Bitcoin Forum

Bitcoin inflation is running about 10% a year and will continue at a high rate for next 7 years or so.

This inflation limits the price growth of Bitcoin . . . currently at $100, with a 25 coin block reward, with 6 per hour, . . . 25 x 6 x 24 x $100 =  $360,000 of new money(net) has to enter the market every day to maintain this price. People talk about a $100,000 price target for Bitcoin . . . maintaining that price would require $360 Million of new money to enter the market every day. Pretty unrealistic.

If inflation were much lower, with just enough new coins created on each block to maintain security, there wouldn't be the constant downward pressure of 3600 new coins flooding the market every day. Under those conditions, a coin could increase in value to much higher levels.

So. Are there any low-inflation, or deflationary altcoins out there? Or am I going to have to build this myself?

Closest thing I can think of to what you say is Freicoin: http://freico.in/about/

That's interesting, and 5% demurrage is actually a lot less bad than 14% inflation (just seen the correct figure for Bitcoin inflation, holy cow!) . . . but somehow losing 5% through demurrage is a tougher sell than losing 14% through inflation. And 5% is still way too high.

Also
>during the initial money creation period (approximately 3 years), 80% of the generated Freicoins are to be distributed by the Freicoin Foundation via donations and only 20% are awarded to miners.

Facepalm.

Good luck to them in trying to start a cryptocurrency without appealing to early adopter's greed.

Our solution tries to keep supply as close to real demand as possible with a variable eMu creation.

It also "tops" up the current stake holders with "interest" so their holding doesn't devalue.

https://bitcointalk.org/index.php?topic=246463.0

Might be of interest.

It really doesn't depend on the minting, but on the supply of goods traded with it, and there's so much stuff that could be priced in any coin that the actual weight of minting is marginal. Now, if we had a coin reaching a saturation point, then we could compare the rate of minting to the economy's growth and guess if it's inflationary or deflationary. As a very gross guess, I think any coin that in the distant future would be minting less than 2% a year would possibly be deflationary.

I think you get something wrong here. It doesn't matter how much coins how fast are created as long as they are unlimited divisible per design. The important part is that all ever existing coins don't get created too fast. The block-half about every 4 years leads to a much more long term oriented market value than one like every few days/blocks or so. You don't want a coin that creates all the coins too fast, because that leads to much less widely spread coins (just the very early adopters could have mined some). That would lead to some sort of 'monopoly', huge market manipulation and very likely an early death of it. Do you think gold would be that valuable today if they could have mined them all within one day? I don't think so.

You're right . . . you don't want all the coins to be created too quickly. But halving the block reward every 4 years is way too slow. Bitcoin should have halved the block reward every year. For a new alt coin . . . maybe every 3 months would be appropriate.

Ideally though would be an adjustable inflation rate controlled by holders of the currency.

10%/year inflation is not that high... anyway, bitcoin economy grows much faster than 10%/year, so don't worry about inflation.. there is no inflation.

Thanks - it is of interest. There are a lot of new concepts to digest there, so I'm not up to speed on it yet. Also, because you've got a lot of innovation there I'm expecting you to have a lot more teething problems than altcoins that are just forks of Bitcoin with minor tweaks.