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Bitcoin is not inherently deflationary. And the inflationary consensus in mainstream economics is not one born out of reason, evidence or good faith. The truth
by djbebs 5y ago
Bitcoin is not inherently deflationary.
And the inflationary consensus in mainstream economics is not one born out of reason, evidence or good faith. The truth is, inflationary monetary policy is mainstream because of political reasons, not economic ones.
- smt88 5y agoThe inflationary consensus is a practical issue and common sense. If an asset is deflationary, I have an incentive to hold onto it as long as possible. Spending it is costly. If an asset is inflationary, it's costly to hold it. If everyone receives an inflationary asset by default for goods/services and everyone wants to trade it for something else, we have an extremely liquid asset that can be exchanged for other things -- currency.
- dasudasu 5y agoIt is, after all bitcoins are eventually mined, because some private keys get irretrievably lost and those coins can therefore never be recovered.
- djbebs 5y ago2 things: - bitcoin tends towards 21 million mined bitcoin, but just like mathematical limits that means that it will continue mining some bitcoin essentially forever (progressively smaller and smaller amounts). - people forgetting or losing their keys doesn't make bitcoin deflationary anymore than it makes the USD deflationary. Furthermore that is not something inherent to bitcoin, but simply a practical result.