Post
Topic
Board Economics
Re: Bitcoin Deflation and Its' problems
by
wxa7115
on 12/08/2018, 14:31:31 UTC
I like the blogs published by Bitmex. One of the awesome sources to gather knowledge around cryptocurrency.

In this blog they discuss problem and benefits of deflationary economics. https://blog.bitmex.com/bitcoin-economics-part-3/

To quote from this:
Quote
However, even if Bitcoin has solved this economic problem, perhaps it’s naive to think Bitcoin would result in a more prosperous economic system. Bitcoin is a new and unique system, which is likely to cause more economic problems, perhaps unexpected or new ones. After all there is no perfect money. It just may not be correct to apply the traditional economic problems of the past, to this new type of money. Although it may be more difficult, identifying Bitcoin’s potential economic problems may require more analysis and a stronger understanding of the underlying technology.

I agree that it's a new kind of monetary system and it would have it's own problem when it becomes well adapted. but economically speaking do we need this system adding to the complexity already existing financial system.
It is the opposite, it is true that bitcoin and its low inflation nature will cause a change in the economy in the case that is massively adopted, but bitcoin in fact is going to simplify things up and not make them more complicated, for example the CPI is a measure of how much the prices have changed over the course of time to measure inflation but it has been shown by many that the numbers of the government are fixed an the same happens in many countries.

Bitcoin will fix that since there will be a very low inflation, this means that economic growth is not going to be as fast or as big as before but unlike the current growth that is fueled by inflation and that is not real the growth in a bitcoin economy the growth will be real.