Topic: Is bitcoin inflation wilder than fiat? (Read 592 times)
Because the bitcoin system is decentralized then price fluctuations will always be high, I'm sure if one day the bitcoin marketcap rises more than 100x from now then high fluctuations will continue to occur, if there is a country that legalizes bitcoin then if inflation occurs it can create serious chaos, it is natural that many countries have not legalized bitcoin.
Bitcoin is deflationary, which means instead of losing value over time due to printing of banknotes, it increases in value at the expense of the circulating supply. That alone should answer your question whether bitcoin's "inflation" as you put it is wilder than fiat. However, let's say you mistook bitcoin's volatility rate for its "inflation" rate, to which I will say it is wilder, as bitcoin can virtually go down to as low as half or even practically zero of its price in a single go, depending on market conditions, among other factors. You wouldn't see this happen in fiat, not unless a whole country mutiny against the government and overthrow even their currency system, but hey.
Many countries have thought to change currency into bitcoin because the government thinks bitcoin is more related stable than USD. because the reality, USD is not have something great if their foreign policy isn't great in the past. The powerful country is just running their greedy for self-benefit. Now, they begin to turn to bitcoin and look like started to control the bitcoin inflation, so what you think if bitcoin inflation is wilder than fiat?
Care to say this many countries that thought to change their currency into Bitcoin? Another thing, Bitcoin being highly volatile more stable than USD? How does that happen? I think your source of information is kinda unique that it goes differently on what we have known.
About inflation, what makes you think that Bitcoin inflation is wilder than fiat? As far as everyone knows, Bitcoin has a finite supply. That initially nullifies the inflation factor instead due to lost Bitcoin because of the owner losing access to the wallet, Bitcoin is believed to deflationary.
There isn't really an "inflation" in bitcoin, considering how much is printed everyday, that means that we are going to keep seeing some freshly printed bitcoin, but at the same time it is traded, not spent a lot, sure it's spent a bit but mostly traded. It means that we are not really seeing bitcoin as a big part of inflation, it's mostly regarding the situation as trading sides getting uneven everyday at the start that's about it.
Sellers could be a bit heavier because there are miners, and that could be considered a situation that is unfair to buyers, and that is why going down is easier than going up, but that is not inflation, that is a bit different situation.
Sellers could be a bit heavier because there are miners, and that could be considered a situation that is unfair to buyers, and that is why going down is easier than going up, but that is not inflation, that is a bit different situation.
In my opinion, the inflation that occurs with bitcoin can be more devastating than fiat. If a country uses bitcoin as the first legal currency, of course there will be a lot of chaos. following the price of bitcoin, it is natural that many countries are concerned that bitcoin users are increasing.
It's important to note that while bitcoin's inflation is currently lower than that of many fiat currencies, it is still subject to volatility and price fluctuations. The value of bitcoin can be affected by a variety of factors, including market demand, regulatory changes, and technological advancements.
so what you think if bitcoin inflation is wilder than fiat?
In comparison to fiat currencies, Bitcoin manages its supply differently, and its supply is limited to 21 million coins. This means that the rate at which new bitcoins are created slows over time, and there is a limit to the number of bitcoins that can exist. In contrast, central banks can print fiat currencies at any time, which can lead to inflation if done excessively. While Bitcoin's inflation rate is more volatile than fiat currencies due to its fixed supply and market demand, it is not necessarily more unpredictable. The value of any currency is determined by market demand, supply, and investor sentiment, and it is critical to consider the unique characteristics and risks of each currency before investing. Thanks for that clarification. I have read almost all the comments, and I am surprised that the majority deal with bitcoin as they deal with fiat money. Inflation cannot include assets whose value increases over time. It is assumed that “Bitcoin” assets are resistant to inflation, however, there are other cryptocurrencies that are subject to inflation and their market characteristics make them inflationary. In general, cryptocurrencies such as Bitcoin are often characterized by low inflation rates due to limited supply. I hope everyone could understand this.
while didn't compare it with anything value, fiat or etc, bitcoin will not be affected with inflation. Until today, the bitcoin price is compared with anything fiat,
and because of that, the bitcoin price now is flared up also with that effect. Bitcoin price is also followed by what happens on fiat, stock, and Oil.
