Bitcoin and Inflation

[sfr2017]

I think Bitcoin will protect against inflation, and even hyper-inflation, if the demand for it continues to keep place with the growth in supply. That will only happen if people continue to use it as currency.

[efxtrader]

I think Bitcoin will protect against inflation, and even hyper-inflation, if the demand for it continues to keep place with the growth in supply. That will only happen if people continue to use it as currency.

Inflation or deflation are same dangerous for our economy. Bitcoin could protect from inflation but could bring deflation because bitcoin have limited supply. Inflation should controlled by money supply but i think we should back to gold standart

[Ranly123]

Only a controlled economy can be spared from inflation (though this is also debatable). In an open market like we are enjoying right now, inflation is a matter of fact and is part of the reality of life. Nobody is immune from the power of inflation.

Inflation happens when when the price of goods/services rise up and the money you are holding has less purchasing power like it has before. When inflation rate is going up what is happening is that our money's purchasing is going down. For example, if one bar of soap can cost $1 and the inflation is 5% then there is a possibility that soon the cost of that soap can be $1.05 or maybe what the soap manufacturer would do is reduce the quantity and quality side so that the price remains but the same product is not there anymore.

Now, talking about inflation, I am wondering if Bitcoin can be an anti-inflation agent or will it even induce inflation to a higher level?

There have been many discussions -- continuing discussions in fact -- on this subject and still there is no definite answer maybe because Bitcoin is still relatively new and theories/speculations are still waiting for validation.

As what we have witnessed, Bitcoin is not an antibiotic inflation prospect. We've seen it grow high and now it goes back to what it has been known. I can't say it can help lessen the inflation of a country but atleast it can help the people have other option for a business evolution.

[St4yInTh3D4rk]

I think Bitcoin will protect against inflation, and even hyper-inflation, if the demand for it continues to keep place with the growth in supply. That will only happen if people continue to use it as currency.

Inflation or deflation are same dangerous for our economy. Bitcoin could protect from inflation but could bring deflation because bitcoin have limited supply. Inflation should controlled by money supply but i think we should back to gold standart

Deflation also not good for the economy but in bitcoin there is no inflation or deflation everything just set up by the market demand ans supply.But bitcoin will not control anything until we are converting it into fiat,which will make the price of bitcoin go higher against USD but again it will cause inflation on the fiat money which will impact the world's economy.

[virasog]

I think Bitcoin will protect against inflation, and even hyper-inflation, if the demand for it continues to keep place with the growth in supply. That will only happen if people continue to use it as currency.

Yes, bitcoin can protect us from inflation and there is no possibility of inflation because of its limited supply which cannot be increased. It may be decreased as those wallets whom private key are lost, they bitcoins stored in them are unrecoverable.

The main thing to consider is that people should use it as a currency and if it is mostly used as a trading assets, then we can never get rid of fiat.

[1Referee]

Bitcoin could protect from inflation but could bring deflation because bitcoin have limited supply.

The limited supply is never an issue. It's only a matter of time before the price becomes expensive enough so that we deal with Satoshi units only, and as you may know already, there is no shortage of Satoshi's.

In the end, it all comes down to the price; if the price is high, you can buy more with x amount of coins, while if the price is low, you need to add coins in order to buy the same goods you bought when the price was high. Pretty similar to fiat actually.

Inflation should controlled by money supply but i think we should back to gold standart

Bitcoin standard is better.

[gantez]

Only a controlled economy can be spared from inflation (though this is also debatable)....

It is a known fact that inflation has no business with bitcoin. Inflation can be in a controlled environment as you have rightly said and bitcoin is not controlled.

There have been many discussions -- continuing discussions in fact -- on this subject and still there is no definite answer maybe because Bitcoin is still relatively new and theories/speculations are still waiting for validation.

Yes and I wonder the kind of hypothesis or theory that will be pushed in to invalidate what we already know and experiencing - that bitcoin is not inflation prone but rather, bitcoin can cause inflation because high rate of bitcoin price might mean too much money in the society when converted.

