Topic: [CHART] Bitcoin Inflation vs. Time (Read 1072228 times)

People who think Bitcoin is about to drop in value to $1 are especially hilarious 

While you are technically correct.  Could it also be possible that the number of coins lost per year exceeds the number of coins minted? Well maybe not the whole year, but at least for a certain duration right?

I mean 21 million coins, but not 21 million movable right?

It's always surprised me that some people think Bitcoin is currently deflationary when the supply is inflating.

While we agree that Bitcoin is a deflationary asset but its inflation isn't decreasing everyday.

Well, its design for having a limited supply reduces the inflation thus it's deflationary crypto.

It is about the block reward for miners that is being cut in half and not the supply. It is the most awaited event that we're waiting for, the halving signifies the bull run and increases the demand.

Ya. Bitcoin inflation rate decrease every day. Bitcoin code is law! Bitcoin’s monetary policy reduces network inflation with each confirmed block. The largest reductions in Bitcoin supply occur on the day of each halving. This happens because every 4 years, or exactly 210,000 blocks, the reward for miners is halved. This is built into the Bitcoin code created by Satoshi Nakamoto.

Source : https://altcoinsbox.com/bitcoin-inflation-rate/

Bitcoin is often referred to as "digital gold" and is designed to have a limited supply, with a maximum cap of 21 million coins. This scarcity is one of its primary selling points and is intended to protect it from the effects of inflation that traditional fiat currencies can experience when central banks increase the money supply.

However, Bitcoin's price can still be influenced by various economic factors, including inflation expectations. If there is a widespread belief that traditional currencies are losing value due to inflation, some investors may turn to Bitcoin as a store of value, potentially driving up its price.

So, while Bitcoin itself isn't subject to inflation in the way that fiat currencies are, it can still be influenced by inflationary pressures in the broader economy. It's important to note that Bitcoin's price can be highly volatile and is influenced by a wide range of factors beyond just inflation.

During the initial stage of the Bitcoin projects, users need to provide the default transaction fee, and miners are required to process the transactions according to the system setting even the zero fee transactions, whereas users prefer to offer a higher transaction fee to attract miners in order to reduce the transaction processing waiting time with growth of transaction volume and users. As recorded in the official document of Bitcoin, the transaction fee are not required for some certain types of transactions through the zero transaction fees cannot be financially sustainable with the development of bitcoin.

Would that be any means to be accurate on calculations?
Given that, you never can completely know a coin to have been lost by just nominating some wallets to be domant. After all, we've seen some idle walleta do some big numbers all of a sudden.

Would that mean the numbers considered are mainly coins in exchnages?

It's the quantity of Bitcoin that has been put into circulation so far at that point in time (see the values on the right-hand side of the chart).

That value is the denominator in the calculation of inflation rate. If you have 100 of something, and you create 1 more of that thing, then you've increased the total quantity by 0.01 or 1% ( 1 new item / 100 existing items = 0.01).

So, in the year 2022:

• The year started with approximately 18,916,000 bitcoins in existence. That would be the "monetary base" at the beginning of 2022-01-01
• An additional (approximately) 328,500 bitcoins will be created with the 52,500 blocks that are solved during the year 2022.
• If we divide the number of new coins (328,500) by the monetary base (18,916,000) we get a 2022 inflation rate (inflation of supply, not necessarily of the exchange rate) of about 0.0174, or about 1.74%

These charts are purely indicating the rate at which new coins come into existence as compared to the number of coins that already exist. They don't take into consideration the number of coins that have been permanently lost, or otherwise removed from the current markets by those that aren't interested in selling. These charts do not make any attempt to predict demand and therefore are not meant to indicate exchange rate or perceived value.

I just came across this thread. Can anyone explain to me what "monetary base" means and what does it shows here in the OP plots??

Bitcoin will never be affected by inflation. We can not "print" new bitcoins. So inflation will never be a real problem for it.
Bitcoin is not an asset with "limited" quanitity. It's an asset with a quantity that we already know and that can never be changed.

Yep, you are right. Noone links Bitcoin to grossery prices or electricity bills.

As Satoshi said: "The fact that new coins are produced means the money supply increases by a planned amount, but this does not necessarily result in inflation.  If the supply of money increases at the same rate that the number of people using it increases, prices remain stable.  If it does not increase as fast as demand, there will be deflation and early holders of money will see its value increase."

I don't really understand if Bitcoin inflation can be considered as such. Given its current price, inflation in connection with mining is negligible, and for some other reason inflation of Bitcoin is not possible. Bitcoin owners are more likely will suffer from a fall in the price on the market than from inflation.

