Bitcoin inflation vs Monetary inflation vs "Official inflation"

[Catenaccio]

Bitcoin supply is inflationary until 2140 after all 21M bitcoins appear, it's a fact we must know and admit as well as avoid spreading misinformation that Bitcoin is deflationary.

Fortunately, Bitcoin inflation is lower than inflation of fiat currencies and Bitcoin has very good adoption growth so consequently demands on Bitcoin increases parabolically with time.

Lately River depicts a graphical plot that shows us Money devaluation vs "Official inflation".

It's nothing new if we know about traditional inflationary issues of fiat currencies in many centuries under bad management of central banks. It is still very helpful to enlighten people who still believe in fiat currencies.

Another article to wake people up about risk and declining purchasing power of fiat currencies.
Purchasing power of the US. dollar over time.

You can see very different supply and inflation future with Bitcoin.
Bitcoin inflation vs Time.

[kotajikikox]

Bitcoin supply is inflationary until 2140 after all 21M bitcoins appear, it's a fact we must know and admit as well as avoid spreading misinformation that Bitcoin is deflationary.

Technically we can claim that bitcoin still experiences inflationary effects but the fact remains that its supply is fixed and limited which allows it to remain scarce. Scarcity and high demand creates high value hence why it is considered to be anti inflation and in which we can hold our money in in order to protect our money. If we continued to hold fiat for a long time, its value will decrease over time. No matter what the technical side of things, bitcoin can still be anti inflationary.

[davis196]

I guess that most people claim that Bitcoin is deflationary mostly because they compare BTC to all the fiat currencies.
Should we keep comparing Bitcoin to fiat currencies, since BTC actually isn't competing against fiat currencies as a currency for everyday purchases? Maybe Bitcoin should only be compared to Gold, since BTC has turned into "digital gold". I'm not the biggest expert in finance, but I think that the difference between USD monetary inflation and consumer inflation is the fact that the US dollar is a global currency. This means that the USA "exports inflation" overseas, which means that that the consumer inflation rates inside the USA are lower than they should've been, if the USD wasn't a global currency.

[betswift]

Bitcoin supply is inflationary until 2140 after all 21M bitcoins appear, it's a fact we must know and admit as well as avoid spreading misinformation that Bitcoin is deflationary.

Technically we can claim that bitcoin still experiences inflationary effects but the fact remains that its supply is fixed and limited which allows it to remain scarce. Scarcity and high demand creates high value hence why it is considered to be anti inflation and in which we can hold our money in in order to protect our money. If we continued to hold fiat for a long time, its value will decrease over time. No matter what the technical side of things, bitcoin can still be anti inflationary.

1 BTC will always be 1 BTC.

And that is all that can be said about all the non-inflationary talks.

[BIT-BENDER]

I guess that most people claim that Bitcoin is deflationary mostly because they compare BTC to all the fiat currencies.
Should we keep comparing Bitcoin to fiat currencies, since BTC actually isn't competing against fiat currencies as a currency for everyday purchases? Maybe Bitcoin should only be compared to Gold, since BTC has turned into "digital gold". I'm not the biggest expert in finance, but I think that the difference between USD monetary inflation and consumer inflation is the fact that the US dollar is a global currency. This means that the USA "exports inflation" overseas, which means that that the consumer inflation rates inside the USA are lower than they should've been, if the USD wasn't a global currency.

When you mean compare what are you talking about? All I can say is that people are valuing Bitcoin in Fiat (the US dollar) that's the way to know the actual monetary value of Bitcoin, I have not seen much comparison between Bitcoin and Fiat.
Firstly Bitcoin is more volatile and so far in terms of growth Bitcoin is on a league of its own and I don't see how any competition can even exist. I have seen more comparison between Bitcoin and gold than Bitcoin and any Fiat currency.

[Ucy]

When we say Bitcoin is deflationary we mean the number of new mined bitcoins deflate or decrease periodically/overtime. The decrease could be accompanied by increase in price of Bitcoin due partly to demand for bitcoins becoming greater than its supply.
Nevertheless, there are factors that also cause the price of Bitcoin to increase, without them the price wouldn't increase very much regardless of the high demand. They are what give Bitcoin its value, and the price largely depends on the factors. But so far the factors aren't well encouraged or embraced, just like this post calls the deflationary feature of Bitcoin a misinformation. That important factor is one of the reasons people value Bitcoin.

