Today is the largest public market day in the city where I live, and it is the common meeting place of hundreds of vendors who gather to sell their own grown organic products and thousands of customers struggling to buy.
Although the currency of my country is TRY, it is possible to see increases depending on the exchange rate, since most of the products purchased are dollar indexed. We do not see the exchange rate decreases because even if the dollar rate falls, the rising sticker prices will either not occur at all or take time to happen.
Naturally, this causes artificial inflation. In fact, it is debatable how accurate it would be to say artificial because it may not be the right term to say artificial for inflation that has become permanent.
But what if the merchants in the marketplace all accepted BCH as their payment method?
There would be no change when the payments were based on #BCH, any product that could be purchased with 0.003 BCH would have been 0.003 BCH under all circumstances. The rise or fall of the #BCH rate may not have affected the seller/buyer relationship much.
As long as there was no change in the #BCH indexed labels in the rise and fall of the BCH rate, no one would be affected negatively or positively, but this time, it would be inevitable to observe changes depending on the ups and downs in the BCH price, as there would be cunning sellers and buyers.
This can also create an inflation in itself. A person who meets all the needs of his house for a week in exchange for 0.1 BCH in the previous week will be negatively affected by the 30% BCH increase that may occur in the labels as a result of the 30% decrease in the BCH rate, and may have to spend 0.13 BCH instead of 0.1 BCH with the new prices.
We express at every opportunity that crypto or BCH will not be adversely affected by inflation in the long run, but it can be seen that it would be unrealistic to be unaffected by inflation in short-term shopping, as in the example here.
While the base rate is the difference between the dollar rate and the local currency in real money, since our example is BCH in crypto shopping, there will be the exchange rate difference between BCH / dollar.
Let's multiply the example with a more realistic approach.
1 week ago;
1 kg. of leeks 0.001 BCH
1 kg. of potatoes 0.0005 BCH
1 kg. of green pepper is 0.002 BCH
In the past week, with BCH increasing by 25% against the dollar rate,
1 week later;
1 kg. of leeks 0.00075 BCH
1 kg. of potatoes 0.000375 BCH
1 kg. of green pepper is 0.0015 BCH.
Contrary to the first example, in the next example, since BCH rose against the dollar rate, the sticker prices became cheaper on a BCH basis. The opposite will happen when BCH depreciates against the dollar rate.
However, in the connection between the dollar rate and the local currency in the first example, the decrease in rising prices either does not occur at all or its realization spreads over time, thus creating the artificial inflation I mentioned. Even the rulers complain about this artificial inflation.
On the other hand, the connection between BCH and the dollar rate is instantly reflected in BCH-based labels on rises and falls. Because citizens who follow the difference between crypto and dollar rate instantly become the controller of this situation. But when it comes to the dollar rate and the local currency, these differences are not reflected as a decrease in the labels, and people who are the controllers in crypto cannot do anything about this situation.
Here comes the fact that the main issue is not just inflation, as in the case of crypto and BCH, which we have discussed, but the transparency that crypto affords to everyone. Inflation will be reflected instantly in crypto as well, but transparency will prevent them from hiding all the facts they can hide.
Take care of your cryptos!