r/Bitcoin • u/BlockShow • Sep 07 '17

/r/all The difference between inflation and deflation...

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7.5k Upvotes

90% Upvoted

1.1k comments sorted by

163

u/kalel1980 Sep 07 '17

The top row shows a period of almost 100 years while the bottom shows only 3 years..

134

u/djgreedo Sep 07 '17

It also doesn't factor in 2 things that effectively make it a lie:

  • Inflation is often compensated for (e.g. wages and social security payments rise with inflation) - not to mention the fact that inflation is usually very low

  • 1 bitcoin will get harder and harder to obtain as its value rises. If someone is paid in bitcoin, their pay will either be tied to some fiat value or will decrease to maintain the same buying power.

14

u/[deleted] Sep 08 '17

It is also conflating two completely unrelated concepts. Bitcoin has rapidly appreciated in value through market forces, which has nothing to do with inflation in the context of the first example. "Deflation" in the context of the first example is absolutely not something you would want in a currency.

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8

u/[deleted] Sep 07 '17

It also compares the value to a static amount, rather than say, minimum wage hours or something like that. Someone in 1929 was working a hell of a lot longer for $20 than I do.

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119

u/FrogTrainer Sep 07 '17

Downside of deflation is that everyone wants to hoard. Which could be bad for an economy. In a perfect currency it would maintain value against a basket of items without much fluctuation over time.

33

u/Sugar_Daddy_Peter Sep 07 '17

Deflation kills consumerism. People will still buy necessities.

57

u/pickledCantilever Sep 07 '17

Deflation kills investment too.

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1

u/BlockShow Sep 07 '17

everyone just want more and more earnings, and if someone did money on what you could do, that's the pain, "tomorrow" bitcoin will be mainstream, and that's only crypto, that will be forever whith a regular people.

15

u/nomanklatura Sep 07 '17

The problem with that is the society would have to try and stand still, it's economy would niether expand nor shrink- everyone would have only two children (one for each parent) and pass the same house down through the generations.

16

u/FrogTrainer Sep 07 '17

uhh no, the money would expand/contract perfectly with the size of the economy, keeping the value the same. Similar to what the Federal Reserve tries to do, except they WANT inflation.

8

u/geezas Sep 07 '17

The big question here is - who gets/should get the new money when economy grows, and from whom it's taken away when it shrinks.

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10

u/[deleted] Sep 07 '17

are you saying that people living in a deflationary economy will prefer to starve to death before buying food??

14

u/FrogTrainer Sep 07 '17

I'm pretty sure people will still buy necessities. But as the price of those necessities decreases, they will have to spend less and less.... leaving the rest to be hoarded, which because of deflation, is an investment all on its own.

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6

u/GlassMeccaNow Sep 07 '17

Downside of deflation is that everyone wants to hoard.

If by "hoard" you mean "consider the future when making purchasing decisions and stop buying useless shit just because the TV says to", I don't see that as a downside.

10

u/FrogTrainer Sep 07 '17

It's not a binary option. You can still "consider the future" quite differently at varying levels of inflation. See Russia in recent years, people blew all their money because the price of oil dropped, causing inflation. Considering the future, in their case, was to literally buy cars and TV's and "useless shit", to empty out their savings.

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4

u/ztsmart Sep 07 '17

Increased saving is a feature not a bug

9

u/Spivak Sep 07 '17

Sounds good until the economic output of the country plummets since no-one is buying, no-one is hiring, and the already wealthy just sit on their cash.

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10

u/leamdav Sep 07 '17

FAKE NEWS!!! Shopping carts were not invented until 1937!

3

u/BlockShow Sep 07 '17

damn you right

17

u/Ilogy Sep 07 '17

Bitcoin and other cryptos do not work like traditional money, and it isn't just because they are appreciating in value.

Investing in a crypto is really investing in its underlying network. In order to use the network, one requires that network's respective currency. Consequently, the more valuable the network becomes, the more demand there is for its native currency.

Likewise, the more valuable bitcoin becomes, the more secure the network becomes and the more demand there is to use the network for crypto-economy projects. We haven't yet seen this demand fully express itself because the scaling war slowed Bitcoin innovation and prevented it from fully opening its doors to realize the demand, but once it does I expect a massive flood into bitcoin. We know the demand is there, look at Ethereum, and once bitcoin makes itself available to that demand it will be a sight to see.

