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Topic
Board Beginners & Help
Re: Why such agreement that Deflationary currency is a bad thing
by
Billy3
on 09/04/2013, 14:33:36 UTC
The money stock is currently inflating at around 12% a year.  To offset this the bit coin economy would need to grow by that amount in order for prices to remain stable.  It is very difficult to get statistics about how many bitcoin transactions are actually used to purchase goods and services. We are currently seeing price deflation due to speculation that the bitcoin economy will expand rapidly in the near future.

While the 12%/yr distribution of BTC is inflationary, I do think that the final number of 21 million is the important point. It is well known and is what is causing the deflation in spite of the temporary and declining 12% inflationary force.

Also, IMHO price discovery would be more efficient and we'd have better liquidity if a decent trading platform were developed. I think I have read that a dark pool is in the works; maybe they will offer bracket orders with stops/limits.