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Contents
<ul class="article__contents-list"><li class="article__contents-item"><a class="article__contents-link link-pseudo" href="#h257">Bitcoin is disinflationary</a></li><li class="article__contents-item"><a class="article__contents-link link-pseudo" href="#h350">A stable currency?</a></li></ul>
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Conner Brown, a crypto enthusiast from Stanford University, wrote a lengthy <a rel="nofollow" target="_blank" href="https://medium.com/@Conner_/stop-calling-bitcoin-deflationary-84462cb90345">Medium post</a> where he debunks the myth about <a rel="nofollow" target="_blank" href="https://www.economist.com/free-exchange/2014/04/03/bitcoins-deflation-problem">Bitcoin being a deflationary currency</a>.
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Bitcoin is disinflationary
The thing is, many fail to realize the very definition of "deflation," which doesn't necessarily mean a decrease in the price of a certain asset. Instead, it is a decrease in the money supply.
<blockquote>
Deflation is not a decrease in prices itself, but a monetary phenomenon that sometimes causes decreasing prices.
</blockquote>
However, Bitcoin's supply is not going to decrease anytime soon given that the top coin is only estimated to reach a hard cap of 21 mln BTC in 2140. The level of inflation will be gradually reducing with each <a rel="nofollow" target="_blank" href="#/news/bitcoin-hash-rate-wont-drop-after-halving-if-btc-price-rises-above-20000-analyst">halvening event</a> (the most recent one is expected to take place in May 2020). Hence, BTC can be described as a disinflationary currency.
<blockquote>
The Bitcoin protocol is not inflationary or deflationary in the long run. It is instead programmed to be disinflationary, culminating in a constant monetary base without changes to the supply.
</blockquote>
<a rel="nofollow" target="_blank" href="https://medium.com/@Conner_/stop-calling-bitcoin-deflationary-84462cb90345"><em>image by @Conner_</em></a>
<a href="https://u.today/what-happened-to-bitcoin-and-what-happens-next">card</a>
A stable currency?
Because of Bitcoin's fixed supply, Brown expects the coin to stabilize in the future when it turns into a full-fledged asset. After <a href="https://u.today/heres-why-crypto-wont-solve-inflation-crisis-in-developing-countries">its price discovery phase</a>, the Bitcoin can become a store-of-value and compete with gold.
<blockquote>
With bitcoin functioning as a storage vehicle that cannot be diluted, the manic hunt for a “risk-free” safety from inflation will be a thing of the past, leading to more accurate and measured investment decisions.
</blockquote>
The "store-of-value" narrative has been dominating the global crypto conversation in 2019, but Bitcoin's wild price swings serve as a stark reminder that it is yet to become a safe haven asset.
Peter Schiff, one of the most prominent crypto critics, recently pointed out that the latest price increase was purely the result of <a href="https://u.today/bitcoin-whales-are-selling-btc-before-market-crash-peter-schiff">whale manipulations</a>.
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Contents
<ul class="article__contents-list"><li class="article__contents-item"><a class="article__contents-link link-pseudo" href="#h257">Bitcoin is disinflationary</a></li><li class="article__contents-item"><a class="article__contents-link link-pseudo" href="#h350">A stable currency?</a></li></ul>
Advertisement
Conner Brown, a crypto enthusiast from Stanford University, wrote a lengthy <a rel="nofollow" target="_blank" href="https://medium.com/@Conner_/stop-calling-bitcoin-deflationary-84462cb90345">Medium post</a> where he debunks the myth about <a rel="nofollow" target="_blank" href="https://www.economist.com/free-exchange/2014/04/03/bitcoins-deflation-problem">Bitcoin being a deflationary currency</a>.
<a rel="nofollow" target="_blank" href="#">card</a>
Bitcoin is disinflationary
The thing is, many fail to realize the very definition of "deflation," which doesn't necessarily mean a decrease in the price of a certain asset. Instead, it is a decrease in the money supply.
<blockquote>
Deflation is not a decrease in prices itself, but a monetary phenomenon that sometimes causes decreasing prices.
</blockquote>
However, Bitcoin's supply is not going to decrease anytime soon given that the top coin is only estimated to reach a hard cap of 21 mln BTC in 2140. The level of inflation will be gradually reducing with each <a rel="nofollow" target="_blank" href="#/news/bitcoin-hash-rate-wont-drop-after-halving-if-btc-price-rises-above-20000-analyst">halvening event</a> (the most recent one is expected to take place in May 2020). Hence, BTC can be described as a disinflationary currency.
<blockquote>
The Bitcoin protocol is not inflationary or deflationary in the long run. It is instead programmed to be disinflationary, culminating in a constant monetary base without changes to the supply.
</blockquote>
<a rel="nofollow" target="_blank" href="https://medium.com/@Conner_/stop-calling-bitcoin-deflationary-84462cb90345"><em>image by @Conner_</em></a>
<a href="https://u.today/what-happened-to-bitcoin-and-what-happens-next">card</a>
A stable currency?
Because of Bitcoin's fixed supply, Brown expects the coin to stabilize in the future when it turns into a full-fledged asset. After <a href="https://u.today/heres-why-crypto-wont-solve-inflation-crisis-in-developing-countries">its price discovery phase</a>, the Bitcoin can become a store-of-value and compete with gold.
<blockquote>
With bitcoin functioning as a storage vehicle that cannot be diluted, the manic hunt for a “risk-free” safety from inflation will be a thing of the past, leading to more accurate and measured investment decisions.
</blockquote>
The "store-of-value" narrative has been dominating the global crypto conversation in 2019, but Bitcoin's wild price swings serve as a stark reminder that it is yet to become a safe haven asset.
Peter Schiff, one of the most prominent crypto critics, recently pointed out that the latest price increase was purely the result of <a href="https://u.today/bitcoin-whales-are-selling-btc-before-market-crash-peter-schiff">whale manipulations</a>.
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Twig\Template->displayWithErrorHandling(Array, Array) (Line: 367)
Twig\Template->display(Array) (Line: 379)
Twig\Template->render(Array, Array) (Line: 40)
Twig\TemplateWrapper->render(Array) (Line: 53)
twig_render_template('themes/cryptod/templates/field--body.html.twig', Array) (Line: 372)
Drupal\Core\Theme\ThemeManager->render('field', Array) (Line: 436)
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Twig\Template->render(Array, Array) (Line: 40)
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twig_render_template('themes/cryptod/templates/node.html.twig', Array) (Line: 372)
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Tomiwabold Olajide
Godfrey Benjamin
Arman Shirinyan
