donbu7 (OP)
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December 04, 2013, 04:00:13 PM |
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BTC has a limit of 21 million so we all agree that for that reason makes it a deflate currency, but I have also read a lot and many people say that in case BTC is use all over the world the BTC could be split many many more times that .00000001 so I think that in that case if BTC can be split for ever, is the same that keep making more than 21 millon so it is at the end and inflate currency.
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defaced
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December 04, 2013, 04:05:25 PM |
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Its inflating until the last coin is minted.
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Miz4r
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December 04, 2013, 04:18:04 PM |
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The supply is inflating until we reach 21 million around 2140. So it is an inflating currency until that time. Because it's new and adoption rate is rising fast the price of a bitcoin is going up, but this doesn't change the fact that the total supply of bitcoin is increasing at about 10% per year right now. This is the very definition of inflation.
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Bitcoin = Gold on steroids
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Etlase2
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December 04, 2013, 04:23:40 PM |
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Inflation and deflation are not measures of the supply but of prices. Inflation does not "stop" at 2140, inflation could happen at any time in the future, even in 250000 AD, because of changes in the velocity of money. Anyone who says different is using unorthodox definitions of inflation and deflation to serve no purpose other than to confuse. The supply that exists is irrelevant compared to the actual useful description of prices which is what matters to each individual.
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PenAndPaper
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December 04, 2013, 04:27:26 PM |
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Let the inflation / deflation definitions battle begin!! I for one go with the price not supply definition!
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MoneyMorpheus
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December 04, 2013, 04:36:01 PM |
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The supply is inflating until we reach 21 million around 2140. So it is an inflating currency until that time. Because it's new and adoption rate is rising fast the price of a bitcoin is going up, but this doesn't change the fact that the total supply of bitcoin is increasing at about 10% per year right now. This is the very definition of inflation.
Inflation: The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. The purchasing power of BTC rises, so by definition its not an inflationary currency. The fact that a 10% of btc are emitted yearly at the moment is overwhelmed because of the increase of users getting btc. Also the amount of emitted gets reduced every few years, most of the coins will already be mined by 2020. In simpler terms. Imagine a country. Population 10 habitants. The total emitted currency 10$. Every year 1$ is added to the total. So next year you have 11$ for the 10 habitants. But that year 90 more people immigrate to your country. They are all forced to adopt your $. They have goods to exchange for it. But given that 100 people have to live with a total of 11$, and new goods where introduced to that market, the purchasing power of those 11$ is much bigger than what it used to be. Making that currency deflate, even though more money is emitted every year. Now imagine what would happen if a few million people get into BTC ![Grin](https://bitcointalk.org/Smileys/default/grin.gif)
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Peter Lambert
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December 04, 2013, 04:40:29 PM |
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The problem is that there are two definitions of inflation/deflation which are used by different people. There is monetary inflation, measured by the total amount of money in the economy, and there is price inflation, measured by the change of price of everything. Usually if you have monetary inflation you will also have price inflation, but it does not always happen that way. Bitcoins are an example of monetary inflation (25 new bitcoins are added every 10 minutes), but at the same time we have price deflation.
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Use CoinBR to trade bitcoin stocks: CoinBR.comThe best place for betting with bitcoin: BitBet.us
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deisik
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December 04, 2013, 08:28:48 PM |
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The problem is that there are two definitions of inflation/deflation which are used by different people. There is monetary inflation, measured by the total amount of money in the economy, and there is price inflation, measured by the change of price of everything. Usually if you have monetary inflation you will also have price inflation, but it does not always happen that way. Bitcoins are an example of monetary inflation (25 new bitcoins are added every 10 minutes), but at the same time we have price deflation.
I'd rather go for appreciating/depreciating currency instead of deflationary/inflationary currency, which is what most people actually mean. This would be much more intuitive for an average Joe and easier to explain without losing the accuracy of the notion behind it. So we wipe out the possible misunderstanding caused by different definitions of inflation/deflation you rightly refer to (and probably would give rise to new terminological tensions)...
