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"It's not like Bitcoin is the only currency that undergoes inflation..." You mean "deflation"? ;) The nice thing about BTCs (aside from anonymity) is that you

by eksith 13y ago

"It's not like Bitcoin is the only currency that undergoes inflation..." You mean "deflation"? ;) The nice thing about BTCs (aside from anonymity) is that you can always subdivide to tiny increments.

csomar 13y ago
Inflation is when the price of something increase. So, yes, Bitcoin undergoes inflation and not deflation.
- Smirnoff 13y ago
  Bitcoin is a deflationary currency, which means it INCREASES in value. If you don't trust me (or my Finance degree), then google and read the paper of the Bitcoin creator, where he/she/they outlined the economics benefits of Bitcoin. Sorry, can't link to the paper myself.
icebraining 13y ago
No, inflation is right. Bitcoin is currently inflating in both value and supply.
- Zigurd 13y ago
  No, bitcoin is appreciating in price relative to other currencies because the supply has a hard upper bound. In periods of inflation, currencies depreciate in value compared to gold or "baskets" of goods.
  - icebraining 13y ago
    bitcoin is appreciating in price relative to other currencies That's what inflating in value means. Not all inflation is of the general level of prices of goods; you can have asset price inflation, or cost inflation, or in this case, Bitcoin value inflation. because the supply has a hard upper bound It's appreciating because demand is increasing faster than supply. The future limit may be driving that demand, but it's certainly not the whole reason, since not all currencies with such an upper bound are this successful.
    - fancyketchup 13y ago
      >That's what inflating in value means. You're using "inflation" to mean exactly the opposite of what economists usually use the term "inflation" to mean. Bitcoin is experiencing deflation because the value of each bitcoin is increasing.
      - icebraining 13y ago
        No, I'm just not talking about inflation of the same thing. When people - including economists - just say inflation, that's just an abbreviation for "inflation [of the general level of prices]", out if they're Austrian, "inflation [of the money supply]". But even if this type of inflation is more commonly discussed, that doesn't mean it's the only, and economists also talk about types (e.g. asset value inflation). Now, notice I didn't write that Bitcoin is an "inflationary currency", but that it's inflating in value. That's because the former term refers to the first kind of inflation I wrote above, when I'm talking about another. Why did I use an unconventional type of inflation? Is because while it's technically true that the general level of prices in Bitcoins is deflating, I don't think that's very relevant when almost no product sets its prices in that currency, nor will any economy thus experience any deflation due to it. At least for now, Bitcoin is more like an asset than a currency, therefore it makes sense to speak of its value inflating, just like we do for other assets.
        Smirnoff 13y ago
        I think you are confused about the term "inflation". When there is an inflation, the value of that item/money goes down. Or in other words, you have to pay more to get the same amount of goods. This is clearly not the case with Bitcoins. What I think you really meant to say was: "increasing in both value and supply". And that would be right.
        icebraining 13y ago
        When there is an inflation, the value of that item/money goes down. So when Anna Schwartz wrote her paper "Asset Price Inflation and Monetary Policy" where she talks about the "assets whose prices have escalated", she actually means the value of the assets went down? I think you've just invented new economic theory. An asset price inflation is an escalation of their prices, much like a Bitcoin value inflation is an escalation of its value. What I think you really meant to say was: "increasing Why do you think the word "inflation" was chosen in the first place? What does it mean to inflating something?
- fnordfnordfnord 13y ago
  At the normal, and expected rate, minus the bitcoins that are being lost.
drcode 13y ago
Here's the correct answer: Bitcoin is BOTH inflating and deflating. The money supply of bitcoins is inflationary because bitcoins are still being made. The purchasing power of bitcoins is deflationary because its buying power has historically increased (making other goods decrease in their bitcoin price over time.) Since the deflationary element has predominated in the years since its creation however, it is more sensible to call it "deflationary" in the whole.

by eksith 13y ago

"It's not like Bitcoin is the only currency that undergoes inflation..." You mean "deflation"? ;) The nice thing about BTCs (aside from anonymity) is that you can always subdivide to tiny increments.

csomar 13y ago

Inflation is when the price of something increase. So, yes, Bitcoin undergoes inflation and not deflation.

Smirnoff 13y ago
Bitcoin is a deflationary currency, which means it INCREASES in value. If you don't trust me (or my Finance degree), then google and read the paper of the Bitcoin creator, where he/she/they outlined the economics benefits of Bitcoin. Sorry, can't link to the paper myself.

icebraining 13y ago

No, inflation is right. Bitcoin is currently inflating in both value and supply.

Zigurd 13y ago
No, bitcoin is appreciating in price relative to other currencies because the supply has a hard upper bound. In periods of inflation, currencies depreciate in value compared to gold or "baskets" of goods.
- icebraining 13y ago
  bitcoin is appreciating in price relative to other currencies That's what inflating in value means. Not all inflation is of the general level of prices of goods; you can have asset price inflation, or cost inflation, or in this case, Bitcoin value inflation. because the supply has a hard upper bound It's appreciating because demand is increasing faster than supply. The future limit may be driving that demand, but it's certainly not the whole reason, since not all currencies with such an upper bound are this successful.
  - fancyketchup 13y ago
    >That's what inflating in value means. You're using "inflation" to mean exactly the opposite of what economists usually use the term "inflation" to mean. Bitcoin is experiencing deflation because the value of each bitcoin is increasing.
    - icebraining 13y ago
      No, I'm just not talking about inflation of the same thing. When people - including economists - just say inflation, that's just an abbreviation for "inflation [of the general level of prices]", out if they're Austrian, "inflation [of the money supply]". But even if this type of inflation is more commonly discussed, that doesn't mean it's the only, and economists also talk about types (e.g. asset value inflation). Now, notice I didn't write that Bitcoin is an "inflationary currency", but that it's inflating in value. That's because the former term refers to the first kind of inflation I wrote above, when I'm talking about another. Why did I use an unconventional type of inflation? Is because while it's technically true that the general level of prices in Bitcoins is deflating, I don't think that's very relevant when almost no product sets its prices in that currency, nor will any economy thus experience any deflation due to it. At least for now, Bitcoin is more like an asset than a currency, therefore it makes sense to speak of its value inflating, just like we do for other assets.
      - Smirnoff 13y ago
        I think you are confused about the term "inflation". When there is an inflation, the value of that item/money goes down. Or in other words, you have to pay more to get the same amount of goods. This is clearly not the case with Bitcoins. What I think you really meant to say was: "increasing in both value and supply". And that would be right.
        icebraining 13y ago
        When there is an inflation, the value of that item/money goes down. So when Anna Schwartz wrote her paper "Asset Price Inflation and Monetary Policy" where she talks about the "assets whose prices have escalated", she actually means the value of the assets went down? I think you've just invented new economic theory. An asset price inflation is an escalation of their prices, much like a Bitcoin value inflation is an escalation of its value. What I think you really meant to say was: "increasing Why do you think the word "inflation" was chosen in the first place? What does it mean to inflating something?
fnordfnordfnord 13y ago
At the normal, and expected rate, minus the bitcoins that are being lost.

drcode 13y ago

Here's the correct answer: Bitcoin is BOTH inflating and deflating. The money supply of bitcoins is inflationary because bitcoins are still being made. The purchasing power of bitcoins is deflationary because its buying power has historically increased (making other goods decrease in their bitcoin price over time.) Since the deflationary element has predominated in the years since its creation however, it is more sensible to call it "deflationary" in the whole.