Is bitcoin inflation wilder than fiat? - page 4.

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Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

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?

Bitcoin has inflation that decreases over time. This is implemented through a mechanism such as halving.

In addition, Bitcoin inflation is decreasing due to the constant withdrawal of coins from circulation. The withdrawal of coins from circulation occurs due to the loss of access of holders to their wallets (due to death or negligence). Fiat currency inflation depends on the economic situation in the market and on the actions of regulators (for example, Central Banks or the US Federal Reserve).

The inflation of fiat money and Bitcoin is very difficult to compare with each other - they are different concepts.

But we can say that in the long run, fiat currencies are an inflationary asset, and Bitcoin is a deflationary asset.

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Quote from: Sarah Azhari on February 01, 2023, 07:03:20 PM

-cut-
Like fiat, who would have thought be popular than gold?.
the gold standard was abolished since 1934 and changed to the fiat standard now, but we know fiat is just paper that doesn't have value if there is no government judgment, some smart people understand that and begin to accumulate bitcoins on the safe box because they know fiat standard will die soon like old brother, gold.

Fiat money has nothing to do with bitcoin, they have whole different purpose to exist. They are not in competition with each other so bitcoin won't be killing fiat standard nor it can replace it because bitcoin doesn't serve the same purpose. If old fiat standard gets killed it's because it has transformed to something more efficient.

Neither bitcoin is competing with gold. Saying that gold would die doesn't mean anything. Where does it go? Will we get rid of it and shoot it to space or something?

Please be more specific when you make such claims.

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Quote from: Sarah Azhari on February 01, 2023, 07:03:20 PM

Quote from: stompix on February 01, 2023, 10:52:32 AM

Can you name one country besides Salvador (which btw did so before the war) that has done such a thing?
Furthermore, Salvador still uses the $ and with the latest polls coming from there, even the population does so more than Bitcoin.

Elsavador is one, and followed Panama next.

Wrong.

The second country which accept Bitcoin as legal tender is Central African Republic, Panama is just friendly to Bitcoin, they have a plan to legalize Bitcoin but the president reject it [1]. There are a lot countries which want to legalizing Bitcoin as legal tender, the strong contenders are: Venezuela, Paraguay and Anguilla.

However even though both Central African Republic and El Salvador already accept Bitcoin as legal tender, the adoptions aren't that high and many people are tend to use their own local fiat. It's really a lot task if you're want to hope majority will use Bitcoin rather than their local fiat.

[1] https://www.bloomberg.com/news/articles/2022-05-19/panama-president-will-refuse-to-sign-crypto-law-in-current-form

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I agree with the comments that the OP doesn't quite seem to understand the concept of inflation.

There is a certain sense in which we could understand that bitcoin has inflation, though. And that is that when central banks print, things end up costing more: food, light etc. But many assets also end up costing more, it is more expensive to acquire them, and that happens with the Bitcoin.

If we look at the returns of Bitcoin since its inception, we see that they are greater than the increase in money supply. In that sense one could say that Bitcoin inflation is higher than fiat inflation, understood as CPI, but I'm not sure that's what the OP is referring to.

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1.

https://tradingeconomics.com/united-states/inflation-cpi

Our countries have different inflation rates, but this is the latest inflation chart of the US. Apparently, it is consistently going down. Although it has to further go down, 2023 is probably not a year of frightening inflation rates. The battle, as a matter of fact, might even shift to a combat against the detrimental effects of the measures necessary to pull down inflation. So the problem might be more on the effects of the victory against inflation rather than inflation itself.

2. There is no single country that changed currency into Bitcoin. There are 2 though that added Bitcoin as another legal tender. But it's not because Bitcoin is more stable than the USD.

3. Bitcoin's inflation is never a problem. It follows strict mathematics. It can't be changed. It is predictable, foreseen, expected. It isn't erratic. It can't go wild all of a sudden.

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Quote from: mk4 on February 01, 2023, 01:20:02 AM

Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

Many countries have thought to change currency into bitcoin because the government thinks bitcoin is more related stable than USD.

Cite your sources. Also, who the heck thinks bitcoin is more stable than USD? That's just false.

Quote from: stompix on February 01, 2023, 10:52:32 AM

Can you name one country besides Salvador (which btw did so before the war) that has done such a thing?
Furthermore, Salvador still uses the $ and with the latest polls coming from there, even the population does so more than Bitcoin.

Elsavador is one, and followed Panama next.

