Topic: Is bitcoin inflation wilder than fiat? (Read 674 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.

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.

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.

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.

In a world dominated by the dollar despite all its faults and caused by it, there are no standards by which the bitcoin price (its value) can be determined without going through/to the dollar or other major global currencies. It will not be possible, for example, to determine its price in gold, since gold itself is linked to the dollar, and its price is determined only in dollars. Unfortunately, the United States is strangling the entire world with this forcibly imposed policy.
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.

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.

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.

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."

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.

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.

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.

By its development it is against inflation. Having limited supply always keep it against inflation. The price fluctuation can't be compared with the inflation, because fluctuation is part of it. With time the price and the market have got widened which means the demand have increased. The increasing demand reflects on growth which means the market isn't on inflation. As mentioned when adoption happens automatically we'll experience the difference.

The value of the denomination wouldn't be affected if the price already reaches such a high place where 1 satoshi will equal $1 or even more. Though it sounds utterly unrealistic, but let's just say it happens. That way, the smaller units will only represent a smaller value of the denomination just like how 1 satoshi does right now.

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.

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?

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.

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.

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.

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.

Which government says bitcoin is more stable than USD? can you tell us which country it is from? No country says so. Even an ordinary person can see the volatility of bitcoin, I don't think the government is not stupid enough to not know about it. No asset is more volatile than bitcoin, if any then only shitcoins are pumped and dumped.

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. This uncertainty also limits the utility of crypto as there is no reason to express the value of a crypto asset as a monetary unit.

I'm not sure if bitcoin's inflation is greater than fiat money, but bitcoin's gradual loss of decentralization is something I've been thinking about. Yes, it is like gold, once an organization or country holds the majority of bitcoins, controlling the bitcoin price is not too difficult. Just like what is happening in the market, even though no one can control the bitcoin network, the sharks who own a lot of bitcoin can still manipulate the market easily. The current bitcoin price does not depend on supply and demand, it is being manipulated by the sharks, if they want it to drop, nothing can stop.

I don't think the government sees Bitcoin is more stable than USD, Bitcoin price can change 10% just in a day and many people would be panic to see that. Bitcoin do help their economy to grow because they can create a law to tax it, it's actually a win-win situation for them. But they just don't trust Bitcoin and can't accept the risk, that's why they haven't adopt Bitcoin yet. Still remember the early phase where El Salvador accept Bitcoin as legal tender? a lot pensions and old people are complaints because they're don't want to accept their money in Bitcoin. This is another reason why the countries doesn't ready to accept Bitcoin as legal tender.

Smallest denomination of bitcion didn't subjected to inflation. Sometimes, people can't afford to buy huge amounts of bitcoin to do transaction or investments. That's why there was denomination of bitcoin. It gives a way for people with small amounts of money to be able to use bitcoin.

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.

Yes, i ever imagined that supply minted and no more bitcoin to be mined. But, bitcoin still has units that can be Redenomination to small it again from units of satoshi today. 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.

The deflationary pattern of bitcoin will drive up its price, this has been going on for many years, and periodic bear markets should not confuse you, eventually bitcoin will be able to save your funds from inflation. To do this, it is worth looking at its entire history from the first days of its existence, it is constantly only growing in price, because its quantity is limited.

Do you know that inflation existed even before Covid, Ukraine, and Russia wars began, this tells you that inflation is an element of Fiat/cash which is here to stay, as long as the principles of cash remain the same, we will continue to see inflation. Bitcoin, on the other hand, has beaten inflation from different angles while halving has been acting as a deflationary tool with supply, the two are not comparable in this argument may be speculations of the economy led us into believing that the fiat drives bitcoin price.


The problem with this country is that they came late, not late in the sense that it wouldn't strive in the future but they bought at a high time price, and since the effects of bad guys(SBF and CO) infiltrated the crypto space, it hasn't been funny with losses, if they continue to believe like in the early days, they would definitely have a story to tell to other countries who have yet adopted bitcoin as a store of value.

Actually the problem in several developed countries that have not legalized Bitcoin is not only in the price fluctuation sector, but in their ability to still not be able to control their own financial system so they must really have the ability to do that so they don't experience a lot of losses when the price goes down, but they also have to look for opportunities when the price increases a lot like what happened now where the price of Bitcoin is already approaching $ 25K.

This means that price fluctuations in Bitcoin are very reasonable and also every Bitcoin holder only has to understand it in general and be able to withstand it in the long term. So the serious problems that may be faced by countries that have legalized Bitcoin also have a better solution as long as the state wants to look for it properly.

Technically it is possible that Bitcoin's supply could get inflated in the future, but it is not a likely scenario as the vast majority of stakeholders would have to upgrade their software / nodes in order for a new supply to come into effect. It is not probable because there is usually no stakeholder who would financially benefit from an increase in the supply.

The way Bitcoin is designed and the basic principle which the community agrees on will favor scarcity and a limited supply. It is still many decades to go until there will be no more Bitcoin issuance per block mined. Until then the network should be in a state where miners are still sufficiently incentivized to invest hash power and get rewarded from the transaction cost. That's an interesting situation none of us will be able to witness, but I think we'll have an idea whether the network is going to make it in several years from now when we had two or three more halvings.

