Bitcoin Cash
How Bitcoin Cash Can Help The Economy of Zimbabwe
The Economics Aspect Of P2P Electronic Cash
Zimbabwe is a country locked in the crossroads of a geostrategic position in Africa in a region containing vast resources with various forces trying to exploit them.
Zimbabwe’s economy for decades has suffered from hyperinflation that devastates its economy and impoverishes the people.
It is a similar situation with Venezuela, another nation with extensive supplies of mineral wealth and oil. The geopolitical concerns in these countries are identical, and they both experienced similar financial calamities for decades.
Zimbabwe is also planning a CBDC, a Central Bank-issued and controlled digital currency that will represent the digital form of the Zimbabwean dollar.
Yet, what any economy in such a dire situation should be thinking about is a money system decentralized and far from the reach and manipulation of corrupt politicians. A CBDC will not present a solution.
We examine here why Bitcoin Cash presents an alternative for Zimbabwe and other economies facing similar hardships.
Catastrophic HyperInflation
There are valid reasons to consider why a cryptocurrency with nobody in control, a fixed supply of 21 million, AND scalability that enables peer-to-peer payments with low fees and instant transactions could significantly improve financial conditions in this devastated economy and create terms for stable and robust growth while also improving the overall living conditions.
It’s interesting to note that the Zimbabwe economy has taught us about a number called ‘sextillion’, which many people may not have been aware of previously.
Apparently, it means that money was completely worthless in this economy, but even the current inflation is not changing anything (100–1000% since 2018).
These inflation levels also explain the 100 trillion dollar bill introduced at the beginning of the century by the Central Bank of this economy.
A table of inflation levels in Zimbabwe explains the excessive mismanagement, corruption, and violent redistribution of land tactics the Mugabe government forced and destroyed the economy of a previously economically flourishing nation.
At the peak of inflation in 2008, prices were rising by 98% day-to-day!
Nobody wants to hold money that devaluates this rapidly.
Recent data from Zimbabwe’s inflation appear to give a lower inflation level than the issues we used to learn in the news, even so, the official announcements contain extremely high numbers.
Inflation rate compared to the previous year
2021 99.25%
2020 557.21%
2019 255.29%
(Source: Statista)
Zimbabwe is currently repeating this vicious cycle and entering the hyperinflation zone once again despite the relatively decreased inflation in 2021.
Why Bitcoin Cash?
Bitcoin Cash is possibly the only cryptocurrency that can serve commerce in this nation and create a barrier against corrupt forces that manipulate the national currency and hyper-inflate the economy.
The Zimbabwean dollar is volatile on its own, but only to the downside.
As we read from Statista, the population of Zimbabwe is trying to hold foreign fiat banknotes like the euro and dollar, but the most available one is the South African Rand. However, this currency also faces issues and keeps devaluing versus the dollar and the euro.
The euro and the dollar are not available to accommodate the needs of an economy outside their reach. There is limited trade that can’t create enough influx of these two most stable currencies and the government cannot trade Zimbabwean dollars at forex markets.
There is a need for a currency outside the bounds of the Zimbabwean economy. One currency that is not subject to government manipulation and corruption of officials.
Sound money is mandatory to fix the ailing economy and the financial issues of this government.
Bitcoin Cash is money for the world. It doesn’t have to take over completely the Zimbabwean fiat but can be used in parallel and ease the inflation fears with its limited supply.
As we’ve seen, the population of Zimbabwe needs a currency that won’t lose value to the dollar and euro. Adopting Bitcoin Cash will be the answer.
It is easy to use and can create better terms for commerce and international trade. Bitcoin Cash scales to reach millions and later on billions of users.
Bitcoin Cash has all the positive features of cash and can become an integral currency, at least running in parallel to the Zimbabwean dollar for some of these reasons:
- Fast (instant) with 0-conf transactions (no RBF, DSProofs).
