Can Bitcoin really resist inflation?

[Tim-BTC]

Now the impact of the U.S. epidemic has forced the Federal Reserve and the U.S. Department of the Treasury to jointly change the U.S. macroeconomic policy over the past four decades. The crazy rescue plan of the Trump team and the Biden administration has led to a huge crisis in the credit of the U.S. dollar, which is raised by money printing and debt issuance. The U.S. bailout fund has brought inflation.

At this time, people again mentioned that Bitcoin can fight inflation.

Since the total issuance of Bitcoin is limited to 21 million, Bitcoin has had its own "anti-inflation" aura since its inception.

However, Can Bitcoin really resist inflation?

Because, although Bitcoin has a total issuance limit as a "protective cover" against inflation, but under the impact of a dazzling variety of virtual currencies such as ETH, BNB, XRP, LTC, DOGE, etc., Bitcoin's "protective cover" "It's easy to break the power.

The main determinant of currency issuance in the modern economy is not how many physical banknotes are printed by the banknote printing plant, but how much credit the bank issues. If the amount of credit is too large, it will lead to inflation. To prevent inflation, the number of entities that control the base currency is ineffective.

The key is to control the floodgate of credit. Imagine that if Bitcoin really becomes currency, Bitcoin bank loans and Bitcoin bonds will certainly follow.  Can inflation in the Bitcoin world be controlled simply by limiting the number of Bitcoins?

The central bank's quantitative easing policy and the ever-expanding money supply are in stark contrast to the quantitative tightening policy of Bitcoin's third halving. The supply of fiat currencies is growing rapidly, and claims about the scarcity of Bitcoin are becoming more and more important. Can this prove that Bitcoin can resist inflation?I am confused.

[1714675782]

1714675782

[1714675782]

1714675782

[ranochigo]

Bitcoin has a monetary deflation because it doesn't compensate for the lost coins and there should be an overall monetary deflation, year on year despite the steady inflation due to the increase in the supply. That would depend on how much of the Bitcoin gets removed from the supply. Eventually, Bitcoin will be deflationary, because the supply increase is zero.

Since Bitcoin's maximum supply cap and it's reward schedules are pre-determined from the start, you cannot change the rate of monetary inflation (or deflation) unless everyone agrees on it. Don't take into account the actual value of Bitcoin, because there is no way to predict whether it gets more valuable or vice-versa.

[pooya87]

If I draw Franklin's face on a piece of paper that doesn't become a 100 dollar bill. It would be a useless piece of paper.
That's the same with altcoins, when a shitcoin copies bitcoin it doesn't affect bitcoin's supply or the fact that it is deflationary. It would simply be considered a weak copy.
Same thing is true if some day banks and other institutes start giving out "fake" bitcoin's through loans, etc. It won't affect bitcoin itself.

[Mcphail]

If I draw Franklin's face on a piece of paper that doesn't become a 100 dollar bill. It would be a useless piece of paper.
That's the same with altcoins, when a shitcoin copies bitcoin it doesn't affect bitcoin's supply or the fact that it is deflationary. It would simply be considered a weak copy.
Same thing is true if some day banks and other institutes start giving out "fake" bitcoin's through loans, etc. It won't affect bitcoin itself.

This analogy is very apt.Suddenly I understood that replicas are always replicas, and Bitcoin is always Bitcoin.
But I guess OP wants to express bitcoin derivatives, not replicas.

[Kong Hey Pakboy]

To answer the title, yes it can resist inflation because it keeps up with it, remember that the world is experiencing inflation every year so we can witness that bitcoin can and does resist inflation. Plus, what's the point of bitcoin being decentralized when it can't even resist inflation.

[mk4]

Bitcoin's success as a hedge against inflation will really depend on if people see the importance of bitcoin or not. As for other cryptocurrencies, I really don't see them as a threat that could be a reason that Bitcoin wouldn't succeed. Only a small minority knows about Ethereum and other cryptocurrencies in the first place.

