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Very severe price swings. Since supply is decreasing, the demand for bitcoin well whip the price all over the place. Fiat currencies can keep a stable price by

Very severe price swings. Since supply is decreasing, the demand for bitcoin well whip the price all over the place. Fiat currencies can keep a stable price by liquidity injection (they can also drive it to zero that way too). Bitcoin over corrects by not allowing any new coins to come into existence. Imagine the day there is only a single bitcoin left. Regardless of how small you can split it, massive deflation. Currencies with a fixed or decreasing supply are a disaster.

jebeng 9y ago
Supply is increasing though through mining. Stolen coins are still coins. And there's no way that lost coins are out pasing newly mined coins. True loss/data destruction/inaccessibility is fairly rare. Even in the Bitcoin community it's a huge misconception that Bitcoin is somehow inherently deflationary. The supply increases predictably through mining. It can be price deflationary when demand exceeds supply. But there is nothing inherent or guaranteed about that at all. Bitcoin is inflationary, with a predictable inflation schedule.
- jnordwick 9y ago
  Btc has a fixed supply that will be hit. About 17 of the 21 million have already been mined. That's a hard cap unless bitcoin radically changes. We will hit a time of zero miner reward, and even before that when the reward in miniscule in relation to float. We don't know the extent of lost coins. We can make an estimate based on inactive accounts. And stolen coins that have been blacklisted are essentially lost too. > Bitcoin is inflationary Crypto people are deluding themselves.
  - mort96 9y ago
    Just a small note: we won't ever hit a point where a miner will get zero money from mining a block, because people sending transactions pay a fee to the miner to have their transaction prioritied over people who pay a smaller fee, and the number of transactions per time unit is limited (and pretty small), and can't be easily changed radically (as in by orders of magnitude). I think you're technically right, as the "miner reward" (as in the coins the miner cand give itself as a reward for finding a block) goes to 0, and you probably know that already, but I wanted to clarify for people who didn't yet know that. Otherwise, I agree.

jebeng 9y ago

Supply is increasing though through mining. Stolen coins are still coins. And there's no way that lost coins are out pasing newly mined coins. True loss/data destruction/inaccessibility is fairly rare. Even in the Bitcoin community it's a huge misconception that Bitcoin is somehow inherently deflationary. The supply increases predictably through mining. It can be price deflationary when demand exceeds supply. But there is nothing inherent or guaranteed about that at all. Bitcoin is inflationary, with a predictable inflation schedule.

jnordwick 9y ago
Btc has a fixed supply that will be hit. About 17 of the 21 million have already been mined. That's a hard cap unless bitcoin radically changes. We will hit a time of zero miner reward, and even before that when the reward in miniscule in relation to float. We don't know the extent of lost coins. We can make an estimate based on inactive accounts. And stolen coins that have been blacklisted are essentially lost too. > Bitcoin is inflationary Crypto people are deluding themselves.
- mort96 9y ago
  Just a small note: we won't ever hit a point where a miner will get zero money from mining a block, because people sending transactions pay a fee to the miner to have their transaction prioritied over people who pay a smaller fee, and the number of transactions per time unit is limited (and pretty small), and can't be easily changed radically (as in by orders of magnitude). I think you're technically right, as the "miner reward" (as in the coins the miner cand give itself as a reward for finding a block) goes to 0, and you probably know that already, but I wanted to clarify for people who didn't yet know that. Otherwise, I agree.