Topic: Current Bitcoin inflation rate = 35%. Price = stable - page 5. (Read 11541 times)

Depends on what 'is' is. ~ Bill Clinton (Idiot?)

Define: "Planet" it took since Galileo Galilei to Hershel to the IAU in 2006 argued of the definition of Planet. 

Pedantic I guess. But meh...

Idiot, one does not 'debate' definitions. If you were not an idiot, then this would be clear to you already. Definitions are meant to make communication convenient. The rest of the world, including 99.9% of academic economists like me, and 99.9% of regular Joe's too, defines inflation as changes in the price level. If you prefer to use the asshat definition, so be it. What can I do if you decide that chocolate means cheese and are very obstinate about it? I certainly can't argue with you. Again, what an idiot you are. You certainly didn't learn this asshattery in school, which I suggest you go back to.

"properly defined". Always thought you were funny judging from your avatar.

You just won't accept that there are several definitions, and the ones I mentioned about are just as "proper", in fact accepted by most mainstream economists.

But my main point would be, as pointed out the OP mentioned the CPI (he googled "us inflation" but really got CPI data), so it appeared he compared bitcoin inflation to the US CPI inflation. So the "proper" thing is to compare apples to apples, no matter what definition you prefer. Can't directly compare numbers from different equations without conversion or correction. It's a different metric.

...Which keeps things simple. Looking back, the OP has some slightly inelegant reasoning because of the "USD price inflation", which was really CPI.

Moreover, the thread has also helped me realise how hard it is to quantify growth. How do you quantify something if you don't know what it is? Why don't I know what "growth" is, in terms of the Bitcoin economy? Because I don't know what the Bitcoin economy is! I have a vague idea about some of the businesses that exist, the size of the community and so-forth, but very little concrete data. I suppose I could gather some data, give weight to various factors, and then calculate the percentage change over time, calling it growth (or shrinkage). However, anyone could argue for a different basket of metrics.



There I made some leaps in reasoning that the "rate of change of mining turnover" (in USD & other currencies) = "rate of investment into Bitcoin economy" = "rate of growth of Bitcoin economy". It would suggest that mining turnover is an investment unto itself. Is it? I don't know. Perhaps if the miner is hoarding coins, or if they subsidise the project... However, mining turnover doesn't seem to provide useful information about investment levels in Bitcoin. And of course, "investment" is just one of many possible metrics that could be used to define growth.

The discussion is carrying on with civility and consideration, until cunicula shows up, and calls everyone monkeys who should be pissed on. I think the irony is perhaps lost on him?

Cunicula - though your economic reasoning is fallacious, and your demeanor is inappropriate at best and obnoxious at worst, I still refrain from calling you names and have never advocated urination as fitting punishment for you. If you'd like to debate the economics with us "libertarian austrian asshats" whom you loathe so mightily, please do. But stop the immaturity. Your untenable positions can be considered if dressed for the event, but if you're unable or unwilling to engage in proper discourse please go elsewhere.

Inflation, properly defined, is the degree by which the money supply increases. It is a useful metric unto itself irregardless of economic activity or other metrics. To claim that "GDP" and "prices" must be considered when strictly measuring inflation is to pervert the term beyond its useful definition. If you take umbrage with this statement, then please explain. I understand many contemporary economists use "inflation" to describe what is more accurately referred to as CPI figures, but many contemporary economists also think spending and consumption is productive behavior, so I'm skeptical of their prescience and take issue with their distortion of terminology.

I know you're not a monkey, so stand up for yourself and address the issue like a man or bow politely and find your way to the door.

The price did not go up. There were no bitcoin in existence in the beginning, therefore the price was also nonexistant (or "infinity").

In the first year the inflation rate was infinity! But the price went up! Economic madddddness.

Well the real size of the BTC economy, whether traders, users or miners will ultimately define how many people need to buy BTC at any given time.

If that number is stable while BTC are being created and sold by miners then there would be a decrease in value.

Since the USD/BTC is pretty stable there must be an increase in regular users/buyers to offset the BTC creation roughly equal to the creation rate.



If BitCoin was a start-up company I would say it has entered its linear growth phase and in the future as the easy BTC markets are conquered and you run into regulators its growth will flatten out.

Facebook, paypal, ebay, Google and oil production have all had similar curves.