[Febo]

Since Bitcoin has a limit of only 21 million of coins so in  normally saying there is a deflation in Bitcoin because each year the coins reduces slightly by mining .and the Bitcoin has a limit and no doubling is expecting and so there is no chance of inflation occur in Bitcoin .there are only few ways that people store value either people store money in a bank or buy ornaments to stor e as value .Bitcoin is completely different from physical assets Bitcoin is a digital currency and this will be convenient to keep as an asset  and useful .

Come on man. Last year Bitcoin had huge inflation because price in USD decreased greatly. In USD same as in hamburgers or bread or icecreams or cars or gold or whatever. But reason was not emission but extreme price growth in 2017.

Lets be real now. Bitcoins yearly emission is now like 4% a year.  USD M1 yearly emission in last 10 years was 15%. They added 15% more UDS in circulation every year.  This then over long term influence inflation. So decrease of value of currency. If Bitcoin would have 20% yearly emission hen over time when price of Bitcoin would stabilize would have quite nice inflation.   But that will not happen since already next year bitcoins yearly emission will go under 2%.

[Indamuck]

Bitcoin still has a higher inflation rate than USD.  USD tends to have an inflation rate near 2% with it being higher some years.  People always forget that gold has an inflation rate as well as more and more gold gets mined from the ground each year.  We will start to see some big price increases after the next reward reduction.

[Canoppo99]

Actually there are some people that immune to inflation but indirectly. Inflation only affect to people who only have fixed income, entrepreneurs who already have financial freedom actually not affected by inflation because they keep produce something. Industries loves inflation because industries can get more profit because of inflation. But honestly I think it's unfair, I hope most of people make their own industry, there is no inflation in bitcoin but it doesn't mean that industry will not get profit. It will still get profit because the price is rise and the velocity of money can be better.

[GregH37]

I think Bitcoin will protect against inflation, and even hyper-inflation, if the demand for it continues to keep place with the growth in supply. That will only happen if people continue to use it as currency.

Yes, bitcoin can protect us from inflation and there is no possibility of inflation because of its limited supply which cannot be increased. It may be decreased as those wallets whom private key are lost, they bitcoins stored in them are unrecoverable.

The main thing to consider is that people should use it as a currency and if it is mostly used as a trading assets, then we can never get rid of fiat.

I think it will be difficult to get rid of fiat because irrespective of bitcoins usage as a currency, there will always be many who would prefer to have it as a trading asset and am sure we do not expect it to correct inflation this way. So, it is kind of clear that bitcoin cannot help control inflation, it is the government putting certain policies in place, and one of such could be complete adoption of bitcoin as their only means of exchange

[eaLiTy]

     Inflation means an increase in price and fall in purchasing .Bitcoin have a limited supply of coins to mine and  so now it has come to a deflation state so the power of purchasing may increase since the amount of Bitcoin is limited the difficulty of mining will be impossible as more people try to mine. So automatically Bitcoin software will increase the difficulty in mining .

[richmcrich]

Good stores of value are always scarce. Bitcoin moves according to the supply and demand and when the demand is low, you will see that the price starts to drop , unlike when the demand is high.

This article here explains why bitcoin is technically an inflationary currency - https://fee.org/articles/why-bitcoin-is-technically-an-inflationary-currency-even-though-its-purchasing-power-is-increasing

I think you should go through the article and it will help you understand some things.

[Ziskinberg]

     Inflation means an increase in price and fall in purchasing .Bitcoin have a limited supply of coins to mine and  so now it has come to a deflation state so the power of purchasing may increase since the amount of Bitcoin is limited the difficulty of mining will be impossible as more people try to mine. So automatically Bitcoin software will increase the difficulty in mining .

Bitcoin is a good store of value and can combat inflation, provided the price will be stable going uptrend, but if we will continue to experience
the current state, this would make no sense even if it has all the quality to become a non inflation currency, this would only apply on currency that are already stable and unfortunately, BTC is not at the moment.

So, if we can wait until that time will be realize, then maybe we will find the right purpose of investing BTC.