Not only the price of bitcoin has change in these 2 years. Hence almost all the crypto currency has changed a lot in these days. If you bought 1 ethereum before 2 years how much it was? It was not more than 170$. And now it is about 2000$. So it is about 10 times in these 2 years. For more clarification please have a look on the screenshoot.

price of bitcoin is victorious and can be told launch to the moon these days. the question further is "can it possibly reach more than the current price in the upcoming months.

why not doing both?
Like is more than 0s and 1s.
if you're in a hurry and think 10 years is too long you could still adjust exposure to bitcoin and gold in a desired %.

but take into account that upside for BTC is much higher than for gold.
bitcoin scarcity will never change (code is law)

gold amount could change in the world, we could find new spots to mine it or even asteroids
(have you seen this? https://theprint.in/opinion/giant-asteroid-has-gold-worth-700-quintillion-but-it-wont-make-us-richer/260482/ )

Of course, your choice, yet there are a decent number of people who are going to figure out ways tto invest in bitcoin in ways that don't really hurt them, in the even that they lose everything, but that they would also be in a decent position to potentially profit stupendously from bitcoin in the event that it does perform anywhere close to the asymmetric bet that it presents.

You may be presented with a great once in a lifetime opportunity to invest in something (referring to bitcoin) that seems to be such a great asymmetric bet, but sure, do what the fuck you want, if you believe that you are better off with gold, then that is your choice in the event that you believe that you have to choose one or another.

By the way, for more than 10 years before I got into bitcoin (I got into bitcoin in late 2013), I had been considering investing in gold in order to hedge my dollar-based investments, and surely, I considered almost all of my other investments to be dollar based or dollar dependent in some kind of way... and some of my explorations into gold was causing me to consider gold to have a bit too many dollar dependencies too and including several complications that seemed to be considerably less problematic in bitcoin in terms of various attributes that bitcoin has in regards to its scarcity, verifiability, portability, divisibility and even some of the various third party complications that come with buying/selling, securing and/or transporting gold.  So, I suppose that part of my receptivity towards bitcoin soon after learning about bitcoin came from my desire to find an investment that was kind of like gold but seeming to have fewer problems that I had perceived to have been in gold, and the case for bitcoin is way the fuck stronger than it was in late 2013 when I started or even in 2014 while I was building my initial investment into bitcoin while continuing to study it.

So, I have some troubles with how you could be so hot and heavy about gold when there are a whole hell of a lot of challenges with gold, likely little upside, and even current generation of investors are likely to increasingly learn similar things to me in terms of appreciating bitcoin to be much better than gold in a variety of ways, so in that regard, you are likely to witness ongoing gravitation of value into bitcoin and some of that value is also going to come from gold bugs either migrating over to bitcoin or at least hedging some of their investments with bitcoin instead of gold.. which seems to be happening more and more and more, even if you want to stick with that historical relic of an investment that is likely to continue to underperform bitcoin, just like it has done in the past 10 years.. gold is likely to continue underperform bitcoin in the coming 10 years... and we will see... we will see.. hopefully you figure it out rather than assuming that shininess or the fact that you can snuggle up with your gold bars or coins actually means value, when it may well be more of a burden than it is worth.. except perhaps having some gold in small portions.. just for funzies... rather than a practical long term investment hedge/compliment.

I believe in bitcoin. But despite this, I will not risk investing part of the capital in bitcoin for 10 years. It is better to choose gold - even if I increase my capital, but at least I will not lose. Because how Bitcoin will behave in 10 years is unknown.

Of course, there are no guarantees in bitcoin, so if you have any knowledge of bitcoin, then you should use that knowledge to figure out how much of your wealth that you would like to put into bitcoin.  I surely do not believe in all or nothing investing, but if you are a young investor, it might be practical for you to start out with one investment while you are expanding the kinds of things that you invest in, and while you are building your investment portfolio.

Some people make mistakes regarding what they invest in, and other people make mistakes by not investing at all.

But, you still need to ask yourself if you are not investing into bitcoin, then what are you going to invest in, and if you have some competing investments, then maybe you would choose to put somewhere between 1% and 10% into bitcoin, while investing the rest of your capital into other kinds of investments.  Ultimately, people are not going to choose the same, and also people are going to have varying degrees of performance too.

So the personal factors that you figure out for yourself should be: your cashflow, your other investments, your view of bitcoin as compared with other investments, your risk tolerance, your timeline, and your skills, time and abilities to research, manage and tweak your investments from time to time, including trading, if any.  People are going to be in different places, including different if you can afford to invest some lump sum or if you only can invest $10 per week or maybe you can afford $200 per week, but if you have 10 years as your investment horizon, something like dollar cost averaging, even a small amount, might end up working out better in terms of NOT being so worried about what is going to happen in 2030, if anything... and if you are really worried about it, then maybe if you have $100 per week to invest, , you only put $1 to $10 into bitcoin in such a way that feels comfortable to you, and whether you are correct or not is a risk that you have to take for yourself, because other people do not know either, they merely have theories and some of those theories are more likely to be better theories and some theories are going to NOT look so good, when we look back 10 years from now.