Bitcoin Deflation Debate
Comments debate whether Bitcoin is deflationary due to its fixed 21 million supply cap and lost coins, discussing implications like hoarding incentives versus spending, and comparisons to inflationary fiat currencies.
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Bitcoin doesn't have built-in deflation; it has built-in hardness: a(n eventual) strictly fixed supply. Deflation comes from currency concentration; inflation comes from currency dilution. Bitcoin has neither.
what you are mentioning is deflation, the opposite of inflation. there is a limited amount of bitcoins, so indeed it is indeed deflationary, unlike most fiat, that central authority keep printing anytime they need.
Bitcoin is deflationary, isn’t it? How could it ever replace fiat if just by merely holding it you are guaranteed in the long run to increase value? You need mild inflation to get people to actually spend and not hoard. Bitcoin’s supply is fix so there is no point in ever spending it unless you want to cash out.
They don't see deflation as a problem - bitcoin is designed to deflate.
That's one of the sources of a deflation. Bitcoin was purposely made as a deflationary currency, so it does not change anything.
Bitcoin is deflationary with a cap on the number of units. If there is economic growth the value of each bitcoin will increase. Every current conventional currency introduces more monetary units as the economy grows.
Bitcoin is still deflationary, which makes it unusable as money. Inflationary currencies like USD incentivize people to spend and invest. Deflationary currencies incentivize people to hoard.
Bitcoin is actually inherently shrinking in supply. Once the 21 million are created there can only be coin loss (via lost or destroyed wallets). And a deflationary currency is far from desirable.
limited supply of bitcoin means that the value of bitcoin will probably inflate. equivalently, prices of goods and assets denominated in bitcoin will probably deflate.
Well, in theory, Bitcoin is deflationary: By holding it it goes up in value, not down, over time. This has its own problems, and it yet remains to be seen if those problems are insurmountable. We shall see. But insofar as Bitcoin is what it is, this means that it doesn't suffer from this specific problem, in theory.