Post
Topic
Board Altcoin Discussion
Re: Altcoin - the alternative cryptocurrency?
by
bitv
on 17/08/2011, 08:06:02 UTC
When you'll already have the 21 million bitcoins, but the userbase is still growing or the mined coins are lost, happens deflation. The prices of the goods and services will drop, because each of us will have less coins to spend in the long run.
The user base has nothing to do with inflation or deflation. The inflation or deflation is price of money measured in itself if the factor of time is included.

Suppose we reached the bitcoin maturity and all the 21 million coins are distributed. Now, the userbase starts growing: more and more people want to get their share of bitcoins too. Everybody wants to get rid of their fiat currencies and exhange them to bitcoins instead. The value of each bitcoin increases and prices will drop, deflation happens.

And I probably used the term "inflative" irresponsibly. Although there is a constant supply of new coins, there's of course nothing assuring that inflation will happen. "Forcing inflation" is something that cannot be done with cryptocurrencies.