RE: Bitcoin goes into deflation on this date.

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Bitcoin goes into deflation on this date.

in bitcoin •  6 years ago  (edited)

While I understand your argument that in the interim it is somewhat inflationary because we haven't reached the conclusion of the mining process of 21 mil coins, I think that's sort of a misleading claim. Unlike fiat there are only 21 mil coins to be mined. You glossed over supply but didn't express its importance, the supply is finite, 21 mil and that's it. You did mention the different factors in fiat being inflationary but supply is the most important. I like how you broke down the math though, many don't account for lost coins.

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Bottom-line, if the supply is expanding, then that is inflation. Just because this expansionary process is going to end, does not counter the fact that the supply has been expanding since inception. Bear in mind here that I must stress I used a deliberately conservative set of figures so I actually think the liquidity drain is going to be much more severe than my calculations show. I could not however get away from the fact that my calculations show we're still in an expansionary period (however minimal) at least until May 2020 whereupon the game changes as my math attempts to show. I think we're going to see some pretty mad stuff next year as the end of mining as a viable de facto business venture (even on the large scale) is going to shake up the entire market.