5 ms·
A good example of non deflationary cryptocurrency is ethereum
by menzoic 5y ago
A good example of non deflationary cryptocurrency is ethereum
- yholio 5y agoThat's certainly not a good example. The price has grown much faster than inflation in the western world, while the issuance of new currency has trended down, not only as a percentage of total money supply, but in nominal terms: https://www.wisdomtree.com/-/media/us-media-files/blog/blog-images-2/2021/08-02-21-2/figure-1_ether-issuance-and-supply.png https://www.wisdomtree.com/-/media/us-media-files/blog/blog-... While in theory the community can elect to inflate the money supply, in practice the people who get to vote on the issue are holders of currency, who have strong incentives to restrict the supply and deflate the currency. If an inflationary EIP is proposed, these people will simply ignore it and stick to the deflationary chain.
- wuliwong 5y agoThere is always confusion when discussing deflation and inflation because there are multiple definitions. There is a inflation/deflation which refers to the size of supply and then price inflation which refers to the cost in some other fiat currency. The former is simple and clear, the latter depends on other variables.
- yholio 5y agoEthereum is deflationary by both definitions, the market value increases while the rate of disbursement decreases with time.
- tromp 5y agoRegarding supply behaviour, you're confusing deflationary with disinflationary (yearly inflation rate going down toward 0).
- yholio 5y agoYou are ignoring the large amounts of coin that are taken out of circulation by software and hardware bugs, owner death or amnesia, intentional destruction by transfer to unspendable addresses. For bitcoin, by credible estimates we are already talking about millions of coins.