Topic: Within 2 years, effectively 85% of all bitcoins are mined! - page 2. (Read 4768 times)

I think this could potentially negatively affect the security of the network if not enough people are using bitcon by this time. If TX fees are not high enough then miners will likely not make enough to justify continuing to mine

Could you give an example of "currency reform" when the peak amount of currency was not exceeded within 6 months? In other words, on January 2015 there is $100 in currency in the economy, then on January 5th, the central banks takes some amount of money out via "currency reform", then there would still be some amount less then $100 in currency through the end of June 2015.

Can you give any real world examples of when central banks wanted to engage in deflation in your terms at all?

I already said in my second sentence, that central banks don't deflate continuously, because it doesn't fit their policy. When deflation occurs it's a singular event, a "currency reform".

Miners will be competing for transaction fees...

Anything is possible in theory, but I don't think this would happen in practice. Can you provide an example when a central bank engaged in this kind of deflation over a period of at least 6 months (a time period that I would consider to be short to medium term)? I do not know of one, nor do I think one exists.

AFAIK even in times of hyperinflation central banks have not engaged in this kind of deflationary policies.

EDIT: hyperinflation in terms of risking prices

If you don't have a BTC by now you are mentally handicapped.

In theory central banks could deflate money supply by reducing the monetary units in circulation. But they don't do it, because it's not their policy. These days, central banks only inflate, they never deflate. Deflation mostly occurs as a singular event when central banks have inflated a lot and currency use becomes impractical. Such events they use to call euphemistically a "currency reform". I guess, we'll all have the questionable honor to experience such an event in our lifetime.

Ours have been mined so we will let them ride for a while!

We just need more and more businesses to have confidence in them. Those who make international payments over the internet especially; it is much cheaper than using a third party system that takes a few percent.

Just have some faith and hold your bitcoin savings, they will eventually rise again.

Sometimes I wonder what will happen when all the bitcoins will be mined,like the king of coins will be gone from mining.How will it effect the crypto world then?

Some say that Bitcoin will begin rising again in the near future to newer and newer highs. I just can't help but think that it will behave like the Yahoo stock at the end of the 90s...

I would say that deflation would generally be when prices are falling as a whole. It is nearly impossible for overall money supply to fall as a whole as the central bank could simply print more money to prevent this (thus preventing deflation even being an economic concept if it was measured by money supply).

Long may it continue, someone buying 1 BTC a couple of yrs ago made a few hundred dollars by now.
And if it continues like this, someone buying 0.01 BTC today will make a few hundred dollars in a few years time.
What's the problem.
No one's missed the boat,
Bitcoin is deflationary over the long term,
the time to jump on board (cautiously) is always today.

Great post zimmah, thanks for the effort.

The inflation (monetary base inflation) is the new money created compared to the money there already is.

So, if there is 1 bitcoin, and i mine more bitcoin, that's an inflation of 100%. But if i mine 1 bitcoin while there are 1000 bitcoin, that's an inflation of 0.1%

Right now, there are 13,276,000 bitcoins mined (https://blockchain.info/charts/total-bitcoins) and there are about 25 bitcoins mined every 10 minutes (slightly faster, due to difficulty lagg).

That means, every year (a year has 525949 minutes, so 52594.9 times 10 minutes) 25*52594.9 = 1,314,872.5 bitcoin are mined (at least until block reward halves)

That means, the next year, inflation is  1,314,872.5/13,276,000 which is roughly 10% (9,9%)

The year after that, there will still be 1,314,872.5 coins mined (assuming difficulty has not readjusted by the end of next year) but the amount of coins mined will be 13,276,000 + 1,314,872.5 = 14590872.5 so inflation will be 1,314,872.5/14,590,872.5 = 9% This is a gradual decrease of inflation that happens constantly.

the year after that difficulty will likely have been readjusted, so the amount of coins mined per year will be about 657,436.25 (because 12.5 coins per 10 minutes) and the amount of bitcoins will be about 15,905,745 when that happens. So inflation will suddenly drop in half (this happens about every 2 years, on top of the gradual decrease in inflation). 657,436.25/15,905,745 = 4.1%

So in just about 2 years, inflation would be lowered from 9.9% to 4.1% and the two years after that it's not even 2% anymore. That's even faster than i guestimated in the previous post.

The real question is; will anyone care when it happens.
Seams like the bitcoin bubble is being slowly drained of its momentum.
I seriously have doubts it will sustain >400$ prices for much longer

I guess they could just report that purchasing power is increasing... Either way, QE∞ + "deflation" isn't a good sign, I imagine. There's an enormous elephant invisible to me if the economy's recovering, the housing market is resuming bubble status, monetary supply is increasing rapidly, and CPI is somehow stagnating, occasionally being negative. I doubt it's that the money supply isn't actually increasing, and house prices seem to clearly be nearing pre-crash peak to me...

I could not agree more. The fact that central banks claim that fiat money can deflate (and claim this is actually happening) proves beyond doubt how incompetent they are.

Yes, I know that inflation is commonly defined in the former sense, but I think that definition is technically wrong when you consider the derivation of the term. Actually the word's usage to describe price increases may have been evolved from the observation that an increase in money supply subsequently causes (in many cases) price increases. But price increases can also be caused by other factors.

thx for the info.

Just a question to realize if i've understood right: inflation will go down because in the next years demand will be more than supply?