Topic: Inflation and Deflation of Price and Money Supply - page 26. (Read 1424528 times)
Inflation has direct relation with money supply while deflation has inverse relation because when inflation occurs money supply increases and when deflation happens money supply automatically gets low this is the same for bitcoin when more bitcoin come in market price goes down when people hold them prices goes higher
The market economy can work only when people spend money, and the more money is spent the better, it is built on inflation, if money becomes cheaper, then you will be more motivator to spend than to save! dude...
I think the price will continue to rise until the capacity reaches the maximum. we see now that the supply has reached 16.5 million the price continues to soar and one more thing bitcoin not affected by inflation.
Inflation is the rise or increase of the prices which have different types and that can usually occur when bitcoin is down. While deflation is the decrease or fall of prices which occurs when bitcoin is high or up.
if Supply Currency Supply refers to reducing money due to the increase in money supply. Also, at present, an increase in Money Supply is exactly that, "when the total money supply increases". The former was an effect of the latter, and I did not refer to the latter.
so Now to deal with argument of demand ...
If any real economy, there is no guarantee that demand exists (maybe in the keynesian paradise, but that's about it). However, there is a guarantee to increase the Money Supply.
Inflation Money Supply (or inflation due to an increase in currency supply) does not exist regardless of demand, which contributes to reducing money. Demand only helps to stabilize or increase value and price. Sure, they can be recovered when they are equal, but this does not mean that inflation due to an increase in Money Supply does not exist.
So I would argue that the Supply Currency of Inflation means change in value.
so Now to deal with argument of demand ...
If any real economy, there is no guarantee that demand exists (maybe in the keynesian paradise, but that's about it). However, there is a guarantee to increase the Money Supply.
Inflation Money Supply (or inflation due to an increase in currency supply) does not exist regardless of demand, which contributes to reducing money. Demand only helps to stabilize or increase value and price. Sure, they can be recovered when they are equal, but this does not mean that inflation due to an increase in Money Supply does not exist.
So I would argue that the Supply Currency of Inflation means change in value.
someone can give a predict me about the price of bitcoin? going up or down? 
Yes sure I can help you with a prediction of Bitcoin price in near future we all know that this cryptocurrency is going to take over the international market in upcoming few days and hence it is not wrong to say that the Bitcoin price is going to increase with some great mark. You must be aware of the present situation that this digital currency is most highly valued therefore you must not sell them in fear of getting loss.
So when I lend money, what kind of interest should I get since I know after some time any it is gonna depreciate? Would that give rise to a scenario where I'm asked to pay interest for giving loans?
Money is an abstraction accustomed to negotiate financial obligations. Information and cash are bodily representations of that abstraction irrespective if they're made from gold or document. The only reason gold was utilized because the materials of preference is it experienced the desirable properties.
if the price of bitcoin is increases and the supply of demand is also increase. Is there any possibility that the price of goods will also increase?
When demand will increases the price of it results to increase too. The price of goods will also increase depending on it's demand, that's how the law of supply and demand works. But even if the price of bitcoin increases but those goods aren't getting total high demand so that will not work, it will remain cheap. Btw, what goods are you preferring to?
An area dedicated to discussing the differences of these two terms and the theories supporting them.
I'm looking forward to an in-depth discussion on the subject! I've noticed that confusion between the two seems to come up quite a bit on the forum, and thought it may be reasonable to dedicate a thread on the matter.
Pulled from a discussion in Wall Observer
Price-Deflation is what you are used to hearing about in Bitcoin. That term is used to describe the prices of goods/services as they decrease, because the value of Bitcoin goes up.
Price-Inflation is the opposite. When prices of goods/services increase because the value of Bitcoin goes down.
So, when dealing with Price-Inflation or Deflation, there is an inverse relationship of price and value, in regard to goods/services and Bitcoin.
Example: As the Bitcoin price goes from $10 to $20, the prices of goods/services goes down from 20BTC to 10BTC. As the Bitcoin price goes from $20 to $10, the prices of goods/services goes from 10BTC to 20BTC!
