11 ms·

Bitcoin has no inflation, there are only a given number of total bitcoins in existence, which many (myself included) would argue makes it a poor currency.

by Balero 8y ago

TomMarius 8y ago
I know, that's why I'm asking what does the commenter mean with inflation in their comment.
- emodendroket 8y ago
  Probably meant deflation.
mkirklions 8y ago
> there are only a given number of total bitcoins in existence, which many (myself included) would argue makes it a poor currency. I have always question who says this. What makes you think deflation would be bad? My conspiracy is that governments require inflation to print themselves out of bad policy. Without government abilities to do this, the government performs poorly. Common citizens do not lose 2-4% of their income in inflation.
- jonknee 8y ago
  > What makes you think deflation would be bad? Literally economics 101. Investment grinds to a halt and progress along with it.
  - snikeris 8y ago
    Does investment really grind to a halt though? I'm thinking people would just demand a higher return on their investments before they parted with their cash. Recently, many countries had negative interest rates. So I suppose people were being incentivized to find "investments" that would return 0% on their money. Was that a good thing? Also, inflation means everyone needs to be investors or the money they worked hard for evaporates. Why should we force Joe Sixpack into being an investor for the good of the economy? He should be able to focus on earning money from his trade without having to worry about investing due to inflation being forced upon him.
    - mundo 8y ago
      > Does investment really grind to a halt though? Well, it's discouraged, but yes, basically. Under inflation, you need to invest money just to stay even. The lower inflation is, the less urgent the need to invest. With deflation, you're somewhat incentivized not to lend. A fixed money supply guarantees deflation, so yes, this would significantly reduce lending and the economic growth that lending stimulates. > Also, inflation means everyone needs to be investors or the money they worked hard for evaporates. Why should we force Joe Sixpack into being an investor for the good of the economy? If Joe Sixpack lives paycheck-to-paycheck he can ignore inflation entirely, it doesn't affect him a whit. Once he gets some savings, if he doesn't like risk he can buy bonds or something and continue ignoring inflation. But since you brought it up and since this seems to be a point of confusion for a lot of people, yes, let's see how a fixed money supply would affect Joe Sixpack. If the government stops printing money, we are guaranteed to get deflation any time the GDP grows, right? With money supply held constant, "The US currency deflated by 2% last year" is equivalent to saying "The US GDP grew by 2% last year." And what makes the GDP grow? Joe Sixpack and his friends, out there mining ore or building furniture or otherwise increasing the amount of value in the world. 2% deflation also means that anyone with savings sees the buying power of their savings increase by 2%. If Scrooge McDuck has $5M in his mattress, his inflation-adjusted net worth increased by $100,000. He can retire and spend the rest of his life living very comfortably on the equivalent of $90k/year, and despite him doing no work, despite him incurring no financial risk, somehow every year he'll get a little wealthier. How is that possible? Who's paying for his life of luxury? Joe Sixpack. Deflation is quite literally a tax by capital on labor. As long as the GDP is increasing, arguing for deflation is tantamount to saying, "I think some of that GDP growth created by workers should go to anyone with money." AFAIK this is universally understood to be a Bad Thing (tm) by virtually everyone.
      - ric2b 8y ago
        > If Scrooge McDuck has $5M in his mattress, his inflation-adjusted net worth increased by $100,000. He can retire and spend the rest of his life living very comfortably on the equivalent of $90k/year, and despite him doing no work, despite him incurring no financial risk, somehow every year he'll get a little wealthier. He'll have to part with some of his wealth whenever buying something, and eventually it will still run out. It's not a stock that produces dividends, you have to spend the principal to take advantage of the value growth. Think of it as owning a $5M home that you have to sell a part of each time you buy something, even though the house increases in value. > How is that possible? Who's paying for his life of luxury? Joe Sixpack. Deflation is quite literally a tax by capital on labor. Joe Sixpack's salary would increase in value by default. As in, by default salaries would track GDP growth, how does that look like a tax to you? Companies will have to actively tell people "we're going to reduce your salary", which helps workers in the negotiation. > How is that possible? Who's paying for his life of luxury? Joe Sixpack. Or whoever is after the currency, just like whoever wants to buy a house pays for equity value growth. > "I think some of that GDP growth created by workers should go to anyone with money." AFAIK this is universally understood to be a Bad Thing (tm) by virtually everyone. As opposed to "I think some of that GDP growth created by workers should go to banks so that they can charge interest on everyone else and make easy profits."
