Bitcoin Stack Exchange
Bitcoin Stack Exchange

Questions tagged [deflation]

Deflation is a general fall in the price of goods measured in a particular currency. Deflation indicates an increasing value of currency so that over time, less and less of that currency is required to purchase the same value of goods.

Deflation is a general fall in the price of goods measured in a particular currency. Deflation indicates an increasing value of currency so that over time, less and less of that currency is required to purchase the same value of goods.

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Will deflation destroy Bitcoin?

With the limited total quantity of bitcoins, and people losing their wallets constantly decreasing that number, won't rampant deflation destroy Bitcoin?
eMansipater
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Changing Bitcoin's deflationary nature

One of the most common criticisms made against Bitcoin is related to its deflationary nature. Regardless of the advantages and disadvantages of an inflationary system, would it possible to change the rate of coin generation in order to transform…
nmat
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Psychological price

I live in Europe, and more than a decade ago our national currency was replaced by the Euro. For a few years, everyone calculated back the price in Euro to the old currency when buying something, because it was hard to get a 'feeling' of the price.…
Maestro
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Will the energy cost and deflationary nature of Bitcoins doom the currency to obscurity?

I couldn't find enough questions that ask this head-on1, so consider that if: Bitcoins are designed to reflect the deflationary characteristics of a specie currency; and The distributed nature of the cryptocurrency requires a high intrinsic value…
LateralFractal
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Why are fiat Currencies inflationary and Bitcoin deflationary?

Why are all fiat currencies inflationary, and lose value with time? Could governments make them deflationary? What are the advantages of inflationary currency compared with deflationary currency? Why was Bitcoin chosen to be deflationary (limited…
vi.su.
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Why was Bitcoin designed with a decreasing production rate?

I have no doubt that the person who designed Bitcoin was many times smarter than me but with the benefit of hindsight was the decreasing number of bitcoins a good design decision given the 'hoarding' it encourages? Wouldn't a steady and low…
fj2942ks
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Cryptocurrency with less deflationary properties

I wonder what is the benefit of having Bitcoin reduce the coins mined per block over time? Suppose a slightly less deflationary growth scheme was possible (and keep other properties that make Bitcoin desirable), that might encourage more people to…
lurscher
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Inequality in a Bitcoin World

So let's assume at some point in the future bitcoin has replaced fiat currencies and we thus have a fixed money supply. Let's also assume we have increasing production and therefore deflation. It seems that wealth could then be preserved simply by…
Brian Fabian Crain
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Why are all popular crypto currencies deflationary?

There is a lot of criticsm and debate over whether bitcoins will ultomately fail because of its deflationary nature. I don't want to debate if that's the case or not and I also understand that the goal of bitcoin was to have a fixed amount of coins…
aKzenT
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Bitcoin inflation in 9/12 doesn't seem to have been corrected. Why not and will it be fixed?

I'm looking at the Total Bitcoins in Circulation graph and don't understand why there is a spike of coins being generated in Sept '12. What caused this to happen? Also, since there is a fixed number of Bitcoins that will be created, then I would…
makerofthings7
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Can anyone point to flaws in my counter-arguments of bitcoin critiques?

Regarding the granularity problem: Here is a worst case scenario: M2 Monetary Supply is 66 trillion. If it all moved to BitCoin, each coin would be worth 3.1 million dollars. Math: 66000000000000/21000000 = $3,142,857 One Satoshi is the smallest…
Robert Christian
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Could bitcoin's limited supply prevent it from becoming a worldwide currency

I've recently read about the Great Depression period of the USA and made a striking relevance with Bitcoin. In short, the Great Depression was caused by a drastic decrease in the circulating money (more than 1/3). This in turn lead to prices going…
Georgi Popov
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Will cryptocurrencies that have a finite supply (like 21m btc) cause deflation?

I figured out that cryptocurrencies can cause a deflationary spiral, since the cap is the same (eg. 21m BTC) but the economy is growing. That would only happen if all coins are mined. But deflation would usually lead to a recession. Is there a way…
Andrew
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How is hoarding to be prevented?

If all humans used bitcoins now (Jan 2013) for most of their transactions, then a dollar would be worth about a billionth of a bitcoin (1/10 Satoshi). If bitcoins take ten years to catch on that fully, and population rises only a little while…
user2733
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How many coins are needed to ensure stability i.e. neither inflation nor deflation?

The key to currency stability is to have neither too many nor too few of a currency in circulation. So what is the "Goldilocks" area going to be if Bitcoin really catches on and everybody wants to use it? Could it turn out that demand will outstrip…
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