5 ms·

Yet another "deflation is bad hence bitcoin is bad" post, except due to the rate of mining Bitcoin has been highly inflationary if anything. See this graph htt

by yc1010 11y ago

Yet another "deflation is bad hence bitcoin is bad" post, except due to the rate of mining Bitcoin has been highly inflationary if anything. See this graph http://i.imgur.com/vRsIMvt.png http://i.imgur.com/vRsIMvt.png edit: Oh I see now who the author is :D well euros or bitcoins the way Greece is going inlation or deflation will be the least of their worries....

celticninja 11y ago
With an added "bitcoin is bad but if we take the idea and reshape it so it works in tandem with the existing financial system as a support system then it could be good"
nabla9 11y ago
Inflation without specifier means rise in the price level. If you mean monetary inflation, call it monetary inflation. Bitcoin is deflationary (as negative inflation) in the first sense and this is the deflation yanisv is talking about.
- sp332 11y ago
  Bitcoin has not in fact been deflationary, according to the graph. Maybe it will be in the future.
  - mike_hearn 11y ago
    It's been in severe deflation price wise over the long run, the idea is that it means bitcoin holders won't spend their coins. However that doesn't really match reality: transactions have been going up over time. Additionally I recall BitPay saying that their traffic goes up when the price goes up, as people find that they are suddenly rich and splash out. Like a lot of macroeconomics, the whole "falling prices means falling skies" theory doesn't hold up to close inspection: https://www.minneapolisfed.org/research/sr/sr331.pdf https://www.minneapolisfed.org/research/sr/sr331.pdf
    - atmosx 11y ago
      The only problem is that we don't know if these transactions happen between different parties or it's just a guy holding 22% of BTC in circulation mixing his portfolio ;-)
      - mike_hearn 11y ago
        BitPay is only counting purchases from verified merchants.
  - imaginenore 11y ago
    You're confusing monetary deflation with price (value) deflation. Yes, BTC is monetarily inflating, but 1) It's all baked in. We know exactly how much BTC is generated and will be generated and when it will stop. 2) The demand for BTC is growing, so we don't see the price collapsing exponentially.
    - zanny 11y ago
      The problem with bitcoin is inevitably the monetary base starts contracting irreversibly whenever coin generation is eclipsed by lost wallets. It is actually a great place to store value, buy BTC, and over time there is just less BTC so BTC becomes more valuable. Its not good for a daily currency to run an economy on. Something like dogecoin would do that better, albeit even doge is kinda doing it wrong because they just linearly increase the monetary base by 5 billion a year forever.
      - imaginenore 11y ago
        How is that a problem? Somebody loses his wallet, my money is worth a bit more. That's awesome.

by yc1010 11y ago

celticninja 11y ago

With an added "bitcoin is bad but if we take the idea and reshape it so it works in tandem with the existing financial system as a support system then it could be good"

nabla9 11y ago

Inflation without specifier means rise in the price level. If you mean monetary inflation, call it monetary inflation. Bitcoin is deflationary (as negative inflation) in the first sense and this is the deflation yanisv is talking about.

sp332 11y ago
Bitcoin has not in fact been deflationary, according to the graph. Maybe it will be in the future.
- mike_hearn 11y ago
  It's been in severe deflation price wise over the long run, the idea is that it means bitcoin holders won't spend their coins. However that doesn't really match reality: transactions have been going up over time. Additionally I recall BitPay saying that their traffic goes up when the price goes up, as people find that they are suddenly rich and splash out. Like a lot of macroeconomics, the whole "falling prices means falling skies" theory doesn't hold up to close inspection: https://www.minneapolisfed.org/research/sr/sr331.pdf https://www.minneapolisfed.org/research/sr/sr331.pdf
  - atmosx 11y ago
    The only problem is that we don't know if these transactions happen between different parties or it's just a guy holding 22% of BTC in circulation mixing his portfolio ;-)
    - mike_hearn 11y ago
      BitPay is only counting purchases from verified merchants.
- imaginenore 11y ago
  You're confusing monetary deflation with price (value) deflation. Yes, BTC is monetarily inflating, but 1) It's all baked in. We know exactly how much BTC is generated and will be generated and when it will stop. 2) The demand for BTC is growing, so we don't see the price collapsing exponentially.
  - zanny 11y ago
    The problem with bitcoin is inevitably the monetary base starts contracting irreversibly whenever coin generation is eclipsed by lost wallets. It is actually a great place to store value, buy BTC, and over time there is just less BTC so BTC becomes more valuable. Its not good for a daily currency to run an economy on. Something like dogecoin would do that better, albeit even doge is kinda doing it wrong because they just linearly increase the monetary base by 5 billion a year forever.
    - imaginenore 11y ago
      How is that a problem? Somebody loses his wallet, my money is worth a bit more. That's awesome.