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Shneebly
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December 05, 2013, 02:29:23 AM |
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The problem is that there are two definitions of inflation/deflation which are used by different people. There is monetary inflation, measured by the total amount of money in the economy, and there is price inflation, measured by the change of price of everything. Usually if you have monetary inflation you will also have price inflation, but it does not always happen that way. Bitcoins are an example of monetary inflation (25 new bitcoins are added every 10 minutes), but at the same time we have price deflation.
Good explanation. "Inflation" literally means "expansion." If you are judging inflation by purchasing power it is unlikely the creation of new Bitcoin will have anything to do with it (given the current volatility). I think it's a bit silly that one would define Bitcoin as "inflationary" or "deflationary" depending on the day, and accept Ron Paul's definition of inflation-- the expansion of the monetary supply. As the previous commenters explained, under this definition Bitcoin will remain inflationary until more Bitcoins are lost/destroyed than created.
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Shneebly
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December 05, 2013, 02:41:54 AM |
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I'd rather go for appreciating/depreciating currency instead of deflationary/inflationary currency, which is what most people actually mean. This would be much more intuitive for an average Joe and easier to explain without losing the accuracy of the notion behind it. So we wipe out the possible misunderstanding caused by different definitions of inflation/deflation you rightly refer to (and probably would give rise to new terminological tensions)...
Great idea-- I'll start saying that now.
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Etlase2
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December 05, 2013, 03:47:32 AM |
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I think it's a bit silly that one would define Bitcoin as "inflationary" or "deflationary" depending on the day, Except no one does this. Inflation is usually measured on a yearly rolling basis. and accept Ron Paul's definition of inflation-- the expansion of the monetary supply. I love how every anti-establishment thinker is credited with these idiotic definitions. Guess what? That is not Ron Paul's definition, because he's not an idiot out to confuse people--he's out to educate them and commonly calls inflation a form of theft. Calling it an "expansion of the monetary supply" does absolutely nothing to educate the uneducated any more about what is actually going on. It perpetrates stupidity by causing confusion of terms that are well-defined and usually include the cause. http://www.thefreedictionary.com/inflation2. (Economics) Economics a progressive increase in the general level of prices brought about by an expansion in demand or the money supply (demand-pull inflation) or by autonomous increases in costs (cost-push inflation) Calling inflation an "expansion of the money supply" only still does nothing to explain what is really going on. So everyone who tries to use inflation in this manner, or tries to "educate" people on this definition, is making everyone stupider for it. Deflation, on the other hand, makes no sense to be used in the sense of a reduction in the "physical" supply of currency due to it being lost. In terms of money, it has *always* been used to mean a reduction in the available amount of currency. The amount of available currency can change at any given time based on economic factors, and it will likely always overwhelm the concept of lost coins meaning deflation and further confusion of terms employed only in bitcoinomics. You will never find an Austrian that has ever used the term to mean as such. Definitions of words should not be used to obfuscate the fact that bitcoin is intended to be higly deflationary--to use them in such a way is to commit the same intellectual crime as the establishment so reviled.
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polarhei
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December 05, 2013, 03:49:24 AM |
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BTC likes rare,unique answer. Treat as gold, so when trust still exists, the price for fiat, well keep increasing in reasonable rate.
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kjj
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December 05, 2013, 04:42:03 AM |
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...words...words...you aren't missing much...
Just FYI, you are a gigantic tool. I really need to stop showing your posts, you are on ignore for a reason. Some people use the term inflation differently than you. Get over it.
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17Np17BSrpnHCZ2pgtiMNnhjnsWJ2TMqq8 I routinely ignore posters with paid advertising in their sigs. You should too.
