Topic: Does halving really create deflation? - page 4. (Read 1214 times)
Halving is not creating anything directly. Only traders are giving to it any special abilities
If people used only bitcoins to pay for goods and services and halving was expected ahead, it would definitely create deflation. That is, people would not buy goods in the hope of growing their bitcoins. But since Bitcoin is now an investment asset, and in everyday life people pay with Fiat currencies, Bitcoin does not create deflation.
let's take a look first at what exactly the definition of deflation itself before making any statement."Deflation is a general decline in prices for goods and services, typically associated with a contraction in the supply of money and credit in the economy. During deflation, the purchasing power of currency rises over time"
via investopedia
"deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). Inflation reduces the value of currency over time, but deflation increases it."
via wikipedia
which means in this case that bitcoin price become cheaper -the bitcoin purchasing power become weak and low- despite the halving day in the next few months that expected to make bitcoin even more expensive.
deflation usually about fiat money but here we are in different dimension where bitcoin itself considered as a digital money -some people believe bitcoin itself is free fro inflation with its unique valuation- , but with op questioning about the deflation it just makes me even more confused lol.
i mean here bitcoin for now still debatable wether it is considered as a money or an asset, if you agree to consider bitcoin as money then it has deflation but if you agree bitcoin is an asset then at this point it should not has a deflation just like any other asset.
confused?
yes me too.
hey guys, i'm quite serious on this topic because of the confusing people when talking about Bitcoin "deflation". As far as I understand, the deflation is that goods are cheaper than they are on time or because there is no need to buy goods or the supply of money gets lower.
So for Bitcoin, why is there a deflation? Although I know that miners will find it harder to mine bitcoins after every Halving event, the value of our goods stays the same and is based on fiat money. Bitcoin's price is still being manipulated and it is not necessarily a strong growth after halving. or the best example is Litecoin. after halving, its price is halved instead of rising higher.
So, the question is, does the Halving event actually cause deflation, or is it just some bullshit theory?
Ps: I highly appreciate the comments with sincere contributions. Thanks
when bitcoin halving, bitcoin miner income will decrease, for example, miners a month get 1000 BTC every month, but if bitcoin halving certainly revenue from mining will be reduced by half for example a month to 500 BTC, if the price goes down the miner will feel loss because the value is cheap and while the buyer demand bitcoin is very high, most other investors are HODL, so what do you think if the value is low, does that make sense? soon 2020 So for Bitcoin, why is there a deflation? Although I know that miners will find it harder to mine bitcoins after every Halving event, the value of our goods stays the same and is based on fiat money. Bitcoin's price is still being manipulated and it is not necessarily a strong growth after halving. or the best example is Litecoin. after halving, its price is halved instead of rising higher.
So, the question is, does the Halving event actually cause deflation, or is it just some bullshit theory?
Ps: I highly appreciate the comments with sincere contributions. Thanks
If people used only bitcoins to pay for goods and services and halving was expected ahead, it would definitely create deflation. That is, people would not buy goods in the hope of growing their bitcoins. But since Bitcoin is now an investment asset, and in everyday life people pay with Fiat currencies, Bitcoin does not create deflation.
Make your salary as an example.
This year you are gaining $100 then next year you are just gaining $50 for every payroll.
You will ask yourself why?
Is our economy getting better or is it just that the prices of necessities is getting cheaper.
It could be the same.
Now, the halving is coming and miners will have problems also with economy. They are paying electric bills in high amounts while the ROI is not being reached.
Same as your salary. It needs to be proportioned with how much you will receive.
Indeed the halving will decrease the rewards of miners by half but still they are making some huge earnings. Do not consider miners as some common people who cannot afford electricity bills. They are actually the real whales. After one successful mining, a miner gets almost 12 bitcoin at present. Even if we half this amount, 6 bitcoin is not a small amount at all. Miners can also manipulate market. This year you are gaining $100 then next year you are just gaining $50 for every payroll.
You will ask yourself why?
Is our economy getting better or is it just that the prices of necessities is getting cheaper.
It could be the same.
Now, the halving is coming and miners will have problems also with economy. They are paying electric bills in high amounts while the ROI is not being reached.
Same as your salary. It needs to be proportioned with how much you will receive.
but that's a fact that you can see it, has it increased even more now? I think this is just recovery because if there is no recovery it can go down even further, and in my opinion, there is no hype from halving for now, but it will start next year. The majority of those who should buy at ATH should have sold above $10k because mid-2019 the price had risen to $13k.
If you look at the past market situation the hype does not start after the halving and when the market steadies themselves you will see that the market starts to go higher and that is what we are expecting to happen this time around, the regulation is a major topic and it all depends upon how these major nations are trying to regulate the market and we can expect them to come up with regulation in the next year.but that's a fact that you can see it, has it increased even more now? I think this is just recovery because if there is no recovery it can go down even further, and in my opinion, there is no hype from halving for now, but it will start next year. The majority of those who should buy at ATH should have sold above $10k because mid-2019 the price had risen to $13k.
