Is Bitcoin anti-inflation? - page 2.

n0ne

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Quote from: cryptosize on September 18, 2022, 02:48:07 PM

I don't like fiat, but this is a good point.

What would you prefer to do?

1) Take a $20000 loan at 5% interest rate and repay it 10 years later.

2) Take a 1 BTC loan at 5% interest rate and repay it 10 years later.

I think acquiring 1 BTC in 2032 will be darn near impossible, unless you're super rich.

On the other hand, 20k USD might not even be enough to buy a car due to inflation... easy repayment!

So yeah, I don't think BTC incentivizes a debt-based system.

This is both a good and a bad thing, depending on how you see it... some people consider debt a form of slavery (with invisible and not metallic chains), while others consider a debt-based system necessary to promote economic growth.

But economic growth (due to QE) also means that bubbles will be created from time to time... even BTC's bubbles every 4 years, since we're still in the fiat standard.

With fiat we can say firmly that the inflation increases with time. This happens with most currencies, and there'll be exception with few country's fiat. In all ways bitcoin is stronger than fiat in terms of inflation and other features, but what is being stated seems to be something on prediction and hope and not the truth. No one knows the future of bitcoin, based on the growth it have attained over the years we can expect growth with bitcoin that will be high against the inflated currencies.

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Quote from: BlackHatCoiner on September 18, 2022, 12:13:11 PM

Quote from: Pierre 2 on September 17, 2022, 08:54:34 AM

Only thing which people may dislike is, it is nearly impossible to get loan through Bitcoin. Our fiat currencies welcome credit/debt systems more with their inflationary structure.

This has nothing to do with inflation. A debt-based currency is reasonable to welcome loaning. Besides, you can loan/borrow bitcoin. Even this Internet board has such place: https://bitcointalk.org/index.php?board=65.0

Bitcoin will not be affected by inflation of any fiat currency, but the increase in the price of bitcoin every 4 years when there is a halving may be considered this movement as inflation, because as far as I have learned about inflation, it is a price increase that always occurs at any given time, so it is possible the price of bitcoin will skyrocket again as it approaches the halving that will occur in 2024.

Borrowing using Bitcoin currency is terrible when bitcoin price conditions are high because the exchange rate you get can be very little and when the price collapses and repaying the loan will require a very large amount of Bitcoin, borrowing in the cryptocurrency world I prefer to use stable a coin that has a more stable price movement than Bitcoin.

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Quote from: john alex young on August 09, 2021, 04:57:48 AM

According to many analyzes, inflation is caused by the printing of money by the Central Bank. Excessive printing of money will create an imbalance in supply and demand, which will have a negative impact on the balance sheet.
As a person who really loves BTC, I want to ask, is Bitcoin anti-Inflation?

It depends on which side to look at it. Judging by how Bitcoin fell from $69k to $19k, can we call it an anti-inflation model? Very unlikely. This is subject to short-term judgment. Having analyzed the graph of changes in the price of Bitcoin for all the time of existence, you can see a completely different picture, close to the anti-inflationary model of behavior. In fact, this is embedded in the very essence of Bitcoin: despite the fact that the number of Bitcoin mined is growing, which means that the total number in circulation is also increasing, Bitcoin can't be printed indefinitely, like ordinary money.

cryptosize

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Quote from: Pierre 2 on September 17, 2022, 08:54:34 AM

It is obviously anti inflationary currency cause, through PoW (Proof of Work) system, Bitcoin's hardness to mine increases over time in years. This means if enough people will keep supporting Bitcoin, its price will keep increasing in next years. I believe Bitcoin tech may get outdated in future so it may need updates or upgrades but, I think we will keep using same old Bitcoin next 10-15 years for sure. Only thing which people may dislike is, it is nearly impossible to get loan through Bitcoin. Our fiat currencies welcome credit/debt systems more with their inflationary structure.

I don't like fiat, but this is a good point.

What would you prefer to do?

1) Take a $20000 loan at 5% interest rate and repay it 10 years later.

2) Take a 1 BTC loan at 5% interest rate and repay it 10 years later.

I think acquiring 1 BTC in 2032 will be darn near impossible, unless you're super rich.

On the other hand, 20k USD might not even be enough to buy a car due to inflation... easy repayment!

