. He explained that their inflation rates will be increasingly low and adds that they will remain below the gold rate so that both satisfy the definition of being sound money.
To reflect that alternative sources of scarcity represent the safest money in the world, Kim provided an example in which a person turns to these systems to seek refuge from inflation. He said that this person would buy one-millionth of all the gold that there will be in the world in 100 years.
There are currently 200,000 metric tons of gold and its supply grows by about 1.8% per year. At this rate, there will be more than 1 million metric tons of gold in 2120. In other words, Kim estimates that the person must buy a metric ton of gold, requiring an investment of USD 76 million.
Kim did the same calculation with Bitcoin, whose total supply in 100 years will be 21 million coins, as its white paper states. Therefore, a person needs to invest USD 244,000 now to buy one millionth of all the Bitcoin in the world in a century.
By Alexander Salazar