[daarul50]

I was surprised and always wondered, why is Bitcoin always associated with inflation problems? even bitcoin is said by some observers of the world economy to be the cause of inflation in the world economy. So far, since the birth of bitcoin I have never heard that inflation is so severe in the world economy, on the contrary, bitcoin can be a solution if inflation really happens.

[Betwrong]

~
As what we have witnessed, Bitcoin is not an antibiotic inflation prospect. We've seen it grow high and now it goes back to what it has been known. I can't say it can help lessen the inflation of a country but atleast it can help the people have other option for a business evolution.

It depends on what time frame you are talking about. People who bought BTC before August 2017 are still in profit. The highest price for 1 Bitcoin before Aug 2017 was $2,705 and it's $3,780 today. 40% rise for your investment in 19 months is still a good achievement. And I think it's almost certain that in 19 months from now Bitcoin price will be much more than just 40% higher. Of course I can be wrong. I know that I can lose with pocket Aces preflop. But my point is that BTC is like AA; USD, CHF and EUR are like KK; GBP is like QQ etc. Anything can happen, but normally Bitcoin has all the chances to perform better than others.

[vixcious]

Only a controlled economy can be spared from inflation (though this is also debatable). In an open market like we are enjoying right now, inflation is a matter of fact and is part of the reality of life. Nobody is immune from the power of inflation.

Inflation happens when when the price of goods/services rise up and the money you are holding has less purchasing power like it has before. When inflation rate is going up what is happening is that our money's purchasing is going down. For example, if one bar of soap can cost $1 and the inflation is 5% then there is a possibility that soon the cost of that soap can be $1.05 or maybe what the soap manufacturer would do is reduce the quantity and quality side so that the price remains but the same product is not there anymore.

Now, talking about inflation, I am wondering if Bitcoin can be an anti-inflation agent or will it even induce inflation to a higher level?

There have been many discussions -- continuing discussions in fact -- on this subject and still there is no definite answer maybe because Bitcoin is still relatively new and theories/speculations are still waiting for validation.

Bitcoin is an agent against inflation. deflation occurs when the supply is infinite and the price of the product is raised at an unreasonable level. but BTC's supply is limited and it has Halving events and it makes the value of BTC increase. That's why many of Vene's people bought BTC when their fiat money was inflated.

[TheUltraElite]

Bitcoin is an agent against inflation. deflation occurs when the supply is infinite and the price of the product is raised at an unreasonable level. but BTC's supply is limited and it has Halving events and it makes the value of BTC increase. That's why many of Vene's people bought BTC when their fiat money was inflated.

Typically good case of how a deflationary currency can bring out changes for the betterment of humans. I hope in future governments assume the use of crypto to be borderless and without any legal problem. It will open up a number of avenues for traditional investors to put some assets in bitcoin holdings.

The reason infaltion kills the value is pretty much known to people everywhere now. But something that is deflationary will be always attracting attention because that is what really draws FOMO. However I am not sure what people in this thread are meaning by "bitcoin standard" -  Think about buying groceries with bitcoin where 1 satoshi = 1USD.

[tegacoll86]

I think Bitcoin will protect against inflation, and even hyper-inflation, if the demand for it continues to keep place with the growth in supply. That will only happen if people continue to use it as currency.

Inflation or deflation are same dangerous for our economy. Bitcoin could protect from inflation but could bring deflation because bitcoin have limited supply. Inflation should controlled by money supply but i think we should back to gold standart

I don’t think that told itself is a better option, Gold is inflationary too. The reason why many people consider gold as a better store for value is because of its scarcity. No one can will it existence , except nature (so nature is in control of that  ). That’s why a lot of people are considering gold as a better option when it comes to storing their value.

[rocketbits]

I do not see any correlation between bitcoin and inflation. It’s the economy of each country that determines if they experience inflation or not while it is the adoption or acceptance of bitcoin that determines its increase in value.The government of a country can find a way out to or implement policies  to correct inflation but bitcoin on the other hand  has a decentralized system.