- Transaction fees are less than a penny
- Easy to use and adapt. User-friendly and simple infrastructure (wallets) and process. Works like a cash transaction within a cashless network.
- Immune to inflation and geopolitical risks. Nothing can touch Bitcoin Cash, it is a universal decentralized network with a limited supply of 21m coins.
- BCH can help combat inflation. Prices of goods may rise to a certain point depending on supply and demand, but with Bitcoin Cash, there are no hyperinflation fears since the money supply will always be fixed (21 million).
- Bitcoin Cash will probably increase in price if it gets adopted massively in any economy. This is the basic economics of supply and demand. This will in turn reduce inflation in local currency terms, increase the public’s wealth, and assist the economy by increasing spending and commerce nationwide.
- Major trading partners can accept it as its value has been relatively stable, even for a cryptocurrency since the BCH brand was established (2017). The price ranges between $200 and $800 for most of this time, but certainly, it is basic economic knowledge that the price will increase together with a rising network effect.
- BCH contains all of the critical aspects of Bitcoin (decentralized, permissionless, and secure network) with the addition of scalability. BCH can accommodate millions of users unlike BTC, LTC, Dogecoin, or most of the rest cryptocurrencies that refuse to test/enhance their scaling abilities.
- Bitcoin Cash can deliver much-needed stability to a hyperinflating economy if it is used in parallel to the fiat legal tender currency. Such a scenario would probably create favorable terms for robust economic growth. As Bitcoin Cash’s price keeps increasing, the wealth of the nation will do so as well.
The GDP of Zimbabwe stands at $ 28,3 billion today and the population is at 16 million. These stats alone represent a country battling poverty and a weak economy.
74% of the population lives with less than $5 daily, and mostly in rural areas.
If monetary stability is secured, Zimbabwe can begin rebuilding the fundamentals of its economy, increase infrastructure, and attract foreign capital.
Zimbabwe can achieve all of these within a few years with a much lower inflation level, but this takes decisive action.
Since apparently the politics in Zimbabwe massively failed to protect the interests of the people, it is probably up to the will of the people to select to start using Bitcoin Cash. Eventually, in a boom in the use of BCH, the politicians will be forced to follow and recognize a money system that can assist them without even controlling it.
The Zimbabwean economy has the potential for decades of growth and increase in GDP, with a reduction in poverty level and infrastructure growth that will promote industrialization and technology.
The leaders should probably focus more on serving the people, and refrain from disastrous money-printing politics that devastate the potential and reduce the economy into junk.
The only way to make sure politics will stop interfering is by using a money system separated from the state. And this system will work for the people.
In Conclusion
This is also a situation that was frequently discussed in the early days of Bitcoin when it was still acting as a P2P electronic cash network and looking forward to scaling to meet its initial mass adoption intentions.
Bitcoin Cash is the upgrade that scaled Bitcoin and should be identified as a potential replacement or parallel solution to hyper-inflating economies such as Zimbabwe, Venezuela, Lebanon, and Turkey.
Bitcoin Cash does not represent an enforced monetary system. It has to be voluntarily adopted by those who see it as a better alternative to the failures of fiat currency.
Because of its voluntary and permissionless nature, individual merchants and consumers can adopt it with no interference, enforcement, or censorship.
Just an announcement that Bitcoin Cash is allowed is not enough, since the public is uneducated on the matter.
Initiatives and incentives with seminars that explain what Bitcoin Cash is and how to use a mobile wallet and protect private keys.
Bitcoin Cash has all the required features to stabilize an economy in need, but this can’t happen with force or coercion.
The concept is about escaping the forced fiat currency calamities and entering a new world of economic independence that will reduce poverty and increase the wealth of nations.
Also Watch:
More Stories From Pantera:
👉 Tipb.ch (BCH donations)
👉 LinkTree (my links)
Cover Picture on Wikimedia Commons, Licence
Originally published in 2021 on read.cash (revised and rewritten for Medium).
Don’t forget to Subscribe and Like if you enjoyed this story!
