Deflation is not a good thing for a cryptocurrency that is being controlled by the community, and it is also impossible at some cases.
I will explain why.
First of all, the miners that maintanance the network are getting paid somehow.
The payment comes from the inflation, they get newly generated coins, which means that all the holders lose value from their coins(because there are more coins in circulation now), but the miners are getting their pay indirectly.
Deflation can lead the network to die because people would just hold the coins and won't use it( they would believe that those coins are really rare because no coins can be created anymore), and the network usage will dump into zero.
Topic: Is deflation good for a coin? - page 2. (Read 545 times)
Bitcoin is based on an increased demand an a deflationary supply, however that eventually leads to a coin that people don´t use to trade or to transact. What do you think that the emission rate of a crypto should be to be used as a coin? Any automatic mechanism to adapt exists?
In my opinion it is not good for the coin but is sometimes good for the investors since they will be able to invest as much as possible as its market value gets lower. It opens opportunity to its users. But surely, if it is possible, it would be much better if the market value of a certain coin will continuously increase. But the problem is that most cryptos are volatile so deflations are inevitable.
Deflation is good to invest money or to trade, but it is advisable to not purchase any coins. Once you have purchased, you should better to hold the coins till the deflation ends.
I dont think bitcoin is going to be used in the near future as a payment method even though that was one of its purpose because of the high fees. You cant go to a shop and buy food and also pay an extra 2-3$ fee because thats a lot for paying a single time. Also the volatility of bitcoin makes it impossible to be used as a payment method because it can dropp 1000$ in a single day. Of course it can also go up with 1000$ but thr risk is to big
I guess you can do what most payment processing apps are aiming to these days, to immediately convert the transaction into Fiat and get a fee in the process, so that the exchange rate is not relevant for the seller.
I dont think bitcoin is going to be used in the near future as a payment method even though that was one of its purpose because of the high fees. You cant go to a shop and buy food and also pay an extra 2-3$ fee because thats a lot for paying a single time. Also the volatility of bitcoin makes it impossible to be used as a payment method because it can dropp 1000$ in a single day. Of course it can also go up with 1000$ but thr risk is to big
If you mean transaction fees, today they are way higher than $2-3. It is more like $20-30. But you can still use Bitcoin payment cards and don't pay that much because you would in effect be paying with fiat. For big payment processors high volatility is also not a big issue up to a certain limit. But ultimately you are right. It is a vicious circle. No one accepts Bitcoin due to its volatility, while its volatility is due to lack of acceptance.
I dont think bitcoin is going to be used in the near future as a payment method even though that was one of its purpose because of the high fees. You cant go to a shop and buy food and also pay an extra 2-3$ fee because thats a lot for paying a single time. Also the volatility of bitcoin makes it impossible to be used as a payment method because it can dropp 1000$ in a single day. Of course it can also go up with 1000$ but thr risk is to big
Yes, it is an opportunity for many investors to know and invest in cheap altcoins instead of high prices a week ago. Many investors in an altcoin are better off than some who invest a large amount of money because they can control their coin value and that is what the altcoin does not like.
If a coin aims to be used in trades or shopping it should not have a volitile price value and must have low transaction fees. Otherwise it will never used a trade medium.
Bitcoin will be used for trade at some time in the future but it needs so much development and improvement to solve scability and fee issues.
I agree that nowadays bitcoin is facing major scalability issues like long confirmation time and also high transaction fees, Bitcoin will be used for trade at some time in the future but it needs so much development and improvement to solve scability and fee issues.
it needs to improve in order to be use in stores and retailers etc. but you can't deny that for trading volatility of price is much needed,
and that's why bitcoin is perfect for trading purpose.
May be in future scalability issues could be resolved and we would able to use bitcoin in small transactions too like for shops and retailers.
I have a bad feeling about the scalability issues in Bitcoin. There are already excellent technical solutions to those issues and they are either not implemented or only slowly implemented. The miner´s greed is the most serious problem of bitcoin.
It’s more likely that price volatility is more of a threat than deflation to bitcoin right now. Plus it’s hard to tell what will happen to secondary decentralized virtual currencies like litecoin because of regulation. It’s possible that these other currencies might be able to act as a buffer.
We are all aware of Bitcoins and other altcoins volatility of price in the market. Its sudden increase and decrease is the main core or features of having an investments. Through this movement activity, it is where investors come up for profit or loss and decision to strategize their investments. I think it is good for a coin, because it opens opportunity for everyone to make a move whether to buy or sell their coins and these is how investments in the market goes well.
For a currency deflation is not a good idea but as crypto currencies use as an investment purposes rather than a currency deflation is not that bad. Bitcoin become known by its fluctuating value which leads to a sudden increase in its market price and resulting to income for those who hold it others wait for it to drops so they can put some sort of investment for future purposes. If fluctuations will continue I think bitcoin is not goos as a currency but instead an investment
Bitcoin is based on an increased demand an a deflationary supply, however that eventually leads to a coin that people don´t use to trade or to transact. What do you think that the emission rate of a crypto should be to be used as a coin? Any automatic mechanism to adapt exists?
Its actually not preferable to use bitcoin as a form of payment in trading, people cant afford to use it with so high value of transaction fee. People instead use it as a form of asset and investment. Basically, this why bitcoin value continues to increase there were increasing demand from the market yet people instead of selling it just hild it hoping thatvits value will increase over time.
