"The question is why do users want to buy bitcoins? And that's what makes bitcoin has a price and worth because users want bitcoin for them to use?"
All this is mostly a speculativ bubble, remember tulipomania, people buying alts and bitcoin hoping to sell it higher, would they buy it knowing the price would stagnate OR diminish ? the answer is certainly no
Topic: Inflation and Deflation of Price and Money Supply - page 31. (Read 1424634 times)
Even people in Wall Street cant even read and predict the movement of bitcoin. So inflation nor deflation affects the price movement of bitcoin. Its really how people see its value and adoption of the public to its use. Law of supply and demand comes on second.
Price Inflation is an increase in the price of a standardized good/service or a basket of goods/services over a specific period of time while deflation in price is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0%.
Inflation of money supply is a sustained increase in the money supply of a country while deflation of money supply is just the opposite of it.
Inflation of money supply is a sustained increase in the money supply of a country while deflation of money supply is just the opposite of it.
Deflation/Inflation <=> Speculation. In this case. It is not predictable in the moment due to high fluctuations.
You have to stop a bit a consider trustworthiness. You can not have it, neither in real money regard nor costs. In case you by some methods make sense of how to do the abnormal regardless of its trouble, you pick up the structure static and no ground is possible, and you in like manner murder all danger. The wiping out of risk, without any other person changes the structure. So it is doubly unfathomable.
It takes after fishballs in white sauce. If you crush one down, another flies up. The best (and as consistent as you get) is to just leave everything drifting.
It takes after fishballs in white sauce. If you crush one down, another flies up. The best (and as consistent as you get) is to just leave everything drifting.
How i see now is simple btc gains value over the time with the speculation and trust but the fiat lose value related to the inflation and economic crisis.
The question is why do users want to buy bitcoins? And that's what makes bitcoin has a price and worth because users want bitcoin for them to use?
Because when demand goes up, so does the value. That's what makes BTC so interesting to me. It's pretty much the opposite of the valuations of most everything else in that when demand goes up, the price/value goes down.
inflation and deflation of price of bitcoin i think this is the main cause of to attract the investor. because every investor want benefit. i think this is the main reason of uses of bitcoin. this is very effective for economy.
Inflation and deflation occur because of demand and which makes the demand is the user? The question is why do users want to buy bitcoins? And that's what makes bitcoin has a price and worth because users want bitcoin for them to use?
How can a digital simulation of money become more illusory than it already is? Simulated money will always be an illusion, but because it is a simulation we do not have to accept the 'rules' coded into it as if they were the Ten Commandments. Instead, we can select the relevant sections of source code, hit the delete button, and start over.
The idea was that you print money when economy is not doing so well and then collect it back when times get better again. It seems like governments forgot about the 2nd part
Inflation in a country is both beneficial and harmful to the economy but if it is regulated, then it is advantageous. Every country has its own rules about the rate of inflation that they must control. Here in the Philippines, the inflation rate of a country must be around 2-3%. Anything more or less than that will affect the economy. Inflation is really not a bad thing since it increases the money supply in the market. But if you print money due to the economy being low, this will significantly increase the supply of money in the market. By following the law of supply and demand, the tendency is that prices in the general market will increase and this will lead to chaos. Like what happened in Zimbabwe, the prices of goods are so high that even their currency's value is so high. There are many options under our banks to fix the economy but printing money is the last resort that they will do.
Is that any effect on inflation or defletion on evolve of Bitcoin and other Cryptocurrency? Now what is the total economy of this digital currency?
Inflation or deflation affects everyone. It has something to do with the rise and fall of the interest rate and that is how our economy works. If people have lots of money the tendency is they spend more and the more they spend the more they need more money and once their money is gone then they will borrow particularly if the interest rate is low. Then the economy moves faster and it will come to an inflation. When the time comes to pay their loans and interest, they will stop spending and the economy slows down and this is deflation. Then interest rate will be lowered to help the economy.
The effect of this to the bitcoin is not direct but rather related for if people dont have money then they cant afford to buy bitcoin and less bitcoin circulating then economy slows down.
Is that any effect on inflation or defletion on evolve of Bitcoin and other Cryptocurrency? Now what is the total economy of this digital currency?
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!
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!
Hello @thefiniteidea,
I think that I came up with a solution to your questions in this article. In fact, I was able to discover the price of a monetized currency pair in terms of another without using any market data at all. Only intrinsic variables and rational models based on the praxeological axioms. When I mean I was able to discover such a thing, I mean that with my model anyone can arrive to a number that matches (with some random noise) the price of a monetized currency pair.
https://steemit.com/bitcoin/@pablomp/cryptocurrencies-what-is-the-fair-value-of-a-currency
I hope you enjoy it and appreciate it. I am sure that it will be very useful. You can download a PDF version of it at the bottom of the article.
Regards,
pablomp
Bitcoin prices continue to rise, perhaps because of the large number of bitcoin demand or more investors believe bitcoin than in conventional currencies
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!
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!
thank you very much for discussing this topic thread by thread. it made the trading terms and process easier to understand. I was looking anywhere for article that is easier to understand about bitcoins since i want to learn more. Reading this post and also the other replies helped me a lot. My questions has been answered. This forum is really great if you'll meet the right people. i know i still have a lot to learn and is so far in the process. but having people like who are in this forum, i believe it wont be hard.
is it tru that the Bitcoin Improvement Proposal (BIP) 148, Bitcoin will be undergoing a user activated soft fork on August 1, 2017.
There are three possible outcomes of the soft fork, although the exact outcome is unknown as the outcome will depend on the actions of the nodes on the network.
In a worst case scenario, BIP 148 could cause Bitcoin to chain split into two separate blockchains, one with SegWit activated and one without. what do you think of this?
There are three possible outcomes of the soft fork, although the exact outcome is unknown as the outcome will depend on the actions of the nodes on the network.
In a worst case scenario, BIP 148 could cause Bitcoin to chain split into two separate blockchains, one with SegWit activated and one without. what do you think of this?
Asset backed currencies have been the ONLY succesful models tried. They stood for centuries, none ever "failed" they were all replaced by fiat systems.
The dollar was removed from gold backing in 1971, but it was weaned from gold onto oil and the "petrodollar" was formed, it was a brilliant plan and when put forth to Saudi "leaders" they realised that if they got in on the ground floor of the pyramid scheme they would greatly benefit.
Fiat moneys have ALWAYS failed. The ability to "print your way out of trouble" is in fact "printing your way into trouble" and will always end bad for the users (good for the bankers).
The dollar was removed from gold backing in 1971, but it was weaned from gold onto oil and the "petrodollar" was formed, it was a brilliant plan and when put forth to Saudi "leaders" they realised that if they got in on the ground floor of the pyramid scheme they would greatly benefit.
Fiat moneys have ALWAYS failed. The ability to "print your way out of trouble" is in fact "printing your way into trouble" and will always end bad for the users (good for the bankers).
inflation and deflation of price of bitcoin i think this is the main cause of to attract the investor. because every investor want benefit. i think this is the main reason of uses of bitcoin. this is very effective for economy.
The idea was that you print money when economy is not doing so well and then collect it back when times get better again. It seems like governments forgot about the 2nd part
It seems that government has been doing manipulations of money's circulation to economy and yet in asia like philippines loaned to world bank for money to sustain the economy, despite of the power of ordering prints out of money production. That idea of money printing just for economy adjustments can be beneficial to the country if the power of the government system will prevail and prevent those monopoly of businesses who take control of inflation and deflation of price as well as supply of money.
The idea was that you print money when economy is not doing so well and then collect it back when times get better again. It seems like governments forgot about the 2nd part
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