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> So, in a sense, the real price of all consumer goods also remains constant. No, you're ignoring GDP growth. As the bitcoin economy grows (more goods and serv
by maaku 13y ago
> So, in a sense, the real price of all consumer goods also remains constant.
No, you're ignoring GDP growth. As the bitcoin economy grows (more goods and services available), the share of the pie 1 bitcoin represents correspondingly grows. This results in decreasing prices, i.e. price deflation.
- scotty79 13y agoThat's right. Government through banks has to issue new money just to keep up and keep prices of consumer goods fairly constant and prevent deflation which is considered bad because last few times people tended to stuff cash in mattresses then and there was not enough physical cash left on the market to facilitate the trades. Also deflation increases tendency of consumers to save what they earned and noone in America wants that.