The Philosophy Behind ViCA
ViCA is established as a virtual asset with no inflation under consideration. The model undertaken by ViCA is interpreted based on the “Noflation” concept, a method of ensuring profits to all the stakeholders without any devaluation in the coming years. This model might seem different from the conventional currencies and the cryptocurrencies currently in the financial market. However, the concept ensures a wonderful strategy aimed at the creation of profit, growing itself, and expanding the profit through thorough planning.
To get a comprehensive understanding of the profit-sharing model utilized by ViCA, you must know the background of inflation and then the difference of the “Noflation’’ model from the conventional inflation that occurs in underdeveloped as well as developed countries. Generally, inflation is the measure of the increasing prices of certain goods in a country or the economy. It can occur due to a variety of reasons, but whenever the prices of necessities and goods are increasing, it can leave adverse impacts on the conditions of that economy leading to a reduction in the currency value. There is no concept of Noflation in the current financial and banking systems. In any country, the state or central bank is responsible for the issuance of currency, and this currency is issued based on or equivalent to a certain amount of warranty, either in the form of gold or other valuable things. The currency circulates among different people and acts as a means of expansion of the market capacity for that currency. Any person has the right to demand valuable something i.e. gold in most of the countries in return for the currency notes they possess.
The increase in the currency issued by the central bank is due to a variety of reasons i.e. country’s bad financial conditions, disasters, or natural incidents which can increase unemployment or prices of goods, services, and other basic facilities. The more currency is issued, the higher the inflation rate and value of prices but it leads to the devaluation of the currency. However, there might be a notion that the increase in currency issuance or the increasing inflation rate is a financial loss for both the government and an individual relating to that specific economy. In the case of a government, the source of income for the government is the tax being collected from the citizens of the country. This tax is then spent on various development processes, salaries, and other projects. Just like a normal individual, if the government spends more than the revenue generated through their tax income, they have to take on debt to complete the deficits. For this purpose, a conventional method is practiced by many governments in which they issue “bonds” of a certain value. These bonds are sold to any person in return for money while they can also be purchased by the central bank. When the central bank purchases those bonds, they issue currency and the government is in debt to the central or state bank. However, in this case, the amount of currency floating in the market gradually increases leading to inflation and lower value of the currency as compared to other foreign currencies. Similarly, keeping in view the inflation rate increasing day by day, any person who gives a certain amount of money for a specific period as debt with some percentage as the interest rate will be actually at a loss. As when he receives his amount after around 5 to 10 years, the currency deposited will be of much lower value, as the prices of the goods increase with time and the currency devalues over time due to inflation.
If the government pledges bonds as a guarantee and receives some amount, they will benefit by returning relatively lower value after a few years. So, whoever is holding a certain amount of currency will be actually at a loss as his savings will be of less value in the future and inflation will lead to increased prices of every single commodity.
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