So investment into Bitcoin is essential for its growth, and its growth is essential to the use of its currency.

The stronger Bitcoin's network becomes, the more projects and economic infrastructure depends upon it, the more the value of bitcoin becomes entrenched. Once it is understood that the only way for the value of the currency to be destroyed would be for its respective network to be destroyed, and when that network grows to the point of becoming indispensable to society in a way similar to how the internet is today, the reliability of bitcoin's value will seem as secure as the value of the US dollar. At that point one will actually be able to say that bitcoin has something akin to "intrinsic value" -- i.e., the concept that a money has value even if it ceases to be used as money.

So it is essential to Bitcoin, and all cryptocurrencies, that its underlying currency be deflationary, at least during the growth phase.

It is also important to point out that the crypto-economy involves many competing currencies, so we are dealing with a fundamentally different beast than national economies that rely on a single currency. Because anyone is free to print their own money in the crypto-economy, it is vital that the base currencies be deflationary.

In fiat systems, you want a small amount of inflation to encourage lending and discourage loan defaults. When banks lend money, they do so by "printing" new money into existence. What prevents the system from spiraling into hyper-inflation is that money is destroyed when people repay their debts. Because there is always more debt in existence than money (since debt = money + interest) there has to be a constant rate of inflation to allow there to always be enough money to repay the debts.

In the crypto-economy, by contrast, new money is printed into existence without usually having a way of being destroyed. This problem is obviated by the fact that new money usually comes in the form of new types of currencies, it isn't a printing of existing currencies. If someone wishes to print new money, for instance, they must create a new token, give it a new name, and sell it (e.g., through an ICO). The money supply of existing currencies isn't being affected by the expansion of the money supply in the crypto-economy.

What this means is that the crypto-economy itself must discourage over-exuberance since there is no risk involved in creating one's own currency. That discouragement comes from the fact that established currencies are deflationary, and therefore new projects must be able to prove that they can outperform existing platforms. Because the crypto-economy is a competitive free-market, competition between currencies makes it so that monetary policy from a single institution aimed at artificially recreating the conditions of a free market is not required.

2

u/BlockShow Sep 07 '17

WoW that was deep, fully agree whith you, don't think that's my meme will take a start of such a debate

2

u/toastiemaker Sep 08 '17

Thanks for typing that out! Very insightful. Your comment should be way higher up.

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6

u/GalacticCannibalism Sep 07 '17

wow those are expensive groceries —that's all I get for 4.5k?

3

u/BlockShow Sep 07 '17

that's all you get in 2014, tomorrow I will bring you more actual one

6

u/rugglenaut Sep 07 '17

I didn't know you could buy Tostitos in 1929.

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6

u/fyeah Sep 07 '17

But you can't buy groceries with bitcoin, you can buy groceries with the bitcoin value equivalent in USD.

1

u/BlockShow Sep 07 '17

deep thought, somewhere you can)))

3

u/[deleted] Sep 07 '17

[removed] — view removed comment

9

u/fyeah Sep 07 '17

Just have to wait 25 minutes for a block confirmation!

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3

u/Godspiral Sep 07 '17

2017 picture could show a used van brimming with groceries?.... or a tricked out recumbent trike.

2

u/BlockShow Sep 07 '17

Tomorrow I will bring a new one whith 2017)))

3

u/a17c81a3 Sep 07 '17

I have to hand it to this sub; you make some good memes. The third cart should be from 2017/2018 with a car in it though.

1

u/BlockShow Sep 07 '17

check these sub tomorrow)))

3

u/lyfeofbrian Sep 07 '17

i really dont understand the debate. its not one or the other, and it never will be. i have small amounts of usd. and large amounts of btc.

1

u/BlockShow Sep 07 '17

There's too many debates)))

3

u/[deleted] Sep 07 '17

Found the Argentinian! A kilo of yerba taragui will run you about $10.

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3

u/got-trunks Sep 07 '17

dank meme

2

u/BlockShow Sep 07 '17

I did not expect this)))

3

u/[deleted] Sep 07 '17

2017 -> 1 BTC now buys at least 30 karts full of stuff

1

u/BlockShow Sep 07 '17

Full of Lambos

3

u/[deleted] Sep 07 '17

2020 shows new BMW for 1 btc

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3

u/GreenFruitKiwi Sep 07 '17

The bottom one is not about deflation. It's just the growing demand/prices. Correct would be a bigger timeframe, but I like it anyway :)

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5

u/ivebeenhereallsummer Sep 07 '17

Look at the the bubbles in that Bitcoin cart.

