There's not much difference between an inflation rate of 440000% and 880000%, it just means that the bolivar doesn't work anymore.
Money is a purely social construct. It's only worth something when people collectively believe and trust that it's worth something.
It's a popular idea that dollars and euros derive their value because taxes are paid in that currency, or because it's backed by the state's military power.
Venezuela shows that neither of these are the source of the currency's value.
Collective belief is a pretty fragile foundation to build an economy on, hard to build and easy to destroy.
Another term for "collective belief" is "consensus". We're witnessing a disintegration of political and economic consensus not only in Venezuela, but also in the US.
What happens to the dollar when public consensus, trust and collective belief is weakened?
This is why I find the decentralized, trustless consensus of cryptocurrencies to be especially attractive at this moment in history.
Money is a purely social construct. It's only worth something when people collectively believe and trust that it's worth something.
It's a popular idea that dollars and euros derive their value because taxes are paid in that currency, or because it's backed by the state's military power.
Venezuela shows that neither of these are the source of the currency's value.
Collective belief is a pretty fragile foundation to build an economy on, hard to build and easy to destroy.
Another term for "collective belief" is "consensus". We're witnessing a disintegration of political and economic consensus not only in Venezuela, but also in the US.
What happens to the dollar when public consensus, trust and collective belief is weakened?
This is why I find the decentralized, trustless consensus of cryptocurrencies to be especially attractive at this moment in history.