If you look at the past market situation the hype does not start after the halving and when the market steadies themselves you will see that the market starts to go higher and that is what we are expecting to happen this time around, the regulation is a major topic and it all depends upon how these major nations are trying to regulate the market and we can expect them to come up with regulation in the next year.Are you talking about full time regulation to the usage and transfer of bitcoin? Or regulation of maybe exchanges.
On the latter, I hardly see that happening with bitcoin or maybe not in the near future.
Anyway, as for devaluation that op asked. bitcoin is not fiat and I don't think is going to have a direct impact on the fiat.
but that's a fact that you can see it, has it increased even more now? I think this is just recovery because if there is no recovery it can go down even further, and in my opinion, there is no hype from halving for now, but it will start next year. The majority of those who should buy at ATH should have sold above $10k because mid-2019 the price had risen to $13k.
If you look at the past market situation the hype does not start after the halving and when the market steadies themselves you will see that the market starts to go higher and that is what we are expecting to happen this time around, the regulation is a major topic and it all depends upon how these major nations are trying to regulate the market and we can expect them to come up with regulation in the next year.but that's a fact that you can see it, has it increased even more now? I think this is just recovery because if there is no recovery it can go down even further, and in my opinion, there is no hype from halving for now, but it will start next year. The majority of those who should buy at ATH should have sold above $10k because mid-2019 the price had risen to $13k.
If you look at the past market situation the hype does not start after the halving and when the market steadies themselves you will see that the market starts to go higher and that is what we are expecting to happen this time around, the regulation is a major topic and it all depends upon how these major nations are trying to regulate the market and we can expect them to come up with regulation in the next year. 
but so far the movements are almost similar to the two previous halving cases, some of which seem to have declined before halving, news of the hack that just happened.
I didn't expect it to make a new ATH, but at least it could again touch $20k, that's really good.
I didn't expect it to make a new ATH, but at least it could again touch $20k, that's really good.
You should be careful before making such assumptions, because this time the prices have already increased a lot, in part due to the hype surrounding the block reward halving. And another thing is that the investors may be a bit reluctant, after the 85% decline we had in 2018. Many of those who purchased Bitcoin at ATH prices are still stuck with their investment and they are looking for a way out. If the prices reach 10K or 12K again, then we may see a lot of sell-off from this group.
but that's a fact that you can see it, has it increased even more now? I think this is just recovery because if there is no recovery it can go down even further, and in my opinion, there is no hype from halving for now, but it will start next year. The majority of those who should buy at ATH should have sold above $10k because mid-2019 the price had risen to $13k.
If the prices reach 10K or 12K again, then we may see a lot of sell-off from this group.
Never thought about that. Next year could possibly start with unseen sequence of events - btc halving, price growths, sell-off from mentioned group of people, price falls.
And only god knows what will happen afterwards
but so far the movements are almost similar to the two previous halving cases, some of which seem to have declined before halving, news of the hack that just happened.
I didn't expect it to make a new ATH, but at least it could again touch $20k, that's really good.
I didn't expect it to make a new ATH, but at least it could again touch $20k, that's really good.
You should be careful before making such assumptions, because this time the prices have already increased a lot, in part due to the hype surrounding the block reward halving. And another thing is that the investors may be a bit reluctant, after the 85% decline we had in 2018. Many of those who purchased Bitcoin at ATH prices are still stuck with their investment and they are looking for a way out. If the prices reach 10K or 12K again, then we may see a lot of sell-off from this group.
Deflation will occur when the number of new coins being minted < the number of coins being lost. That point in time technically can't be known since nobody knows for sure when coins have been lost. However, it's likely to take place many decades before the supply is fully distributed.
By 2070, there will only be ~80 new coins minted per year. It's likely Bitcoin will be deflationary by this point, and perhaps a good deal sooner.
By 2070, there will only be ~80 new coins minted per year. It's likely Bitcoin will be deflationary by this point, and perhaps a good deal sooner.
I think many of the bitcoins lost was from its first decade, when people still don't take it seriously. I know someone who got gifted a paper wallet which he promptly lost because he wasn't thinking much about it. Then he saw bitcoin in the news around 2016 and realized he used to have some.
These days with people being more careful about handling them, simple errors like forgetting the password to an email/exchange would probably be fewer and there is less and less bitcoin getting "lost".
I'm trying to account for that. Based on most estimates for lost coins, about 500K BTC were lost per year over the first 8 years of Bitcoin's existence.
My estimate for the year 2070 reduces that number by 625,000%. People will no doubt be more careful with private key storage, but humans are not infallible. There will definitely be coins still being lost 50 years from now. We just don't know exactly how many.
BTC500k, imagine the worth of all those during the ATH.
Would suck to be one of those that lost them. I'd just like to think that those lost bitcoins will be doing us a favor in the future by making the supply much smaller than it possibly can.Yes, hard to get an accurate amount on those being lost but I just assumed it'll get smaller. We still are prone to errors.
Deflation is a decrease of price of services and goods. In economics deflation usually occurs when the supply is too high that it cannot fulfill the demand. Deflation is a wrong context in halving, bitcoin has its own limited supply. It was designed by Satoshi to keep bitcoin inflation in check. Imagine if bitcoin is infinite and it is regularly created it would make definitely bitcoin to decrease its value since there are too many bitcoin in circulation. Halving was designed to keep bitcoin inflation under control. Since the supply decreases the demand increases, and so the inflation exist.