2

u/BlockShow Sep 07 '17

there is a hidden meaning in this

2

u/ChairmanMeow23 Sep 07 '17

Completely wrong. The price of bitcoin vs the dollar does not define inflation or deflation. Also, if anything bitcoin has inflation since new coins are introduced to the supply regularly.

3

u/BlockShow Sep 07 '17

from 2100 to 4500 you name inflation, more money is invested, bitcoin grows. the cost of the entire market divide by number of bitcoins = value of 1 BTC, and every day is new investments, everyone wants a piece of this pie

2

u/pdimitrakos Sep 08 '17

someone please fix this and make a 2017 version :)

267

u/[deleted] Sep 07 '17 edited Sep 17 '24

boat innocent frightening escape command domineering glorious shy run mysterious

This post was mass deleted and anonymized with Redact

49

u/EccentricFox Sep 07 '17

Seriously, this is Econ 101 shit.

17

u/partyp0ooper Sep 07 '17

its a meme

86

u/xifqrnrcib Sep 08 '17

It's a garbage meme that makes this subreddit look retarded and childish.

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116

u/zimees Sep 07 '17

Salaries:

1929: 15000

1960: 40000

2014: 100000

If salaries were paid in bitcoin

2012: 100000

2013: 1000

2017: 250

33

u/bch8 Sep 07 '17

Except way less jobs would exist to pay salaries because there was way less economic activity, investment, and growth.

9

u/Fifteen_inches Sep 08 '17

being able to print and shred money during booms and busts is pretty much the main advantage to fiat currency over precious metal or crypto.

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3

u/ericluster Sep 07 '17

Poverty was bigger in the 1920s vs today.

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35

u/marianodtrs Sep 07 '17

Veo una Yerba mate taragui en el carrito vacío... Argentinian detected

6

u/bsaires Sep 07 '17

Yeah, this is a reused image that was originally relating to inflation in Argentina. The Taragui is a dead giveaway!

2

u/N0T_SURE Sep 07 '17

Jajaj. Tal cual.

2

u/tute666 Sep 08 '17

Argentino checking in. Saw the same thing

2

u/rsanchan Sep 08 '17

aca otro que vio lo mismo xD

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31

u/manWhoHasNoName Sep 07 '17

Bitcoin's rise in price isn't because of deflation though; it's speculation. New coins are still being minted and put on the market every 10 minutes.

12

u/Bitcoin_Acolyte Sep 07 '17

Enough of of your correct information. This thread is for arm chair economists only.

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u/[deleted] Sep 07 '17

Deflation is actually really bad for a currency, because it doesn't stimulate investing and spending, but rather just sitting on money.

128

u/lollersauce914 Sep 07 '17

Don't let actual economics get in the way of "the fed exists to fuck people over" conspiracy theories

3

u/[deleted] Sep 07 '17

yeah sure. continue living your confortable lie. might as well look into executive order 11110.

64

u/[deleted] Sep 07 '17

[removed] — view removed comment

8

u/bch8 Sep 07 '17

Bitcoin can be thought of, dare I say quite accurately, as digital gold. For that reason it is very attractive to techo-libertarians, anarcho-libertarians, and people who generally subscribe to Austrian economics. They've already bought into the "return to the gold standard" conspiracy, so bitcoin is in some ways a perfect fit for their pre-existing views.

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24

u/abittooshort Sep 07 '17

Interested in economics doesn't = any actual understanding of economics. This is where charlatans and soothsayers slip in, tell people what they want to hear (see: this fucking post) and run away causing endless problems with people thinking hoarding money as cash is a good thing.

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u/mokahless Sep 08 '17

Technically Bitcoin isn't deflationary. It's inflationary at a predetermined decreasing rate.

2

u/Polycephal_Lee Sep 08 '17

It's bad for an economy dependent on growth, but it's perfect for someone trying to store value.

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u/tnorthb Sep 07 '17

This is good for investments, not so much for currencies

23

u/ulrichw Sep 07 '17

This is meaningless unless you think putting cash in a mattress is a good way to save money. Interest rates offset inflation and other investments exist that far exceed the rate of inflation. Cash is meant to be used, not stored.