To assume that Bitcoin will experience same type of inflation as fiat currencies is not accurate, because of its supply is limited of 21 Million coins , whereas fiat currencies can be printed in unlimited quantity by the central banks of the countries . Inflation in fiat currencies is caused by money supply which governments usually control by increasing interest rates. In contrast, Bitcoin has been programmed for maximum supply of 21 million and it is not possible to increase it. Inflation is Bitcoin is caused by increase in demand with limited supply of coins, can lead to higher price of Bitcoin.

Same thing I was going to comment. I believe that most countries are not struggling in terms of their economy or finances so it's true that they will stick on their local currency but I already saw some extremely poor and struggling countries who made BTC and other currency as their main currency because their own is totally useless anymore.

Volatility of Bitcoin is not a bad thing. I know it's risky but that is if you don't know how to deal with it but if you will only use it as your advantage like buying when the price dips and selling when the price pumps, you will say that the risk was worth it. BTC had some difference with fiats but there are times where each of them can affect the other.

Of course bitcoin inflation is deeper than fiat, bitcoin price fluctuations occur almost every day so that it makes it difficult for anyone to control prices, and if you want to control prices you need a very large stock and capital, this is what makes many countries not legalize bitcoin because it can cause problems serious if not controlled.

For one, bitcoin isn't inflationary. The coin's value is deflationary by means of supply cut every now and then. Get your facts straight. Another, one, bitcoin is volatile, USD isn't. So that alone should give you an idea that Bitcoin's valuation doesn't give a damn about whatever USD's valuation is. Most countries as well wouldn't choose bitcoin to be their national currency even if it's the last thing they'd have to do to get to heaven. It's volatility rate's not worth the huge potential for profit it could bring, plus bitcoin's supply's limited, no way it can cater to a large population let alone multiple country's worth if used as.a bona fide transaction currency. One last thing, bitcoin's market is different from fiat's. Therefore no direct impact against the other is expected.

If the country legalizes bitcoin and making bitcoin equivalent to Fiat will certainly be a complicated problem in the event of inflation, as we know that bitcoin is very fluctuating so it is difficult to predict, besides that large marketcap makes it difficult for the country to be able to control bitcoin. While Fiat is certainly simpler because it is fully controlled by the central bank.

In general, the government that sees bitcoin as more stable than USD. They're not really a lot, only very few and little countries sees that and that's the reality.

But we'll come to that point that even the biggest and poweful countries will have to consider that but, they'll have to test the waters if it's going to help their economy to grow.

They cannot assert to an asset which is highly volatile and say that it's more stable than the traditional one that they've used to have.

This leaves out the fact that Bitcoin is not a stagnant technology, it keeps evolving. It also depends on the individual context people are using it in and also on the individual purposes that people are using it for. Some consider it a store of value in the form of digital gold, and some use it for transacting value on a frequent basis, making it more being used as a form of currency.

There are many questions that will impact our opinion about what Bitcoin is. New technology and applications, ever growing infrastructure, code updates and global adoption by governments, institutions/organizations and people, etc. For Bitcoin to function as a currency, it is obvious that the circulating supply has to carry a certain value first. Volatility is likely to flatten out with growing adoption and increasing value. Inflation is hard-coded and therefore deterministic. Everyone knows what the inflation will be, but nobody yet knows how volatile it will be. I do expect Bitcoin volatility to decrease over longer periods of time if the market cap keeps increasing.

I agree that bitcoin is like gold, if we hold it in the short term then we can lose money, gold is associated with long-term investments where at least the increase will not be affected by the inflation that occurs. it's just that bitcoin doesn't have a form like gold, even though it actually has other functions as currency. we will experience a profit when we sell it at the right time because of high fluctuations, from that profit it multiplies when converted to fiat currency. and that is why there has been a shift in the function of bitcoin from a tool of exchange to an investment tool.

I think there are reasons why bitcoin inflation is wilder than fiat? First, this happens because the more money circulating in the market, the more money is used for spending and investing. The second reason why bitcoin has high inflation is because of the constant crashes of cryptocurrencies. The value of Bitcoin can fall at any time, but every time there is another high value explosion, it causes high inflation so that its value is now less than before that high.
The third is that one of the biggest problems we face today with bitcoin is bitcoin hacking and theft.

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.

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.

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.

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.

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

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.

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.

Elsavador is one, and followed Panama next.

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.

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

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.

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!


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.

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.

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.

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.

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.

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

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

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.

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.

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.

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.

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

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.

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.

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.

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.


Bitcoin does not got inflated, fiat does.

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.

It's impossible, can't even imagine what way it could affect bitcoin inflation.
Moreover, in terms of decency or regulation, during a crisis the government prefers to save the value of their own currency rather than think of an entity that is not at all one of the identities of their country.

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.

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


What.


Cite your sources.


Seems like you don't understand Bitcoin at all. Governments can't control bitcoin's inflation because changes to Bitcoin lies in the hands of the community.

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?