Debunking the Deflationary Bitcoin Argument
A print from 1845 shows cowrie shells being used for money. It seems every day we hear the Bitcoin deflationary argument, not only from publications such as Business Week, but even from proponents of Bitcoin. Let's state it clearly: The Deflationary Bitcoin Argument: Bitcoin is not inflationary because the supply is limited to 21 million coins. Therefore, people want to hold it and won't spend. When no one spends this reduces the demand for products and services. This ultimately harms the productivity of the economy leading to a worsening of economic conditions. Therefore, Bitcoin is bad,....
Related News
A misguided article has been spreading misinformation about Bitcoin and tether recently. Here’s what it got wrong. The post Debunking Misconceptions From “The Bit Short: Inside Crypto’s Doomsday Machine” appeared first on Bitcoin Magazine.
There have been multiple mentions of bitcoin ending up in a deflationary spiral on the long run. At a bird's eye view for a layman, it sounds true. However, if one takes some time to study bitcoin and understand it in details, it will become obvious that the digital currency is quite different from conventional fiat currencies, and the deflationary spiral that seems perfectly applicable to fiat currency at certain circumstances doesn't apply to its digital counterpart. For those who do not know about deflationary spiral, it is an economic concept which states that continued deflationary....
On this episode of the Bitcoin Magazine Podcast, macroeconomist Lyn Alden discusses her work "7 Misconceptions About Bitcoin." The post Video: Debunking Seven Misconceptions About Bitcoin With Lyn Alden appeared first on Bitcoin Magazine.
I hope to set a Bitcoin Magazine record for most succinct argument here, as my profession has an uncomfortable obsession with efficiency. I study economics because I like teaching at the University level, and because I want to improve the field. Here's how the community can help. Coin enthusiasts often struggle at convincing economists and academics that Bitcoin is interesting, and that's largely because the community is misusing many economic ideas. At the forefront of this is the misuse of the notion of a deflationary currency. Deflation is a decrease in the prices of goods, and yes as....
A spike in gas fees and ETH burn rates has produced almost 800 deflationary blocks so far. The theoretical deflationary properties of Ethereum’s London upgrade last week have already been seen in action on the blockchain with almost 800 "deflationary blocks" produced.A spike in the Ethereum transaction fee burn rate has resulted in at least two hours when the supply was deflationary. The network has come under heavy load over the past couple of days which has resulted in a lot more gas being burnt.Around four hours ago (as of 22.00 UTC), the ‘ETH Burn Bot’ recorded an instance when 545 ETH....