Post
Topic
Board Economics
Re: Inflation and Deflation of Price and Money Supply
by
deisik
on 10/10/2016, 14:33:35 UTC
Wow its such a good explanation about BTC in terms of inflation and deflation.
a general increase in prices and fall in the purchasing value of money is called inflation but bitcoin we use only in online system than how we know that price id less or greater .

Calling the "general" increase or fall  in prices "inflation" is just a misuse of the term.
The fact so many in the press and in the university / professional fields misuse this term show just how low is the understanding of economics.
Using the wrong terms end always in misunderstanding and fuzzy logic arguments.

We can measure the changing in the money base with a precise and not disputable number;
E.G. there are so many gold coins, so many bitcoins tokens, so many silver coins, so many dollar bills of with various values printed on

This might work with gold as well as silver coins (arguably), works with bitcoin "tokens", but it doesn't work with fiat money. And not just because the majority of dollars (for example) exist only as digital money (that could still be accounted for somehow), but primarily because the amount of money printed or emitted by a central bank makes up only a small part of monetary equivalents or substitutes that flow through the economy. For example, credit money is created and destroyed by banks...

Are you sure that it is not you who doesn't quite understand economics?