4 ms·

inflation? I think he means DEflation

by lingben 14y ago

drcode 14y ago
Bitcoin has inflation in the short term but deflation in the long term. Right now more bitcoins are still being generated, so I think the term "inflation" makes sense.
etherael 14y ago
Not for the next 127 years.
mckoss 14y ago
In 8 years (by 2021) 90% of Bitcoins will have been issued. Strictly speaking, the supply is inflating continuously, though it is unlikely to ever be growing faster than future demand (we seem to have past that point within the last year). The only reason economists would call Bitcoin deflationary is the presumption of constantly growing demand.
- BadCRC 14y ago
  > Strictly speaking, the supply is inflating continuously what about Bitcoins being lost? perhaps we should also consider coins that are not used in the past five years also "lost".
  - fnordfnordfnord 14y ago
    >what about Bitcoins being lost? At some point, the rate of loss may overtake the rate of new coin creation. > perhaps we should also consider coins that are not used in the past five years also "lost". Maybe, but be prepared for some of those to someday be spent, they may merely have been hoarded. I have dollars that have been in my possession for more than five years, they aren't lost as far as I am concerned.
  - chimeracoder 14y ago
    This is known as seigniorage: http://en.wikipedia.org/wiki/Seigniorage http://en.wikipedia.org/wiki/Seigniorage Interestingly, though, while (some) seigniorage is a good thing for a debt-based like the dollar, it's a bad thing for Bitcoin.
  - _ikke_ 14y ago
    Even if you mark them 'lost', you can't just trivially reassign them. You would need to have the private key to be able to spend them, there is no other way.
- lolcraft 14y ago
  Eh, not really. Economists would call a currency deflationary if it causes deflation, that is, if it inflates slower than demand does. Bitcoin is massively deflationary, and only inflating in a very pedantic sense. I think assuming that Bitcoin will be (for practical purposes) eternally deflationary is the safest bet that could be made today. The world economy has been growing by triple digits every century. Not even now we're nowhere near a global Star Trek post-scarcity future. So it's misleading to say that Bitcoin is deflationary "based only on a presumption". Somewhat like saying that physics is just "based on the presumption of Newton's laws".
  - codeulike 14y ago
    Does the divisibility of bitcoin make any difference? If they changed the protocol now and then so that the number of decimal places (currently 8) increased to 9, then 10, etc, would that be viewed as increasing the supply of bitcoins?
    - cecilpl 14y ago
      If the US government started minting 0.1 cent coins and 0.01 cent coins, would that be viewed as increasing the supply of dollars?
      - codeulike 14y ago
        If the USD was deflationary, then maybe it would?
      - jontaylor 14y ago
        In Bitcoin the supply and availability of currency are decoupled. By funging or splitting a unit of Bitcoin currency into pieces you increase the availability for use while preserving the value of everyones holdings. Based on the supply and demand the price will fluctuate independently of supply levels. My understanding is that regardless of how inflationary or deflationary Bitcoin is, there will be no effect on the availability for anyone to buy and sell.
    - jellicle 14y ago
andylei 14y ago
limited supply of bitcoin means that the value of bitcoin will probably inflate. equivalently, prices of goods and assets denominated in bitcoin will probably deflate.
tonez 14y ago
In the context of mining, I think what he really meant is neither inflation nor deflation, but rather issuance. (http://en.wikipedia.org/wiki/Central_bank#Currency_issuance http://en.wikipedia.org/wiki/Central_bank#Currency_issuance)
jcampbell1 14y ago
He used an imprecise word. He meant something like "supply increase". Both inflation and deflation are incorrect because both require speculative opinions, and he was referring to the way the total number of bitcoins outstanding increases over time, which is a fact.
tlrobinson 14y ago
The price relative to other currencies deflates as long as demand rises. The total number of Bitcoins inflates (at a decreasing rate) for the next 100+ years.

inflation? I think he means DEflation

by lingben 14y ago

inflation? I think he means DEflation

Bitcoin has inflation in the short term but deflation in the long term. Right now more bitcoins are still being generated, so I think the term "inflation" makes sense.

etherael 14y ago

Not for the next 127 years.

mckoss 14y ago

In 8 years (by 2021) 90% of Bitcoins will have been issued. Strictly speaking, the supply is inflating continuously, though it is unlikely to ever be growing faster than future demand (we seem to have past that point within the last year). The only reason economists would call Bitcoin deflationary is the presumption of constantly growing demand.

BadCRC 14y ago
> Strictly speaking, the supply is inflating continuously what about Bitcoins being lost? perhaps we should also consider coins that are not used in the past five years also "lost".
- fnordfnordfnord 14y ago
  >what about Bitcoins being lost? At some point, the rate of loss may overtake the rate of new coin creation. > perhaps we should also consider coins that are not used in the past five years also "lost". Maybe, but be prepared for some of those to someday be spent, they may merely have been hoarded. I have dollars that have been in my possession for more than five years, they aren't lost as far as I am concerned.
- chimeracoder 14y ago
  This is known as seigniorage: http://en.wikipedia.org/wiki/Seigniorage http://en.wikipedia.org/wiki/Seigniorage Interestingly, though, while (some) seigniorage is a good thing for a debt-based like the dollar, it's a bad thing for Bitcoin.
- _ikke_ 14y ago
  Even if you mark them 'lost', you can't just trivially reassign them. You would need to have the private key to be able to spend them, there is no other way.
lolcraft 14y ago
Eh, not really. Economists would call a currency deflationary if it causes deflation, that is, if it inflates slower than demand does. Bitcoin is massively deflationary, and only inflating in a very pedantic sense. I think assuming that Bitcoin will be (for practical purposes) eternally deflationary is the safest bet that could be made today. The world economy has been growing by triple digits every century. Not even now we're nowhere near a global Star Trek post-scarcity future. So it's misleading to say that Bitcoin is deflationary "based only on a presumption". Somewhat like saying that physics is just "based on the presumption of Newton's laws".
- codeulike 14y ago
  Does the divisibility of bitcoin make any difference? If they changed the protocol now and then so that the number of decimal places (currently 8) increased to 9, then 10, etc, would that be viewed as increasing the supply of bitcoins?
  - cecilpl 14y ago
    If the US government started minting 0.1 cent coins and 0.01 cent coins, would that be viewed as increasing the supply of dollars?
    - codeulike 14y ago
      If the USD was deflationary, then maybe it would?
    - jontaylor 14y ago
      In Bitcoin the supply and availability of currency are decoupled. By funging or splitting a unit of Bitcoin currency into pieces you increase the availability for use while preserving the value of everyones holdings. Based on the supply and demand the price will fluctuate independently of supply levels. My understanding is that regardless of how inflationary or deflationary Bitcoin is, there will be no effect on the availability for anyone to buy and sell.
  - jellicle 14y ago

andylei 14y ago

limited supply of bitcoin means that the value of bitcoin will probably inflate. equivalently, prices of goods and assets denominated in bitcoin will probably deflate.

tonez 14y ago

In the context of mining, I think what he really meant is neither inflation nor deflation, but rather issuance. (http://en.wikipedia.org/wiki/Central_bank#Currency_issuance http://en.wikipedia.org/wiki/Central_bank#Currency_issuance)

jcampbell1 14y ago

He used an imprecise word. He meant something like "supply increase". Both inflation and deflation are incorrect because both require speculative opinions, and he was referring to the way the total number of bitcoins outstanding increases over time, which is a fact.

tlrobinson 14y ago

The price relative to other currencies deflates as long as demand rises. The total number of Bitcoins inflates (at a decreasing rate) for the next 100+ years.