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by Deritio 1469 days ago
Wikipedias definition of inflation sounds exactly like op said and what I assume as well:

'In economics, inflation is a general increase in the prices of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money.'

I can afford less for the same unit of currency (Bitcoin) therefore I have inflation or deflation if I get more.

And people claim that Bitcoin is inflation save due to a limit amount of bitcoins being produced (I read that multiple times) while this is just not true.
2 comments
GoblinSlayer 1469 days ago
Intuitively laymen really care about purchasing power, not its cause, they just use inflation as a short synonym for reduction of purchasing power, because inflation is often the cause of reduction of purchasing power, but I think they aren't really synonyms.
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celticninja 1469 days ago
It's not really safe from inflation, more correctly it is deflationary by design. The limited supply means you can't dilute the existing value by creating more coins, as you can do with USD (or any fiat currency)
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ketzu 1469 days ago
The point of this discussion as I understand it is that the limited supply of bitcoin does not help with inflation in practice and, further, that monetary supply is not the only source of inflation to begin with.

It is correct that bitcoin is designed with limited supply in mind, but that does not necesaarily stop inflation and definitely doesn't in practice because currency risk dominates the perceived value of bitcoin.

As far as i remember, people often claimed that bitcoin protects against inflation, that statement has so many requirements attached so it doesn't matter in practice.

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Deritio 1469 days ago
People buy smaller and smaller denominations of Bitcoin then.

Which means earlier you invest more your Bitcoin is worth.

Until someone realizes that who ever was rich before is now loosing valur by investing in BTC too late and making early adopters rich.

The question is only when this ruse gets so outbalanced that no one wants to invest anymore which will either lead to inflation or the big crypto burn.

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