  - mr_spothawk 8y ago
    I keep reading that "economics isn't a science"
    - jonknee 8y ago
      And it doesn't take a scientist to realize that when things will be cheaper tomorrow people tend to avoid making purchases today. (Think back to when home prices were crashing, there wasn't exactly a rush of people to buy homes that were declining in value.)
      - mkirklions 8y ago
        But what if you need to eat food? Or pay your mortgage? How will you pay for things if you dont spend Bitcoin?
        jonknee 8y ago
        Yes, essential spending would happen. But why upgrade your car, or go out to eat, or go on a vacation, or all the other non-essential spending that powers our economy? Even a very small change in these behaviors has huge effects because one person's spending is another person's income.
        mkirklions 8y ago
        > why upgrade your car, or go out to eat, or go on a vacation, or all the other non-essential spending that powers our economy? I find 0 of those good. Upgrading your car when you dont need to is wreckless spending. Maybe the Economy changes to become more conservative and less environmentally damaging. Going out to eat + vacations are unnecessary expenses. And btw, I completely doubt people are going to stop doing those 3.
        jonknee 8y ago
        Consumer spending is what keeps everyone employed. Even in Silicon Valley because who do you think is buying all the ads? > Upgrading your car when you dont need to is wreckless spending. But that's what creates the used car market, which is much bigger than the new car market. When people stop buying new cars it means tons of layoffs, which means tons of reduced spending by all the previously employed auto workers, which means more businesses lay people off, etc etc.
  - mkirklions 8y ago
    >economics 101 I wouldnt use an entry level economics class to judge technology that eliminates risk of government hyperinflation and lowers/eliminates cost of transactions. The economic benefits of free/low cost transactions and money that can be saved/spent rather than invested may have its own benefits.
    - jonknee 8y ago
      > I wouldnt use an entry level economics class to judge technology that eliminates risk of government hyperinflation and lowers/eliminates cost of transactions. I didn't, the question was "What makes you think deflation would be bad?". That is entry level economics and has nothing to do with technology.
  - maehwasu 8y ago
    Very true. Now do the inefficient capital allocations caused by inflationary monetary environments.
  - jpadkins 8y ago
    I have taken econ 101, this wasn't covered. Deflation via credit default has shown to be harmful to wider economy 2x times in US history (monetary shocks). I am not aware of any conclusive study that a deflationary currency is bad for investment and progress. The easy counterpoint is Gold, which is often deflationary (when economic growth outpaces gold mining). We have had 10k years of investment that have shown your basic statement is false (deflationary currency causes investment to grind to a halt). Inflationary fiat or credit based currency is a relatively new invention (1972 in the US). I have not seen any serious analysis showing that real investment has radically improved since going off the gold standard. Real investment has been growing for decades as real wealth increases, inflationary currency hasn't changed that very much AFAIK.
    - nerfhammer 8y ago
      > Inflationary fiat or credit based currency is a relatively new invention (1972 in the US) The dollar has been fiat since the 1930s. The gold standard from 1933-1972 was essentially in name only.
      - jpadkins 8y ago
        https://en.wikipedia.org/wiki/Bretton_Woods_system https://en.wikipedia.org/wiki/Bretton_Woods_system 45-72 was bretton woods era which was still fixed price to gold. It was only after 1972 that the value was allowed to be free floating, not tied to an amount of gold https://en.wikipedia.org/wiki/Nixon_shock https://en.wikipedia.org/wiki/Nixon_shock
        jonknee 8y ago
        Did you miss the "essentially in name only" part? It was fixed to gold, but they also fixed the price of gold by outlawing [1] people from owning it! When they wanted to deflate the USD they just raised the price of gold [2]. It was a crude fiat system. [1] https://en.wikipedia.org/wiki/Executive_Order_6102 https://en.wikipedia.org/wiki/Executive_Order_6102 [2] https://en.wikipedia.org/wiki/Gold_Reserve_Act https://en.wikipedia.org/wiki/Gold_Reserve_Act
- algo646464 8y ago
  A simple argument is as follows. Without inflation, i.e. fixed money supply, it would be impossible for a majority of loans to be repaid with interest, or give a positive return to investments. Note that this fact is independent of how well the borrower or business performs. (This is like a zero-sum game). So, it would be irrational for investors or lenders to part with their deflationary money, as the net profit is always zero (or negative because of other costs). I am very interested to know if there is a way around this problem.
