Vocabulary Context Is The Reason Bitcoin Isn't Deflationary
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....
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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....
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,....
New 90+page research report on NFTs discusses how investors get stuck holding NFT hot potatoes when liquidity dries up. Investors who survived the 2008 financial crisis understand the importance of liquidity. When an economic recession starts, deflationary pressure hits the market, and buyers disappear. Sellers frantically try to sell assets before their prices drop further, but buyers want to de-risk and go into safe-haven assets, such as treasury bonds and money market funds. The lack of liquidity associated with nonfungible assets is the one reason why investors may think they are....
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....
A bearish technical setup and a declining number of Ether whales pose downside risks for ETH’s price. The annual supply rate of Ether (ETH) slipped below zero for the first time since Ethereum’s transition to proof-of-stake via the Merge in September. The reason? A spike in on-chain activity amid a massive cryptocurrency market crash. Ether turns deflationary for realAs of Nov. 9, more Ether tokens are being burned than created as a part of Ethereum’s fee-burning mechanism. Simply put, the more on-chain transactions, the more ETH transaction fees get burned. On a 30-day timeframe, the....