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USD inflated 2.44% last year. Satoshi can dump his alleged 5% of the total supply once, and then he can't do it again. The fed can keep inflating at whatever ra

USD inflated 2.44% last year. Satoshi can dump his alleged 5% of the total supply once, and then he can't do it again. The fed can keep inflating at whatever rate they want year after year. That's the difference, and it's huge. The fed's power approaches infinity, but Satoshi's does not. Gold doesn't become inflationary just because the pope owns a lot of it.

dragontamer 8y ago
There were 5-Million BTC in 2011, and there are now over 15-million BTC today. BTC has inflated 300% in the past 7ish years. There will be 657,000 BTC added to the system in the next year, or roughly 4.5%. Which means BTC is "inflating" more than USD right now (with your definition of 'inflation', which isn't very good IMO). The next halfening won't happen until 2020 or so.
- blotter_paper 8y ago
  That's not my definition you're using! I wouldn't count a hypothetical Satoshi dump as inflation, nor do I count new coins mined as inflation. Again, think of Bitcoin as analogous to gold (and ignore the fact that we can technically make prohibitively expense gold now, as economists of the past were not considering modern alchemy when defining inflation). We don't claim that gold has inflated when more is mined, because it is understood that the gold mined already existed. The fact that there was hard-to-get gold underground has already been accounted for in the market valuation of gold. The fixed total number of bitcoins is what makes Bitcoin deflationary, even though more bitcoins are becoming available in the short term; the market knows this, and has theoretically accounted for it. This is more true of Bitcoin than the classic example of gold, as our gold estimates are just that and our Bitcoin estimates are perfect (barring breakdown of the network). Yes, the market is irrational and hasn't _really_ accounted for it, but don't tell the economists that! This is covered in intro macroeconomics, a currency/commodity isn't considered inflationary just because more becomes _available_, it's about whether or not there is a known finite supply. I'm not pulling this out of nowhere. Ask any economist if Bitcoin is deflationary.
  - dragontamer 8y ago
    > We don't claim that gold has inflated when more is mined, because it is understood that the gold mined already existed. Historically, I disagree. There was a big gold / silver crash that could only be described as inflation when the Conquistadors returned from the "New World" in the middle-ages. https://en.wikipedia.org/wiki/Price_revolution https://en.wikipedia.org/wiki/Price_revolution We're talking about a change in Gold / Silver prices which lasted for two CENTURIES. Yes, Gold / Silver is effectively finite on Earth. But it is wrong from an economics perspective to ignore the "short term" impact that can last centuries. I'd argue that most people are probably concerned about time-scales roughly relating to one's life.

dragontamer 8y ago

There were 5-Million BTC in 2011, and there are now over 15-million BTC today. BTC has inflated 300% in the past 7ish years. There will be 657,000 BTC added to the system in the next year, or roughly 4.5%. Which means BTC is "inflating" more than USD right now (with your definition of 'inflation', which isn't very good IMO). The next halfening won't happen until 2020 or so.

blotter_paper 8y ago
That's not my definition you're using! I wouldn't count a hypothetical Satoshi dump as inflation, nor do I count new coins mined as inflation. Again, think of Bitcoin as analogous to gold (and ignore the fact that we can technically make prohibitively expense gold now, as economists of the past were not considering modern alchemy when defining inflation). We don't claim that gold has inflated when more is mined, because it is understood that the gold mined already existed. The fact that there was hard-to-get gold underground has already been accounted for in the market valuation of gold. The fixed total number of bitcoins is what makes Bitcoin deflationary, even though more bitcoins are becoming available in the short term; the market knows this, and has theoretically accounted for it. This is more true of Bitcoin than the classic example of gold, as our gold estimates are just that and our Bitcoin estimates are perfect (barring breakdown of the network). Yes, the market is irrational and hasn't _really_ accounted for it, but don't tell the economists that! This is covered in intro macroeconomics, a currency/commodity isn't considered inflationary just because more becomes _available_, it's about whether or not there is a known finite supply. I'm not pulling this out of nowhere. Ask any economist if Bitcoin is deflationary.
- dragontamer 8y ago
  > We don't claim that gold has inflated when more is mined, because it is understood that the gold mined already existed. Historically, I disagree. There was a big gold / silver crash that could only be described as inflation when the Conquistadors returned from the "New World" in the middle-ages. https://en.wikipedia.org/wiki/Price_revolution https://en.wikipedia.org/wiki/Price_revolution We're talking about a change in Gold / Silver prices which lasted for two CENTURIES. Yes, Gold / Silver is effectively finite on Earth. But it is wrong from an economics perspective to ignore the "short term" impact that can last centuries. I'd argue that most people are probably concerned about time-scales roughly relating to one's life.