[hero_the_bossman]

When we say Bitcoin is deflationary we mean the number of new bitcoins mined deflate or decrease periodically/overtime. The decrease could be accompanied by increase in price of Bitcoin due partly to demand for bitcoins becoming greater than its supply.
Nevertheless, there are factors that also cause the price of Bitcoin to increase, without them the price wouldn't increase very much regardless of the high demand. They are what give Bitcoin its value, and the price largely depends on the factors. But so far the factors aren't well encouraged or embraced, just like this post calls the deflationary feature of Bitcoin a misinformation. That important factor is one of the reasons people value Bitcoin.

As time goes on, Bitcoin becomes more scarce due to what you described in your first paragraph.

And that's really, really beautiful about it. No coin upholds its values like it.

[Free Market Capitalist]

That's right, this is the problem with the modern economy, not the rich or whatever scapegoat you want to use. There is an official inflation that is manipulated downwards and therefore shows as a result a figure much lower than the real one. People are happy if their salaries are raised by 2% while the official inflation is 3% (and the real inflation is 10% or more) but they cannot explain how it is increasingly difficult for them to make ends meet. That's why bitcoin has gone from an initial price of less than $0.01 to over $100K recently, and that's why it will continue to rise.

[Dunamisx]

Bitcoin supply is inflationary until 2140 after all 21M bitcoins appear, it's a fact we must know and admit as well as avoid spreading misinformation that Bitcoin is deflationary.

Fortunately, Bitcoin inflation is lower than inflation of fiat currencies and Bitcoin has very good adoption growth so consequently demands on Bitcoin increases parabolically with time.

Or maybe its just something we need to understand by that bitcoin is more of a volatile currency than being an inflationary one, talking about inflation, this obeys a particular law of the centralized economy controlled by the government and we cant say that the increase in the bitcoin market price and fall in it should appear being the same as the economy inflation whereby goods and commodity items only rises and failing to fall.

[Catenaccio]

Or maybe its just something we need to understand by that bitcoin is more of a volatile currency than being an inflationary one, talking about inflation, this obeys a particular law of the centralized economy controlled by the government and we cant say that the increase in the bitcoin market price and fall in it should appear being the same as the economy inflation whereby goods and commodity items only rises and failing to fall.

Inflation is bad, hyperinflation is worse but deflation does not mean better.

Talking beyond Bitcoin as it is inflationary, altcoins have coins that are deflationary through buy back and burn programs, but you know that altcoins are weak and most of them die with time. Buy back and burn programs to create deflation won't help weak and useless altcoins become usefulness and have values.

Inflation of fiat currency and decrease of fiat currency purchasing power mutuallly correlates with Bitcoin price. It helps Bitcoin price grows up very shaprly by effect of Bitcoin adoption growth, more demands, higher value, and from decrease of fiat currency purchasing power. It has double effects on Bitcoin price in long term.

https://charts.bitbo.io/satoshi-per-dollar/

[Cryptohygenic]

Fortunately, Bitcoin inflation is lower than inflation of fiat currencies and Bitcoin has very good adoption growth so consequently demands on Bitcoin increases parabolically with time.

The inflationary purpose of bitcoin has advantage over the fiats in the fact that bitcoin keep good values for a long even when there is a global economy red wings,  bitcoin could still keep to perform it wonderful purposes.
Although, could face it wrath of devaluation when it volatility is looped against the hold of value stability.
The fiats can always maintain a stable number as physical tender but are vulnerably to deflation and values less in an economy stumble.

[john_egbert]

Fortunately, Bitcoin inflation is lower than inflation of fiat currencies and Bitcoin has very good adoption growth so consequently demands on Bitcoin increases parabolically with time.

The inflationary purpose of bitcoin has advantage over the fiats in the fact that bitcoin keep good values for a long even when there is a global economy red wings,  bitcoin could still keep to perform it wonderful purposes.
Although, could face it wrath of devaluation when it volatility is looped against the hold of value stability.
The fiats can always maintain a stable number as physical tender but are vulnerably to deflation and values less in an economy stumble.

1 BTC will always be one BTC.

And each cycle, we see that less and less BTCs are mined, just like it was said previously, Bitcoin's scarcity ensures its value being appreciated over any period of time.

[Free Market Capitalist]

1 BTC will always be one BTC.

Yes, but if you take it as a tautology it is a nonsense, self-evident, yes, but it says nothing, the same as if you say that A=A.

And each cycle, we see that less and less BTCs are mined, just like it was said previously, Bitcoin's scarcity ensures its value being appreciated over any period of time.

I like this part more because here what is relevant is the purchasing power that bitcoin is acquiring over time but with volatility, so at some points also loses purchasing power even though the long term trend is clearly upwards. I opened a thread about it some time ago.