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Etlase2
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December 05, 2013, 05:36:48 AM |
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Just FYI, you are a gigantic tool. I really need to stop showing your posts, you are on ignore for a reason. Some people use the term inflation differently than you. Get over it. Just an FYI, the definition you linked to is this: "The term 'inflation' originally referred to increases in the amount of money in circulation", which is not the definition espoused in this thread--an "increase in the money supply". There is a significant difference, but people like you and the OP of the other thread fail to see the distinction whereas I have pointed this out on many occasions. Pointing out the rampant intellectual dishonesty around here may make me a tool, but at least I'm not the nail. PS - Nice how you ignored my point where deflation has never meant a decrease in quantity of money, yet it is used around here to mean such nonsense.
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kjj
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December 05, 2013, 06:02:51 AM |
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Just FYI, you are a gigantic tool. I really need to stop showing your posts, you are on ignore for a reason. Some people use the term inflation differently than you. Get over it. Just an FYI, the definition you linked to is this: "The term 'inflation' originally referred to increases in the amount of money in circulation", which is not the definition espoused in this thread--an "increase in the money supply". There is a significant difference, but people like you and the OP of the other thread fail to see the distinction whereas I have pointed this out on many occasions. Pointing out the rampant intellectual dishonesty around here may make me a tool, but at least I'm not the nail. PS - Nice how you ignored my point where deflation has never meant a decrease in quantity of money, yet it is used around here to mean such nonsense. Dishonesty... I'm not sure you are using that word correctly. It does not mean "disagrees with me". Many people would argue that as far as economics is concerned, "supply" is shorthand for "apparent supply", which is more or less the same thing as saying "in circulation". As far as markets are concerned, the dollars under your mattress, for example, do not exist, or exist only tangentially. So, the two terms are not exactly synonyms, but the overlap is such that most people will feel free to use them interchanably. If you'd like to debate the appropriateness of that imprecision, that's one thing. Calling people dishonest for failing to adopt your peculiar and precise definitions is an example of why I call you a tool. Your PS is silly. People use "inflation" to mean either "increase in quantity of money" or "increase of prices". The inverse terms are "deflation", "decrease in quantity of money" and "decrease of prices". If we have offended you by failing to use one of those terms sufficiently, we apologize for the oversight.
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17Np17BSrpnHCZ2pgtiMNnhjnsWJ2TMqq8 I routinely ignore posters with paid advertising in their sigs. You should too.
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Shneebly
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December 05, 2013, 06:03:53 AM |
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Guess what? That is not Ron Paul's definition, because he's not an idiot out to confuse people--he's out to educate them and commonly calls inflation a form of theft.
http://www.youtube.com/watch?v=oLiN6p0FSVk2:14 "As far as I'm concerned deflation is when the money supply shrinks, and inflation is when the money supply expands." -Ron Paul
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Etlase2
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December 05, 2013, 07:10:50 AM |
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Dishonesty... I'm not sure you are using that word correctly. It does not mean "disagrees with me".
Many people would argue that as far as economics is concerned, "supply" is shorthand for "apparent supply", which is more or less the same thing as saying "in circulation". But this is exactly what the definitions are not being used for. They are being used to refer explicitly to increases or decreases in the quantity of money--notions that are completely irrelevant compared to the effects of money in circulation which has many more complex interactions and implications. These "easy" definitions are being used to pretend that the problems associated with deflation are not worth talking about because, lol, there is no deflation. Your PS is silly. People use "inflation" to mean either "increase in quantity of money" or "increase of prices". The inverse terms are "deflation", "decrease in quantity of money" and "decrease of prices". If we have offended you by failing to use one of those terms sufficiently, we apologize for the oversight.
You pointed out that inflation was originally a term used to describe an increase of money in circulation. It is now used to describe a general increase in the price level. Historically, deflation as a term came about much later than inflation and always referred to a general decrease in the price level. No one of any merit has ever used it to mean specifically a decrease in the quantity of money or money in circulation. At some point, you have to give up this silly definition charade because all it does is create a microcosm of bitcoinomics that hinders any real discussion--likely the intended purpose. Intellectual dishonesty.
