Is in-built deflation an advantage or disadvantage

Is in-built deflation an advantage or disadvantage

  • it is disadvantageous

    Votes: 0 0.0%

  • Total voters
    6

AnarchicCluster

Active Member
Dec 22, 2014
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Hello economists of darkcointalk, I wonder what is your opinion on deflationary currencies. In the current fiduciary monetary system, an inflation at 2% seems to be some sort of rule of thumb for most central banks. Darkcoin and many other cryptocurrencies are deflationary what means that they will slowly gain in value as economy around them grows bigger and bigger. I personally believe that because the supply is governed by an algorithm and is absolutely predictable, markets should be able to adjust even in spite of certain level of price stickiness.
On the other hand, inflation incentivise people to spend their money instead of holding on to it. In theory, that should speed up the development of the economy.

What do good people of darkcointalk think?
 

DrGonzo87

New Member
Feb 12, 2015
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It seems to be good for speculation. The scarcer the asset, the more it's affected by deflationary pressure. An obvious example is gold, which is more expensive than silver because it is rarer, so a higher price can be asked for it. I notice the same principle applies to assets like BTC, DRK, Counterparty, Monero, etc.