The limited bitcoin supply is meaningless if people still compare bitcoin with another currency.
On the other hand, I can understand that Bitcoin can be affected by those criteria on the basis of which its price is determined. In a debate between some economists, all of them emphasized the difficulty of getting rid of the dollar and the necessity of dealing with the successive crises because of it.
Thanks for that clarification. I have read almost all the comments, and I am surprised that the majority deal with bitcoin as they deal with fiat money. Inflation cannot include assets whose value increases over time. It is assumed that “Bitcoin” assets are resistant to inflation, however, there are other cryptocurrencies that are subject to inflation and their market characteristics make them inflationary. In general, cryptocurrencies such as Bitcoin are often characterized by low inflation rates due to limited supply. I hope everyone could understand this.
while didn't compare it with anything value, fiat or etc, bitcoin will not be affected with inflation. Until today, the bitcoin price is compared with anything fiat,
and because of that, the bitcoin price now is flared up also with that effect. Bitcoin price is also followed by what happens on fiat, stock, and Oil.
The limited bitcoin supply is meaningless if people still compare bitcoin with another currency.
In my opinion, bitcoin inflation is higher than fiat but bitcoin is decentralized so it doesn't have as impact as fiat currencies. It is possible to prevent inflation by investing in bitcoin while fiat money is significantly more useful for a stable economy, countries often prefer to have a stable market rather than an advanced but highly uncertain currency.
Honestly I could not get what is bitcoin inflation. Inflation is a common thing and it does not be differentiated like fiat inflation and bitcoin inflation because inflation is basically a scenario of declining in buying power of people. In other words, people are not interested in spending more money for same product which is priced higher due to less supply or war like reasons.Inflation is leading fiats to devalue. Inflation will happen everywhere over the time like same orange will cost more in next 2 years due to higher costs for cultivating it. Unlike fiats, 1 bitcoin is not valuing same in next 4 years hence devaluing of bitcoin is not happening over the time. So, bitcoin is protected against inflation by design concepts and adapting bitcoin will help us to fight against higher costs happening due to inflation.
First of all to my knowledge Bitcoin does not have inflation but what Bitcoin does have is its volatility which causes its price to fluctuate. So your question here seems absurd to me, still, I want to say that Volatilities in Bitcoin sometimes make a trader worse off than inflation of fiat currencies, and it is through these volatilities that traders can profit by trading. So I will tell you to think about it differently, don't confuse inflation with Bitcoin volatility, they are not the same thing.
the volatility factor is the reason why traders like this market. they can easily gain profits at a short period of time. however, it depends on your tactics how to gain on this market as you can also easily lose your investments by one mistake.
but if the OP wants to enlighten about inflation, can check this article - What is inflation?
and based from this, the answer is -
"Yes, technically even Bitcoin experiences inflation as more of it is mined (as does gold). But because the amount of new bitcoin is automatically reduced by 50 percent every four years, Bitcoin’s inflation rate will also decrease."
We know Inflation has become a frightening specter in 2023 because of covid and Ukraine and Rusia war. This is related to crypto, I am not sure if crypto price today has grown up in the line without following the fiat. Yes, fiat aka conventional money is the factor we pursue to bitcoin.
Many countries have thought to change currency into bitcoin because the government thinks bitcoin is more related stable than USD. because the reality, USD is not have something great if their foreign policy isn't great in the past. The powerful country is just running their greedy for self-benefit. Now, they begin to turn to bitcoin and look like started to control the bitcoin inflation, so what you think if bitcoin inflation is wilder than fiat?
Many countries have thought to change currency into bitcoin because the government thinks bitcoin is more related stable than USD. because the reality, USD is not have something great if their foreign policy isn't great in the past. The powerful country is just running their greedy for self-benefit. Now, they begin to turn to bitcoin and look like started to control the bitcoin inflation, so what you think if bitcoin inflation is wilder than fiat?
