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10 sats \ 2 replies \ @moon 6 Jul 2022 \ on: How does everyone think about Bitcoin and Inflation - is a 21 million *permanent* cap correct? bitcoin
What argument are you trying to make? Because there's only 2 possibilities: either it's capped or it isn't capped, which means inflation. Actually with time some coins are bound to be lost, so the supply is always slowly shrinking.
During this phase, when bitcoin is still growing in adoption, yes it will not only preserve but increase your purchasing power. It's an investment and there's risk, like other investments. If this is not ok, then we can't have free markets.
I don't have a specific answer, mainly curious in everyone's arguments (for/against)...
My initial thought is that on the outset the capped supply gives great scarcity properties, but over time it could be a hindrance with any of:
- decreased mining (security) incentives
- technology increases pose deflation (thus a bitcoin grows in purchasing power and proportion over time)
- population increases pose purchasing power increases over time
This growing in adoption phase for bitcoin is so volatile and has so much upside that the exact inflation rate over time may not matter right now, but it may even pose other issues? Such as hindering investment in the ecosystem in the short term? #40456
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decreased mining (security) incentives
yeah this I'm also curious how it will turn out, but we probably won't be here to see
technology increases pose deflation (thus a bitcoin grows in purchasing power and proportion over time)
it seems that with or without bitcoin this is already the direction we are going
population increases pose purchasing power increases over time
how does that work? I think population is peaking soon
Thanks for the link, I'll reply on that other thread about that topic.
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