Topic: Inflation and Deflation of Price and Money Supply - page 41. (Read 1457336 times)
Thanks a lot for the thread. Its quite informative. Its interesting to know about the relationship. Reading it for the first time.
Thanks for the thread it's interesting even when you have good knowledge of Bitcoin in general.
can u please explain me how the prices of bitcoin rise and fall..?? and how trading effect it... as i have some exp in trading according to which there are trends of buyers /sellers .. the prices of currency only fall/rise in some exceptional case...
Regards to Bitcoin rise and fall, you can watch excellent Bitcoin Videos in YouTube by searching through in, or if you want him only to explain, then send Private Message to him, I am sure he would help you out.OKi .. thanks .. first i'll go with YouTube video then if still i found some issue then will ask him or will start thread to get understanding of it .
can u please explain me how the prices of bitcoin rise and fall..?? and how trading effect it... as i have some exp in trading according to which there are trends of buyers /sellers .. the prices of currency only fall/rise in some exceptional case...
Regards to Bitcoin rise and fall, you can watch excellent Bitcoin Videos in YouTube by searching through in, or if you want him only to explain, then send Private Message to him, I am sure he would help you out. 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.
and how trading effect it...
as i have some exp in trading according to which there are trends of buyers /sellers .. the prices of currency only fall/rise in some exceptional case...
Is that not also the benefit of block halving every 210,000 Blocks? To decrease the supply rate, thus increasing the value even if Demand is constant. (demand should continue to grow in theory)
Since the value of BTC increases with the increase in demand, what if there is an increase in demand with a proportionate increase in supply? This question is in reference with the estimation of value , when demand intersects supply.
There is proportionate supply taking place, the lack of demand is the reason of turbulence and that is what needs to boost and that is how there will be more increase in supply too. When huge demands take place, bitcoin will grow. Such demand can only take place when a major country adopts bitcoin. That is how the flags of the bitcoin empire go high
Since the value of BTC increases with the increase in demand, what if there is an increase in demand with a proportionate increase in supply? This question is in reference with the estimation of value , when demand intersects supply.
impossible to survive 
Deflation generally occurs when the supply of goods rises faster than the supply of money, which is consistent with these factors, the supply of money goes down, the supply of other goods goes up, demand for money goes up and finally demand for other goods goes down. Deflation in supply money usually defined as a general drop in prices of goods and services.
All such inflation and deflation occur randomly,as it part of living.
In a sound situation, a high degree of saving will lower the interest rate, and signal to entrepreneurs that more investing is needed. When new products arrive, some time afterwards, people have the money to spend.
The artificially low interest rate, which can only be brought down by creating new money and ever expanding debt, likewise signals to entrepreneurs to invest. But at the same time, low rates and inflation signals to consumers to spend more. When products are ready, nobody have the money to buy them. That is what we have now, a general oversupply and a general low demand, world wide. That is why the oil price is down.
impossible to survive
Deflation generally occurs when the supply of goods rises faster than the supply of money, which is consistent with these factors, the supply of money goes down, the supply of other goods goes up, demand for money goes up and finally demand for other goods goes down. Deflation in supply money usually defined as a general drop in prices of goods and services.
All such inflation and deflation occur randomly,as it part of living.
Deflation generally occurs when the supply of goods rises faster than the supply of money, which is consistent with these factors, the supply of money goes down, the supply of other goods goes up, demand for money goes up and finally demand for other goods goes down.
Economists generally believe that deflation is a problem in a modern economy because it increases the real value of debt, and may aggravate recessions and lead to a deflationary spiral. To be true, deflation is one of the most scariest part in the Economic sections.Nonsense.
Many economists say that deflation is a problem because they've already taken a pro-inflation stance which requires that they be opposed to anti-inflation. Then again, most economists don't know enough about economies to have honest opinions about such matters, but they are statists, and being pro-inflation lets them provide cover to their political counterparts.
Inflation is nothing less than the theft of value done in a way that is hard for most people to understand because no money is actually taken.
Deflation generally occurs when the supply of goods rises faster than the supply of money, which is consistent with these factors, the supply of money goes down, the supply of other goods goes up, demand for money goes up and finally demand for other goods goes down.
Economists generally believe that deflation is a problem in a modern economy because it increases the real value of debt, and may aggravate recessions and lead to a deflationary spiral. To be true, deflation is one of the most scariest part in the Economic sections. impossible to survive
Deflation generally occurs when the supply of goods rises faster than the supply of money, which is consistent with these factors, the supply of money goes down, the supply of other goods goes up, demand for money goes up and finally demand for other goods goes down. this thread so helping, finally i knew about inflation and deflation of bitcoin and its suplied but i just wondering why there are diferent price both of one exhanger and other exchanger?
It could be that the groups of customers of each exchange thinks differently about the value of bitcoin, and that there is a difference in cost of transacting, including fiat to fiat conversions and bank transfers. Transaction latency could be different, and the level of risk that the exchange runs away with your money. It is impossible to say exactly what is the reason. But it is expected and normal that there are slight differences.
Yup i got it,thats why other people utilize this chance for make arbitrage right? especially for alternative coin and earn some profit from it
Arbitage is only for the same coin, the relatively risk free buying on the cheap exchange and at the same time selling on the expensive exchange. Arbitrage is possibly working between chinese bourses, as they have a quick mechanism to move renminbi, the peoples money. But mostly I think traders just look on the prices on other bourses, that is the main reason they are connected.
this thread so helping, finally i knew about inflation and deflation of bitcoin and its suplied but i just wondering why there are diferent price both of one exhanger and other exchanger?
It could be that the groups of customers of each exchange thinks differently about the value of bitcoin, and that there is a difference in cost of transacting, including fiat to fiat conversions and bank transfers. Transaction latency could be different, and the level of risk that the exchange runs away with your money. It is impossible to say exactly what is the reason. But it is expected and normal that there are slight differences.
Yup i got it,thats why other people utilize this chance for make arbitrage right? especially for alternative coin and earn some profit from it
this thread so helping, finally i knew about inflation and deflation of bitcoin and its suplied but i just wondering why there are diferent price both of one exhanger and other exchanger?
It could be that the groups of customers of each exchange thinks differently about the value of bitcoin, and that there is a difference in cost of transacting, including fiat to fiat conversions and bank transfers. Transaction latency could be different, and the level of risk that the exchange runs away with your money. It is impossible to say exactly what is the reason. But it is expected and normal that there are slight differences.
this thread so helping, finally i knew about inflation and deflation of bitcoin and its suplied but i just wondering why there are diferent price both of one exhanger and other exchanger?
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!
Ty.. This was a lot of help
Very interesting thread,,now i am in independent development of a kind of economy system with deflation inflation control algorithm,and fastest currency on market,half second
All based on Chicago Economy School ,mostly Milton Friedman
I will like to sent you pm and introduce you to system and contact to dev of you willl ike to
Regards
P
All based on Chicago Economy School ,mostly Milton Friedman
I will like to sent you pm and introduce you to system and contact to dev of you willl ike to
Regards
P
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