An area dedicated to discussing the differences of these two terms and the theories supporting them.

I'm looking forward to an in-depth discussion on the subject! I've noticed that confusion between the two seems to come up quite a bit on the forum, and thought it may be reasonable to dedicate a thread on the matter.

Pulled from a discussion in Wall Observer

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Price-Deflation is what you are used to hearing about in Bitcoin. That term is used to describe the prices of goods/services as they decrease, because the value of Bitcoin goes up.

Price-Inflation is the opposite. When prices of goods/services increase because the value of Bitcoin goes down.

So, when dealing with Price-Inflation or Deflation, there is an inverse relationship of price and value, in regard to goods/services and Bitcoin.

Example: As the Bitcoin price goes from $10 to $20, the prices of goods/services goes down from 20BTC to 10BTC. As the Bitcoin price goes from $20 to $10, the prices of goods/services goes from 10BTC to 20BTC!

Why does the price of Bitcoin go up and down? The price of BTC goes up and down based on the exchange rate, or market price, which is set by buyers and sellers, or traders. They directly trade the Bitcoin currency with all sorts of other currency, and even some with gold; the most popular being the USD (US dollar). They set the price when executing orders to buy or sell. I will get into the actual reason of why the price fluctuates in the last section.

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Now that we've gone over PRICE Inflation and Deflation (which honestly, to me, is a term made popular by Keynesian's to hide the real facts, as price inflation/deflation is simply the market exchange rate, reflective of the money supply into a currency from itself and other currencies), let's go over the REAL inflation/deflation of a currency (otherwise known by many as Monetary Inflation).

MoneySupply-Inflation is when the value of Bitcoin decreases when the total supply of Bitcoin increases. In our current state, this is at a generation rate of 25 BTC every 10 minutes.

MoneySupply-Deflation will essentially never occur. It is when the value of Bitcoin increases when the total supply of Bitcoin decreases. This may happen, say, when someone loses their private key and all the BTC associated with it are lost. This effectively "makes the rest of us richer". That being said, there is a SET DECREASE in the generation rate of BTC, so you have sort of a "deflationary effect" in the value, as long as more exchange occurs for BTC at a rate which is faster than that set generation rate.

When all 21 million coins are produced, the MoneySupply will be neutral, and the value will continue to increase (prices will decrease, consequently), as long as people continue to exchange in BTC.

This leads me to the last section.

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What determines the PRICE of Bitcoin? The VALUE of Bitcoin at a particular moment.

What determines the VALUE of Bitcoin? The SUPPLY and DEMAND of Bitcoin in the economy.

What determines the SUPPLY of Bitcoin? Currently, the MoneySupply-Inflation rate of 25 BTC every 10 minutes, and traders willing to SELL Bitcoin to BUYERS in exchange for other supplies of money (currencies).

What determines the DEMAND of Bitcoin? Traders willing to BUY Bitcoin from SELLERS in exchange for other currencies.


Therefore: BUYERS, SELLERS, and MONEYSUPPLY-INFLATION (miners) determine the VALUE of Bitcoin, which determines the PRICE of BTC as BUYERS and SELLERS trade based on that VALUE (or supply and demand) of Bitcoin.


We don't exactly know the totality of the supply and demand. Sure, we could try and aggregate data from all the exchanges, but we will never be accurate as there are exchanges which can not be accounted for (OTC). The cool thing is that we DO know the MoneySupply rate, and we DO know the exchange rate. From this, we can determine a real value of Bitcoin when simply multiplying the two factors; a sort of inflation-adjusted view of the currency.

Effectively, the quantitative analysis of supply and demand is really what the currency exchange traders attempt to accurately determine which is conveyed through buying and selling of Bitcoin, setting a VALUE via the PRICED exchange rate of the currency. On a side note, most of the big Market Makers (FX Traders) use this price movement as a way to make a profitable living, as well. Especially when price fluctuations are a consequence of hype or fear (bubbles, cliffs), not factual supply/demand data, and are wildly out of the real price range.

Thus, if you analyze the proper macroeconomic data in an attempt to forecast future DEMAND for more Bitcoin (price increase), you will realize some very interesting things, and have a more accurate picture of where the price is going...

Happy trading!

Free from government oppression-yes,but not free from miners,"hard fork supporters",big holders trying to manipulate the market price and "off-chain" supporters.I think the term "crowd-economy" is meaningless,what are you trying to say with this?Every economy is a "crowd economy".Obviously we need people (crowd) to have an economy.

I'm not sure mate, but if I were you I would try to get my funds out of Poloniex ASAP as they indeed might and will most likely collapse in the future in my opinion. What I think is they currently have a problem that they couldn't fix/fund. Move them ASAP to better exchanges like Bittrex.

Here are some complaints:
https://www.reddit.com/r/CryptoMarkets/comments/6sevhr/update_poloniex_not_letting_me_withdraw_my_funds/
https://www.reddit.com/r/xmrtrader/comments/6g8jp2/poloniex_withdrawals_who_else_is_still_waiting/
https://www.reddit.com/r/BitcoinMarkets/comments/6ssti7/poloniex_holding_funds_even_after_withdrawal/

Don't gamble again is all i would i say forget that 60$ it doesn't matter just save you will be able to make more just trade some coins or invest in the site you will easily recover your loss in few weeks of you invest a good sum. I didn't understand rest of your post all i would recommend is don't try to recover that loss

When i first started here I also dont know how to invest in bitcoin but after reading some of the posts here I learned how. I joined signature campaign they pay you according to your rank so I invested the payment i got in bitcoin. For now I didnt use the money I earned I just keep and hold it in my wallet.

From an economic standpoint, which factors make one cryptocurrency worth more than another?

1) current number of coins
2) maximum number of coins
3) rate of growth in the supply of coins
4) how many people/businesses accept it as a form of payment
5) total number of users
6) technical aspects of the protocol
7) number of exchanges that allow conversion to other cryptos or fiat currencies

Discuss.

Things do look abysmal with how things are going currently and the path we seem to be taking, over the decades we made so much progress and it seems we've taken a wrong turn. I don't think we're a failed nation though because we see a lot of resistance to status quo now and people are saying, 'THIS ISN'T RIGHT!' marching and protesting on the street too. So I think there will be a rebound from all of this.

I say a capital NO to the question in the OP. No, Bitcoin isnt a wise way to invest! It's volatile and unpredictable. It's a risky venture but sadly a lot of people see it as a kind of get rich quick engagement. But if OP expands it to the cryptos (the altcoins included) I would say yes it is a good way to invest one's money. Just look out for potential coins out of the over 900 cryptos and buy to sell off in the future. That way one makes money.

I think you should learn more about the opportunities of bitcoin earnings. People around us are leaving the real jobs because they get paid more in the bitcoin forum as compared to it. They get the time for themselves as well as for their families too. What would you need more than this and real job will never give you such freedom in first place. Bitcoin has started giving the opportunity for steady incomes and it's no more just sideline but real business for many. There are not single ways of earning and that makes us free from worrying about unsteadiness in it.