However if utilities such as POS systems, smartcards or new exchanges are developed it will be like a new product launch over again and "the BTC start-up" may see another exponential phase.

Until then BTC is limited to easily convinced rich people with personal computers and internet access - a rather limited market that perhaps needs BTC the LEAST.

It's easy to guesstimate that the Bitcoin economy is growing by at least 30% per year based on watching the trade page on the wiki.


Yes, we're asshats for assuming that the reward for work and technological improvement should go to those who produce, rather than those who just print money.  Find somewhere else to troll.

I probably should have been clearer that I was taking a snapshot (10 minutes and 24h in the OP) and then extrapolating for the whole year. So the "35%" is only valid for a short while and will gradually decrease during the year before hitting the 25-coin changeover. Your calc sort of ends up being an average of that because it adds up all the new coins over a whole year.

While I do appreciate someone thinking about the growth of the BTC economy, I am curious as to how you got to this conclusion?

Because if we just measure it by looking at transactions I would doubt that we get meaningful results, it's hard to tell from blockexplorer or blockchain.
Likewise if we look at trading volumes at exchanges, they don't really reflect the size of the underlying bitcoin economy either.

How did you measure or estimate BTC economic growth?

Yes the economy of BTC is currently growing by about the BTC creation rate.

If this holds BTC should raise its value growth rate after the 25 reward begins.

If BTC econ. growth is ~30% BTC would appreciate 15% extra a year, after December, this year.

However with markets as emotional as they are, who knows.... BTC has yet to establish a full economy cycle and is largely dependent on investors.

The rate is closer to 31% though than your number as the growth is linear and NOT exponential: 6*24*365*50/8.5 mil=0,309 right now.

Yes, I posted a link to the source I used, up top. I called it a "conservative" rate because out of the total 35%, it takes the gross growth down a notch to ~25%. If we had taken off 3%, anyone could argue that we were being too ambitious because of skewed figures. Incidentally, 10% doesn't sound all that far-fetched to me. The computer and electronics industries seem to be used for skewing the results - I remember when "clicky" keyboards used to cost over $50 in the 1990s, but unlike modern keyboards, those could be repaired.

The people here either a) know nothing at all or b) are Austrian asshats. The asshats obstinately define inflation as the absolute growth rate of the money supply. GDP, prices, etc. don't enter into it. Don't waste your time explaining. It is like speaking to a troop of monkeys. Your just going to get pissed on and hooted at. Best approach is to piss on them instead. It will help prevent the know nothings from falling into error.

Not put at all. I'm simply asking if you are comparing your rate to the "US rate" to state the conditions of your comparison properly.
If someone is talking about inflation nowadays, currency inflation comes to mind first. And that comparison is still flawed without taking economy into account for calculations. Normalizing by economic value is not cheating for a currency as it is really relative to its purchasing power.

Now you are taking the CPI at 10% (that's 2.6 times a value decrease over 10 years)? Cheese, where do you get that shit? I guess SGS.
Their numbers as I pointed out somewhere before are just as skewed as the CPI, just the other way round; the truth is probably somewhere in between.

You seem a bit put out because I didn't want to divide by the estimated growth rate. We'd simply arrive back at the start with a net inflation rate equalling the US rate at somewhere around 3 to 10%. AFAICT, more accurate data about the growth can't be gained without somehow separating real growth from various kinds of speculation. Even if we conservatively take CPI inflation to be 10%, and let's say two thirds of the supposed growth is speculative, that's still over 8% real, non-speculative growth for the Bitcoin economy... Don't know about you but I'm impressed.

And I remember my $$$ purchasing power (in relation to my income and living situation) was surely not 2.5 times higher 12 years ago, so that number is just as skewed as the CPI.

U.S dollar inflation rate is more like 8%, the government statistics are fucked up.

In that case, just carry on 


In case of a currency I would argue that statement is outright false, as a currency can only be seen in the context of its economy.

But since you never said you are talking about a currency the debate about that is open...

I never said it was a currency. As you can see I was simply providing some calcs on the raw numbers. Compensating for a "change in value of Economy" is essentially cheating and I wholeheartedly agree with the Bitcoin ideology of eliminating that approach.


There are sure to be a number of people "buying in" and then sitting on their hoard, hoping that someone else will do the productive part.