So yeah, I don't think BTC incentivizes a debt-based system.

This is both a good and a bad thing, depending on how you see it... some people consider debt a form of slavery (with invisible and not metallic chains), while others consider a debt-based system necessary to promote economic growth.

But economic growth (due to QE) also means that bubbles will be created from time to time... even BTC's bubbles every 4 years, since we're still in the fiat standard.

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Quote from: bitmover on August 09, 2021, 09:58:01 AM

Quote from: john alex young on August 09, 2021, 04:57:48 AM

According to many analyzes, inflation is caused by the printing of money by the Central Bank.

I think this is the main cause of inflation. However, the effect is not so easily observed in real life.

Central Banks are also able to control inflation increasing interest rates. When interest rates are high, inflation tends to go down.

It's all based on whether they can scare people away from spending money and make them save up,, especially in centralized institutions that can literally take money off the market.
When inflation is very high like 20% or more raising interest rates doesn't do much because people see the banks are giving them 10% on their deposits a year but they're still going to lose 10 or more to the inflation so it's better to keep spending and buying real life goods, gold, silver, jewelry, even cars because those are not going to lose 10% each year.
Situations like that could be observed in former Soviet Union countries in the 90s where people preferred to buy additional home appliances than hold fiat and they'd hoard washing machines, fridges and furniture.

When inflation is below 10% you can play around with rates. When it goes to 80% like it is in Turkey now it won't change anything. You're on your way to hyperinflation and the big reset of the fiat currency that happens usually at least once every 100 years.

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Quote from: Pierre 2 on September 17, 2022, 08:54:34 AM

Only thing which people may dislike is, it is nearly impossible to get loan through Bitcoin. Our fiat currencies welcome credit/debt systems more with their inflationary structure.

This has nothing to do with inflation. A debt-based currency is reasonable to welcome loaning. Besides, you can loan/borrow bitcoin. Even this Internet board has such place: https://bitcointalk.org/index.php?board=65.0

Quote from: samuraijin on September 18, 2022, 10:18:28 AM

without inflation the price of Bitcoin will certainly free fall, as we see today

Certainly not. Inflation exceeded 2-3% about 2 years ago, a little after March 2020. Until then bitcoin was normally appreciating in value.

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Quote from: john alex young on August 09, 2021, 04:57:48 AM

According to many analyzes, inflation is caused by the printing of money by the Central Bank. Excessive printing of money will create an imbalance in supply and demand, which will have a negative impact on the balance sheet.
As a person who really loves BTC, I want to ask, is Bitcoin anti-Inflation?

Yes it's anti inflation or what it is technically termed as deflationary. It works on the concept where the value of the currency becomes stronger over time as it is based on the concept of limited supply but unlimited demand. Ironically we have never had such a currency model for any country before. A set of economists say that deflationary currency isn't practically feasible due to the technical problem called deflationary spiral. As the value of currency will increase over time people will tend to spend less today and save for tomorrow which will reduce the aggregate demand in the economy further increasing deflation and slowing economic growth. This circle is not considered good for economy.

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Whether the decline in the price of Bitcoin some time ago, it could have been caused by the current inflation, but if you calculate the rhythm of the four-year cycle, then this year it remains, that the price of bitcoin will get a price decline in all markets, without inflation the price of Bitcoin will certainly free fall, as we see today, maybe there are some people here who believe in the 4 year cycle, this is just my speculation, it all depends on your belief..

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Quote from: Pierre 2 on September 17, 2022, 08:54:34 AM

Only thing which people may dislike is, it is nearly impossible to get loan through Bitcoin. Our fiat currencies welcome credit/debt systems more with their inflationary structure.

It doesn't impossible, but you just don't know how to get it.
You can get Bitcoin loan from centralized services e.g. Binance, Blockfi, Coinbase etc and you need to provide valid collateral. In this forum there's a lending board [1] where you can become a loaner or borrower, you can get loan without collateral or with collateral depend on your account trustworthy.

So this mean Bitcoin doesn't have any disadvantages since the problem has been solved?

[1] https://bitcointalk.org/index.php?board=65.0

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Quote from: john alex young on August 09, 2021, 04:57:48 AM

According to many analyzes, inflation is caused by the printing of money by the Central Bank. Excessive printing of money will create an imbalance in supply and demand, which will have a negative impact on the balance sheet.
As a person who really loves BTC, I want to ask, is Bitcoin anti-Inflation?

