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Author: Admin | 2025-04-28
The value of the U.S. dollarPrior to 1971, the US dollar was backed by and could be redeemed for gold, helping maintain its purchasing power. After President Nixon took the US off the gold standard in 1971, the dollar became a fiat currency backed only by the full faith and credit of the US government. This allowed the money supply to expand more rapidly through policies like quantitative easing, diluting each individual dollar’s value. With the dollar no longer tied to a commodity like gold with limited supply, prolonged periods of high inflation have eroded the dollar’s purchasing power over time. Since 1971, the dollar has lost over 80% of its value against a basket of goods and services.How bitcoin solves this problemBitcoin has a fixed and limited supply that is mathematically capped at 21 million coins. Unlike fiat currencies issued by central banks, no authority can arbitrarily increase the Bitcoin supply, making it immune to inflation caused by excessive money printing. The issuance of new bitcoins is predetermined by the Bitcoin protocol, with the rate of issuance halving every four years in a process called “halving.” This controlled and predictable issuance rate ensures that Bitcoin’s purchasing power is not eroded by inflation over time. As a decentralized and scarce digital asset, Bitcoin provides an alternative to inflationary fiat currencies and serves as a hedge against currency debasement.ResourcesBlockchainBitcoin is built on blockchain technology, which is a decentralized, distributed digital ledger that records transactions across many computers in a network. The blockchain allows Bitcoin transactions to be verified and recorded without a central authority, providing transparency and eliminating the need for intermediaries like banks. Blockchain Technology Explained
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