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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 f
by mckoss 13y 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 13y 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 13y 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 13y agoThis 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_ 13y agoEven 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 13y agoEh, 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 13y agoDoes 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 13y agoIf 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 13y agoIf the USD was deflationary, then maybe it would?
- jontaylor 13y agoIn 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 13y agoIf Zimbabwe adding extra zeros before the decimal point to its money doesn't cure inflation, then Bitcoin adding extra zeros after the decimal point won't cure deflation.
- codeulike 13y agoZimbabwe was very different: the amount of money people had was devalued by new notes being printed that had extra zeroes before the decimal point. Adding extra zeroes after the decimal point for money already in circulation leaves the total supply the 'same' but could also be viewed as increasing supply 10-fold, without disadvantaging anyone currently holding the currency. Its never happened before, so I'm not sure many economists have thought about it