Understanding inflation

In simple terms, inflation is the increase in price that all assets in the economy suffer. For instance, a house in 1890 would normally cost about $10,000 dollars, but the same house now costs about $350,000 dollars, even though it got older – that's the result of a high inflation. It could be caused by the increases in material costs because of reduced supply when natural resources are scarce. Maybe it is because there's a shortage of jobs, so people request better wages since the requirements are increasing. It could also be because land costs are increasing, caused by the fact that not enough houses are being sold. All of these, and many other factors, force businesses to increase prices, which forces people to earn more money while increasing inflation.

Cryptocurrencies such as Ethereum are able to increase in price, because adoption is rising since the technology is constantly improving and more use cases are being developed, that makes them somewhat resistant to external inflation. The fact that supply is increasing more slowly every year keeps the value relatively stable compared to fiat money, where governments and agencies are able to print on demand, which makes Ethereum and many others a great store of value.