In this case we can notice one thing. That is, the central bank can print money as they wish, in this case, the more money they print, the more inflation will occur. But Bitcoin has a limited supply. As we all know the maximum supply is 21 million where currently over 19 million circulating. There are only a few millions left but the miners are not keen on the high mining cost. So nothing like this is likely to happen with Bitcoin.

We do not even have that much bitcoin to be honest, between the million satoshi took away with him, and maybe another million or two that is forever gone from losing them, I would say that there is a good chance we may have something like 17 million bitcoins up for grabs possibly, there are also a lot of long term holders, and I mean a lot.

So that leaves us with maybe like 10 to 15 million bitcoins traded every year, not every day of course because people hold, but every year that could be the real number. So that is a good and important thing that people need to keep in their minds. I personally try my best to keep realizing how scarce it really is, and that gives me hope.

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The reason for this is because while Bitcoin was created as a currency, many people use it now as a store of value. However, when using Bitcoin as a store of value, people think how much its value will go up, which means that they multiply the current price by what they think the future price will be. It's not anti-inflation I think it's just a rebalancing of money due to increasing demand.

Pierre 2

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It is obviously anti inflationary currency cause, through PoW (Proof of Work) system, Bitcoin's hardness to mine increases over time in years. This means if enough people will keep supporting Bitcoin, its price will keep increasing in next years. I believe Bitcoin tech may get outdated in future so it may need updates or upgrades but, I think we will keep using same old Bitcoin next 10-15 years for sure. Only thing which people may dislike is, it is nearly impossible to get loan through Bitcoin. Our fiat currencies welcome credit/debt systems more with their inflationary structure.

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Quote from: john alex young on August 09, 2021, 04:57:48 AM

According to many analyzes, inflation is caused by the printing of money by the Central Bank. Excessive printing of money will create an imbalance in supply and demand, which will have a negative impact on the balance sheet.
As a person who really loves BTC, I want to ask, is Bitcoin anti-Inflation?

Yes BTC is anti inflation medium of exchange i would like to elaborate it as Not only anti inflation also well designed supply to demand management which creates its Market price always higher then its realized price except for bear or accumulation period. BTC is true freedom of money. As its anti-inflation you dont need to worry about you savings long term,its decentralized no need to worry about assets freedom spend where you want to, its in growing stage book your place / position now.

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Quote from: KennyR on September 16, 2022, 06:50:22 PM

Based on the systematic view, bitcoin needs to be anti inflationary, but it doesn't look like it is against inflation. The limited supply makes it a tool against the inflated currencies. However to take effect it needs to have the market big as the fiat and now the cryptomarket have begun to coexist along with the traditional market.

Bitcoin is against inflation, but not in short period of time, but in a long period of time. Checking since all-time-high, you will only noticed that bitcoin is inflationary, but not because all-time-high is certain, and that bitcoin is not getting back to the pre-bullsih period price which makes it deflationary. Do not mind those news that bitcoin is behaving like the traditional market, they is all lies, in much longer time, bitcoin is an hedge against inflation.

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Quote from: bitmover on August 09, 2021, 09:58:01 AM

Quote from: john alex young on August 09, 2021, 04:57:48 AM

According to many analyzes, inflation is caused by the printing of money by the Central Bank.

I think this is the main cause of inflation. However, the effect is not so easily observed in real life.

Central Banks are also able to control inflation increasing interest rates. When interest rates are high, inflation tends to go down.

Quote

Excessive printing of money will create an imbalance in supply and demand, which will have a negative impact on the balance sheet.
As a person who really loves BTC, I want to ask, is Bitcoin anti-Inflation?

Bitcoin may protect you against inflation, just like gold. The problem is that bitcoin is still very volatile, so you are exactly protecting yourself against inflation. You lose much more money than you would lose to inflation (especially if you live in a country where inflation is controlled), but you may also have huge gains.

So, I think that it is a nice protecting against inflation, but it shouldn't be your only protection against inflation, due to its high volatility.