Deflation is good, because when experts say people won't want to spend currency, they are talking about spending money for luxurious.
People are always going to spend money for food, energy, housing, and so on.
People are always going to spend money for food, energy, housing, and so on.
Thats would always be true, people are hoping that bitcoin will make them the new rich one. Personally I wont ever usey coins for mu basic needs, it's like wasting gold for a shit. Money will alway be the better way paying and spending goods and service.
Coins now are going through a problem nowadays and its alarming. Even the deflation is good or bad for a bitcoin we cant do something about it because deflation is a normal thing on any coin in the market. We are the main factor why is this happening on the market now.
Deflation is not common to any coin, in fiat it is considered an abnormal situation that requires action because it slows the economy. That is a bit of a problem for bitcoin too.
Bitcoin is based on an increased demand an a deflationary supply, however that eventually leads to a coin that people don´t use to trade or to transact. What do you think that the emission rate of a crypto should be to be used as a coin? Any automatic mechanism to adapt exists?
Bitcoin grows in price not because it is deflationary. As a matter of fact, it has been quite inflationary so far. New coins are created every hour (actually, every 10 minutes on average), so it is inflationary. It grows because demand exceeds supply and that can be true in respect to both inflationary and deflationary coins. If you really want to ask whether a small inflation is better than deflation for a currency, then I will likely agree with you.
You are right , bitcoin has certain inflation for the moment in terms of emission. But it is deflationary in term of what you said: the market. It would be the same for any fiat.
Yes I think inflation is very good at cryptocurrency, with this inflation a trader will faster play their money. Applied with investment is also very good we can get profit quickly, it just depends on you, how much you want to gain profit. Imagine if the bitcoin price is stable and the movement is very slow, maybe bitcoin will not be liked by many people as it is now.
Yes.. there are some projects who are always doing coins burning in order to decrease the supply, and this increases the price of each one of the tokens that are already on the market.
No, those who can print as much as they can are just BS.
No, those who can print as much as they can are just BS.
Bitcoin is based on an increased demand an a deflationary supply, however that eventually leads to a coin that people don´t use to trade or to transact. What do you think that the emission rate of a crypto should be to be used as a coin? Any automatic mechanism to adapt exists?
There may be two sides to the deflationary coin.
On one side, supply decreases. On the other side, the value of the coin increases as it becomes rare. The two forces can mutually compensate to create a balance where they'll cancel each other out.
The main concern with deflation is scale, value and base unit. With 8 digits to work with on the right side of the decimal point, deflation becomes less of a concern.
With real numbers 1 bitcoin is only 1 segment. Using the 8 decimal places to the right 1 bitcoin becomes 100,000,000. That provides plenty of growth space for bitcoin's to be broken up into smaller fractional elements if the need arises, or under circumstances where bitcoin's go out of circulation due to deflation.
On one side, supply decreases. On the other side, the value of the coin increases as it becomes rare. The two forces can mutually compensate to create a balance where they'll cancel each other out.
The main concern with deflation is scale, value and base unit. With 8 digits to work with on the right side of the decimal point, deflation becomes less of a concern.
With real numbers 1 bitcoin is only 1 segment. Using the 8 decimal places to the right 1 bitcoin becomes 100,000,000. That provides plenty of growth space for bitcoin's to be broken up into smaller fractional elements if the need arises, or under circumstances where bitcoin's go out of circulation due to deflation.
There is a third side to this coin which people often miss or forget. When Bitcoin price rises, so do the transaction costs. They may remain the same in satoshis but they definitely grow in dollars. Dollars is what ultimately matters to most people, and the transactional costs become prohibitively expensive at a certain price. So it is not only scale, value and base unit. There is also at least one extra factor at play here.
Bitcoin is based on an increased demand an a deflationary supply, however that eventually leads to a coin that people don´t use to trade or to transact. What do you think that the emission rate of a crypto should be to be used as a coin? Any automatic mechanism to adapt exists?
The market cap is humongous it takes more than a whole country to entirely deflate the supply of Bitcoin. As it grows rapidly due to buyers the price gets higher and the supply slowly decrease its numbers due to its expensiveness. Deflation is part of the cycle.
Deflation is a normal habitual cycle, everyone would agree with that. But the only good thing I can see and be happy about a deflating
coin is the potential ability, capability and opportunity of anybody purchasing them at a lower and cheaper price.
This gives anyone the advantage despite the negative impact deflation has on everything in the cryptocurrency market.
Deflation may be a usual trend but if it goes down deeper, that would really be bad concern for any individual invested on them.
coin is the potential ability, capability and opportunity of anybody purchasing them at a lower and cheaper price.
This gives anyone the advantage despite the negative impact deflation has on everything in the cryptocurrency market.
Deflation may be a usual trend but if it goes down deeper, that would really be bad concern for any individual invested on them.
Bitcoin is based on an increased demand an a deflationary supply, however that eventually leads to a coin that people don´t use to trade or to transact. What do you think that the emission rate of a crypto should be to be used as a coin? Any automatic mechanism to adapt exists?
As form of profit yes, deflation is very good for a coin. Look at Bitcoin, with its deflationary feature, bitcoin is expected to increase in value overtime. This will give investors to hold bitcoin and reap reward in the future. I am a fan of this kind of system, the longer we hold it the larger its value, thus it can make the market demands for it more. Early comers which support the coin first will have more benefits since it is just because they had jump to the economy when no one is believing it (confronting Risk and beating it).
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