15

Year #bitcoins Inflation per annum 2009 1,624,250 - -------------------------------------------------- 2010 5,020,250 209.1% 2011 8,001,400 59.4% 2012 10,733,825 34.1% (halvening November 28) 2013 12,199,725 13.7% 2014 13,671,200 12.1% ---------------------------------------------...


7

There are two objections I would raise: Miners have expenses. You need to pay your power bill. You need to pay your employees. You need to pay for new ASICs when the old ones inevitably become obsolete. You need to pay off your initial investment in ASICs. All of these things cost money. You might object that miners wouldn't be doing this unless revenue ...


6

As I understand it, this is by consensus, i.e. all the nodes in the network agree on this protocol. No. The network doesn't vote to change itself. Read this: What can an attacker with 51% of hash power do? Arguably, you could try to get a change to the bitcoin client implemented through astroturfing. Here's how you'd increase monetary inflation. Find this ...


4

Not everybody needs to agree (that would probably never happen!) for there to be a change in the protocol (which would be needed to cause inflation), but it's not based on just a majority of hashpower either. It's really a vast majority of users that need to agree; if just 51% of users decided to change the protocol, it's entirely possible that it would ...


4

The Money supply with Bitcoin is designed to increase in value. Effectively the money supply grows by allowing the prices of goods and services to fall to fit the amount of Bitcoin required. Yes this encourages saving. But saving increases the value of Bitcoin, making prices fall further, until prices are so low people are willing to spend their savings/...


4

There is a few problems with giving a crypto-currency a stable value algorithmically: Stability compared to what? The algorithm would have to be specifically pegged to either an asset, a currency, or some kind of calculated wealth index. But, if it were stable in comparison to e.g. the USD, it would not be stable in comparison to other currencies, or a ...


4

This is a tough question. I'd consider Bitcoin as being just deflationary. Why? Because, instead of thinking about mining as "adding new currency", you could consider that mining is just "enabling" more coins each block from the 21 million total coins. Everyone knows that ultimately there will be 21 million coins, just not all of them are spendable. ...


3

Considering that the US dollar has lost 90% of its purchasing power over the last 100 years you should be worried regardless of cryptocurrencies.


3

Bitcoins are created at a predetermined rate. Until this rate drops to 0 (around the year 2140), the supply of bitcoins is increasing. If this isn't offset by destroyed/lost coins and increased demand, some amount of inflation will occur. However, I'd expect the inflation rate to be low (if positive at all), and getting lower. Once all ~21 million bitcoins ...


3

I would suspect that most Bitcoin advocates would disagree with you. The simplest counter-argument is this -- wouldn't that mean inflation discourages people from selling things? And you can't spend if nobody wants to sell to you, can you? Another way to make the same counter-argument is this: Actually, no, deflation encourages people to spend the bitcoins ...


3

No it does not become computationally infeasible, 1 halving per 210.000 blocks leads to a total of 21m due to math. Bitcoin block reward is 50 for 210.000 blocks then 25 for 210.000 blocks then 12.5 etc. So the total reward is 210.000 * (50 + 25 + 12.5 + ...). Inside the parenthesis is a geometric series which can be rewritten as 50 * (1 + 1/2 + 1/4 + ...). ...


3

It appears to largely be just a belt-and-suspenders check. As you say, it is unnecessary to do this check. However it doesn't hurt to have this check in there. At worst, it just adds a few nanoseconds to verification time. At best, it will catch some serious bugs. Given that this is consensus related, it does not hurt to have extra checks that are ...


3

Inflation is "a general increase in prices and fall in the purchasing value of money." One cause of inflation is printing more money. By halving the rate of production of new money you halve its inflationary effect.


2

Fiat currencies are inflationary by design, so that people don't hoard currency. The more your money loses value every year, the less likely you are to keep it sitting in a bank. This availability of money in the market encourages the growth of the economy. When money is easy to borrow, entrepreneurs and businesses can use it to hire/build/invest, and pull ...


