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Author Topic: [CHART] Bitcoin Inflation vs. Time  (Read 1050292 times)
Bitcoinsummoner
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February 16, 2021, 06:40:36 AM
 #981

Hello, I still do not understand the mechanism by which bitcoin or ethereum, or any other virtual currency, increases or decreases the price / value.I kept ethereum for 2 years and not much happened. only bitcoin had a big change of value during years
Not only the price of bitcoin has change in these 2 years. Hence almost all the crypto currency has changed a lot in these days. If you bought 1 ethereum before 2 years how much it was? It was not more than 170$. And now it is about 2000$. So it is about 10 times in these 2 years. For more clarification please have a look on the screenshoot.
The network tries to produce one block per 10 minutes. It does this by automatically adjusting how difficult it is to produce blocks.
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March 23, 2021, 09:32:28 AM
 #982

I don't really understand if Bitcoin inflation can be considered as such. Given its current price, inflation in connection with mining is negligible, and for some other reason inflation of Bitcoin is not possible. Bitcoin owners are more likely will suffer from a fall in the price on the market than from inflation.

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June 23, 2022, 08:28:23 PM
 #983

A clarifying note: These charts show the monetary (supply) inflation of Bitcoin. They bear no relation to price inflation, which is an entirely distinct phenomenon.

As Satoshi said: "The fact that new coins are produced means the money supply increases by a planned amount, but this does not necessarily result in inflation.  If the supply of money increases at the same rate that the number of people using it increases, prices remain stable.  If it does not increase as fast as demand, there will be deflation and early holders of money will see its value increase."
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June 30, 2022, 12:17:50 PM
 #984

I don't really understand if Bitcoin inflation can be considered as such. Given its current price, inflation in connection with mining is negligible, and for some other reason inflation of Bitcoin is not possible. Bitcoin owners are more likely will suffer from a fall in the price on the market than from inflation.
Yep, you are right. Noone links Bitcoin to grossery prices or electricity bills.
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July 05, 2022, 03:18:20 PM
 #985

Bitcoin will never be affected by inflation. We can not "print" new bitcoins. So inflation will never be a real problem for it.
Bitcoin is not an asset with "limited" quanitity. It's an asset with a quantity that we already know and that can never be changed.
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July 16, 2022, 09:44:43 PM
 #986

I just came across this thread. Can anyone explain to me what "monetary base" means and what does it shows here in the OP plots??

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July 19, 2022, 01:12:19 AM
Merited by BlackHatCoiner (2), PowerGlove (1)
 #987

I just came across this thread. Can anyone explain to me what "monetary base" means and what does it shows here in the OP plots??

It's the quantity of Bitcoin that has been put into circulation so far at that point in time (see the values on the right-hand side of the chart).

That value is the denominator in the calculation of inflation rate. If you have 100 of something, and you create 1 more of that thing, then you've increased the total quantity by 0.01 or 1% ( 1 new item / 100 existing items = 0.01).

So, in the year 2022:
  • The year started with approximately 18,916,000 bitcoins in existence. That would be the "monetary base" at the beginning of 2022-01-01
  • An additional (approximately) 328,500 bitcoins will be created with the 52,500 blocks that are solved during the year 2022.
  • If we divide the number of new coins (328,500) by the monetary base (18,916,000) we get a 2022 inflation rate (inflation of supply, not necessarily of the exchange rate) of about 0.0174, or about 1.74%

These charts are purely indicating the rate at which new coins come into existence as compared to the number of coins that already exist. They don't take into consideration the number of coins that have been permanently lost, or otherwise removed from the current markets by those that aren't interested in selling. These charts do not make any attempt to predict demand and therefore are not meant to indicate exchange rate or perceived value.
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March 20, 2023, 07:15:18 PM
 #988

I just came across this thread. Can anyone explain to me what "monetary base" means and what does it shows here in the OP plots??

These charts are purely indicating the rate at which new coins come into existence as compared to the number of coins that already exist. They don't take into consideration the number of coins that have been permanently lost, or otherwise removed from the current markets by those that aren't interested in selling. These charts do not make any attempt to predict demand and therefore are not meant to indicate exchange rate or perceived value.
Would that be any means to be accurate on calculations?
Given that, you never can completely know a coin to have been lost by just nominating some wallets to be domant. After all, we've seen some idle walleta do some big numbers all of a sudden.

Would that mean the numbers considered are mainly coins in exchnages?

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April 23, 2023, 12:44:42 PM
 #989

During the initial stage of the Bitcoin projects, users need to provide the default transaction fee, and miners are required to process the transactions according to the system setting even the zero fee transactions, whereas users prefer to offer a higher transaction fee to attract miners in order to reduce the transaction processing waiting time with growth of transaction volume and users. As recorded in the official document of Bitcoin, the transaction fee are not required for some certain types of transactions through the zero transaction fees cannot be financially sustainable with the development of bitcoin.
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September 08, 2023, 06:07:14 AM
 #990

Bitcoin is often referred to as "digital gold" and is designed to have a limited supply, with a maximum cap of 21 million coins. This scarcity is one of its primary selling points and is intended to protect it from the effects of inflation that traditional fiat currencies can experience when central banks increase the money supply.

However, Bitcoin's price can still be influenced by various economic factors, including inflation expectations. If there is a widespread belief that traditional currencies are losing value due to inflation, some investors may turn to Bitcoin as a store of value, potentially driving up its price.

So, while Bitcoin itself isn't subject to inflation in the way that fiat currencies are, it can still be influenced by inflationary pressures in the broader economy. It's important to note that Bitcoin's price can be highly volatile and is influenced by a wide range of factors beyond just inflation.
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September 12, 2023, 05:13:40 PM
Last edit: September 13, 2023, 10:04:41 PM by Ancemon1
 #991

Ya. Bitcoin inflation rate decrease every day. Bitcoin code is law! Bitcoin’s monetary policy reduces network inflation with each confirmed block. The largest reductions in Bitcoin supply occur on the day of each halving. This happens because every 4 years, or exactly 210,000 blocks, the reward for miners is halved. This is built into the Bitcoin code created by Satoshi Nakamoto.

Source : https://altcoinsbox.com/bitcoin-inflation-rate/
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September 16, 2023, 10:05:59 AM
 #992

Ya. Bitcoin inflation rate decrease every day.
While we agree that Bitcoin is a deflationary asset but its inflation isn't decreasing everyday.

Bitcoin’s monetary policy reduces network inflation with each confirmed block.
Well, its design for having a limited supply reduces the inflation thus it's deflationary crypto.

The largest reductions in Bitcoin supply occur on the day of each halving. This happens because every 4 years, or exactly 210,000 blocks, the reward for miners is halved. This is built into the Bitcoin code created by Satoshi Nakamoto.
It is about the block reward for miners that is being cut in half and not the supply. It is the most awaited event that we're waiting for, the halving signifies the bull run and increases the demand.

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March 01, 2024, 04:17:13 PM
 #993

It's always surprised me that some people think Bitcoin is currently deflationary when the supply is inflating.
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March 05, 2024, 08:10:48 AM
 #994

While you are technically correct.  Could it also be possible that the number of coins lost per year exceeds the number of coins minted? Well maybe not the whole year, but at least for a certain duration right?

I mean 21 million coins, but not 21 million movable right?

It's always surprised me that some people think Bitcoin is currently deflationary when the
supply is inflating.
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