Two centuries apart, two similar currency crises. The Roman Empire and modern-day Venezuela share a lot more things in common than you might believe. Both deeply understand the risks of rising inflation and the consequences of a decline in investors’ confidence. However, only one of the two has Bitcoin Buyer Deutsch Offizielle Seite on its side. Bolivar is the official currency of Venezuela and for five years now it has suffered from hyperinflation. Factors such as constant currency devaluation, heightened public spending, and an increase in the minimum wage are responsible for this hyperinflation.
For a long period, the Roman Empire relished in commercial benefits and vast trades linked to the first fiat currency. The roman currency was divided into three; brass or copper coins (Dupondius and Sestertius), silver (Denarius), and gold (Aureus). While the value of these coins fluctuates over time, an imperial decree made sure the exchange rates were fixed.
This very simple financial creativity gave way to untold riches and vast commercial opportunities to Roman citizens. Eventually, this led to the transition of Ancient Rome which depended on imperial conquests and the should of war to a society established on commerce and free trades.
Similar to modern fiat currencies, the coins were backed by a complex system of banking. This system allowed for services to be rendered and goods to be purchased without the need for physical exchanges of plentiful precious coins. Exactly like our modern economy, a larger percentage of the currency in circulation was held in bank deposits. The only difference is the modern-day banking system is faster and instantaneous aside from that the process is the same.
Eventually, the Roman Empire, similar to modern-day Venezuela began to experience a decline in investors’ confidence and heightened inflation. All this was courtesy of currency debasement and reckless public spending by the Roman government.
However, what would have happened if the Romans like modern-day Venezuela were able to trade Denarius for Ethereum. Or better still, if the Roman government were able to set up a digital Aureus could Ancient Rome have survived?
Two thousand years apart, Caracas and Rome face the same problem: Hyperinflation
The complex banking system and fixed exchange rate came to an end in 244AD to 249D during the time of Emperor Philip. Variable exchange rates made commercial activities very difficult for the Romans. Ultimately, citizens could no longer ascertain the value of their coins and economic activities dipped. This then led to the end of the very first government-controlled currency in the world.
While similar situations have transpired in Venezuela, the citizens of Venezuela have had a saving grace in cryptocurrencies. They are now able to bypass the Bolivar through the adoption of digital currencies such as Bitcoin, Ethereum, and so on. In fact, the Venezuelan government, in 2018, introduced its digital coin dubbed the Petro.
While Venezuela had cryptocurrency to turn to, Ancient Rome didn’t have that option. As a result, the country fell into a turmoil of economic activity which triggered a decline in economic growth. A decline in the ancient community would never really recover.
Romans could have made a mint from crypto
No doubt cryptocurrency would have saved the Romans from economic decline. Not just that, crypto would have saved the Romans from constantly minting new currencies.
What led to hardship was the scarcity of silver and gold to make new coins. As a result, the government had to intervene and so they cheated by coating each coin with the base metal. When discovered, this ultimately led to a decline in investors’ confidence in the coins they held.
The decline in investors’ confidence turned for worse when a civil war caused the Roman citizens to abandon vital reforms that controlled the economy. Once that was lost, trade and production also took a decline.
Even though Venezuela experienced similar circumstances, the advent of crypto paved a way out of their hardship. Presently, Venezuelans use cryptocurrencies for everything be it pizza deliveries, hotel booking, rent, and so on. A saving grace indeed.
Roman cryptocurrencies could have survived to modern times
The Venezuelan government, including other governments across the globe, are now starting to adopt crypto as the official currency. The government of every country should take heed to the experience of Ancient Romans. They should also understand the disadvantages that come with centralized currencies.
Maybe if the Romans had been fortunate enough to have access to crypto, their economy wouldn’t have collapsed. If so, we probably would have inherited a digital currency from the era of Vespasian and Nero.
Also read: What is XRP’s Purpose in Ripple’s Products?
