Bitcoin is no hedge against inflation - i unadopted it.

[venlo]

People like to call it 'hedge against fiat inflation' others said 'it's digital gold'

None of it is true. In fact it is misleading. Bitcoin inflates twice as heavy as fiatmoney until 2016 - after that it'll continue to inflate at the same rate as fiatmoney. So how can that be a hedge against inflation or compared to gold? It's a lie.

Bitcoin is inflating heavily with around 10% per year. This is causing negative feedbackloops like we see now and causes high volatility.
The high inflation in bitcoin also impacts adoption in a negative way. People will probably not adopt something that goes down 90% of the time to make a crazy rise (maybe) at one point for a few weeks and then starts declining again for ages.
Sane people will not adopt that.

So, can i ask. Why was it again we are having that inflation? What sense does it make? Why do we need it?
Is Bitcoin maybe just a plot to make big miners rich?

I myself unadopted bitcoin again for that reason.
I refuse to invest in inflationary coins.

your thoughts?

[1715051512]

1715051512

[1715051512]

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[franky1]

my thoughts are that your research is lacking the big picture. and you need to do more research.

5 years ago bread was $2 now its $2.50
pick ANY item in the world you want to buy and then look at the price now.
beef, oil, car fuel, pepsi, beer.

now for another example, using bitcoin this time:
5 years ago 2 pizza cost 10k bitcoin. now 2 pizza cost 0.1bitcoin. meaning to can get 200,000 pizza's for the same 10k bitcoins

learn about what inflation really is, and dont worry about the small day to day price changes, much like economists dont worry about day to day special offers of 50c off bread, or 'happy hour' in bars. or buy one get one free on pepsi.. the big picture long term is that bitcoin is DEFLATIONARY and legal tender is INFLATIONARY.

as for your unadoption.
lets say you only had 1BTC and now have cashed out
i dare you to hold your bank notes for just 2 years. and on that piece of paper write out a shopping list of things that you can buy with it. ($400 shopping list).

and in 2 years lets see how many of those items on your shopping list you can buy. and compare it to purchases using bitcoin.

goodluck with your FIAT savings 

[newyorker91]

So, can i ask. Why was it again we are having that inflation? What sense does it make?

As any currency it has that inflation. You need to wait a few year when it will be more stable.

Why do we need it?
Is Bitcoin maybe just a plot to make big miners rich?

To make transactions/payments smooth and quick without having a middleman, there are many reasons why. And, no, it's not about making big miners rich.

[venlo]

sure, sure, but am i not better off not using it and to just jump in every 4 years 2 weeks before the halving, ride the wave and leave again? I don't see a reason to hold it during times of low adoption at least until 2020 when the inflationrate is at a reasonable level. I think for me it'll make more sense just to stay out until 2020.

I think my gold bullion will do a better job in protecting me against a collapse of the dollar.

We had 9 months of a bearmarket, adoption is not picking up and now the thing tanks on good news. No, thank you. You can have it.

Google trends shows declining interest in it. Not a good investement with that inflationrate, i guess. It is not designed to hold value or to be adopted at this point in time.

[Lauda]

No matter what one does, they can't please everyone.
Even if Bitcoin were to become near perfect someone would find things that are "wrong" with it.
Stop complaining. FIAT is bad. End of story.

[venlo]

Sure, Bitcoin is currently experiencing monetary inflation. The new coins are being distributed.

Apparently Bitcoin can't do everything right in the eyes of everyone. One person complains about the early adopters having too many coins, another complains that the inflation is too high.

right. The problem is see is: early adopters are punished for holding it to accomodate the latecomers who may never come actually for various reasons. The inflation does make no sense. If inflation was lower latecomers could still benefit because what difference does it make for them not to be able to hold as many coins and become as rich with it when it only was designed to hold value? They could still benefit from it if it wasn't as inflationary. Now the problem we are having: people leaving why? so the latecomers can have more  worthless coins in 10 years?

I hold bitcoins because it allows me to store and transfer value without the help of a middleman or the permission of an authority.

wrong. It doesn't allow you to store value yet.