Quote from: noorman0 on February 01, 2023, 02:15:29 AM

Basically, bitcoin volatility is extreme. It is only influenced by the law of demand and supply, not a reflection of the state of the economy of any country.

Maybe not yet, and are you know how many bitcoins us government owns? (214,000 bitcoin),
and Bulgaria owns 213,519 bitcoin.
so, I am really sure the government as most holders of bitcoins will control smallholders like us or people who don't have bitcoin completely.

Quote from: EarnOnVictor on February 01, 2023, 02:39:28 AM

Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

so what you think if bitcoin inflation is wilder than fiat?

You are getting it all wrong, it's certainly unprofessional to ask whether the inflation of Bitcoin is more/wilder than that of fiat, it's just like you are asking nothing. Both could be argued to have worth that could be tendered for their value at their prevailing rate, so they are the same in your context.

I just want to make it realize that most bitcoin holders in the world will control bitcoin in the future.

Quote from: Hydrogen on February 01, 2023, 08:49:33 AM

Bitcoin appears to be entering the initial stage of yet another boom cycle. Whether it will be followed by yet another bust cycle is anyone's guess. As are motives and reasons behind price trends following their curvature.

Like fiat, who would have thought be popular than gold?.
the gold standard was abolished since 1934 and changed to the fiat standard now, but we know fiat is just paper that doesn't have value if there is no government judgment, some smart people understand that and begin to accumulate bitcoins on the safe box because they know fiat standard will die soon like old brother, gold.

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Quote from: Hydrogen on February 01, 2023, 08:49:33 AM

Bitcoin is deflationary rather than inflationary. The amount of bitcoin minted and produced over time, declines. Rather than increasing as is generally the trend with inflationary currencies.

More like inherently deflationary.
The circulating supply of Bitcoins still grows, the fact that there is a cap on the amount that is ever produced doesn't mean that right now it isn't inflating the number of coins in circulation.
If the FED would declare that they set up a limit of 100 tredecillion of dollars to be printed all 2100 with just a few trillion a minute till that date would that make the $ deflanatory since it will have a fixed limited maximum supply?

Right now the amount of coins available on the market does increase, every day 900 more are printed each day, it's for everyone to see!

Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

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.

Can you name one country besides Salvador (which btw did so before the war) that has done such a thing?
Furthermore, Salvador still uses the $ and with the latest polls coming from there, even the population does so more than Bitcoin.

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Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

so what you think if bitcoin inflation is wilder than fiat?

No. Bitcoin is not like fiat which has an unlimited number of supply, but like others have opined, it has a fixed supply rate of 21million. Also, scarcity is another key to making a store of value resistant to inflation. Unlike gold which can be discovered, it's not the same for Bitcoin and this adds to make for a unique predictability.
Although Bitcoin experiences inflation, as more of it are being mined, investors are willing to overlook this little upset as the amount of new Bitcoin mined is reduced by 50% every four years.

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Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

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?

Bitcoin is deflationary rather than inflationary. The amount of bitcoin minted and produced over time, declines. Rather than increasing as is generally the trend with inflationary currencies.

Price volatility or market speculation could be moreso terms you're thinking of.

I think a person would need to follow market trends for many months to comprehend the context of our current state of affairs. Price fluctuations are historical in nature. To put financial history into context requires some knowledge of the past, present and future projections. All of which can only be gained through experience.

Bitcoin appears to be entering the initial stage of yet another boom cycle. Whether it will be followed by yet another bust cycle is anyone's guess. As are motives and reasons behind price trends following their curvature.

They do say history repeats itself. This is especially true when people do not remember past history, or want to know previous history of the last time _______ was tried.

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Many countries are what would you give a few examples of?As far as I remember, countries that are used as legal tender can be counted on one hand (if we talk about the country's reserves, for example)The second point, if we talk about inflation, then as we all know, bitcoin has a limited emission and it is impossible to do more, so it will not affect it.

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Seems like you're taking economic principles and conflating them together in a way that doesn't make sense.

Bitcoin is inherently deflationary, first of all. The total supply is capped, and the number of coins that can be mined decreased by a fixed amount.

Volatility is not inflation. Inflation is a supply and demand principle. Money supply backed by fiat can be modified by printing more new currency units. This causes demand to go up and consumer goods start to increase in price causing inflation.

Important to note that you can still see consumer prices go up even if the demand remains the same if the supply isn't steady. But you expect prices to stabilize once the supply recovers. Currency induced demand increases (ie introducing more currency units into the economy) essentially means prices never go down because it becomes difficult to take out money from the economy that's already been introduced.