Why does the price of Bitcoin go up and down? The price of BTC goes up and down based on the exchange rate, or market price, which is set by buyers and sellers, or traders. They directly trade the Bitcoin currency with all sorts of other currency, and even some with gold; the most popular being the USD (US dollar). They set the price when executing orders to buy or sell. I will get into the actual reason of why the price fluctuates in the last section.
Now that we've gone over PRICE Inflation and Deflation (which honestly, to me, is a term made popular by Keynesian's to hide the real facts, as price inflation/deflation is simply the market exchange rate, reflective of the money supply into a currency from itself and other currencies), let's go over the REAL inflation/deflation of a currency (otherwise known by many as Monetary Inflation).
MoneySupply-Inflation is when the value of Bitcoin decreases when the total supply of Bitcoin increases. In our current state, this is at a generation rate of 25 BTC every 10 minutes.
MoneySupply-Deflation will essentially never occur. It is when the value of Bitcoin increases when the total supply of Bitcoin decreases. This may happen, say, when someone loses their private key and all the BTC associated with it are lost. This effectively "makes the rest of us richer". That being said, there is a SET DECREASE in the generation rate of BTC, so you have sort of a "deflationary effect" in the value, as long as more exchange occurs for BTC at a rate which is faster than that set generation rate.
When all 21 million coins are produced, the MoneySupply will be neutral, and the value will continue to increase (prices will decrease, consequently), as long as people continue to exchange in BTC.
This leads me to the last section.
What determines the PRICE of Bitcoin? The VALUE of Bitcoin at a particular moment.
What determines the VALUE of Bitcoin? The SUPPLY and DEMAND of Bitcoin in the economy.
What determines the SUPPLY of Bitcoin? Currently, the MoneySupply-Inflation rate of 25 BTC every 10 minutes, and traders willing to SELL Bitcoin to BUYERS in exchange for other supplies of money (currencies).
What determines the DEMAND of Bitcoin? Traders willing to BUY Bitcoin from SELLERS in exchange for other currencies.
Therefore: BUYERS, SELLERS, and MONEYSUPPLY-INFLATION (miners) determine the VALUE of Bitcoin, which determines the PRICE of BTC as BUYERS and SELLERS trade based on that VALUE (or supply and demand) of Bitcoin.
We don't exactly know the totality of the supply and demand. Sure, we could try and aggregate data from all the exchanges, but we will never be accurate as there are exchanges which can not be accounted for (OTC). The cool thing is that we DO know the MoneySupply rate, and we DO know the exchange rate. From this, we can determine a real value of Bitcoin when simply multiplying the two factors; a sort of inflation-adjusted view of the currency.
Effectively, the quantitative analysis of supply and demand is really what the currency exchange traders attempt to accurately determine which is conveyed through buying and selling of Bitcoin, setting a VALUE via the PRICED exchange rate of the currency. On a side note, most of the big Market Makers (FX Traders) use this price movement as a way to make a profitable living, as well. Especially when price fluctuations are a consequence of hype or fear (bubbles, cliffs), not factual supply/demand data, and are wildly out of the real price range.
Thus, if you analyze the proper macroeconomic data in an attempt to forecast future DEMAND for more Bitcoin (price increase), you will realize some very interesting things, and have a more accurate picture of where the price is going...
Happy trading!
Therefore: BUYERS, SELLERS, and MONEYSUPPLY-INFLATION (miners) determine the VALUE of Bitcoin, which determines the PRICE of BTC as BUYERS and SELLERS trade based on that VALUE (or supply and demand) of Bitcoin.I'm looking forward to an in-depth discussion on the subject! I've noticed that confusion between the two seems to come up quite a bit on the forum, and thought it may be reasonable to dedicate a thread on the matter.
Pulled from a discussion in Wall Observer
Price-Deflation is what you are used to hearing about in Bitcoin. That term is used to describe the prices of goods/services as they decrease, because the value of Bitcoin goes up.
Price-Inflation is the opposite. When prices of goods/services increase because the value of Bitcoin goes down.
So, when dealing with Price-Inflation or Deflation, there is an inverse relationship of price and value, in regard to goods/services and Bitcoin.
