What Is Inflation?
Inflation measures the rate at which the average prices of goods and services rise over time. As prices rise, the currency used to buy them becomes weaker. In other words, the same unit of currency buys fewer goods than it did before.
Often measured as a percentage, inflation gives an idea of the purchasing power of a particular currency or cryptocurrency.
A Closer Look at This Term
Economies across the globe have to often deal with growing inflation. When inflation rises past 50%, it is known as hyperinflation.
Venezuela is a prime example of what inflation does to an economy. The Venezuelan Bolivar was recently rendered worthless by runaway inflation. In response, the Venezuelan government introduced a blockchain-based cryptocurrency to control the unprecedented inflation rate.
Cryptocurrency inflation is thought to be less likely since their supply is controlled by programming code. Also, they are not controlled by governments or central banks.
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