[CHART] Bitcoin Inflation vs. Time

[hgmichna]

First off, it's a chart, not a graph.
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I disagree. […]

The words are not that sharply defined.

Not worth discussing here. Whatever you call it, it is useful and interesting.

But there are certainly other forums somewhere in the Internet where a discussion on the precise semantics of such words are perfectly on-topic.

[1714254118]

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[1714254118]

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[DannyHamilton]

First off, it's a chart, not a graph.
- snip -

I disagree. […]

The words are not that sharply defined.

Not worth discussing here. Whatever you call it, it is useful and interesting.

But there are certainly other forums somewhere in the Internet where a discussion on the precise semantics of such words are perfectly on-topic.

I agree 100%.  I only pointed it out because whitslack took the time to scold someone else as if he were an expert on the matter and the other member was somehow uneducated. I'm more than willing to delete my posts regarding this if I see that whitslack has removed his insulting and demeaning reply to a well meaning member of the forum.

[Storan]

2whitslack
I do not understand how You expected inflation in the first year of the currency?

inflation = current(monetary base) / 1_year_ago(monetary_base, right?

Eventually that little line on your graph will level out. Once all BTC are mined and in the hands of bearers, inflation will be impossible because the amount of BTC is FINITE!

Exactly.

Inflation (total coin# over time) was only written into bitcoin to attract miners in order to establish the network. If the network infrastructure were already in place then bitcoin could have been seeded with 21M coins along with the genesis block and inflation could be zero from T0.

Of course to establish this network prior to genesis block would have required tremendous capital into an unknown system. A self growing system is far sweeter. Inflation of coin was written in mainly for this reason.

Bitcoin in many ways is a computer virus that pervades beyond software, beyond hardware and into wetware (brains). It is a very good symbiotic virus that will increase our happiness. It is a glimpse of the singularity, the "perfect" system.

No matter what the reasons were for this launch.
But the fact is - the current bitkoin, this hyper-inflation currency (more than 30% per year up to 2013, 10% now - it's very much in comparison to fiat currencies).
And whether inflationary bitkoin successfully transformed into a deflationary, or die in the process - a topic for much discussion.


Sorry for my English, translated by Google translate.

[hgmichna]

But the fact is - the current bitkoin, this hyper-inflation currency (more than 30% per year up to 2013, 10% now - it's very much in comparison to fiat currencies).
And whether inflationary bitkoin successfully transformed into a deflationary, or die in the process - a topic for much discussion.

Sorry for my English, translated by Google translate.

There is a little difference though. Fiat currencies are continuously devalued, while bitcoin increases in value.

One could say that bitcoin inflation is too low right now. But even this was intended. The currency's price rise attracts buyers early on, increasing its popularity. This seems to work exceedingly well, except that it creates a sequence of speculative bubbles like the current one. You can't have everything.

[whitslack]

I do not understand how You expected inflation in the first year of the currency?

inflation = current(monetary base) / 1_year_ago(monetary_base, right?

The chart shows instantaneous annualized inflation.

Annualized inflation of the monetary base (MB) is calculated as follows, where T is a time period in years:

Code:

inflation = [MB(now) - MB(now - T)] / MB(now - T) / T

If T=1, then the equation calculates the proportional increase in the money supply since one year ago, which is probably how you're thinking of inflation. If you calculate the limit of the equation as T approaches zero, then you get the instantaneous annualized inflation, which is what is shown in the chart.

[fredtrader]

The chart looks nice but something a lot of people always forget is the lost bitcoins, the true monetary base may only be 20-50% of the calculated monetary base.

[Billy the Bit Miner]

Great charts!!! 

[zakoliverz]

I think, we'll have a combination of delfation and inflation, maybe hyper stagflation.  The price for things we need to live, food & energy, will be expensive, in terms of purchasing power.   Yet, housing, TVs, and cars will be inexpensive, in relative terms.

[baad]

Thanks!

[Manstef]

http://www.economist.com/blogs/freeexchange/2013/04/exchange-rates?fsrc=scn/tw_ec/inside_the_bitcoin_economy

Macro-economic factors

[Evo]

Thanks for posting these interesting graphs.

[agentbluescreen]

These graphs are totally meaningless, and colossally misleading.\

2 1/2 years ago a Bitcoin would cost you one $5 Happy Meal (0.3448% of an oz. of gold).

Thus far, today, a Bitcoin cost you either 24.8 of your Happy Meals (= $128) or 33 of your Happy Meals (= $165).