Example: As the Bitcoin price goes from $10 to $20, the prices of goods/services goes down from 20BTC to 10BTC. As the Bitcoin price goes from $20 to $10, the prices of goods/services goes from 10BTC to 20BTC!
Why does the price of Bitcoin go up and down? The price of BTC goes up and down based on the exchange rate, or market price, which is set by buyers and sellers, or traders. They directly trade the Bitcoin currency with all sorts of other currency, and even some with gold; the most popular being the USD (US dollar). They set the price when executing orders to buy or sell. I will get into the actual reason of why the price fluctuates in the last section.
Now that we've gone over PRICE Inflation and Deflation (which honestly, to me, is a term made popular by Keynesian's to hide the real facts, as price inflation/deflation is simply the market exchange rate, reflective of the money supply into a currency from itself and other currencies), let's go over the REAL inflation/deflation of a currency (otherwise known by many as Monetary Inflation).
MoneySupply-Inflation is when the value of Bitcoin decreases when the total supply of Bitcoin increases. In our current state, this is at a generation rate of 25 BTC every 10 minutes.
MoneySupply-Deflation will essentially never occur. It is when the value of Bitcoin increases when the total supply of Bitcoin decreases. This may happen, say, when someone loses their private key and all the BTC associated with it are lost. This effectively "makes the rest of us richer". That being said, there is a SET DECREASE in the generation rate of BTC, so you have sort of a "deflationary effect" in the value, as long as more exchange occurs for BTC at a rate which is faster than that set generation rate.
When all 21 million coins are produced, the MoneySupply will be neutral, and the value will continue to increase (prices will decrease, consequently), as long as people continue to exchange in BTC.
This leads me to the last section.
What determines the PRICE of Bitcoin? The VALUE of Bitcoin at a particular moment.
What determines the VALUE of Bitcoin? The SUPPLY and DEMAND of Bitcoin in the economy.
What determines the SUPPLY of Bitcoin? Currently, the MoneySupply-Inflation rate of 25 BTC every 10 minutes, and traders willing to SELL Bitcoin to BUYERS in exchange for other supplies of money (currencies).
What determines the DEMAND of Bitcoin? Traders willing to BUY Bitcoin from SELLERS in exchange for other currencies.
Therefore: BUYERS, SELLERS, and MONEYSUPPLY-INFLATION (miners) determine the VALUE of Bitcoin, which determines the PRICE of BTC as BUYERS and SELLERS trade based on that VALUE (or supply and demand) of Bitcoin.
We don't exactly know the totality of the supply and demand. Sure, we could try and aggregate data from all the exchanges, but we will never be accurate as there are exchanges which can not be accounted for (OTC). The cool thing is that we DO know the MoneySupply rate, and we DO know the exchange rate. From this, we can determine a real value of Bitcoin when simply multiplying the two factors; a sort of inflation-adjusted view of the currency.
Effectively, the quantitative analysis of supply and demand is really what the currency exchange traders attempt to accurately determine which is conveyed through buying and selling of Bitcoin, setting a VALUE via the PRICED exchange rate of the currency. On a side note, most of the big Market Makers (FX Traders) use this price movement as a way to make a profitable living, as well. Especially when price fluctuations are a consequence of hype or fear (bubbles, cliffs), not factual supply/demand data, and are wildly out of the real price range.
Thus, if you analyze the proper macroeconomic data in an attempt to forecast future DEMAND for more Bitcoin (price increase), you will realize some very interesting things, and have a more accurate picture of where the price is going...
Happy trading!
We don't exactly know the totality of the supply and demand. Sure, we could try and aggregate data from all the exchanges, but we will never be accurate as there are exchanges which can not be accounted for (OTC). The cool thing is that we DO know the MoneySupply rate, and we DO know the exchange rate. From this, we can determine a real value of Bitcoin when simply multiplying the two factors; a sort of inflation-adjusted view of the currency.
Effectively, the quantitative analysis of supply and demand is really what the currency exchange traders attempt to accurately determine which is conveyed through buying and selling of Bitcoin, setting a VALUE via the PRICED exchange rate of the currency.
Value of a store of value depends of various elements
- Aceptance
- Good and services which can de acquired
- expectations about future prices
- Aceptance
- Good and services which can de acquired
- expectations about future prices
Inflation is bitcoin supply is quite high, and will increase for the next years to come.
