Topic: Is bitcoin inflation wilder than fiat? - page 3. (Read 651 times)

that's just a temporary conclusion for the attentive reader. If disagree, there will be a real conclusion and good opinions from known people.


Yes, a lot of people think that bitcoin is good for investing, but the reality is not, bitcoin is money as a white paper said. ( I don't know why people invest money?)

If people think bitcoin as goods, they will hope for a return to percentage profit, whatever the year, they will back to bitcoin as profit. and 95% of people around the world don't really understand why bitcoin was made, and all think now it doesn't fit with satoshi's goals.

While I agree that supply control can be abused for price manipulation, you should still and not mix up the terms inflation and volatility as you seem to have done in your first post.

Inflation within the Bitcoin ecosystem is set in stone for now and deterministic. Everyone can look up the reward schedule and right now we are at 1.7% - 1.8% in newly issued Bitcoin relative to the existing circulating supply.

You are probably referring to purchasing power as Bitcoin is denominated in USD. Of course that varies and has been varying significantly over time. Actually, volatility was what attracted investors, helped the network grow and brought about incentives to improve and grow the global infrastructure for Bitcoin (and cryptocurrencies in general).

Now if you pick specific points in time you can indeed tweak numbers concerning Bitcoin's purchasing power and argue that it performed not very well, but that is very subjective. Nobody in the world would claim that Bitcoin decreased in purchasing power over a 10-year time period. And those who think about it realistically also know that Bitcoin is most likely going to stay highly volatile for an extended period of time. But especially when you take longer periods of time you will see that Bitcoin is much closer to gold than anything else. Gold had its crash of 45% or something from 2011 till 2016. That is why an investment like Bitcoin shouldn't be understood as a short-term gamble. You can be lucky and catch a fantastic bull run momentum, but it can also end in a catastrophe if you need the money in a few months from now and are forced to liquidate your position.

Again, inflation for Bitcoin, in contrast to fiat money, is set in stone as per the parameters hard-coded into the protocol. No single centralized entity has a printer in their basement and can freely issue some new Bitcoin.

From where we are now Bitcoin still has a lot to gain, not least in terms of general acceptance among people. That is different for all the well established fiat moneys. The USD doesn't need to be accepted anymore in the sense that people need to familiarize themselves with and understand its mechanics better (although they probably should). The USD can crash for inflation reasons when new USD simply get printed and it can crash for economic fundamentals when the economy backing it underperforms.

With Bitcoin there are less uncertainties in my opinion when it comes to shenanigans that a government can apply out of the blue and to be honest, not so many people do actually follow the numbers like circulating money supply when it comes to fiat money. The average Joe just notices that there is less food for more money in his basket at the end of the day.

No more decentralized if there are Institutional and companies have a lot of bitcoin, like blackrock, or any company like binance who have hundred thousand of bitcoin, they will easy to control bitcoin price on the market in near future, so you have noted it!.

we know gold is very decentralized on past, but after 1 country alot of gold and hoard it, nor more decentralized, the gold price were control who have alot of gold. so are bitcoins, if owned only 1 institution, company and person, I believe bitcoin isn't more decentralized in future, they will control it like fiat, bitcoin will more have inflation like fiat.

If the state legalizes bitcoin to replace fiat then if there is inflation the impact will be deeper and terrible, it is inconceivable if the very volatile bitcoin price is used by the state for any reason, the central bank certainly can't do anything, moreover the strength of state capital is very small compared to the market cap of bitcoin, and the fact that many developing countries have foreign exchange reserves of only 10% or less than bitcoin's marketcap.

I think the logic is that the price of bitcoin goes down, which means the amount of bitcoin you need to use in order to buy something changes and you end up spending more of your bitcoins to buy the same thing, which is basically what fiat inflation is about as well.

If there was one thing for 60k and you could buy that with one bitcoin, but now need to spend 3 bitcoins, that means there was an inflation, we could also say due to fiat inflation at the same time if it happens, price could jump to 80k and now you need to spend 4 bitcoins. The logic is similar in fiat, you buy one thing for 100 bucks, and tomorrow you spend 200 for it, the amount of money you spend goes up.

The first and foremost: with Bitcoin there is NO inflation, because the supply is finite. You can't print or create more Bitcoins. So, I'm not sure about what Bitcoin inflation you're talking here.

Secondly, no countries have and/or are planning to make Bitcoin their national currency. Instead, countries are accepting Bitcoin as legal tender.

Things like what you said have also happened to Bitcoin in the past where Bitcoin has become a trending topic in television news and social media when an extraordinary increase occurred in 2021. And it is still very likely to happen again to Bitcoin when Bitcoin want to touch a new ATH in the market, although I don't think that it can happen in this year because a correction is still very easy for Bitcoin in the market now.

Of course if bitcoin inflation occurs then it's not wilder than fiat, this is because bitcoin's market cap currently reaches $450 billion spread all over the world, so when bitcoin problems occur like last year it dropped more than 65% but didn't really have an impact on the economy, bitcoin inflation didn't affect commodity prices, whereas fiat inflation greatly affects any price.

If you understand in full what I say in the previous post, this is not a matter of thinking, but rather to the reality that occurs, how can we not see the exchange while we need it in transactions, then for countries that have not received Bitcoin as a transaction tool and of course they have to exchange bitcoin to Fiat, even in El Salvador itself Fiat is still used even though the adoption of Bitcoin has reached the perfect stage, try rereading the purpose of my previous comments.

