Bitcoin Forum

I have a hypothesis that bitcoin is inflationary for the world economy.  Here's why...

Take a simplified market in which there are 10 chickens and 10 dollars.  It stands to reason that each chicken is worth one dollar.

     (10 dollars / 10 chickens = 1 dollar per chicken)

Now add bitcoin to the system as an accepted form of currency.  Now there are 10 dollars and 10 bitcoins.  It stands to reason that a bitcoin would be worth one dollar.

So now there are twenty currency units (10 dollars and 10 BTC) chasing after 10 chickens.  How much is a chicken worth?  I suggest that it is worth 2 currency units since:

     20 currency units / 10 chickens = 2

So a chicken costs:
2 dollars
2 bitcoins
1 dollar and 1 bitcoin

Please discuss and feel free to tear my theory to shreds!

I think it's more like you can buy chicken for bitcoin or dollar and that would be still 10 / 10. You have to pay for that bitcoin in dollar it's not taken from the roof.

One chicken costs 1 bitcoin, and the dollars become worthless?

This is one reason why so many people seem to hate alt-coins.

If one thinks of Bitcoin as a money bubble, and there are loads of these bubbles all located in a finite space (like a kitchen sink), if one bubble gets bigger, the others have less room. Shaking up the water may increase the number of bubbles, but the amount of real value represented -- the air resource -- does not increase, so each bubble controls a smaller amount. (A glass bottle with a closed lid is probably a more accurate analogy).

The Fed prints a new dollar every day and everyone tries to buy chickens to protect themselves from inflation?

lol

Bravo! ;D, but might I suggest...

The Fed prints a new dollar every day and everyone tries to buy bitcoins to protect themselves from inflation?

Chickens are also an inflationary product, as they can lay eggs that hatch into chicks, and are high maintenance as you need to feed and take care of them if you want them to multiply...

Bitcoins on the other hand are very very low maintenance.

It was about time that someone realized the BTC 'dream' of it gobbling up all or most of the value in the world is EXACTLY the same 'theft' that Austrians claim the government commits when it inflates.  BTC hoarders all gleeful of the possibility that you will rob the rest of the world of it's wealth by debasement of it's currency.  The Freudian projection http://en.wikipedia.org/wiki/Psychological_projection is just amazing.

https://www.gldtalk.org/devteam/bubble.png

Did someone say bubble?