I absolutely agree because while new coins are being created it is more correct to talk about inflation. The actual deflation will be possible to speak at the termination of creation of new coins and their receipt on the market. Therefore, halving by itself does not automatically mean deflation. Deflation will occur when the number of new coins being minted < the number of coins being lost. That point in time technically can't be known since nobody knows for sure when coins have been lost. However, it's likely to take place many decades before the supply is fully distributed.
By 2070, there will only be ~80 new coins minted per year. It's likely Bitcoin will be deflationary by this point, and perhaps a good deal sooner.
By 2070, there will only be ~80 new coins minted per year. It's likely Bitcoin will be deflationary by this point, and perhaps a good deal sooner.
I think many of the bitcoins lost was from its first decade, when people still don't take it seriously. I know someone who got gifted a paper wallet which he promptly lost because he wasn't thinking much about it. Then he saw bitcoin in the news around 2016 and realized he used to have some.
These days with people being more careful about handling them, simple errors like forgetting the password to an email/exchange would probably be fewer and there is less and less bitcoin getting "lost".
I'm trying to account for that. Based on most estimates for lost coins, about 500K BTC were lost per year over the first 8 years of Bitcoin's existence.
My estimate for the year 2070 reduces that number by 625,000%. People will no doubt be more careful with private key storage, but humans are not infallible. There will definitely be coins still being lost 50 years from now. We just don't know exactly how many.
Deflation is a decrease of price of services and goods. In economics deflation usually occurs when the supply is too high that it cannot fulfill the demand. Deflation is a wrong context in halving, bitcoin has its own limited supply. It was designed by Satoshi to keep bitcoin inflation in check. Imagine if bitcoin is infinite and it is regularly created it would make definitely bitcoin to decrease its value since there are too many bitcoin in circulation. Halving was designed to keep bitcoin inflation under control. Since the supply decreases the demand increases, and so the inflation exist.
Deflation is the opposite of inflation. Inflation is directed upward while deflation is downward. The fiat currency is deflating because it is losing value over time, while the prices of goods and services are inflating, and as a result the purchasing power of the fiat currency is getting weak over time. Bitcoin is inflating because its value is increasing over time, the exact opposite of fiat. The rewards of miners, however, are deflating due to halving which happens every 4 years.
I think everyone knows that but the thing is that the halving exist in order to keep up with the rising price of Bitcoin as well as to extend the reward that the miners receives because if there is no halving then all or almost the supply of Bitcoin are mined. Also, with Bitcoin the prices are deflating and I think this is a good thing since we don't get to lose the value of our assets unlike in fiat where you need to spend it rather than saving it especially when we talk about long term since the value gradually declines. 
As such there should not be a problem of deflation with Bitcoin, because the supply is increasing and not decreasing. Deflation can only happen if there is a decline in the total supply. That is theoretically possible, given the large number of lost coins (i.e coins that can't be spent, because no one is having the private key to access them). People are more careful with the private keys, but even now a lot of coins are getting unusable every month, either due to deaths (such as the case of Gerald Cotton) or due to carelessness.
I didnt think that halving affects the bitcoin nor market value, years ago as we can observe, the effect of halving makes the price of bitcoin increase, so when it happens, we can see that bitcoin can make ATH or atlease the price will goes up, we can possibly think that by next year it could be a good year in bitcoin.But what I afraid is that if the reward is not worth it anymore some miners will just give up with the mining and therefore we will lose some hash power. Hopefully the price of bitcoin could keep up with the halving so that it still profitable.
I didnt think that halving affects the bitcoin nor market value, years ago as we can observe, the effect of halving makes the price of bitcoin increase, so when it happens, we can see that bitcoin can make ATH or atlease the price will goes up, we can possibly think that by next year it could be a good year in bitcoin.
Halving can have some impact, but I am afraid that this time the impact will be more limited when compared to the previous two events. The first thing to consider is that the prices have already jumped by almost 200% so far this year, probably in anticipation for the upcoming halving event. And secondly, the ratio of annual mining output to the total circulating supply will be much lower this time.
but so far the movements are almost similar to the two previous halving cases, some of which seem to have declined before halving, news of the hack that just happened.
I didn't expect it to make a new ATH, but at least it could again touch $20k, that's really good.
Make your salary as an example.
This year you are gaining $100 then next year you are just gaining $50 for every payroll.
You will ask yourself why?
Is our economy getting better or is it just that the prices of necessities is getting cheaper.
It could be the same.
Now, the halving is coming and miners will have problems also with economy. They are paying electric bills in high amounts while the ROI is not being reached.
Same as your salary. It needs to be proportioned with how much you will receive.
This year you are gaining $100 then next year you are just gaining $50 for every payroll.
You will ask yourself why?
Is our economy getting better or is it just that the prices of necessities is getting cheaper.
It could be the same.
Now, the halving is coming and miners will have problems also with economy. They are paying electric bills in high amounts while the ROI is not being reached.
Same as your salary. It needs to be proportioned with how much you will receive.
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