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Well they also gained much of that value in the same year—looks exactly like an asset getting overvalued by a lot of people followed by a dump. I don’t think th
by drb91 8y ago
Well they also gained much of that value in the same year—looks exactly like an asset getting overvalued by a lot of people followed by a dump. I don’t think this is contrary to a deflationary currency—it’s not like they only move in one direction.
- notahacker 8y agoLosing 80% of purchasing power in a year seems pretty contrary to the ideal of being a "deflationary currency" to me.
- drb91 8y agoWould you like to elaborate on what you consider inflation and deflation to be? Any currency can gain or lose value against other currencies regardless of the currency in circulation, which is different than comparing the proportion of bitcoin you have to the (eventually constant) number in circulation. The former is just being a currency, and the latter addresses its inflation (or deflation in this case).
- notahacker 8y agoInflation is a sustained increased in the level of relevant-currency-denominated prices of a weighted basket of goods (or "all goods") over time; deflation the reverse. Alternately and equivalently inflation can be viewed as the dilution of purchasing power of that currency (in terms of real world goods and services). This is the orthodox definition of inflation, as used by economists and laypeople, inflation hawks and inflationistas alike. Unlike counting numbers in circulation and hoping purchasing power will be broadly proportional to it, this standard definition of inflation has practical relevance. The number of now-defunct Zimbabwean dollars in circulation turned out to be eventually constant, but it didn't mean they didn't turn out near worthless because people strongly preferred payment in other currencies instead.