Bitcoin doesn't have this issue so it doesn't make sense to take inflation and apply it to Bitcoin.

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Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

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.

You need to rephrase this. This doesn't make much sense.

Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

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.

By many countries you mean El Salvador? They are very much using US dollar as well.

Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

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 don't think you understand what word inflation means.
Bitcoin has fixed supply of 21 millions by design and it doesn't have any more unless most of the miners decide so.
No one out there is printing x amount of bitcoins for crypto stimulus packages or something like that.

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Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

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?

You and I are investing in bitcoin, but we need reality, not an illusion. Which country is changing its currency to bitcoin? You need to show proof. Bitcoin is a highly volatile asset class and unrecognized in the world, so no country would risk making bitcoin a national reserve asset. It's like they're going to destroy their own economy.

Inflation is terrible for any economy, but it is also part of the world economic cycle. And don't forget, we've had inflation and economic crises in the past, and everything will be fixed after that even if bitcoin hasn't appeared yet.

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One thing is for sure, bitcoin will always be less hampered by the external inflation. Bitcoin's programming is really breathtaking. It is made to be minted in such way that every four years you will have slow production of the bitcoin thus it will short the market severely. I mean the difficulty increases in such way you are definitely shorting the market by that technique. However, with the time the demand is always rising as the popularity of bitcoin keeps going up. The more it gets adopted and used on the daily basis the more it will stay away from the inflation. By definition things are costed many times more than the actual prices because the fiat itself loses the value. However, here bitcoin's supply and demand is such that it keeps the formula intact and goes without any obstructions over the time.

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People prefer bitcoin because it's more stable than fiat money. Bitcoin is unique in that only 21 million can be made. The government or central bank cannot print more currency to raise prices.

Bitcoin's decentralisation and lack of government make it a great currency. It is less subject to monetary policy changes, political instability, and other economic issues than traditional currencies. Supply and demand determine Bitcoin's price, thus inflation is improbable.

Despite several circumstances, bitcoin's inflation rarely climbs faster than currencies. Bitcoin is more stable than most currencies due to its limited supply and lack of government supervision. Remember that the bitcoin market is young and untested, so short-term instability is possible. Over the next few years, the crypto market will be intriguing to watch.

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Yeah, I don't think BTC and inflation can go into the same sentence, the fundamentality of it just doesn't "allow it."

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Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

Many countries have thought to change currency into bitcoin because the government thinks bitcoin is more related stable than USD.

That is not true, no country wants to change his local currency to bitcoin. USD is not replaced in El Salvador nor CFA franc replaced in Central Africa Republic, while others only accept bitcoin as a means of payment, not as legal tender than in an island in Honduras that bitcoin is also an alternative to their local currency as legal tender. No country replaced or heard to want to replace his country money with bitcoin.

Bitcoin is not more stable than fiat, but fiat is a depreciating asset while bitcoin is an appreciating asset in long term.

Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

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?

What I know is that the whales and those that have huge amount of bitcoin are not the government, while the government do not have control over bitcoin also in relation to price control.

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Each coin has its own story comparing the huge fiat inflation in world history and bitcoin inflation. Bitcoin has only had an inflation rate of 4% in recent years, which is very stable compared to fiat. I think this is what we need from cryptocurrencies, not just another great investment.

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Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

Many countries have thought to change currency into bitcoin because the government thinks bitcoin is more related stable than USD.

This is false, you can come in through another angle but i can bet you not on this, bitcoin is highly volatile and cannot be stable as USD is, as a matter of fact USD is not a volatile currency but only experience much of inflation rather than being volatile, try to conduct further more research about this, government first thought about going against bitcoin because of it high volatility should in case you don't know, they believe it could pose high risk on investors by loosing their entire assets invested.

Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

bitcoin inflation is wilder than fiat?

Bitcoin does not got inflated, fiat does.

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Quote from: Sarah Azhari on February 01, 2023, 12:36:04 AM

so what you think if bitcoin inflation is wilder than fiat?

You are getting it all wrong, it's certainly unprofessional to ask whether the inflation of Bitcoin is more/wilder than that of fiat, it's just like you are asking nothing. Both could be argued to have worth that could be tendered for their value at their prevailing rate, so they are the same in your context.

But in the proper context, inflation has affected fiats differently since some are risk-on, while others are risk-off. Take the USD as an example, it's a risk-off asset, it appreciated throughout last year while the risk-on fiat sold off just like Bitcoin.

Also, those risk-on assets sold off in varied magnitude.

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