Paris is famous for its revolutionary spirit, and it seems that another revolution is underway.
Protesters clad in yellow vests have been rioting every weekend for the past three weeks, effectively turning Paris into a battlefield. The protests are centered on tax hikes – however, the underlying problem is the inefficacy of fiat currencies.
The government recently introduced a broad range of tax hikes as it struggles to maintain its social welfare programs. These tax hikes have increased the cost of living and made everyday necessities such as fuel and transport unaffordable. Interestingly, the current government has also introduced high taxes on all cryptocurrencies – citizens will be required to pay a flat tax rate of 30% on all capital gained from cryptocurrencies.
The recent price hikes may have triggered the mass protests but the underlying issue is much bigger: the unchecked printing of fiat money.
Continuous, Systemic Devaluation
Fiat money is essentially a special piece of paper with an assigned value. This means that the government can always print more money when it needs to, and this is what the French government (and other governments) has been doing. Governments print out more money in a bid to control inflation. However, the French government has been printing more money to cover its expenses, and this has led to inflation and devaluation of citizens’ money and savings.
To this end, it doesn’t come as a surprise that the euro, dollar, and many other fiat currencies are worth a fraction of what they were worth a decade ago. For instance, the U.S. Dollar has lost about 93% of its value and purchasing power since 1913.
Bitcoin (Cryptocurrencies) To The Rescue
Gold was the default currency before fiat money. The price of gold was dictated entirely by natural market forces, unlike fiat currencies that can be manipulated in a variety of ways. Interestingly, Bitcoin’s value is also determined by natural market forces for several reasons.
For starters, only 21 million BTC coins will ever exist as this is where the cap was placed by its inventors. This means that the crypto’s value cannot be manipulated by minting more Bitcoin as is the case with fiat currencies. To this end, Bitcoin is not at risk of losing its value or purchasing power – to the contrary, its value is expected to maintain an upward trajectory for the foreseeable future.
Secondly, Bitcoin is a decentralized, peer-to-peer currency. This means that it is not controlled by anyone, unlike fiat currencies that are regulated and issued by governments.
Interestingly, some yellow vest protestors have been showing up with vests written: “buy Bitcoin”. This shows just how disgruntled people are with their fiat currencies – it also shows that people are realizing that Bitcoin was invented as a better alternative to fiat currencies. To this end, thousands of tobacco stores across France are expected to start selling Bitcoin come 2019. As such, France could become the next hotbed for Bitcoin and cryptocurrencies in general.
The ongoing yellow vest protests in Paris are an ideal illustration of everything that is wrong with fiat currencies. They are also a wake-up call for individuals to shield themselves from their governments’ currency manipulation using Bitcoin and other reputable cryptocurrencies.