[venlo]

the point i am making: the logic is flawed. The inflation does benefit nobody. Maybe the miners. Otherwise: nobody. Also not the latecomers.

Bitcoins design is stupid. It can't hold value by design. Therefor it can't be adopted. At least not until 2016 or 2020.

[medUSA]

When someone say that something hedges against inflation, it usual means long term. Hedging does not mean risk-free, only reduced risk.

[inBitweTrust]

None of it is true. In fact it is misleading. Bitcoin inflates twice as heavy as fiatmoney until 2016 - after that it'll continue to inflate at the same rate as fiatmoney. So how can that be a hedge against inflation or compared to gold? It's a lie.

Incorrect , the next halving will happen sometime mid to late 2015 and inflation will drop below USD /Euro Inflation. USD Fiat inflation is 5-8% a year if you use the correct CPI to calculate inflation which includes food and fuel.

USD fiat  has already lost 99.9998% in value against bitcoin in the last 5 years despite bitcoin being an inflationary currency. Why? Bitcoin is technically an inflationary currency and will remain so till 2140. Despite it being inflationary it keeps going through deflationary bubbles because demand outstrips supply. So an inflationary currency becomes a deflationary currency because it doesn't have the fed tweaking the printing rates to match the demand.

Anyone getting out of Bitcoin before the next halving is crazy as their will be many more "deflationary bubbles" on this initial roller-coaster.

[balu2]

i agree with op to a certain point. But i don't see a need to unadopt crypto entirely.
Go for altcoins with solid community and low inflation. There is a few of them. They are better and will very likely hold more marketcap in the future when people realize this as a problem. There are solutions offered for the too long halving-intervals of bitcoin. Shoot me a message and i'll name you a few.

[OrientA]

BTC is being issued, so there is high inflation. But if you compare it against USD, it is deflationary.

[BitCoinNutJob]

Could we not make the same argument against gold since more gold is being dug out off the ground constantly.  What if a meteorites of solid gold start falling down?

[venlo]

BTC is being issued, so there is high inflation. But if you compare it against USD, it is deflationary.

which is untrue

3600 new bitcoins a day in 365 days = 1.3 million
Currently in circulation: around 13 million

10% inflation - insane

USD hold value better with its 5% inflation annualy and they are not in a negative feedbackloop yet.
Gold never will experience these negative feedbackloops

negative feedbackloop: people sell and sell, miners keep selling, others don't buy in, more selling, panic, more selling, selling, inflation, selling, another panic and more selling, no adoption, more selling, miners keep selling until finally: stagnation

[inBitweTrust]

i agree with op to a certain point. But i don't see a need to unadopt crypto entirely.
Go for altcoins with solid community and low inflation. There is a few of them. They are better and will very likely hold more marketcap in the future when people realize this as a problem. There are solutions offered for the too long halving-intervals of bitcoin. Shoot me a message and i'll name you a few.

Even if you ignored all of bitcoins positive attributes and just focused on bitcoin as an investment this is poor advice.

It is not so much about the rate of inflation within the currency itself but the rate of inflation vs the adoption rate. I would much rather have a mildly inflating currency that is deflating because it has more buying pressure than a fixed asset that has no future.

Many of those alts have no future and are just barely staying alive because marketing.

3600 new bitcoins a day in 365 days = 1.3 million
Currently in circulation: around 13 million

10% inflation - insane

There are many state currencies with higher inflation rates than 10%. When Bitcoin drops to 4-5% inflation next year will you be calling USD inflation of 5-8% insanely high?

Gold never will experience these negative feedbackloops

This is false, gold has the same "negative feedbackloops". Gold is also more dangerous from the aspect that the mining or "inflation" amount isn't fixed or known. There will only be 21 million bitcoins. Who knows how much gold will be circulating in the future with asteroid mining , a large gold find on earth, ect...

[Remember remember the 5th of November]

My thoughts are that your research is lacking the big picture. and you need to do more research.