  - mkirklions 8y ago
    Bitcoin wouldnt be the currency for loans. Bitcoin seems to be best for hording and spending. It holds value and can be transferred easy and cheap. You can still have companies using currencies that incentivise loan/investing. Bitcoin currently exists and the loans keep being written. I think as bitcoin grows its going to become big and boring. No 10x gains, not even 2x gains, like 10% swings over the course of a year. It wont be fun, it will be a store of value if you dont trust fiat. Right now I think its crazy undervalued which is causing the explosion of crypto. As BTC gets bigger, investment will start to look better as it provides better returns.
    - astrodust 8y ago
      > As BTC gets bigger... It can't get any bigger, the transaction limits, the "halvings", the liquidity issues after over a decade of operation, so I guess that experiment has run its course.
  - PKop 8y ago
    A solution I've heard to this problem is selling equity instead of debt.
  - kolinko 8y ago
    That's the theory. But the practice has shown that people who have Bitcoin spend it both on their living expenses, and on investments. Ergo, there must be a hole in your theory somewhere.
- brmgb 8y ago
  Deflation is not a viable strategy for a currency. It's bad because it makes hoarding a valuable strategy and hoarding reduce the amount of currency in circulation leading to even more deflation. Who wants to use a mean of exchange actually discouraging exchange ? The alternative really is between low inflation and price stability. Government tends to prefer low inflation because it encourages people to invest their assets in a productive way and because it's actually pretty difficult to avoid any inflation via monetary policy.
- vitaflo 8y ago
  Deflation reduces demand and increases hoarding. Why spend when tomorrow my deflated currency will be worth more than today? The currency then acts less and less like a currency (sound familiar?). In a deflationary environment, wages would go down over time and workers do not accept reduced wages vs increased wages even if their purchasing power remains the same in both cases. With small amounts of inflation, wages rise over time and people spend those raises, which helps fuel the economy.
- lmm 8y ago
  At the most basic level the function of a currency is: I gave you this amount of goods and services today, you give me a ticket that's good for goods and services from you (or others) in the future. Ultimately those obligations need to gradually decay away to nothing if they're unused, just to stop someone hoarding for ages and then causing chaos when they call in their debts. "Hey, remember those 100 chickens you got from me 5 years ago, you owe me 90 chickens now" seems a lot more socially sustainable over the long term than the reverse.
- kolinko 8y ago
  I don't agree with people talking about a deflationary spiral (has it ever happened?), but there is another issue. In a deflationary model, old money gets more and more valuable with time. In 50 years, it's possible that one Bitcoin will be worth 10M€. What happens then when someone finds a stash of 100k BTC on their grandpa's attic? They can destabilise the whole economy. With inflationary currencies it's never an issue - a money is either in circulation, or "evaporates". If you find your grand-grandfather's savings on the attic, they won't be worth too much (even if it's still a fortune). If you find your grand-grandfather's crypto-savings, you're a trillionaire, and a king of the world.
  - baq 8y ago
    > I don't agree with people talking about a deflationary spiral (has it ever happened?), but there is another issue. these happened all the time before central banks were created; see the two-century CPI plot: http://www.businessinsider.com/chart-inflation-since-1775-2013-1?IR=T http://www.businessinsider.com/chart-inflation-since-1775-20...
- logfromblammo 8y ago
  Add this to your conspiracy. Intentional monetary inflation creates a value gradient, wherein the first spend of a new dollar can buy more than the second spend, and so on, until the knowledge that the new dollar is in circulation has normalized. Now, what happens when you always spend new dollars into circulation through the same entity, but then remove old dollars at the same rate from those who only acquire dollars after they have been value-normalized? If you are an entity that can create new money, and destroy old money, you effectively get a discount on everything you buy. To a lesser extent, the same applies to anyone that can hoard a large enough quantity of money. You can withdraw a quantity from circulation, wait for prices to normalize for the new money supply, then buy at a lower price from hoarded money until people realize the circulating supply is now larger and raise their prices. The counter to this is to restrict fiat money creation and discourage hoarding. Bitcoin already has a fixed-in-stone schedule for the creation of its money supply, but there is no way to stop someone from accumulating a large quantity, and then using the size of that hoard to act like a central bank.

