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Should the value of Bitcoin be rising with inflation?

thaumasiotes 4y ago
By definition, the value of everything rises with inflation. That just tells you that in the absence of inflation, prices now would be lower than they are now. It doesn't tell you whether prices now are higher or lower than they were yesterday.
- mqus 4y ago
  To be precise, the value of money sinks. The value of bread to everyone involved stays the same. Said differently: the price of everything rises, not the value. And another nitpick: by definition the average/median price rises, not the price of everything (afair). Since bitcoin itself is a currency though, I'm not sure how inflation really applies across currencies (since there are "prices" both ways).
  - thaumasiotes 4y ago
    > To be precise, the value of money sinks. The value of bread to everyone involved stays the same. The value of bread as measured in money rises. I'm just using the terminology from the parent comment. > And another nitpick: by definition the average/median price rises, not the price of everything (afair). No, that's wrong. The value of money sinking is exactly the same as the price of everything rising. That is the meaning of "the value of money"; there is not even a theoretical distinction between these concepts. If the value of money falls in half, then all prices, of everything, have increased by 100%. > Since bitcoin itself is a currency though, I'm not sure how inflation really applies across currencies (since there are "prices" both ways). There seems to be some kind of conceptual confusion here. Currencies inflate (by losing value), or deflate (by gaining value), or don't (by maintaining the same value; in reality this can't happen). If one currency inflates more than another one does, then the exchange rate between them will shift. (It will take more of the first currency to buy a constant amount of the second one, or less of the second one to buy a constant amount of the first one.) If two currencies inflate by the same amount, then the exchange rate between them won't shift. What's your question?
- RivieraKid 4y ago
  Everyone (including you) knows what he means.
  - thaumasiotes 4y ago
    The only alternative I see is that you're proposing bitcoin's price should generally rise faster than inflation when inflation is positive. Is that really what you mean, and what you think my parent comment meant? Inflation is a mechanical thing; to get that effect, you'd need a financial instrument that was specifically defined to produce it.
    - RivieraKid 4y ago
      He meant that the price of BTC expressed in USD should be going up with inflation.
      - thaumasiotes 4y ago
        It is. If you want people to understand that you have some other meaning than that, you're going to need to phrase it better.

By definition, the value of everything rises with inflation. That just tells you that in the absence of inflation, prices now would be lower than they are now. It doesn't tell you whether prices now are higher or lower than they were yesterday.

mqus 4y ago
To be precise, the value of money sinks. The value of bread to everyone involved stays the same. Said differently: the price of everything rises, not the value. And another nitpick: by definition the average/median price rises, not the price of everything (afair). Since bitcoin itself is a currency though, I'm not sure how inflation really applies across currencies (since there are "prices" both ways).
- thaumasiotes 4y ago
  > To be precise, the value of money sinks. The value of bread to everyone involved stays the same. The value of bread as measured in money rises. I'm just using the terminology from the parent comment. > And another nitpick: by definition the average/median price rises, not the price of everything (afair). No, that's wrong. The value of money sinking is exactly the same as the price of everything rising. That is the meaning of "the value of money"; there is not even a theoretical distinction between these concepts. If the value of money falls in half, then all prices, of everything, have increased by 100%. > Since bitcoin itself is a currency though, I'm not sure how inflation really applies across currencies (since there are "prices" both ways). There seems to be some kind of conceptual confusion here. Currencies inflate (by losing value), or deflate (by gaining value), or don't (by maintaining the same value; in reality this can't happen). If one currency inflates more than another one does, then the exchange rate between them will shift. (It will take more of the first currency to buy a constant amount of the second one, or less of the second one to buy a constant amount of the first one.) If two currencies inflate by the same amount, then the exchange rate between them won't shift. What's your question?
RivieraKid 4y ago
Everyone (including you) knows what he means.
- thaumasiotes 4y ago
  The only alternative I see is that you're proposing bitcoin's price should generally rise faster than inflation when inflation is positive. Is that really what you mean, and what you think my parent comment meant? Inflation is a mechanical thing; to get that effect, you'd need a financial instrument that was specifically defined to produce it.
  - RivieraKid 4y ago
    He meant that the price of BTC expressed in USD should be going up with inflation.
    - thaumasiotes 4y ago
      It is. If you want people to understand that you have some other meaning than that, you're going to need to phrase it better.