If one currency has been widely adopted, then the money supply must follow the increase in total amount of traded goods/services in the whole economy, so a constant increase in money supply is required to maintain price stability
But what if this currency has not been widely adopted (like bitcoin) or maybe never will be? Then I think defaltion nature tends to keep it's economy scale limited, not the other way around (economy scale getting bigger and the currency get more valuable)
But what if this currency has not been widely adopted (like bitcoin) or maybe never will be? Then I think defaltion nature tends to keep it's economy scale limited, not the other way around (economy scale getting bigger and the currency get more valuable)
As far as my understanding goes, that's accurate. If the economy and currency are growing at the same pace, prices remain stable and everyone goes about with business as usual.
Inflation should not be desired for the mere purpose of keeping prices flat. Prices are important things, they signal where investment ought to occur. Holding any price flat, whether general goods or money, etc. is not only unnecessary but is likely to cause market distortions. All prices ought to float freely against each other... causing the supply of money to increase in order to flatten prices is merely another fallacy of central planning and ought to be avoided.
The fact remains that if two bitcoin-type currencies exist, and Bitcoin proper has zero inflation and the Altcoin has X inflation, then over time the former will retain value in advance of the latter. This will cause the former to be preferred, unless the latter possesses some benefit which overcompensates for this issue. I don't see Altcoin having any substantial benefit over Bitcoin, but I do see it having many negatives.
Those who want perpetual monetary inflation "as long as it's predictable" can go right ahead