Bitcoin has no inflation, there are only a given number of total bitcoins in existence, which many (myself included) would argue makes it a poor currency.

by Balero 8y ago

Bitcoin has no inflation, there are only a given number of total bitcoins in existence, which many (myself included) would argue makes it a poor currency.

TomMarius 8y ago

I know, that's why I'm asking what does the commenter mean with inflation in their comment.

emodendroket 8y ago
Probably meant deflation.

mkirklions 8y ago

> there are only a given number of total bitcoins in existence, which many (myself included) would argue makes it a poor currency. I have always question who says this. What makes you think deflation would be bad? My conspiracy is that governments require inflation to print themselves out of bad policy. Without government abilities to do this, the government performs poorly. Common citizens do not lose 2-4% of their income in inflation.

jonknee 8y ago
> What makes you think deflation would be bad? Literally economics 101. Investment grinds to a halt and progress along with it.
- snikeris 8y ago
  Does investment really grind to a halt though? I'm thinking people would just demand a higher return on their investments before they parted with their cash. Recently, many countries had negative interest rates. So I suppose people were being incentivized to find "investments" that would return 0% on their money. Was that a good thing? Also, inflation means everyone needs to be investors or the money they worked hard for evaporates. Why should we force Joe Sixpack into being an investor for the good of the economy? He should be able to focus on earning money from his trade without having to worry about investing due to inflation being forced upon him.
  - mundo 8y ago
    > Does investment really grind to a halt though? Well, it's discouraged, but yes, basically. Under inflation, you need to invest money just to stay even. The lower inflation is, the less urgent the need to invest. With deflation, you're somewhat incentivized not to lend. A fixed money supply guarantees deflation, so yes, this would significantly reduce lending and the economic growth that lending stimulates. > Also, inflation means everyone needs to be investors or the money they worked hard for evaporates. Why should we force Joe Sixpack into being an investor for the good of the economy? If Joe Sixpack lives paycheck-to-paycheck he can ignore inflation entirely, it doesn't affect him a whit. Once he gets some savings, if he doesn't like risk he can buy bonds or something and continue ignoring inflation. But since you brought it up and since this seems to be a point of confusion for a lot of people, yes, let's see how a fixed money supply would affect Joe Sixpack. If the government stops printing money, we are guaranteed to get deflation any time the GDP grows, right? With money supply held constant, "The US currency deflated by 2% last year" is equivalent to saying "The US GDP grew by 2% last year." And what makes the GDP grow? Joe Sixpack and his friends, out there mining ore or building furniture or otherwise increasing the amount of value in the world. 2% deflation also means that anyone with savings sees the buying power of their savings increase by 2%. If Scrooge McDuck has $5M in his mattress, his inflation-adjusted net worth increased by $100,000. He can retire and spend the rest of his life living very comfortably on the equivalent of $90k/year, and despite him doing no work, despite him incurring no financial risk, somehow every year he'll get a little wealthier. How is that possible? Who's paying for his life of luxury? Joe Sixpack. Deflation is quite literally a tax by capital on labor. As long as the GDP is increasing, arguing for deflation is tantamount to saying, "I think some of that GDP growth created by workers should go to anyone with money." AFAIK this is universally understood to be a Bad Thing (tm) by virtually everyone.
    - ric2b 8y ago
      > If Scrooge McDuck has $5M in his mattress, his inflation-adjusted net worth increased by $100,000. He can retire and spend the rest of his life living very comfortably on the equivalent of $90k/year, and despite him doing no work, despite him incurring no financial risk, somehow every year he'll get a little wealthier. He'll have to part with some of his wealth whenever buying something, and eventually it will still run out. It's not a stock that produces dividends, you have to spend the principal to take advantage of the value growth. Think of it as owning a $5M home that you have to sell a part of each time you buy something, even though the house increases in value. > How is that possible? Who's paying for his life of luxury? Joe Sixpack. Deflation is quite literally a tax by capital on labor. Joe Sixpack's salary would increase in value by default. As in, by default salaries would track GDP growth, how does that look like a tax to you? Companies will have to actively tell people "we're going to reduce your salary", which helps workers in the negotiation. > How is that possible? Who's paying for his life of luxury? Joe Sixpack. Or whoever is after the currency, just like whoever wants to buy a house pays for equity value growth. > "I think some of that GDP growth created by workers should go to anyone with money." AFAIK this is universally understood to be a Bad Thing (tm) by virtually everyone. As opposed to "I think some of that GDP growth created by workers should go to banks so that they can charge interest on everyone else and make easy profits."
