5 ms·
The article uses 90% as the sample figure. There is no direct statement that this is the type of deflation that will occur, but it seems unlikely that bitcoin p
by marcell 13y ago
The article uses 90% as the sample figure. There is no direct statement that this is the type of deflation that will occur, but it seems unlikely that bitcoin prices will increase 10x every year, which is what it would take to have that level of deflation in the long run.
Using a lower number, like 5%, would have been more reasonable, IMO.
- seliopou 13y agoI the the second paragraph, I link to a chart showing the percentage increase of the price of bitcoin in USD between July 25 and November 25, 2013. That increase would correspond to roughly a 90% decrease in bitcoin price levels. People holding bitcoin would perceive this as 90% deflation, while people not holding bitcoin would perceive this as a relative appreciation of bitcoin to the dollar. It is a completely reasonable number because it actually happened, and I point all of this out in the blog post.
- glomph 13y agoThe thing is the use of such a high figure means that it is actually the lack of stability that is at issue and not the deflation. Imagine we had a currency that was inflationary at a rate of 90%. Then there would be absolutely no reason for anyone to accept payment in such a currency. I t would be impossible to order materials to create widgets. Widgets would also not get made unless we had a more stable currency (or system of exchange) alongside our inflationary one. It is easy to argue that it would be the rate of movement and not the direction that causes problems in transactions.