Something that confuses me about the debate on Bitcoin

[andrewducker]

People keep referring to Bitcoin being deflationary, and how awful that is.

Now, leaving aside debate on whether deflationary currencies are inherently awful, it seems to me that for the next 130 years Bitcoin is explitly _inflationary_*. Money is printed approximately every ten minutes, like (slightly wobbly) clockwork.

Sure, in 130 years we'll have to worry about having run out of new Bitcoins. But all things considered this seems something we can push off onto our great-great-grandchildren, who will undoubtedly have generated numerous other ways of dealing with currencies.

*If the price stabilises, of course. If the price keeps shooting up forever then that's different. Seems a tad unlikely though.

Comments

[matgb]

Look at the first chart on your linked page. It shows that bitcoin can be inflationaray short term, but by 2024 the amount of bitcoins produced will be less than 2% more than in 2023.

That means that fewer coins enter the system than there will be, we hope, general economic growth. Which means that, in ten years time, bitcoins go from marginally inflationary (as they are now) to deflationary, and stay that way for the rest of time.

And that's assuming general usage rates remain fairly constant, if the takeoff of BTC users increases significantly between now and 2024, then the amount of currency per user available decreases even moreso, meaning it becomes deflationary even earlier.

In order for BTC to become a generally accepted currency, then it has to have a lot more users, but there simply won't be enough coins in the system for this to happen, ergo it's deflationary.