[davis196]

Every scarce resource or scarce financial asset is protected against inflation.
Inflation is the process of devaluation of fiat money.Scarce resources are protected against inflation,simply because their price measured in fiat money is going to increase,which means that fiat money are becoming less valuable,compared to a scarce asset like Bitcoin.

Because, although Bitcoin has a total issuance limit as a "protective cover" against inflation, but under the impact of a dazzling variety of virtual currencies such as ETH, BNB, XRP, LTC, DOGE, etc., Bitcoin's "protective cover" "It's easy to break the power.

So you think that altcoins will somehow undermine or break the "protective power" of Bitcoin?Why?
Altcoins are altcoins and Bitcoin is Bitcoin.Most of the altcoins,which aren't scarce will lose their value slowly,some of them will keep their value,which is measured in fiat money and this means that they cannot resist inflation.
Bitcoin has nothing to do with this.

[kryptqnick]

Bitcoin hasn't been alone on the market for many years, and yet its value is constantly increasing. I believe it's a good sign that altcoins don't pose a serious threat to Bitcoin and that Bitcoin can resist inflation successfully. It's not only about the limited total supply, but also about the limitations set by halvings. If anything, the problem Bitcoin as money might face is not hyperinflation at all, but reluctance of people who don't want to spend it on goods, knowing that its purchasing power can increase a lot in the future.

[Wind_FURY]

Can inflation in the Bitcoin world be controlled simply by limiting the number of Bitcoins?

In Bitcoin, onchain itself, If from the standpoint of limiting the number of coins within the protocol itself, then YES. That’s obvious. Unless a hard fork to increase the supply cap gets consensus.

I’m also confused, OP. Are you talking about Bitcoin derivatives as instruments for inflation?

[20kevin20]

BTC will only resist inflation if we want it to do so. If most of us see it as a hedge against inflation, it'll be that way.

But on the other hand, I am also afraid of the existence of "virtual" Bitcoins such as bonds or what companies like PayPal/Revolut are selling: just the value of 1 BTC rather than the coin itself. I think they're going to try to introduce some kind of artificial inflation at some point to hurt Bitcoin. That remains to be seen though, and I don't think there's any "cure" for it anyway..

[MIner1448]

By the way, a very important remark, when the economy in the United States begins to shake, the country's population immediately begins to invest in cryptocurrency at my opinion, we have already noticed this more than once, perhaps the problems in the economy in this country will bring a new maximum for bitcoin ...

[carrigan]

The reason why some types of cryptocurrencies can act as a hedge against inflation is for the same reason as gold: supply is limited. This is something that many people, even crypto players themselves, forget, but keep in mind that many cryptocurrencies and especially, Bitcoin are built with inherent limitations. All in all, it is not really clear whether Bitcoin is, in fact, a deflationary assets. Or at least, not yet a deflationary asset. While it is technically true that the supply of this cryptocurrency is limited, we are not close to that limit yet. One of the main drivers behind Bitcoin's shine is the combination of stability and flexibility it offers. In this context, it is encouraging that today investors not only see crypto as a stable hedge against US dollar inflation, but if they only see crypto as a substitute for gold, then they are missing the point: cryptocurrencies are more than just a hedge against inflation.

[Poker Player]

Imagine that if Bitcoin really becomes currency, Bitcoin bank loans and Bitcoin bonds will certainly follow.  Can inflation in the Bitcoin world be controlled simply by limiting the number of Bitcoins?

They are two completely different things. Even in the event that Bitcoin becomes a medium of exchange (currency) in the future, because today it is succeeding more as a store of value, it is normal that it coexists with other currencies. Then, if banks give loans, they will not give bitcoin loans, they will give them in other currencies, either fiat or shitcoins, and in any case they will ask you to leave Bitcoin as collateral.

Lending in the fiat system is a way of creating money out of thin air, and that cannot be done with bitcoin.

Can this prove that Bitcoin can resist inflation?I am confused.

Bitcoin has been the best financial asset to protect you from inflation and will continue to be so because of its intrinsic properties, especially its limited nature, as noted above.

[hatshepsut93]

It's a distorted narrative to say that Bitcoin is here to stop inflation or save people from inflation. Bitcoin itself doesn't have infinite inflation, so it means that theoretically as fiat currency loses its value, Bitcoin's price will go up because its supply didn't change. However, Bitcoin can't stop governments/banks from printing money, and it's not adopted enough to have observable macroeconomic effects. It's also quite volatile for now, so it's not suitable to be a store of value for everyone.

[oHnK]

Bitcoin has been the best financial asset to protect you from inflation and will continue to be so because of its intrinsic properties, especially its limited nature, as noted above.

The Bitcoin market will be the solution to a centralized economic system that creates a new problem, namely inflation.  Bitcoin which is decentralized and has high volatility will provide equal opportunities for profit or loss according to the analytical capabilities of each investor.  When you are able to read the opportunities, profits of up to hundreds of percent is a natural thing to have.  There have been many happy stories of having crypto in their portfolio.

[Coyster]

At this time, people again mentioned that Bitcoin can fight inflation.

Inflation is related to centralized economics, thus, it's the governments actions and measures that can fight inflation and not Bitcoin per se, Bitcoin is a decentralized network and what it can do is to act as a hedge against fiat inflation/devaluation, imo, it's somewhat a wrong ideology to believe that Bitcoin can fight inflation. The reason why there has been an influx of institutional investors and individuals into the Bitcoin network is cause Bitcoin can somewhat retain the value of their funds as the traditional economic system struggles, but people wrongly believe that Bitcoin can solve or stop economic inflation, that I don't think is possible.

[Fesatmas]

Since when is Bitcoin hit by inflation?
because Bitcoins are not continuously minted, a fixed number certainly gives a fixed answer where Bitcoin is the safest savior from Inflation.
Due to the existence of Bitcoin as a solution for fiat currencies, we certainly believe in this. Bitcoin is independent, not centralized, no one controls its rate, not even the whales. Bitcoin is about individuals, with all the rights and freedoms they can hold at will, while Fiat is centralized and has a processed performance system under the auspices of the government.

[dkbit98]

Since the total issuance of Bitcoin is limited to 21 million, Bitcoin has had its own "anti-inflation" aura since its inception.

There are few million bitcoin less because of lost coins, but there are much more Sats or mBTC that can be used as smaller denominations for Bitcoin, so you don't really have to own or buy one Bitcoin.

However, Can Bitcoin really resist inflation?

Bitcoin doesn't have to do anything to resist inflation.
It's a free market that will decide if people will choose Bitcoin or something else like precious metals to hedge inflation and hyperinflation.

Because, although Bitcoin has a total issuance limit as a "protective cover" against inflation, but under the impact of a dazzling variety of virtual currencies such as ETH, BNB, XRP, LTC, DOGE, etc., Bitcoin's "protective cover" "It's easy to break the power.

All those are centralized junk shitcoins that can't really do anything and they can't compare with Bitcoin.
There is no CEO or central authority controlling Bitcoin like it's the case with all other coins and digital currencies.

[int03h]

Bitcoins are global currencies so they have a large and decentralized market. It is everyone in the world that controls Bitcoin with a P2P network. It is different from the FIAT currency, which is also an interesting point that Bitcoin brings.
Bitcoin does not need to reduce its supply. Bitcoin is limited in quantity, scarce through increased mining by miners and halving rewards per block every 4 years. The amount of Bitcoin outside the market is always decreasing due to the active buying of individuals and institutions.

[Tim-BTC]

Because, although Bitcoin has a total issuance limit as a "protective cover" against inflation, but under the impact of a dazzling variety of virtual currencies such as ETH, BNB, XRP, LTC, DOGE, etc., Bitcoin's "protective cover" "It's easy to break the power.

So you think that altcoins will somehow undermine or break the "protective power" of Bitcoin?Why?

What I mean is to judge that Bitcoin can withstand inflation only from the limited supply of 21 million Bitcoins, so that other altcoins can also do it.
Just from a constant amount, although it will not cause inflation, it may not necessarily be able to solve inflation.