[shield132]

Bitcoin supply is inflationary until 2140 after all 21M bitcoins appear, it's a fact we must know and admit as well as avoid spreading misinformation that Bitcoin is deflationary.

For all of us, for those who are alive at the moment, Bitcoin is a deflationary currency. It's still a question whether Bitcoin will remain as it is now because 2140 is a very long time and if we have a look at how far things went in 21th century and how fast things are going every year, I'd say that it's impossible to predict whether we will really mine till 2140 or Bitcoin will be a different.
Btw if we imagine that everything goes as planned and the last Bitcoin will be mined in 2140, I'd say that then the Bitcoin will not be inflationary like our fiat currencies but it will hugely be valued according to demand/supply and inflation rate of fiat but it's still hard to predict because if Bitcoin becomes a store of value, then things will be different.

[alani123]

The CPI is attempting to create a representative index. Of course many argue the real value of money is lost at a faster pace than the CPI can show. But in economics each person has different needs. For instance many young people at the moment are worried about not being able to afford their own home. This is placed very high in their needs at the moment, and if current trends continue with low wages and high house prices they might never be able to afford one. House inflation is higher than the CPI in most countries.

This believe it or not is not just based on how much money gets printed. Based on current trends, it does not look like we increased consumption. In many countries that had record infltion around the pandemic there were even drops in the population. So there's no way consumption increases. Especially when the cost of basic goods keeps going up.

A driving factor of having these rates of inflation is greed. The oligopoly of supermarkets, distributors, import megacorps etc decided they wanted a larger piece of the pie. We had disposable income so they might as well claim it. The excuse of rising costs was there due to the pandemic so instead of covering their costs, they increased prices to increase profits even more on top of the costs.

This has been the case since forever in capitalilsm. Profits have to increase at all costs. We've already been squeezed out of our last cents. Now many of us start being in debt. Where is this going to end up? Last time we had to bail out the banks that cause these catastrophic events from our own money and many of us still suffer from lost pensions, lower wages, and an overall wave of austerity. If they know they'll be bailed out again, nothing will stop them.

Never forget, bitcoin genesis block: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

THIS is what it's about. There's a whole system behind what drives the devaluation of currency. It's built on our backs and has since kept squeezing us more and more. What are we waiting for to tip the balance?

[pooya87]

Being inflationary is not about whether the supply is growing or not. Anything that causes inflation is inflationary. Here is an interesting thing to know: printing money doesn't necessarily cause inflation! Where the money goes does.

As the economy expands, the need for fiat increases (demand rises) that's the time they can increase fiat printing and not cause inflation but only if it goes into REAL economy and REAL production.
The reason why fiats including dollar have lost value is not because they were printed so much but because they were printed so much to cover the debt instead of going into production and expanding the economy.

For example last I checked US government was printing a trillion dollar every 100 days to cover its debt and deficit with all the bonds they've sold and have to pay the interest on them. That is what causes inflation.

So we can't really call bitcoin inflationary just because its supply is growing because the demand for that supply is also growing and it actually grows at an exponentially faster speed (until mass adoption) so it becomes deflationary... Which is why price keeps going up in the long term instead of going down.

P.S. This little and simple explanation is exactly why US government has been desperately trying to change the reason why they print money and where it goes by bringing back production to the colony, imposing tariffs on everyone to help domestic production, and so on.

[Aanuoluwatofunmi]

Being inflationary is not about whether the supply is growing or not. Anything that causes inflation is inflationary. Here is an interesting thing to know: printing money doesn't necessarily cause inflation! Where the money goes does.

Just to add more on this aspect, the leaders keep printing money because they know their self to be the main reason  or cause to the problems they are using the money for, which indirectly means that all these money are coming back to them after been allocated to different sectors of demand, maybe we should now wake up to realize that the entire policies with the centralized economy in inflationary itself and the major cause to all these are those in charge of the policy implementations, the so called leaders and they uses all these to cause extortions and run projects for their counterparts all in the name of helping the economy whereas they are the problem behind it.

[notocactus]

Never forget, bitcoin genesis block: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

THIS is what it's about. There's a whole system behind what drives the devaluation of currency. It's built on our backs and has since kept squeezing us more and more. What are we waiting for to tip the balance?

It's global economic issue in 2009, but since Covid-19 pandemic the world is on a brink of another bailout of banks. There are actually several banks with bankruptcies in past few years in the bear market. Governments want to calm citizens down by saying "technical recession" because they don't want citizens to feel too pessimistic and panic if they announce "recession".

More about the Bitcoin Genesis block and the original copy of the Genesis Block Newspaper.
https://en.bitcoin.it/wiki/Genesis_block
https://www.thetimes03jan2009.com/