Central banks only control inflation through interest rates because they don't put a cap on the money supply. You could theoretically have inflation without fluctuation in the money supply if some global event, ie war/COVID-19, caused supply chain issues and increased the scarcity of consumer products. The difference is, induced inflation through money supply increase ensures that the prices do not actually come down. You can't take the money out of circulation once it's already in there (very easily, for that matter). Temporary price increases due to global events eventually stabilize once supply chains return to normal -- it causes prices to go down.

Interest rates are only part of inflation. That's more the reactionary mechanism of inflation. The core mechanism is an unchecked money supply.

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There are only a few millions left but the miners are not keen on the high mining cost.

This is not true, even though we are in bear season and the drop in bitcoin price makes it hard for miners to mine bitcoins, but they keep going and don't give up despite the tough conditions. It can be said that the bear season will make many miners depressed because they cannot afford to make a profit to spend every day, so they may close a part of their miner, but the big miners, they are still continuing to mine because they have enough reserve costs during hard times. Not to mention once the market rallies, the retail miners will also go back to their jobs. The block reward is decreasing and the difficulty will increase but in return the bitcoin price will increase so they will not pass up this good work.

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Based on the systematic view, bitcoin needs to be anti inflationary, but it doesn't look like it is against inflation. The limited supply makes it a tool against the inflated currencies. However to take effect it needs to have the market big as the fiat and now the cryptomarket have begun to coexist along with the traditional market.

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Quote from: awik p on September 16, 2022, 09:54:04 AM

Quote from: KingsDen on September 16, 2022, 03:35:20 AM

Quote from: john alex young on August 09, 2021, 04:57:48 AM

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if in the current situation investing in bitcoin will give us comfort later because the value will increase and be greater than the inflation that will occur, so with bitcoin we can save our assets from inflation that will continue to rise later. Unfortunately, to achieve this, not everyone can do it because many people actually lose their assets due to their own mistakes who do not understand the characteristics of bitcoin

Even if the price of the equivalent fiat doesn't increase, the value doesn't decrease. The price of Bitcoin doesn't go down, because it is capped at 12kM.
Yea, people lose their bitcoin because of inability to keep it safe, also people lose fiat to disasters, theft and unknown to them by inflation thereby reducing their purchasing power and their savings strength. But it's never a reason for them to stop using fiat.

Apart from being safe for inflation, there are some other reasons that people pick interest on bitcoin, such as; liberty to control their money, ability to be private and save their personal data, because of the volatility of bitcoin to make some profits when the price rises. So, bitcoin serves different purpose for different people.

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A lot of things have been write before me, and now we can say that the inflation of a euro or dollar currency is something different from a Bitcoin inflation. The central bank can print money and increase inflation. Bitcoin has reached the limit in 2140, that is a huge difference. I see it as simple and only then could we know. Until then every 4 years halving will reduce the rewards. The rewards will stop, the money printing not.

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Quote from: KingsDen on September 16, 2022, 03:35:20 AM

Quote from: john alex young on August 09, 2021, 04:57:48 AM

According to many analyzes, inflation is caused by the printing of money by the Central Bank. Excessive printing of money will create an imbalance in supply and demand, which will have a negative impact on the balance sheet.
As a person who really loves BTC, I want to ask, is Bitcoin anti-Inflation?

When we talk about inflation, there are many things that contribute to inflation. I can categorise them as nation base and global base, so the kind of inflation we are seeing today is global inflation and the role of Bitcoin is not to fight against inflation, be it global or otherwise. But bitcoin can protect you as an individual against the adverse effects of inflation. How will bitcoin be able to do that? it is because one BTC is equal to 1 BTC anytime anyday.

When you talk about the Fiat money, the government prints money, they try to regulate it but inflation keep hitting the economy. Prices of goods are almost trippled just from agter covid-19. One thing about global inflation, bitcoin cannot actually stop it, you remember recently that US released the inflation rate, bitcoin price dropped, this is to show that bitcoin is responsive to the economy. Bitcoin protects you and not the whole nation.

if in the current situation investing in bitcoin will give us comfort later because the value will increase and be greater than the inflation that will occur, so with bitcoin we can save our assets from inflation that will continue to rise later. Unfortunately, to achieve this, not everyone can do it because many people actually lose their assets due to their own mistakes who do not understand the characteristics of bitcoin

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