When most people talk about inflation and Bitcoin, they are focused on the fixed amount that will ever be released - 21 million. In that sense, the currency will not be inflated like a traditional currency, but in reality it can be inflated infinitely the other way with as many decimal points as possible, but this is based on end user demand and where they are willing to settle with trading in smaller and smaller millibits. The volatility of the value of bitcoin is a bit difference in that sense, if one day many people think it is worth $50 and the next they think it is worth $100 it is subject to wild swings in price, however when the price jumps up there is not some other entity dropping many more into the market at opportune times to benefit.
First of all to my knowledge Bitcoin does not have inflation but what Bitcoin does have is its volatility which causes its price to fluctuate. So your question here seems absurd to me, still, I want to say that Volatilities in Bitcoin sometimes make a trader worse off than inflation of fiat currencies, and it is through these volatilities that traders can profit by trading. So I will tell you to think about it differently, don't confuse inflation with Bitcoin volatility, they are not the same thing.
We know Inflation has become a frightening specter in 2023 because of covid and Ukraine and Rusia war. This is related to crypto, I am not sure if crypto price today has grown up in the line without following the fiat. Yes, fiat aka conventional money is the factor we pursue to bitcoin.
Many countries have thought to change currency into bitcoin because the government thinks bitcoin is more related stable than USD. because the reality, USD is not have something great if their foreign policy isn't great in the past. The powerful country is just running their greedy for self-benefit. Now, they begin to turn to bitcoin and look like started to control the bitcoin inflation, so what you think if bitcoin inflation is wilder than fiat?
Many countries have thought to change currency into bitcoin because the government thinks bitcoin is more related stable than USD. because the reality, USD is not have something great if their foreign policy isn't great in the past. The powerful country is just running their greedy for self-benefit. Now, they begin to turn to bitcoin and look like started to control the bitcoin inflation, so what you think if bitcoin inflation is wilder than fiat?
I do not know how to accurately measure Bitcoin inflation, because its price is always changing anyway, and it is difficult to understand its value to ordinary goods only if the price of these goods is measured in dollars. And then transfer to bitcoin. In any case, Bitcoin is the currency of the future, and the dollar and other fiats are paper that is not backed by gold and foreign exchange reserves. The future is definitely for cryptocurrencies.
In my opinion, bitcoin inflation is higher than fiat but bitcoin is decentralized so it doesn't have as impact as fiat currencies. It is possible to prevent inflation by investing in bitcoin while fiat money is significantly more useful for a stable economy, countries often prefer to have a stable market rather than an advanced but highly uncertain currency.
Honestly I could not get what is bitcoin inflation. Inflation is a common thing and it does not be differentiated like fiat inflation and bitcoin inflation because inflation is basically a scenario of declining in buying power of people. In other words, people are not interested in spending more money for same product which is priced higher due to less supply or war like reasons.Inflation is leading fiats to devalue. Inflation will happen everywhere over the time like same orange will cost more in next 2 years due to higher costs for cultivating it. Unlike fiats, 1 bitcoin is not valuing same in next 4 years hence devaluing of bitcoin is not happening over the time. So, bitcoin is protected against inflation by design concepts and adapting bitcoin will help us to fight against higher costs happening due to inflation.
OP has confused some terms here which has been outlined before already. Generally speaking, you are right that inflation is related to a decline in purchasing power if increases in salary levels are not sufficiently offsetting that loss.
Though inflation is also related to expected inflation vs. unexpected inflation and how they play out in behavioral economics. Now when you talk about the speculative aspect of Bitcoin then we are actually discussing volatility whereas the expected inflation in terms of the number of units getting into circulation is known and fixed. Since we still convert Bitcoin in USD and then compare prices of goods and services, the difference between Bitcoin inflation and fiat inflation is still not that obvious. But one thing is for sure in the long run: Fiat USD has no upper bound in terms of the money supply (M1, M2 and M3), but Bitcoin definitely has. That will have an effect at some point and those are into Bitcoin expect that this will attract more people to become Bitcoin owners.