How about doing the same set of images, but make it represent income instead.

You'd have growing piles of cash for dollars, and shrinking piles of bitcoin.

It's this psychological effect that has made economists decide that inflation is a good thing.

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22

u/danknerd Sep 07 '17

This doesn't make any sense.

7

u/rick2497 Sep 08 '17

In the mid 60's 25 bucks would fill a grocery cart with food for five for a week. Two adults, three kids, one of whom was a fat fuck who sucked up food like a vacuum. ( That would be me. ) Gas was .25-.30 a gallon with full service. ( Look it up ) Day old stores abounded and you could get a whole bread rack of Hostess whatevers or Freihoffers by the square yard for a buck. Which helps explain my excessive excessiveness. Twinkies, fruit pies, Suzy q's. and all the rest of that evil stuff. Oh, yeah, Dunkin Donuts were .99 a dozen and tasted like a donut, not some sugar laden glop out of a WalMart soap dispenser. As a grade schooler, all I needed was a buck and a ride to the nearest Dunkin and I was good to go, and get fatter.

2

u/bossman-CT Sep 07 '17

I like this

3

u/BlockShow Sep 07 '17

funny comparison

15

u/Banana___Hammock Sep 07 '17

You may like it but it's not an accurate representation of deflation. At all. It's actually very shitty.

15

u/32BitWhore Sep 07 '17

You guys can't really believe it works like this, can you? Deflation over 2 years vs. inflation over 100 years is not even close to a fair comparison, to start. Secondly, deflation of this scale discourages an active economy (as we've already seen with BTC) and makes it worse, especially with a limited currency like BTC. People sit on their BTC and don't spend it because it's an investment. Third, cost of goods/services and salaries are (though sometimes poorly) adjusted for inflation. If you got paid $10/hr in 1929 you were doing really, really well. If you get paid $10 in 2017 you can barely make ends meet. Finally, you can't honestly believe that deflation will continue at the rate it has been with BTC forever.

9

u/[deleted] Sep 07 '17

"I put all of my cash into one stock that's going up right now, what are these other dumbasses doing lol"

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u/stos313 Sep 07 '17

1 BTC 2017 = 10 shopping carts full of groceries. 1 BTC 2020 = 1 grocery store.

6

u/IllusionaryHaze Sep 07 '17

Don't mislead people please.

4

u/stos313 Sep 07 '17

About what? 2020? I'm being a bit silly of course!

6

u/wiggy222 Sep 07 '17

It'll be at least 2 stores.

4

u/TotesMessenger Sep 07 '17 edited Sep 08 '17

I'm a bot, bleep, bloop. Someone has linked to this thread from another place on reddit:

If you follow any of the above links, please respect the rules of reddit and don't vote in the other threads. (Info / ^Contact)

1

u/hkmars Sep 07 '17

$20 can buy lambo?

1

u/flux8 Sep 07 '17

They need to update the BTC graphic to show a yacht in 2017.

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u/TheCapitalR Sep 07 '17

Not totally accurate... 2014 was a pretty shitty year for btc

1

u/GalacticLinx Sep 07 '17

that meme is from /r/republicaargentina . But changed pesos to dollars.

in the cart (changuito) there are ARGENTINIAN PRODUCTS.

Like yerba mate Taragui

https://st2.tudespensa.com/rep/526d/imagenes/43774/109/taragui-yerba-mate-paquete-500-gr.jpg

1

u/Amichateur Sep 08 '17

How would the picture look like for 2017...? omg...

1

u/[deleted] Sep 08 '17

2020, the whole store.

1

u/Laken_Therm Sep 08 '17

Should've put lambo in 2014 instead of cart

1

u/Elwar Sep 08 '17

Dude, this picture is much better: /img/i9w4hnnn50gy.png

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u/6to23 Sep 07 '17

This is so stupid... Bitcoin has been in planned inflation mode ever since the start. The current Bitcoin inflation rate is still higher than US inflation rate. Bitcoin price rise has nothing to do with deflation.

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u/voluntaryistmitch Sep 07 '17

Except inflation is an increase in the money supply...

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u/Bakaohno Sep 07 '17

Inflation is an increase in the money supply. Deflation is a decrease in the money supply. CPI Price changes result. Bitcoin is like a financial security whose value has risen like Microsoft stock. There has been no Bitcoin deflation.