5 years ago bread was $2 now its $2.50
pick ANY item in the world you want to buy and then look at the price now.
beef, oil, car fuel, pepsi, beer.

now for another example, using bitcoin this time:
5 years ago 2 pizza cost 10k bitcoin. now 2 pizza cost 0.1bitcoin. meaning to can get 200,000 pizza's for the same 10k bitcoins

learn about what inflation really is, and dont worry about the small day to day price changes, much like economists dont worry about day to day special offers of 50c off bread, or 'happy hour' in bars. or buy one get one free on pepsi.. the big picture long term is that bitcoin is DEFLATIONARY and legal tender is INFLATIONARY.

as for your unadoption.
lets say you only had 1BTC and now have cashed out
i dare you to hold your bank notes for just 2 years. and on that piece of paper write out a shopping list of things that you can buy with it. ($400 shopping list).

and in 2 years lets see how many of those items on your shopping list you can buy. and compare it to purchases using bitcoin.

goodluck with your FIAT savings  

For once you are correct.

10 years ago I could buy a lot of things with the same amount of money I use today to buy only a few. Even bread costs twice as much as before.

[CoinRocka]

BTC is being issued, so there is high inflation. But if you compare it against USD, it is deflationary.

which is untrue

3600 new bitcoins a day in 365 days = 1.3 million
Currently in circulation: around 13 million

10% inflation - insane

USD hold value better with its 5% inflation annualy and they are not in a negative feedbackloop yet.
Gold never will experience these negative feedbackloops

negative feedbackloop: people sell and sell, miners keep selling, others don't buy in, more selling, panic, more selling, selling, inflation, selling, another panic and more selling, no adoption, more selling, miners keep selling until finally: stagnation

Let's assume all 21 million bitcoin were created/mined on day 0.  Who would get them?  Gold had an insane inflation rate in 1848.

[achimsmile]

the point i am making: the logic is flawed. The inflation does benefit nobody. Maybe the miners. Otherwise: nobody. Also not the latecomers.

Bitcoins design is stupid. It can't hold value by design. Therefor it can't be adopted. At least not until 2016 or 2020.

You should check out non-inflationary PoS coins, such as Nxt or BitsharesX.

[CoinRocka]

My thoughts are that your research is lacking the big picture. and you need to do more research.

5 years ago bread was $2 now its $2.50
pick ANY item in the world you want to buy and then look at the price now.
beef, oil, car fuel, pepsi, beer.

now for another example, using bitcoin this time:
5 years ago 2 pizza cost 10k bitcoin. now 2 pizza cost 0.1bitcoin. meaning to can get 200,000 pizza's for the same 10k bitcoins

learn about what inflation really is, and dont worry about the small day to day price changes, much like economists dont worry about day to day special offers of 50c off bread, or 'happy hour' in bars. or buy one get one free on pepsi.. the big picture long term is that bitcoin is DEFLATIONARY and legal tender is INFLATIONARY.

as for your unadoption.
lets say you only had 1BTC and now have cashed out
i dare you to hold your bank notes for just 2 years. and on that piece of paper write out a shopping list of things that you can buy with it. ($400 shopping list).

and in 2 years lets see how many of those items on your shopping list you can buy. and compare it to purchases using bitcoin.

goodluck with your FIAT savings  

For once you are correct.

10 years ago I could buy a lot of things with the same amount of money I use today to buy only a few. Even bread costs twice as much as before.

And Entenmann's donuts are half the size   

[Beliathon]

Some helpful visual aids:



The red line below is Bitcoin's inflation rate. Notice how it decreases to nearly zero very quickly. Consider, dear reader, how this decrease in inflation might affect the price of BTC in the years to come, especially 2013-2021.



By 2021, reality will have set in. No one will be able to afford to live in denial of this new reality by then. On the outside, we've all got about ten years to accept reality. Anyone who hasn't figured it out by then, is going to get fucked hard, right in the wallet. With no lube.

[Envrin]

I hold bitcoins because it allows me to store and transfer value without the help of a middleman or the permission of an authority. In today's world of ever increasing capital controls, this power is priceless to me. I can deal with the volatility of Bitcoin's early years to have this kind of control over my asset. Some people may not care about this feature (they don't mind paying middlemen and trust the authorities), in which case Bitcoin may not be for them.

Couldn't have said it better myself.