2

It seems to me that your confusing the number of bitcoins in existence with the value of bitcoins in existence. "Because lets say you have one bitcoin that is worth 1 dollar and I sold you something that only cost one penny than your saying I would recive 0.01 Bitcoin." Say for instance that there will only ever be 21 million pounds of gold in the world....


2

The answer to this question depends on the terminology used. "To inflate" normally means "to increase the volume". "To deflate" is the opposite. In this sense, bitcoins were inflationary in 2013 (the inflation was ca 15%) and will be inflationary in 2014 as well. At the same time, bitcoins were undergoing hyperappreciation in 2013 (bitcoin appreciation ...


2

Let's compare the total size of circulating BTC to US dollars. According to coinmarketcap.com, the total value of all Bitcoin is 250 billion as measured in US dollars. Throw in Ethereum, Bitcoin Cash, IOTA, Ripple, Monero, Dash, Bitcoin Gold and Litecoin, and you're at 350 billion US dollars. (Bitcoin makes up the sizable majority of all cryptocurrency.) ...


2

Yes, the information is public and in the ledger history. you can find how inflation works in Stellar.org's mandate https://www.stellar.org/about/mandate/#Stellar_creation and https://www.stellar.org/developers/learn/concepts/inflation.html in a nutshell: you can look at the inflation transaction that runs every week and look at its metadata. The metadata ...


2

First of all, there's nothing wrong about some inflation or deflation in general. You can hear lots of flame from various economists, some of them trying to persuade you that a small inflation is beneficial or even essential, but this is not necessarily true (one example is IT hardware market). OK, that was just a note to calm down and think first when ...


2

Inflation is increase in price without increase in utility. A car with similar features helps you get from point A to point B just like it did one year ago (same utility). However, the cost of the car increased by 2x one year later (higher price) indicating that the currency in which the price has been quoted has been reduced to 0.5x versus its value last ...


2

The currency supply of Bitcoin currently inflates at about 2.5% p.a.. However, this is what economists refer to as monetary inflation. The supply is disinflationary, because the rate of monetary inflation is decreasing over time as each block increases the supply by a smaller relative amount. When people speculate about Bitcoin being inherently "...


2

Inflation is newly mined coins added to circulating supply. When block rewards become zero and transaction fees are the only incentives for miners, there won't be any new coins added to circulating supply. According to https://www.viewbase.com/inflation (In last 24 hours): 1031 BTC mined Circulating Supply of Bitcoin is 18,504,668 BTC % of newly mined coins(...


1

Technically yes, but miners themselves can then sell those Bitcoins back into the pool for non-miners to pay for their own goods and services. While this brings up an interesting point about an eventual "miner elite", this is far in the future and for now a non-issue. Ultimately, some other coin may need to become dominant to stop this centralization you ...


1

No. Miners do not "eat" the transaction fees. The fees are their income and they can spend them later.


1

In addition to all that has been said: You, like everyone else, can become a miner (or part of a mining pool). So, every miner is in competition with every other miner, and as said, will have an interest that the coins remain in circulation (the mined coins keep real value). In a perfect bitcoin world, everyone would be part of mining too.


1

Move some of your savings into Bitcoin or etherium simply as insurance against hyperinflation. BTC is not the threat to fiat currencies; Bitcoin is the lifeboat away from fiat currencies when they ultimately implode. The more an imploding dollar worries you, the more to move into non-fiat assets like Bitcoin. The Fed has not stopped the printing presses. ...


1

Not directly. The gateway would have to create a transaction for each user, to award them their interest. It would not be built into the protocols as demurrage is. So it would really be up to each gateway to decide who would get interest and how much (and if this process breaks down, no interest gets paid)


1

If one could simply "print more" Bitcoins, then it would quickly lose its value (this is the definition of inflation btw) because of increased supply. This is the main reason why, for instance, the USD has lost so much value in the last 50 years. People invest in Bitcoin because they think it will increase in value, not because there is a limited supply. ...


1

The term "inflation" usually refers to prices for goods and services in the offical fiat currency of a country. In that sense "inflation" does not really apply to the price of one unit of crypto in fiat. You probably refer to the price of 1 Crypto in Fiat and assume that that price must go down if more of such crypto units are thrown onto the market. And ...


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