- mr_spothawk 8y ago
  I keep reading that "economics isn't a science"
  - jonknee 8y ago
    And it doesn't take a scientist to realize that when things will be cheaper tomorrow people tend to avoid making purchases today. (Think back to when home prices were crashing, there wasn't exactly a rush of people to buy homes that were declining in value.)
    - mkirklions 8y ago
      But what if you need to eat food? Or pay your mortgage? How will you pay for things if you dont spend Bitcoin?
      - jonknee 8y ago
        Yes, essential spending would happen. But why upgrade your car, or go out to eat, or go on a vacation, or all the other non-essential spending that powers our economy? Even a very small change in these behaviors has huge effects because one person's spending is another person's income.
        mkirklions 8y ago
        > why upgrade your car, or go out to eat, or go on a vacation, or all the other non-essential spending that powers our economy? I find 0 of those good. Upgrading your car when you dont need to is wreckless spending. Maybe the Economy changes to become more conservative and less environmentally damaging. Going out to eat + vacations are unnecessary expenses. And btw, I completely doubt people are going to stop doing those 3.
        jonknee 8y ago
        Consumer spending is what keeps everyone employed. Even in Silicon Valley because who do you think is buying all the ads? > Upgrading your car when you dont need to is wreckless spending. But that's what creates the used car market, which is much bigger than the new car market. When people stop buying new cars it means tons of layoffs, which means tons of reduced spending by all the previously employed auto workers, which means more businesses lay people off, etc etc.
- mkirklions 8y ago
  >economics 101 I wouldnt use an entry level economics class to judge technology that eliminates risk of government hyperinflation and lowers/eliminates cost of transactions. The economic benefits of free/low cost transactions and money that can be saved/spent rather than invested may have its own benefits.
  - jonknee 8y ago
    > I wouldnt use an entry level economics class to judge technology that eliminates risk of government hyperinflation and lowers/eliminates cost of transactions. I didn't, the question was "What makes you think deflation would be bad?". That is entry level economics and has nothing to do with technology.
- maehwasu 8y ago
  Very true. Now do the inefficient capital allocations caused by inflationary monetary environments.
- jpadkins 8y ago
  I have taken econ 101, this wasn't covered. Deflation via credit default has shown to be harmful to wider economy 2x times in US history (monetary shocks). I am not aware of any conclusive study that a deflationary currency is bad for investment and progress. The easy counterpoint is Gold, which is often deflationary (when economic growth outpaces gold mining). We have had 10k years of investment that have shown your basic statement is false (deflationary currency causes investment to grind to a halt). Inflationary fiat or credit based currency is a relatively new invention (1972 in the US). I have not seen any serious analysis showing that real investment has radically improved since going off the gold standard. Real investment has been growing for decades as real wealth increases, inflationary currency hasn't changed that very much AFAIK.
  - nerfhammer 8y ago
    > Inflationary fiat or credit based currency is a relatively new invention (1972 in the US) The dollar has been fiat since the 1930s. The gold standard from 1933-1972 was essentially in name only.
    - jpadkins 8y ago
      https://en.wikipedia.org/wiki/Bretton_Woods_system https://en.wikipedia.org/wiki/Bretton_Woods_system 45-72 was bretton woods era which was still fixed price to gold. It was only after 1972 that the value was allowed to be free floating, not tied to an amount of gold https://en.wikipedia.org/wiki/Nixon_shock https://en.wikipedia.org/wiki/Nixon_shock
      - jonknee 8y ago
        Did you miss the "essentially in name only" part? It was fixed to gold, but they also fixed the price of gold by outlawing [1] people from owning it! When they wanted to deflate the USD they just raised the price of gold [2]. It was a crude fiat system. [1] https://en.wikipedia.org/wiki/Executive_Order_6102 https://en.wikipedia.org/wiki/Executive_Order_6102 [2] https://en.wikipedia.org/wiki/Gold_Reserve_Act https://en.wikipedia.org/wiki/Gold_Reserve_Act
algo646464 8y ago
A simple argument is as follows. Without inflation, i.e. fixed money supply, it would be impossible for a majority of loans to be repaid with interest, or give a positive return to investments. Note that this fact is independent of how well the borrower or business performs. (This is like a zero-sum game). So, it would be irrational for investors or lenders to part with their deflationary money, as the net profit is always zero (or negative because of other costs). I am very interested to know if there is a way around this problem.