Yes I know, I just tell effect in the future if all bitcoin is minted and the value is been greater. I believe, the people will find a way how to further shrink the more unit. we don't know in the future if 1 sat may equal with $1. if happens, maybe there will be units smaller than satoshi. 0.1 sat, 0.01 sat, 0.001 sat, etc which I thing will be affect to the value of denomination.
It is too difficult to say for sure what will happen in the future, including the value of bitcoin and the direction in which it will develop. I only care that bitcoin is expected to be the currency adopted by most countries in the world, including Europe, America and others. Adoption could allow people to use bitcoin's smallest unit of payment in the same way someone would want to pay for a cup of coffee using LN.
Example, lowest value today is 1 satoshi or 0.00000001 BTC, maybe if no more btc, we can small it unit to be 0.1 satoshi = 0.000000001 BTC BTC, it's not just adding value, but maybe next there For will be a lower fee than today.
Denomination never adds value. The value of bitcoins that gets denominated is always relying on the price of 1 bitcoin = $$$. The fees of bitcoin itself are determined by the block. I think that denomination has no relationship with determining the fees of btc. Also, I don't really think that the price of Bitcoin will ever reach that high, I admit it has great potential, amazing use cases and everything, but I think we are taking it a little too far with that. I can't even imagine thinking of a currency that is worth millions.
Honestly I could not get what is bitcoin inflation. Inflation is a common thing and it does not be differentiated like fiat inflation and bitcoin inflation because inflation is basically a scenario of declining in buying power of people. In other words, people are not interested in spending more money for same product which is priced higher due to less supply or war like reasons.
Inflation is leading fiats to devalue. Inflation will happen everywhere over the time like same orange will cost more in next 2 years due to higher costs for cultivating it. Unlike fiats, 1 bitcoin is not valuing same in next 4 years hence devaluing of bitcoin is not happening over the time. So, bitcoin is protected against inflation by design concepts and adapting bitcoin will help us to fight against higher costs happening due to inflation.
If the assessment of the value of bitcoin against the US dollar continues in the future, then we will see how bitcoin becomes more expensive. In this case, if in the future we come to the fact that we can buy products in stores for bitcoins, then I admit a situation in which we will see how the prices in satoshi will decrease for products, is this possible?Inflation is leading fiats to devalue. Inflation will happen everywhere over the time like same orange will cost more in next 2 years due to higher costs for cultivating it. Unlike fiats, 1 bitcoin is not valuing same in next 4 years hence devaluing of bitcoin is not happening over the time. So, bitcoin is protected against inflation by design concepts and adapting bitcoin will help us to fight against higher costs happening due to inflation.
This is rather strange, since we are only used to seeing prices rise every year, everything becomes more expensive. Or it will be so that prices will no longer be subject to inflation, it will be a stable price in satoshi, although this seems doubtful now.
Yes I know, I just tell effect in the future if all bitcoin is minted and the value is been greater. I believe, the people will find a way how to further shrink the more unit. we don't know in the future if 1 sat may equal with $1. if happens, maybe there will be units smaller than satoshi. 0.1 sat, 0.01 sat, 0.001 sat, etc which I thing will be affect to the value of denomination.
It is too difficult to say for sure what will happen in the future, including the value of bitcoin and the direction in which it will develop. I only care that bitcoin is expected to be the currency adopted by most countries in the world, including Europe, America and others. Adoption could allow people to use bitcoin's smallest unit of payment in the same way someone would want to pay for a cup of coffee using LN. Example, lowest value today is 1 satoshi or 0.00000001 BTC, maybe if no more btc, we can small it unit to be 0.1 satoshi = 0.000000001 BTC BTC, it's not just adding value, but maybe next there For will be a lower fee than today.
Denomination never adds value. The value of bitcoins that gets denominated is always relying on the price of 1 bitcoin = $$$. The fees of bitcoin itself are determined by the block. I think that denomination has no relationship with determining the fees of btc. Jump to: