Quote from: ulhaq on September 02, 2018, 06:05:51 AM

Quote from: Hell-raiser on September 01, 2018, 05:29:24 PM

When I referred to crypto being deflationary, I didn't mean its supply being deflationary or otherwise. Strictly speaking, Bitcoin is also inflationary, at least if we discard the high probability that right now the total number of coins available for trade and commerce is diminishing due to "wear and tear" (coins being lost, stuck as dust, burned alive, etc). I use the term deflationary in a broader sense of not being able or sufficient to satisfy the needs of a growing economy. Whoever tries to challenge this point (that there should be enough monetary supply to support such growth at all times) is either clueless (ok, let's call them poorly informed to not overstep the bounds of propriety) or has something else in mind (read has an agenda).

And no, deflation is not inflation with a minus sign attached to it, though I understand why people think it is. In fact, this topic has been beaten to death already but it still comes up pretty regularly. You bring up the same age-old arguments that have been refuted numerous times even on this forum. A hint, producers profits are non-linearly dependent on inflation (deflation) rates, so deflation is directly destructive to an economy and that has nothing to do with its predictability or lack thereof.

I think you are the one that needs to review your economics. I hope this doesn't come off negatively.

No, it doesn't. I somewhat got used to that thing. There's a lot of confusion about deflation and its effects on the economy, so I consider it kind of natural phenomenon.

Quote from: ulhaq on September 02, 2018, 06:05:51 AM

There are only 2 contexts in which inflation/deflation are used - in the traditional economic sense, and to refer to an increasing or decreasing supply of the currency (which is a new use since crypto came into the mainstream). Bitcoin is deflationary in both of these completely different definitions. When you say that "strictly speaking", bitcoin is inflationary, I can only assume that you mean that the supply is currently increasing? That would be correct, but I was looking at long-term outcomes and whether it is economically viable.

So am I and no, it is not economically viable. If Bitcoin was to completely replace fiat somehow one day and we discard all possible transitory effects as well as Bitcoin's current shortcomings (like transaction costs, confirmation times, etc) as inconsequential, the current level of economic cooperation and development mediated by fiat won't be sustainable, end of story. In effect, that would mean that the world economies would collapse in no time, and given that there are over 7B people now living, the things will quickly develop according to the Mad Max scenario, if not worse than that. Let's assume that the use of Bitcoin is forced upon humans by an almighty entity (or aliens) and there is no way back to fiat money. Just in case, you can substitute any other hard asset for Bitcoin in this hypothetical environment. It will still end in a disaster.

Quote from: ulhaq on September 02, 2018, 06:05:51 AM

To use deflation to mean anything else is just wrong. You say "deflationary in a broader sense of not being able or sufficient to satisfy the needs of a growing economy". That is a very common misconception in economics. "That there should be enough monetary supply to support such growth at all times" is flat out wrong. Economic growth is based on productivity and is not held back by monetary supply. This specific argument you make was analyzed in great detail and refuted in Rothbard's book The Mystery of Banking. I'm sure you will find the refutation in many other books/places as well.

Let's just agree to disagree. This topic is of no particular interest to me (it is the same stuff over and over again), nor am I interested in verbal gymnastics.

Quote from: ulhaq on September 02, 2018, 06:05:51 AM

Producers profits are not dependent on inflation rates. I'd like to know what your source on that is. And any references on this forum I'd be happy to look at. Inflation/deflation are monetary phenomenon. Have you studied Nobel Prize winner Milton Friedman's books/discussions on monetary policy and inflation?

The fact that you need sources and cling to sources yourself says pretty much all. You are on your own here (and there).