This is not at all how currency inflation is calculated. You forgot to include the economy in this calculation.
There's generally two ways people calculate inflation/deflation:
(Change of Money Supply) / (Change of Value of Economy)
or
Change of CPI
Both take the economy into account.
The economy is hard to estimate at this point. And since (this has been discussed up and down now) Bitcoin is generally treated a commodity (or incorporeal hereditament), the inflation term how you calculated it is even more meaningless.
Topic: Current Bitcoin inflation rate = 35%. Price = stable - page 6. (Read 11541 times)
It is an interesting calculation however remember price of btc is affected by many factors including the current demand for btc and future expected inflation, which by Jan 2013 will be halved for 4 years or so. The future expectation is also dampened by the fact that participants know there is an ultimate ceiling of only 21 million coins being produced so that caps the possible depreciation in price due to current inflation rates.
The most important factor at present holding up the price is economic activity; hence non-mining participants buying btc with fiat. That supports the current price ( also the fact that current holders of btc do not sell bydumping their sticks)
The most important factor at present holding up the price is economic activity; hence non-mining participants buying btc with fiat. That supports the current price ( also the fact that current holders of btc do not sell bydumping their sticks)
This is amazing, or shocking, depending on how one interprets the data.
Let's have a look:
From http://blockexplorer.com/q/totalbc the total number of bitcoins that exist is 8726700.
The inflation rate per 10 minutes is: 50 / 8726700 = 0,00000573 or 0,000573%
Given T = 8726700
The annualised inflation at this moment is [(T+50)/T]^(365*24*6) -1 = 0,3514 or 35.14%
Because we're raising very small fractions to very high powers, we can redo the calculation for a daily rate to make sure the accuracy is good:
[(T + 24*6*50)/T]^365 -1 = 0,3512 or 35.12%
Yet, despite this rather high inflation rate (which we already knew about because it's in the Bitcoin brochure), the exchange rate against the USD is somehow not dropping like a stone. Ahh, but what about US dollar inflation? Perhaps Bitcoin isn't really growing at all, and the USD price inflation is 35%? So I googled "official us inflation rate" and they say it's just under 3% (inflationdata.com). If we subtract that from the figures, we find that Bitcoin appears to have a growth rate of only 32%pa
But what about those crazy tin-foil-hatters claiming that price inflation is more like 10% based on 1980s government metrics, as per: http://www.shadowstats.com/alternate_data/inflation-charts ?
I guess that would make Bitcoin's annualised growth rate a measly 25%pa.
Thoughts?
Let's have a look:
From http://blockexplorer.com/q/totalbc the total number of bitcoins that exist is 8726700.
The inflation rate per 10 minutes is: 50 / 8726700 = 0,00000573 or 0,000573%
Given T = 8726700
The annualised inflation at this moment is [(T+50)/T]^(365*24*6) -1 = 0,3514 or 35.14%
Because we're raising very small fractions to very high powers, we can redo the calculation for a daily rate to make sure the accuracy is good:
[(T + 24*6*50)/T]^365 -1 = 0,3512 or 35.12%
Yet, despite this rather high inflation rate (which we already knew about because it's in the Bitcoin brochure), the exchange rate against the USD is somehow not dropping like a stone. Ahh, but what about US dollar inflation? Perhaps Bitcoin isn't really growing at all, and the USD price inflation is 35%? So I googled "official us inflation rate" and they say it's just under 3% (inflationdata.com). If we subtract that from the figures, we find that Bitcoin appears to have a growth rate of only 32%pa
But what about those crazy tin-foil-hatters claiming that price inflation is more like 10% based on 1980s government metrics, as per: http://www.shadowstats.com/alternate_data/inflation-charts ?
I guess that would make Bitcoin's annualised growth rate a measly 25%pa.
Thoughts?
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