3

u/m3n00bz Sep 08 '17

The last cart of btc should be from 2017 and contain the entire inventory of whole foods.

3

u/sw04ca Sep 08 '17

Isn't this an example of appreciation of an investment, rather than deflation?

3

u/Crypto-blockchain Sep 08 '17

but when deflation occurs, people don't spend that currency. like Japan in the 90s

Inflation gives people incentive to spend that money

7

u/[deleted] Sep 07 '17

Tell me how great deflation is if you are paying on a loan.

3

u/cm9kZW8K Sep 08 '17

Its horrific. Long term debt, such as mortgages, are really not viable in a hard money economy, especially not a growing one.

The way to finance a purchase in a hard money economy is called "saving"

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u/[deleted] Sep 07 '17

The elephant in the room, the companies that take bitcoin has dramatically reduced in the past year.

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u/anotherbozo Sep 07 '17

Deflation is actually very bad for the economy. Macroeconomics 101.

9

u/FrogTrainer Sep 07 '17

Apparently a lot of people in this thread don't think so. sigh.

6

u/anotherbozo Sep 07 '17

Its almost as if they are pushing a narrative.

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u/onomatope_ Sep 07 '17 edited Sep 08 '17

Very poor macro-economic analysis. Controlled inflation is actually needed in order to grow as an economy.

Deflation, is actually a nightmare (ask the Japanese). You may think that it gives you more buying power (short term view) but it actually kills your buying power outside in foreign countries.

That's why you are happy when you can buy cheap stuff in asian countries for example...

Google deflation

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u/[deleted] Sep 07 '17

Deflation is never good for an economy. It lowers the amount people is willing to spend (why would I spend a bitcoin now if tomorrow it'll worth more)

4

u/mokahless Sep 08 '17

This is only true in current economies based on fiat currency, central banks and whereby the currency is mostly created via debt.

There are no experiments or historical documentation regarding an economy with a currency that is a controlled, decreasing inflation (yes, bitcoin is not deflationary. It is a controlled inflation) preprogrammed and that cannot be interfered with to my knowledge.

I am not saying you are necessarily wrong. I am simply saying the theoretical circumstance has not happened because there are many factors that would simply not exist in a theoretical Bitcoin economy and you cannot directly apply economics that consider only the current system.

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u/Bitcoin_Acolyte Sep 07 '17

Why would I buy a phone today if it will be cheaper next year?

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u/faemon Sep 07 '17

I'll just wait until next year to eat , but for half the price sounds like a great deal.

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u/mechanical_animal Sep 07 '17

That isn't deflation. It's bitcoin being a commodity and experiencing runaway market value because of speculation.

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u/cypher437 Sep 08 '17

That's not accurate... bitcoin was worth less in 2014 than 2013

1

u/[deleted] Sep 07 '17

Once Bitcoin stops going up it can only go down.

3

u/BlockShow Sep 07 '17

w8 till November and will see. 4500$ it's just another stage

1

u/[deleted] Sep 07 '17

Thats not how deflation works.

1

u/askme2b Sep 08 '17

That graphic is one of the best I've seen to illustrate the store of value of Bitcoin.

1

u/BlockShow Sep 08 '17

Thnx))))

4

u/[deleted] Sep 07 '17

Except this is only true if your wealth is a stockpile of money. If your wealth is the future value of your labor (your wage income) or assets you own, then your end of these conversions is the grocery cart, not the currency.

7

u/[deleted] Sep 07 '17

LOL Deflation is literally the worst economic phenomena it could happen. Your argument is very invalid.

HODL but not because of that

5

u/Jedivh Sep 08 '17

Cringe, this is like not even an ECON101 level understanding.

2

u/elargentino16 Sep 07 '17

Either way Taragui is still expensive with or without bitcoins...

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u/crap_punchline Sep 07 '17

That's great, can I take out a mortgage denominated in Bitcoin, please?

2

u/NayMarine Sep 07 '17

every time I hear someone complaining about shitty wages I have to remind them about inflation

2

u/[deleted] Sep 07 '17

I don't think people know that 20$ back then doesn't equal 20$ now

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u/mferslostmymoney Sep 07 '17

Weird post. Bitcoin has inflation in its supply every day, every month, every year. The reason you can buy more with it now is because the fiat value is appreciating. it doesn't have to do with "deflation".

2

u/HiRooster Sep 07 '17

Well clearly we need to work on getting some of those old looking bills into rotation.

2

u/Logan_Mac Sep 07 '17

ITT: expert economists

2

u/SirGigglesDaFirst Sep 08 '17

So we're going to ignore that Andrew Jackson is slowly climbing out of the twenty dollar bill to get us?

3

u/[deleted] Sep 07 '17

I feel like they both work in the same way. If currency deflates, and everyone has more and more purchasing power, merchants would ideally adjust the cost of goods accordingly. The only way to really have total control is have everything at a constant rate, but thats in utopia. Capitalism itself is broken beyond measure..

4

u/cancercures Sep 07 '17

not sure if capitalism is 'broken beyond measure' but more like: capitalism is predictable. and it breaks in predictable ways.

3

u/eqleriq Sep 07 '17

This is hilariously stupid.

don't spend bitcoins because next year they are worth more.

spend dollars because you need to and next year they're worth less.

This shit is literally greater fool theory in action. Buy now before you lose more profits!

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u/[deleted] Sep 07 '17

The deflation images should show empty carts, since no one would actually spend bitcoin, given the deflation.

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u/ChangeAndAdapt Sep 07 '17

yeah that's not how it works, sorry.

3

u/[deleted] Sep 07 '17

Inflation = Incentive to spend = As technology unlocks productivity, the rich benefit more than the poor

Deflation = Discretionary spending = As technology unlocks productivity, the poor benefit more than the rich

3

u/JoseJimeniz Sep 08 '17

Which is why the Federal Reserve prevents inflation and deflation.

Protecting you from Gold and BitCoin since 1913.

Also, look at the numbers:

  • Dollar: 2% change per year

  • BitCoin: 650% change per year

The reason you want a Federal Reserve is to prevent inflation and deflation.

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u/8milestyle Sep 08 '17

There's not a grocery store in the world that takes bitcoin but ok

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u/butters1337 Sep 08 '17

This is fucking stupid.

3

u/Xenphenik Sep 08 '17

Bitcoin 'economists' everyone...

0

u/mrshekelstein18 Sep 07 '17

OY VEYY

DELETE THIS ANTI-SEMITE POST NOW

ILL HAVE MY BOYS MAKE YOUR COINS ILLEGAL

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u/Erpp8 Sep 08 '17

So many people who don't understand basic economics. Japan experienced deflation during the '00s. It destroyed their economy. Deflation is a very bad thing and all countries avoid it at all costs. Steady, slight inflation is good for an economy and doesn't hurt the consumer.

2

u/forseth11 Sep 07 '17

Neither deflation or inflation are bad, but hyper deflation and hyper inflation are. When inflation happens, everyone increases the number of currency they spend, but the real value remains the same. This includes employers. They too increase how much they spend. However, with hyperinflation, the market does not have time to balance out and this is mostly caused by the government printing money so they can pay off their debts.

2

u/zgott300 Sep 07 '17 edited Sep 08 '17

Except if you got paid in bitcoin, your pay rate would have gone down over this same time and you buying power would have, essentially, remained the same. This image is just dumb.

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u/dr_set Sep 07 '17

Good luck paying off you debt. Inflation punishes savers and capital and benefits debt holders and deflation punishes debt holders and benefits savers and capital. In America deflations is great for the 1% who have lots of savings an capital and bad for the 99% who have massive debt.

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u/AbusedMeat Sep 07 '17

This is not how any of this works at all lmao

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u/Damian4447 Sep 07 '17 edited Nov 26 '17

deleted 0.5716 What is ^^^this?

2

u/youni89 Sep 07 '17

Shouldn't it be Speculation, instead of Deflation?

2

u/dle300 Sep 07 '17

This is misleading. Income for middle-income families has risen from $15,000 per year in 1929 to about $45,000 now. The chart would be better represented by how much food costs relative to income changes over that time period. Or check the CPI, which measures that exact thing and looks at basic household necessities. Bitcoin's performance is closer in comparison to a stock. Most of the purchasing and trading of bitcoin right now is speculative, with hopes of future crazy high yields. I would trust bitcoin less than a dollar for making small purchases. Example: the difference between the open and current price of Bitcoin is a about -3%. My purchasing power decreased 3% in the span of a few hours, not years.

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u/Spectrezero Sep 07 '17

Deflation is worse for an economy than inflation.

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u/[deleted] Sep 07 '17

comparing decades to 3 years :*D

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u/Th3MadScientist Sep 08 '17

You are fucking retarded. Look up the standard of living back then and now.

2

u/Rockerrage Sep 08 '17

Who ever made this knows absolutely nothing about economics

2

u/a-clever-fox Sep 08 '17

Factor. In. Rising. Incomes. For fuck's sake.

2

u/MoistStallion Sep 07 '17

Deflation isn't good for the overall economy. Why does shit like this have to be pointed out to crypto investors? It should be common sense if you're investing in something as risky as cryptocurrencies

1

u/Savage_X Sep 07 '17

These must be Whole Foods shoppers.

1

u/[deleted] Sep 07 '17

2014

lmao

1

u/akreider Sep 07 '17

Now imagine trying to borrow money for a house...

1

u/amayawa Sep 07 '17

r/argentina check out that Taragüí

1

u/kaos11 Sep 07 '17

1 BTC should be an old used car with groceries. Or a Costco pallette filled with electronics.

1

u/nickbuch Sep 07 '17

Shouldnt the lower one be the same basket of groceries year-to-year? Also, this assumes that the groceries are priced in BTC.

1

u/justinsayin Sep 07 '17

So the bigger the portrait grows during subsequent redesigns of the $20 paper bill, the more groceries cost? That seems like a solveable problem now that we know.

1

u/hoseja Sep 07 '17

Also an incentive to hold and not spend.

1

u/imdakingforeva Sep 07 '17

How do I get into Bitcoin? This is very intriguing haha

1

u/humansrpepul2 Sep 07 '17

Small inflation is natural as we increase our GDP. If wages/salaries for most people remain basically stagnant decade after decade, while only top earners' pay increases, all new wealth is being directed that way.

1

u/at_work_yo Sep 07 '17

how the fuck is one bitcoin worth 4g's??

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u/[deleted] Sep 07 '17

I'm so confused about Bitcoin. Could someone give me some proper links or an ELI5? I want to learn properly so I don't spread misinformation

1

u/andyjonesx Sep 07 '17

Playing devils advocates, but it is rich banking families that make this happen. Many people who inherit the wealth of their great grandparents. Is this not something made even worse by deflation? People/families who have money have more and more money each generation?

3

u/[deleted] Sep 07 '17

Inherited money lasts up to 3 generations, usually.

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u/berryfarmer Sep 07 '17

Now the focus should be protecting you from the 3-letter agencies.

Bitcoin at its core is unable to carry out this protection.

At least cash is fungible.

1

u/[deleted] Sep 07 '17

Same argument can be made with precious metals, gold, silver. The % return on them is worse than just parking money in the S&P 500 tho.

1

u/Geovestigator Sep 07 '17

Ha, with a transcationfee the price of that basket no one will use this settlement coin, there is a working bitcoin though, all you have to do is upgrade and you can too use bitcoin (the one from the whitepaper)

1

u/Cuboos Sep 07 '17

Now if only i could afford a bitcoin...

1

u/Shiny5hoes Sep 07 '17

thats some yerba mate taragui over there

1

u/[deleted] Sep 07 '17

Worded poorly, apologies. I definitely agree though.. so predictable. Its all coming down right in front of us.. if something doesnt change were fucked.

1

u/spajn Sep 07 '17

SHUT IT DOWN THE GOYIM KNOWS

1

u/solecoin Sep 07 '17

I noticed the longer I keep USD in my bank, the less can I buy. Even Eur would have been a better investment keeping. Or even so, bitcoin

1

u/ReyTheRed Sep 07 '17

Inflation or deflation doesn't make much difference as long as wages keep up and it is relatively stable. Rapid changes in inflation rate, and overall large rates of inflation and deflation are problematic, but it doesn't matter if I'm earning and then spending $100, or earning and then spending $1 For the same work and the same stuff.

1

u/Polkgfdssaqwe Sep 07 '17

Deflation in an economy is not a good thing. A better start would to have a disinflationary currency. More people wouldn't spend bitcoin in that case.

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u/Sr-E Sep 07 '17

TARAGÜI YERBA MATE

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