This is amazing, or shocking, depending on how one interprets the data.
Let's have a look:
From
http://blockexplorer.com/q/totalbc the total number of bitcoins that exist is
8726700.
The inflation rate per 10 minutes is: 50 / 8726700 = 0,00000573 or 0,000573%
Given T = 8726700
The annualised inflation at this moment is [(T+50)/T]^(365*24*6) -1 = 0,3514 or 35.14%
Because we're raising very small fractions to very high powers, we can redo the calculation for a daily rate to make sure the accuracy is good:
[(T + 24*6*50)/T]^365 -1 = 0,3512 or 35.12%
Yet, despite this rather high inflation rate (which we already knew about because it's in the Bitcoin brochure), the exchange rate against the USD is somehow
not dropping like a stone. Ahh, but what about US dollar inflation? Perhaps Bitcoin isn't really growing at all, and the USD price inflation is 35%? So I googled "official us inflation rate" and they say it's just under 3% (inflationdata.com). If we subtract that from the figures, we find that Bitcoin appears to have a growth rate of only 32%pa
But what about those crazy tin-foil-hatters claiming that price inflation is more like 10% based on 1980s government metrics, as per:
http://www.shadowstats.com/alternate_data/inflation-charts ?
I guess that would make Bitcoin's annualised growth rate a measly 25%pa.
Thoughts?
Thank you very much for these calculations, I was wondering what the current inflation rate was.
But I think you're making a mistake when you're equating inflation with rising prices. You correctly identified inflation as the growth of supply of bitcoins and what it's rate is but this is only one half of the supply/demand story that goes into the exchange rate with another currency/commodity price discovery.
Inflation != rising prices. Inflation can result in rising prices given the right conditions of supply/demand.
IMO what the current inflation rate of bitcoins really tells us is that the demand to hold bitcoins is greater than the growth of supply but it doesn't explain where this demand comes from. Is it new market participants coming in and shoring up their balance sheets? Is it the current market participants saving and increasing their balance sheets? Is it just miners saving? Who knows from who's balance sheet this demand really comes from and what Bitcoins "growth" rate actually is.
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