3 ms·

I like that it is mildly inflationary over the long term, as opposed to deflationary.

• oleganza 13y ago
  Just like Bitcoin: https://ip.bitcointalk.org/?u=http%3A%2F%2Fwww.mattwhitlock.com%2FBitcoin%2520Inflation.png&t=536&c=s0JhtJFgtzBT5Q https://ip.bitcointalk.org/?u=http%3A%2F%2Fwww.mattwhitlock....
  • wmf 13y ago
    In this context, inflation and deflation are commonly understood to be the ratio between supply and demand of the currency. Assuming significant adoption and any economic growth, demand for BTC will increase faster than supply, hence deflation.
• myzerox 13y ago
  Yes, the built-in deflation seems to be Bitcoin's biggest question mark. Other the hand, Bitcoin doesn't have to replace the complete currency system to become a useful medium for transactions. So, a low-level of inflation can still be maintained via fiat currency. (We obviously need a certain amount of inflation to encourage people to invest vs. hoarding their money.)
• SkyMarshal 13y ago
  Same, though it's not actually inflationary either, but equilibritory [1]. Unlike managed currencies that target a constant rate of inflation (2%-3% in the case of USD), Ethereum creates currency at a constant rate forever. But as the size of the monetary base grows relative to the constant rate of issuance, the inflation rate tends to 0%. Eventually, when the monetary base hits a certain size, the rate of ethers lost to bitrot, hardware failures, carelessness, deaths, etc. comes to equal the rate of issuance, the monetary base stops increasing, and inflation rate hits 0%. Both a simple (and in hindsight probably obvious) solution to the problem of lost currency over time, and a nice compromise between inflationary and deflationary currency models. [1]:http://dictionary.reference.com/browse/equilibratory http://dictionary.reference.com/browse/equilibratory