Advantages of Using Silver Crypto-Currency
Silver crypto-currency means that the value of money used in the country is derived from the prices of silver in the country. Fiat currency system is the alternative to silver backed currency where money value is not backed by any physical asset. In asset-backed currency the government plays a very minimal role in the overall value of money used in a country. Therefore if a country is using silver backed currency means that the value of money is affected the prices of silver. A physical commodity determines the value of money used in a country under the asset-backed currency. The following are benefits of using silver backed currency.
Asset-backed currency play a major role in keeping the money supply in the economy at an optimal level. Inflation is when too much money is chasing after too few good as a result of too much money in the economy. This, in turn, leads to loss of value in the currency used in a country. Deflation on the other hand is caused by low money supply. Which may lead to adverse economic conditions. Asset-backed currency offers a way to prevent these problems from occurring. This is because silver as a physical commodity is a scarce resource. By controlling money supply a country is able to have a stable economy. It is evident that most of the countries experiencing economic instabilities is due to the misappropriation of the fiat currency system. The reason is that the government may be involved in activities that affect negatively the value of a country’s currency. This creates a need to solve these negative economic conditions by using silver-crypto-currency.
The most popular economic bubbles in the world could be avoided by using asset-backed currency. The reason is that the physical commodity such as silver has a fixed value at any given point that appreciates steadily. In the past there have been several economies that have collapsed due to these economic bubbles. The reason is that people acquire debt to buy assets that increase in value rapidly with hopes of selling later at a profit. Therefore the banks seem like they are making money out of the air. The problem is that the rapid increase in value of the asset is not stable and will suddenly drop leading to substantial loses. Silver backed currency offers a way to prevent economic bubbles from happening the first place. This is because silver like other precious stones is limited in supply. This means that all the assets in the country will have a stable value because there is stable demand for money is also limited in supply. Silver backed asset helps to avoid rapid increase in value of assets that cause the economic bubbles and collapse.