- mkirklions 8y ago
  Bitcoin wouldnt be the currency for loans. Bitcoin seems to be best for hording and spending. It holds value and can be transferred easy and cheap. You can still have companies using currencies that incentivise loan/investing. Bitcoin currently exists and the loans keep being written. I think as bitcoin grows its going to become big and boring. No 10x gains, not even 2x gains, like 10% swings over the course of a year. It wont be fun, it will be a store of value if you dont trust fiat. Right now I think its crazy undervalued which is causing the explosion of crypto. As BTC gets bigger, investment will start to look better as it provides better returns.
  - astrodust 8y ago
    > As BTC gets bigger... It can't get any bigger, the transaction limits, the "halvings", the liquidity issues after over a decade of operation, so I guess that experiment has run its course.
- PKop 8y ago
  A solution I've heard to this problem is selling equity instead of debt.
- kolinko 8y ago
  That's the theory. But the practice has shown that people who have Bitcoin spend it both on their living expenses, and on investments. Ergo, there must be a hole in your theory somewhere.
brmgb 8y ago
Deflation is not a viable strategy for a currency. It's bad because it makes hoarding a valuable strategy and hoarding reduce the amount of currency in circulation leading to even more deflation. Who wants to use a mean of exchange actually discouraging exchange ? The alternative really is between low inflation and price stability. Government tends to prefer low inflation because it encourages people to invest their assets in a productive way and because it's actually pretty difficult to avoid any inflation via monetary policy.
vitaflo 8y ago
Deflation reduces demand and increases hoarding. Why spend when tomorrow my deflated currency will be worth more than today? The currency then acts less and less like a currency (sound familiar?). In a deflationary environment, wages would go down over time and workers do not accept reduced wages vs increased wages even if their purchasing power remains the same in both cases. With small amounts of inflation, wages rise over time and people spend those raises, which helps fuel the economy.
lmm 8y ago
At the most basic level the function of a currency is: I gave you this amount of goods and services today, you give me a ticket that's good for goods and services from you (or others) in the future. Ultimately those obligations need to gradually decay away to nothing if they're unused, just to stop someone hoarding for ages and then causing chaos when they call in their debts. "Hey, remember those 100 chickens you got from me 5 years ago, you owe me 90 chickens now" seems a lot more socially sustainable over the long term than the reverse.
kolinko 8y ago
I don't agree with people talking about a deflationary spiral (has it ever happened?), but there is another issue. In a deflationary model, old money gets more and more valuable with time. In 50 years, it's possible that one Bitcoin will be worth 10M€. What happens then when someone finds a stash of 100k BTC on their grandpa's attic? They can destabilise the whole economy. With inflationary currencies it's never an issue - a money is either in circulation, or "evaporates". If you find your grand-grandfather's savings on the attic, they won't be worth too much (even if it's still a fortune). If you find your grand-grandfather's crypto-savings, you're a trillionaire, and a king of the world.
- baq 8y ago
  > I don't agree with people talking about a deflationary spiral (has it ever happened?), but there is another issue. these happened all the time before central banks were created; see the two-century CPI plot: http://www.businessinsider.com/chart-inflation-since-1775-2013-1?IR=T http://www.businessinsider.com/chart-inflation-since-1775-20...
logfromblammo 8y ago
Add this to your conspiracy. Intentional monetary inflation creates a value gradient, wherein the first spend of a new dollar can buy more than the second spend, and so on, until the knowledge that the new dollar is in circulation has normalized. Now, what happens when you always spend new dollars into circulation through the same entity, but then remove old dollars at the same rate from those who only acquire dollars after they have been value-normalized? If you are an entity that can create new money, and destroy old money, you effectively get a discount on everything you buy. To a lesser extent, the same applies to anyone that can hoard a large enough quantity of money. You can withdraw a quantity from circulation, wait for prices to normalize for the new money supply, then buy at a lower price from hoarded money until people realize the circulating supply is now larger and raise their prices. The counter to this is to restrict fiat money creation and discourage hoarding. Bitcoin already has a fixed-in-stone schedule for the creation of its money supply, but there is no way to stop someone from accumulating a large quantity, and then using the size of that hoard to act like a central bank.