The whole world is printing money, the United States is printing, China is releasing water, but have you noticed that your money doesn't seem to be increasing while things are getting more expensive? Today, we will use the story of a small mountain village's 'water ticket' to explain the logic of currency, and we will also discuss what new choices cryptocurrencies can bring to ordinary people in this wealth transformation.
1. The 'Water Ticket Economy' of a Small Mountain Village: Why Does Printing Money Make You Poorer?
There is a small mountain village that relies entirely on a well at the village entrance for drinking water. The village chief issues 'water tickets' as currency, with 200 households in the village receiving 2000 tickets, 10 tickets per household, and 1 ticket exchanges for 1 bucket of water. A carpenter exchanges 1 chair for 5 tickets, an old farmer exchanges 1 basket of vegetables for 3 tickets, and a teacher has a monthly salary of 20 tickets, leading to a stable life.
Until a severe drought strikes, well water decreases, and income plummets. The village chief decides to issue 2000 new water tickets to lend out through the money shop. But the money shop only looks at collateral: the big landlord Liu borrowed 500 tickets using land as collateral (interest 8%), the small carpenter borrowed 20 tickets with tools (interest 15%), the teacher borrowed 10 tickets (interest 18%), while ordinary villagers received no new tickets due to lack of collateral.
Liu did not expand production but rather used new water tickets to buy land, real estate, and shop shares at high prices. Six months later, asset prices doubled, and he sold part of his assets to pay off debts, netting hundreds of water tickets; meanwhile, ordinary people saw no increase in their water tickets, but prices skyrocketed— vegetable prices rose from 3 tickets to 5 tickets, and housing prices soared from 50 tickets to 120 tickets, weakening the purchasing power of hard-earned money.
This is the truth of the modern monetary system: money is a tool for wealth distribution, not wealth itself; those who get new money first use old prices to buy assets, while ordinary people who get money later face 'harvesting' through inflation; inflation is essentially an invisible tax that continuously devalues cash.
2. Cryptocurrency: A new option against 'water ticket issuance'.
Faced with indiscriminate money printing and inflation, the characteristics of cryptocurrency precisely hit the pain points of traditional currency, becoming a choice for some to hedge against risk.
1. Fixed total amount, rejecting 'unlimited issuance'.
Mainstream cryptocurrencies like BTC (total amount of 21 million) and ETH (total amount of 121 million) have a fixed issuance set in the underlying code, which cannot be arbitrarily increased like 'water tickets'. This means there will be no devaluation dilemma of 'doubling water tickets without increasing well water'— as demand increases, its scarcity may actually drive up its value, countering the dilution of purchasing power of traditional currency.
2. Decentralization, breaking the 'unfair distribution'.
After traditional currency issuance, new money often flows first to the rich who have assets and collateral (like Liu), making it hard for ordinary people to access. Cryptocurrency issuance and circulation do not rely on central banks or other centralized institutions; anyone can obtain it equally through mining and trading without needing collateral or identity endorsement, thus breaking the rule that 'the closer you are to the source of currency, the richer you become' to some extent.
3. Global circulation, avoiding risks of a single currency.
The 'water ticket' can only be used within the mountain village. If the village chief continues to issue more, the villagers have no choice. Cryptocurrency is a globally accepted 'digital asset' that is not affected by the monetary policies of any single country— even if a country excessively prints money, the cryptocurrency you hold can circulate globally and maintain its value, avoiding being 'harvested' by the inflation of a single currency.
4. Asset properties that align with 'anti-inflation logic'.
The key to Liu's wealth is seizing scarce assets with new water tickets. Cryptocurrency, as a scarce asset in the digital age, has 'anti-inflation properties' similar to land and real estate: when traditional currency issuance leads to cash devaluation, the total scarcity of cryptocurrency will attract funds, and its price increase may cover or even exceed the inflation rate, becoming a tool for ordinary people to hedge against wealth shrinkage.
3. How can ordinary people use cryptocurrency to cope with inflation? (Under compliance conditions)
Cryptocurrency is not a 'myth of guaranteed profit', but mastering the correct approach can be an effective supplement to asset allocation:
• Small allocations to diversify risk: Do not invest all savings; consider allocating 5%-10% of assets to mainstream cryptocurrencies (like Bitcoin, Ethereum), creating a hedge with real estate, gold, and funds to avoid single asset shocks from inflation.
• Long-term holding to counter short-term volatility: Cryptocurrency prices are highly volatile, and short-term speculation carries extreme risks. If aiming to combat inflation, one can adopt a 'regular investment + long-term holding' strategy, ignoring short-term fluctuations and focusing on the value growth brought by its long-term scarcity.
• Choose compliant channels to avoid risks: Participate through legal and compliant trading platforms, complete real-name verification (KYC), avoid risks of decentralized OTC scams; simultaneously steer clear of air coins and Ponzi coins, only selecting cryptocurrencies with solid underlying technology and high market recognition.
• Reject blind debt speculation: The rich become wealthy by buying assets with debt, while ordinary people borrowing money to speculate in cryptocurrency may fall into debt crises due to price fluctuations. Cryptocurrency is an 'anti-inflation tool', not a 'gambling tool for overnight wealth', and should be used with idle funds.
4. Key reminder: Cryptocurrency is not a 'universal remedy'.
• Compliance is a prerequisite: Different countries have different regulatory policies on cryptocurrency; some regions prohibit trading. It is necessary to understand local laws in advance to avoid crossing red lines.
• Volatility risk should not be ignored: Cryptocurrency prices may significantly rise or fall due to policies or market sentiment, even leading to losses, so one must have risk tolerance.
• Cannot replace core assets: Cryptocurrency is suitable as a 'supplementary allocation', not the only asset— core city real estate, quality stocks, gold, and other traditional anti-inflation assets must still occupy the main part of the asset portfolio.
Conclusion: In an era of inflation, perception determines the direction of wealth.
The village chief's issuance of water tickets is a dilemma: not issuing leads to economic collapse, while issuing leads to wealth disparity. The emergence of cryptocurrency provides ordinary people with a new perspective to combat 'unlimited money printing'— it does not seek to overthrow traditional currency but aims to become a part of asset allocation that is 'anti-inflation' through its characteristics of scarcity and decentralization.
The essence of the currency game has never changed: cash will devalue, while assets will appreciate. The way out for ordinary people is still to understand the rules, diversify allocations, and enhance cognition. Cryptocurrency is just one of many options; the key is to find a suitable, compliant, and secure way to prevent wealth from being easily 'harvested' in the wave of inflation.
