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. Therefore unlike the fiat currency system where the government influence the value of the money. The good thing about silver backed currency is that the government does not play any role in the value of money used in a country. The essence of using silver backed currency is to reduce the factors that influence the value of money. A physical commodity determines the value of money used in a country under the asset-backed currency. The following are the merits of using asset-backed assets.
Silver crypto-currency is essential to countries that aims to regulate the amount of money in circulation in the economy at any given time. This is very important because excessive money supply leads to high levels of inflation. High levels of inflations means that the country’s money loses value. Whereas low money supply leads to deflation. Which may lead to adverse economic conditions. By using silver crypto-currency a country is able to mitigate against these risks. This is because silver is limited in supply thus the only way to increase money supply is to increase silver mining activities. By controlling money supply a country is able to have a stable economy. Many of the countries experiencing unstable economies is due to using a currency system that is not backed by a physical commodity. This is because the loss of value of money may be caused by the activities undertaken by the government. Therefore these countries are advised to consider using asset-backed currency.
Silver backed currency is essential in avoiding economic collapses due to bubbles. What makes silver backed currency ideal is that the value of this physical commodity is relatively stable. Economic bubbles have led to collapse of economies in various countries. The reason is that people acquire debt to buy assets that increase in value rapidly with hopes of selling later at a profit. The lending institutions give people loans which are beyond their wealth. People make huge loses when the asset they acquired suddenly drops in value. These economic bubbles can be avoided by using silver cryptocurrency. This is because silver like other precious stones is limited in supply. Thus the value of money and assets acquired using more can only appreciate in value steadily. Thus avoiding instances where assets double in value overnight thus keeping the economy at a stable rate and avoids economy crash.