Bitcoin is indeed a high-value asset from other products that have ever existed and have even been proven to be able to maintain investment value, the fact is that no one is able to control the price of bitcoin because of its decentralized nature. Inflation I mean only within the scope of meaning as a price increase, because if interpreted correctly that inflation is an increase not a measure to control.

We can't see crypto exchange anymore if all thinking like you, no more people exchanging bitcoin for fiat and people will save it in noncustody wallet. Then, in the future, bitcoin will be high-value asset than anything in the world, no more inflation and no one people to control it.

yes, there is no other way than that (holding it forever), because that's all it's worth and makes the economic country change 360 degrees if they believe it on future.

I think those smaller nations with not so great economy should turn to legal tender crypto so that they could end up with a lot more money in the country. Not only they would be able to tell their citizens to go make money that way, but they would be able to actually do something about it as well. That way they could tax the people in bitcoin, and use that to keep it in the books and that way treasury would grow whenever bitcoin goes up.

I get that when it goes down that looks bad, but nations do not need to cash out too quickly anyway, so they could just keep holding longer than any other person, in fact they could never cash out and just keep holding it forever.

Slowly, bitcoin's power is getting bigger, bitcoin is getting bigger, with the current market cap reaching around $ 450 billion, of course, this is a very large value, naturally, if there are high price fluctuations, it will become trending on television and social media, but most who invest in bitcoin are anonymous so when inflation occurs so it doesn't have much impact on the economy directly.

If talking in general about crypto then the impact of inflation affecting crypto is still a possibility but if you mention bitcoin it has absolutely no effect on my knowledge. If you want to see references, then try to study the Covid-19 case, where the price of bitcoin is still able to maintain its value and even reach ATH in 2021 and in my opinion the price of bitcoin has never followed fiat.

Your assumption in this paragraph is wrong in my opinion, not many countries think they want to change their currency to bitcoin, this is against the rules of every country that already has fiat currency, for example maybe El Salvador from one of the countries that makes bitcoin as currency which is legal, and even then because they do not have an official currency in the country.

Inflation has a meaning as a price increase and if it is associated with bitcoin then bitcoin is wilder against ongoing inflation, but in the sense of a sudden increase in price. But the speculative nature of bitcoin shifts the pattern of feeling between the suitability of pinning inflation to the journey of bitcoin. After all nobody can control bitcoin inflation, because it goes against decentralization.

I don't know what they're afraid to take the time to make a decision. Libya plans to create a single African currency because use gold where USA don't have much. If bitcoin, we know USA is 1 the most bitcoin holder in the world, they'll just agree if Venezuela, Paraguay and Anguilla use it for currency.

In my opinion no, when there is a storm or inflation of cryptocurrencies, it does not have a direct impact on the economy, in contrast to inflation in Fiat that makes shock and direct difficulties on the community, and it is proven that inflation in Fiat that occurs in many countries makes poverty and asset sales to foreigners so that inflation Fiat is a storm that is difficult to overcome.

Has, at is has already implemented not that it plans to do so.
And even if you would consider future plans as making the requirement, two is obviously not the "many" you have claimed, not even mentioning the fact that you said change:


Adopting another currency is not changing the one they use, they are just exploring another system, not dropping the US, and neither will Panama if they do make BTC


This is nowhere near completely replacing a monetary system with another one.
I can understand optimism on future possibilities but one does live in the present, just because we're back on track and we're no longer watching red candles day after day doesn't mean everything has changed in the world also.

Some points of the op don't make sense to me and seem factually false. Even El Salvador didn't abandon the USD for Bitcoin but instead uses both. As for stability, the USD is obviously more stable, but Bitcoin can grow in value, whereas the USD is unlikely to do so, and if the USD inflation stopped, it would be considered undesirable. Bitcoin is volatile, which during the bear market can have practical impact of a fiat currency suffering from high inflation, but as others have mentioned, volatility and inflation aren't the same thing.

No country is trying to change their currency to bitcoin rather they are only trying to redesign their currency. For instance, my country empathically are trying to redesign their notes not because they want their notes to be bitcoin entirely. Besides bitcoin is not yet to be generally legalized, but can be used as an alternative means of payment across the country that is accept bitcoin trading.

You're right on the spot about the volatility vs inflation difference. They are not the same thing, completely different actually.

Inflated currencies usually do not go down after they go up. That's because it's very difficult, from a phycological point of view, to burn money or otherwise take it out of circulation (something that altcoins do routinely), because everyone craves for more cash.

Volatile currencies though, can either go up or down, but this action is done spontaneously (provided that it's a decentralized coin) and not by the whim of any person

What he is saying is just his misconceptions and without any proof for his claims. Even if bitcoin competes with fiat or gold, bitcoin will never be able to replace fiat, no government organization will do that except in countries with bad economies.

Although bitcoin is deflationary, it has so far been suitable only as a speculative asset. Many say that only bitcoin can reduce inflation, but look at what the Fed is doing, US inflation is falling without bitcoin.

Our economy is thousands of years old, and bitcoin is only 14 years old; bitcoin is outstanding because it gives us huge opportunities that no other asset can give us. But it can't replace fiat or gold, it's a fact we shouldn't run away from.