That's roughly $140, 28 Happy Meals or 9.6551% of an oz. of gold!

Therefore a Bitcoin's labour-exchange value (price/cost) has inflated to somewhere between 24.8X (2560% of) or 33X (3300% of) it's original labour-exchange-value (price/cost), depending what (rather-fortunate or very-unfortunate) point at which you needed to exchange some of your "hard-earned" Happy Meals or gold for one.

Go to http://bitcoin.clarkmoody.com/

Hit "W1"

There's your real, actual Bitcoin "inflation" chart.

The "exchange-value" (price) inflation and deflation of Fiat Bitcoins has squat to do with any "monetary supply" of them and (foreseeably) never, ever will!

Market speculators and their fiat-antics capriciously determine the latest (stale) fiat exchange-value of the last fiat Bitcoin that past their way.

The actual "price" of any given Bitcoin remains forever unknown and unknowable until after it has been re-sold (re-exchange valued) to the next guy, in the future.

A Bitcoin functions exactly in much the same way as a "funded" Credit Default Swap (fCDS). You fund it's former owner's "loss" (costs) on it, and the next owner funds yours.

A Bitcoin is a commercial "over the counter (OTC) derivative" of the current-past value and future possible values of itself and it's network, which are only (at best) completely deregulated commercial resources, and neither "commodity futures" nor "securities" as per the CFMA of 2000. This is why, with it's "market" exchange-value changing every two seconds, it is useless as a "money" because you need an hour to accept and/or spend it. It's exchange-values are really only very useful as a delayed-exchange "funding" medium.

The intrinsic and utility values of the "futures derivative swap-contract token" no matter how attractive or quantitatively prearranged, are materially too small to be any more than a very, very minor factor in it's (inflationary or deflationary) exchange-value (aka price)

Buying a Bitcoin futures derivative swap-contract token is simply gambling that the value of it's current exchange-value will be close to or less than the value of it's future exchange-value.

The commonly accepted use of the term "inflation", describes "price/cost inflation". In 1910 a Ford car cost $500, today it costs $16,000.

The global marketplaces do not function within the values of Bitcoins, the Bitcoin-resources function within the values of them.

[DannyHamilton]

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There's your real, actual Bitcoin "inflation" chart.

That depends on if you're talking about price inflation (in which case what we are experiencing is "deflation" not "inflation") or supply inflation (in which case the charts presented are a "real" Bitcoin inflation chart.

[agentbluescreen]

- snip -
There's your real, actual Bitcoin "inflation" chart.

That depends on if you're talking about price inflation (in which case what we are experiencing is "deflation" not "inflation") or supply inflation (in which case the charts presented are a "real" Bitcoin inflation chart.

The commonly accepted use of the term "inflation", describes "price/cost inflation". In 1910 a Ford car cost $500, today it costs $16,000.

A dollar cost or bought you around a day of common-labour ($9 week) and a decent rent cost $!5 a month.

The global marketplaces do not function within the value of Bitcoins, the Bitcoin-resources function within the values of them.

You might want to brag that it's a "Fiat Bitcoin Deflation" chart, but Fiat Bitcoin (such as it is arbitrarily and capriciously valued or devalued hourly, by "penny stock' market-like fiat-valuations)  is not and never ever can or will be stably valued as nor usable as a "Medium of Labour-Exchange" Currency, against which general, commonly accepted "price inflations" (necessary due to economic growth within a monetized economy) can be rationalized.

If "fiat" Bitcoin was in any manner a "hard" (backed) Medium of Labour-Exchange "currency" it's valuations would be consistent with the massively ever-inflationary "Mediums of Savings" values of "rare" gems, fine art, antiques or third-rate "finites" like gold, silver,metals oil etc  which by virtue of their finite limited intrinsic values, would continue to cause price-inflation due to the ever-expansive "supply growth" demands of all labour resources priced within their ever more limited-supply straightjackets.

This antique form of gold-money slavery is known as Mercantile Tyranny which still stubbornly forms the (now clearly bankrupted) old-underlying and now criminal-counterfeiting basis of the Tory-Bilderberg Trotskyite-Bankstering Western-Globalist Communist "NWO" tyranny of today.

The classical-economics birth of  a flexibly expanding, publicly profitable, publicly owned "endogenous money" (very much ideally like Fiat cooperatively owned, valued and exchanged Bitcoins) solves all of those ancient problems.

Adam Smith noted at the core of the mercantile system was the "popular folly of confusing wealth with money,"

It's simple arithmetic, a foolishly stupid "hard currency" tyranny penalizes you for having children and penalizes everybody for any and all added economic growth that the added-fruits of all of their added-labours produce. It also penalizes your two children for every third or more of their added brothers or sisters who will also need some money to put in their pockets for all of the added fruits of their added labours. It dooms the global marketplace to an eternal tyranny of ever-diminishing returns and eventual certain slavery to fiat loans from domineering monopolist tyrants.

It is therefore, in spite of any and all of it's other faults, that "fiat" Bitcoin is a plentiful and valuably-versatile "credit-derivative pass through" that allows us to store, own and use our own Medium of Value-Swap "money" without involving endlessly un-repayable debts to a tyrants.

[DannyHamilton]

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Fiat Bitcoin (such as it is arbitrarily and capriciously valued or devalued hourly, by "penny stock' market-like fiat-valuations)  is not and never ever can or will be stably valued as nor usable as a Medium of Labour-Exchange Currency, against which general, commonly accepted "price inflations" (necessary due to economic growth within a monetized economy) can be rationalized.
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Fiat Bitcoin?  Never heard of the stuff.

Regardless, that's an interesting opinion you have there.  I believe I've heard it thrown around here a few hundred times before. I doubt you are going to the one who finally convinces all the "disbelievers" that they should subscribe to your opinion. I guess time will tell if you're right, until then you'll probably find a lot of resistance to your opinion around here.

[agentbluescreen]

- snip -
Fiat Bitcoin (such as it is arbitrarily and capriciously valued or devalued hourly, by "penny stock' market-like fiat-valuations)  is not and never ever can or will be stably valued as nor usable as a Medium of Labour-Exchange Currency, against which general, commonly accepted "price inflations" (necessary due to economic growth within a monetized economy) can be rationalized.
- snip -

Fiat Bitcoin?  Never heard of the stuff.

Regardless, that's an interesting opinion you have there.  I believe I've heard it thrown around here a few hundred times before. I doubt you are going to the one who finally convinces all the "disbelievers" that they should subscribe to your opinion. I guess time will tell if you're right, until then you'll probably find a lot of resistance to your opinion around here.

I love Bitcoins but have no illusions about exactly what they are. My "views" are not really"opinions" they are statements of facts.

Bitcoins are a very attractive and useful brand new commercial "Medium of Credit Swap" delayed future-funding alternative but they and the networks that trade, fiat-value/fiat-devalue and exchange them are far too Byzantine to ever allow them to be directly usable as standard, stable, Medium of Labour-Exchange "currency".

When one applies the term "currency" to a "money" the assumption is that it is only a minor, daily "current variation" on a stable-overall alternately-valued "currency-exchange" relationship, not a huge every 15 minute nonsense when it takes an hour just to handle it.

[DannyHamilton]

I love Bitcoins but have no illusions about exactly what they are. My "views" are not really"opinions" they are statements of facts.

Calling an opinion a fact doesn't make it so.

Bitcoins are a very attractive and useful brand new commercial "Medium of Credit Swap" delayed future-funding alternative but they and the networks that trade, fiat-value/fiat-devalue and exchange them are far too Byzantine to ever allow them to be directly usable as standard, stable, Medium of Labour-Exchange "currency".

When one applies the term "currency" to a "money" the assumption is that it is only a minor, daily "current variation" on a stable-overall alternately-valued "currency-exchange" relationship, not a huge every 15 minute nonsense when it takes an hour just to handle it.

Trying to predict what Bitcoin will be capable of in the future based off its behavior during its infancy now is a little silly.

[agentbluescreen]

Trying to predict what Bitcoin will be capable of in the future based off its behavior during its infancy now is a little silly.

Well few babies spread out their pension plans before they learn how to walk either!

 

[agentbluescreen]

While you guys are somehow contented with bragging about some obscure practically irrelevant planned-kindness to it in it's old age, I'm worrying about nurturing, properly raising and sustaining it for the entire duration of it's life

[DannyHamilton]

While you guys are somehow contented with bragging about some obscure practically irrelevant planned-kindness to it in it's old age, I'm worrying about nurturing, properly raising and sustaining it for the entire duration of it's life

Right, because obviously those who see potential for bitcoin to eventually have the stability necessary to be "usable as a "Medium of Labour-Exchange" Currency" are making no effort towards sustaining bitcoin now.  All they do is stand around and "brag about some obscure practically irrelevant planned-kindness".  Meanwhile you've made major strides all alone towards legitimizing bitcoin for its "true purpose".

This conversation is getting silly. Time to move on.