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kjj
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December 05, 2013, 01:01:24 PM |
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Dishonesty... I'm not sure you are using that word correctly. It does not mean "disagrees with me".
Many people would argue that as far as economics is concerned, "supply" is shorthand for "apparent supply", which is more or less the same thing as saying "in circulation". But this is exactly what the definitions are not being used for. They are being used to refer explicitly to increases or decreases in the quantity of money--notions that are completely irrelevant compared to the effects of money in circulation which has many more complex interactions and implications. These "easy" definitions are being used to pretend that the problems associated with deflation are not worth talking about because, lol, there is no deflation. Yeah, I'm not seeing what you are seeing. In fact, you can hardly swing a cat in this forum without hitting a dozen threads where people mention the horror of falling prices. Their claims aren't dismissed because the money supply is still expanding, they are dismissed because they are the same rote recitations that we've all read and argued a hundred times before. If you have something new to add, hopefully something of substance, please do. Plenty of us would love to hear it. I'll even make a point of clicking "show" on your ignored posts for another couple of days just to see. Your PS is silly. People use "inflation" to mean either "increase in quantity of money" or "increase of prices". The inverse terms are "deflation", "decrease in quantity of money" and "decrease of prices". If we have offended you by failing to use one of those terms sufficiently, we apologize for the oversight.
You pointed out that inflation was originally a term used to describe an increase of money in circulation. It is now used to describe a general increase in the price level. Historically, deflation as a term came about much later than inflation and always referred to a general decrease in the price level. No one of any merit has ever used it to mean specifically a decrease in the quantity of money or money in circulation. At some point, you have to give up this silly definition charade because all it does is create a microcosm of bitcoinomics that hinders any real discussion--likely the intended purpose. Intellectual dishonesty. Meh. The definition of deflation as a decrease in the money supply follows very naturally by analogy with inflation as an increase. With bitcoin, we finally have a currency where the money supply can shrink. We need a term to describe that, we picked the term that makes the most sense to us. I get it that this causes you much grief, but you really need to get over it.
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17Np17BSrpnHCZ2pgtiMNnhjnsWJ2TMqq8 I routinely ignore posters with paid advertising in their sigs. You should too.
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viridisk
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December 05, 2013, 01:17:07 PM Last edit: December 05, 2013, 01:36:40 PM by viridisk |
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With bitcoin, we finally have a currency where the money supply can shrink.
Please explain to me how supply of bitcoin can shrink. At some point in the future there can be less than 12 million bitcoins mined that today? How? Supply of bitcoin is ever-growing and it will be until the very last one is mined. But that's not inflation, that's just supply. Thing you can see on the markets with one bitcoin being worth more and more compared to fiat currencies, that is deflation of bitcoin. And deflation is good thing for all basically parties involved as long as economy of some nation (or world) doesn't depend on currency that is deflation. Bitcoin is long way from that point.
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MoneyMorpheus
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December 05, 2013, 01:29:05 PM |
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With bitcoin, we finally have a currency where the money supply can shrink.
Please explain to me how supply of bitcoin can shrink. At some point in the future there can be less than 21 million bitcoins mined that today? How? Supply of bitcoin is ever-growing and it will be until the very last one is mined. But that's not inflation, that's just supply. Thing you can see on the markets with one bitcoin being worth more and more compared to fiat currencies, that is deflation of bitcoin. And deflation is good thing for all basically parties involved as long as economy of some nation (or world) doesn't depend on currency that is deflation. Bitcoin is long way from that point. The supply of btc halves every few years, that's how. Also to the other question a lot of bitcoins where lost already. If you delete your wallet without any sort of backup they are gone. There was even a case in 2011 of an exchange that rebooted the amazon cloud and lost all the btc in their wallet. Gox took over that exchange and refunded all the btc lost from their profits. There will never be 21 million bitcoins.
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