Bitcoin's supply will decrease yes and I'll agree with what you said about inflation on it. But have you heard about the halving? It's been happening every 4 years with bitcoin and there's no way for it to increase for next years to come. It's supply will never increase but the current bitcoin in the market will be increasing and adding more because of it.
Supply of money is also a matter of velocity, or speed, of money flows. Keep that in mind.
I can't comprehend about the supply of money with velocity and speed as I know it's only for the things that moves but okay let's consider it with the "flow" and "movement" of money in the ecosystem.
цeнa pocти бyдeт , нo быки мoгy этy цeнy oчeнь cильнo oпycтить , ecли кoнeчнo зaxoтят ) a oни нe зaxoтят)))
Inflation is bitcoin supply is quite high, and will increase for the next years to come.
Bitcoin's supply will decrease yes and I'll agree with what you said about inflation on it. But have you heard about the halving? It's been happening every 4 years with bitcoin and there's no way for it to increase for next years to come. It's supply will never increase but the current bitcoin in the market will be increasing and adding more because of it.
Supply of money is also a matter of velocity, or speed, of money flows. Keep that in mind.
I can't comprehend about the supply of money with velocity and speed as I know it's only for the things that moves but okay let's consider it with the "flow" and "movement" of money in the ecosystem.
someone can give a predict me about the price of bitcoin? going up or down?
Yes I could help you in this regard .If you are asking about the future of the Bitcoins then I do not fear declaring the fact that the price of the Bitcoins is obviously going to rise the in the upcoming year as it is being used at the greatest rate ever. People's confidence in use of digital currencies has increased because of sustainability and reliability it offers to its users. If you scroll through the Internet then you might find the price of Bitcoins having increased to a much preferable level as compared to near past. 
I was wondering about MoneySupply-Deflation. So as an example when an altcoin burns it`s coins that are not in the circulation their value increases immediately by 30-50 % . Is it the reason of the deflation or people think that it will affect the price and there is a tremendous volume going up which automatically increases the value of the coin. So I wonder when there is such an announcement what should be considered .shall we invest or not ?
Inflation is bitcoin supply is quite high, and will increase for the next years to come. Supply of money is also a matter of velocity, or speed, of money flows. Keep that in mind.
Now that is a magnificently bad explanation :-)
Currently the growth of Bitcoin supply is a little less than 4% and will decrease for the next years to come. Supply of money is deterministic and not a matter of velocity, or speed, of money flows. Keep that in mind.
Inflation is bitcoin supply is quite high, and will increase for the next years to come. Supply of money is also a matter of velocity, or speed, of money flows. Keep that in mind.
someone can give a predict me about the price of bitcoin? going up or down?
You can go at the Speculation board there are so many predictions about bitcoin if it's going to be up or down.There are many factors that are affecting the price and supply of bitcoin so speculations there mostly are coming from the trading experts.
Also there's a specific thread Wall Observer BTC/USD - Bitcoin price movement tracking & discussion there where you can follow that is very active from time to time.
someone can give a predict me about the price of bitcoin? going up or down?
Price-Deflation is what you are used to hearing about in Bitcoin. That term is used to describe the prices of goods/services as they decrease, because the value of Bitcoin goes up.
Price-Inflation is the opposite. When prices of goods/services increase because the value of Bitcoin goes down.
So, when dealing with Price-Inflation or Deflation, there is an inverse relationship of price and value, in regard to goods/services and Bitcoin.
Example: As the Bitcoin price goes from $10 to $20, the prices of goods/services goes down from 20BTC to 10BTC. As the Bitcoin price goes from $20 to $10, the prices of goods/services goes from 10BTC to 20BTC!
This works only if treated as a loose analogy or "what would happen if the economy ran on Bitcoin only and everything else was unchanged".
In fact, Bitcoin does not have any meaningful price inflation (or price deflation) since there are no prices that are actually set in BTC. I've yet to see a price even remotely sticky in BTC, everything is indexed to USD or other fiat. Sure, you could measure how much goods you could buy for your coins, but there is no added information in that.
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