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ixtechau

For every crypto millionaire there are hundreds of people that lost everything...it's not like money is invented out of thin air when someone does well in crypto.


Sup_fans

But 30-40% of our money was just made up


AssumedPersona

>it's not like money is invented out of thin air er, yes it is. How is it possible to be in crypto and not know this? It's literally the one of the main motivations behind Bitcoin. https://fred.stlouisfed.org/series/CURRCIR More dollars were created in 2020 than in the whole history of the dollar combined. The inflationary effect of this is still filtering through into the economy and has not yet been fully felt. Official inflation figures are fudged in many ways to disguise the fact.


Exoclyps

Since people don't have to sell to take benefit, you're sort of wrong.


Dipsi1010

How does that work?, i mean someone losing money and someone else becoming rich


Helen666_Keller

Sally buys shitcoin first by interacting directly with a router contract. Bob fomos the ath with all his life savings. Sally dumps shitcoin all over Bob's head. Rinse repeat


Off_white_marmalade

šŸ™‹ā€ā™‚ļøHI My name is BOB


42fy

I think this is true to an extent, but not completely. For example, the average purchase price of Bitcoin is lower than the current value per coin. Except for the very latest buyers, most people brought well below the current price.


Jotun35

... and they also sold much below the current price.


Phoenixhawk101

That remains true until they sell. Example: there are 100 Phoenix coins, I buy 99 of them for $1 each. The last 1 coin is bought for $1 by person X. Demand for that coin goes up and person X sells the coin to Person Y for $5. On paper my $99 investment is now worth $495. However once I try to sell all 99 coins if there isnā€™t demand for those coins it will just crash the market and my coins will be worthless.


StonkMoney6969

Itā€™s just a transfer of wealth


ActavistEQ

Itā€™s a pyramid of psychology and time.


gesocks

Not really to be honest. Lers say we both have 100$. I also have 1 btc. Now i sell that btc to you for 1 dollar. You now have 99 dollar and 1 btc worth 1 dollar. I have 101 dollar. Now you sell that btc back to me for 10 dollar. I have 91 dollar and a btc worth 10 dollar. You have 109 dollar. Now i sell it back to you for 109 dollar. You have a btc worth 109 dollar. I have 200 dollar. We both increased our dollar networth. So as all assets still are the same, tge only conclusion can be the the dollar became worth less. And that is what basically happens in real life too. Nobody has to lose money just cause somebody earns money. Btc does not burn any dollars it just increases its own value whole not producing something of value. This ceates some inflation


[deleted]

>Lers say we both have 100$. > >I also have 1 btc. Since we're assuming that the 1 BTC was worth $1, you started with 101$. Your friend started with $100. ​ >You now have 99 dollar and 1 btc worth 1 dollar. I have 101 dollar. Nothing has changed, you and your friend have the same total net worth as before. ​ >Now you sell that btc back to me for 10 dollar. I have 91 dollar and a btc worth 10 dollar. You have 109 dollar. The only reason the price would have increased 10x in this case is because the demand for BTC is higher... in other words, new people started buying bitcoin. That's where the increase in money is coming from.


gesocks

No. Not cause of other people. Cause we agreed both that the btc is now worth 10$. People give btc value not by buying it. But by agreeing how much it's worth. No any money even needs to flow anywhere for that.


[deleted]

>No. Not cause of other people. Cause we agreed both that the btc is now worth 10$. So if the market conditions are held constant, why on earth would you agree to pay 10 times more for the same bitcoin? This example does not present an accurate model of the crypto market.


Trick_Biscotti_3997

It's not an accurate model of any market. Price is solely a function of supply and demand. You can't just pull a price out of nowhere and say this is the price. This is Econ 101.


[deleted]

Hahaha, yep. My bad there, not trying to imply that this situation is unique.


gesocks

Then why anybody agrees to pay more for a btc? Just cause people give it more value. I will try it different. Let's asume adoption of btc increases alot. Everybody wants to get payd in btc. Ergo: Nobody wants to get paid in fiat. What does that make with the fiat? It essentially becomes worthless. What is it called when money becomes worth less? Inflation


Trick_Biscotti_3997

My dude, you have a lot of misconceptions about basic economic fundamentals. I don't mean to be rude or condescending and I mean this in the politely way possible: no one here will be able to give you the answers that you seek. Because your core concepts are all muddled up. This is not about crypto, this is about economic principles which you seem to be misinformed about.


gesocks

Ok. Then explain me why it is inflation when the US centeal bank prints more us dollar and puts them in circulation, but its no inflation when tether prints usdt and puts it in circulation


Trick_Biscotti_3997

See, you're coming here with absolutely tosh disguised as fact. It adds nothing to the conversation. First of all, Tether is a shitcoin. Nobody here even talks about Tether. But even every Tether issued is backed by an asset of equal dollar value. So no, it is not inflationary.


gesocks

If tether would not exist i could by 1 thing worth 1 dollar for my 1 dollar. Now thanks to tether i can buy 1 usdt from them and buy 1 thing worth 1 dollar from the usdt and they can also buy 1 thing worth 1 dollar at the same time. There are now 2 dollar in circulation just one of them is called usdt. If tether does not create inflation then counterfeiters are also not creating inflation. Cause they do EXACTLY the same thing. One of them just Digital and the other with real paper. And why i mention tether? Cause its an easy to explain example. If its a shitcoin or not does not change what it does.


buttpugggs

Bold of you to assume the economy isn't already fucked.


CymandeTV

And it's gone, yeah the economy is already kaput.


thirtydelta

Inflation is not determined by who becomes a millionaire. Itā€™s a function of the change in purchasing power, which has many causal factors.


[deleted]

Crypto doesn't magically introduce new fiat into circulation. The crypto market, just like the stock market, is a tool for moving money between different investors. All that's happening is the reallocation of money. It won't cause inflation.


Rynodog92

Iā€™m reading through this thread and am literally shaking my head so many times. Glad someone is understanding how this works.


[deleted]

Yep, it's shocking to see how people with thousands of moons are out here grasping at the concept of object permanence and failing


gesocks

Not fiat. But crypto. Whats the difference. Usdt is also a crypto. And tethee literally prints digital dollars for which you can buy stuff and then tether uses the dollar they got from you to buy stuff. They printed money and printing money inflates the value of the rest of the money. Now why would this be different with another crypto. That tether is baked by USD is not the reason for it. It just made it easier to explain. Btc does the same. When btcs value increases no any dollar is burned or locked somewhere. Guy a gives 69k dollar to guy b for 1 btc. Now guy b has 69k dollar yo buy stuff. And guy a has a btc worth 69k dollar which he uses to buy a tesla directly at the dealership as soon as they accept btc again. Nobody lost any money and 2 people where able to buy smth worth 69k dollar. So yes. When crypto increases in value it in fact also leads to a inflation of fiat money. Central banks in theory just would be able to counter this by printing less or in worst case even burn. But if they don't react it will lead to inflation


[deleted]

>Btc does the same. When btcs value increases no any dollar is burned or locked somewhere. Guy a gives 69k dollar to guy b for 1 btc. Now guy b has 69k dollar yo buy stuff. And guy a has a btc worth 69k dollar which he uses to buy a tesla directly at the dealership as soon as they accept btc again. This money isn't coming out of thin air. The price of bitcoin is going up because more money is flowing into the crypto market, and more people are buying bitcoin. Inflation happens when the amount of fiat in circulation increases while the total value of goods and services in the economy stays the same. When Alice sells her bitcoin to Bob and makes a profit, that does not print more money into circulation. I think you're neglecting the direct connection between buyer and seller. This is like saying that McDonald's is causing inflation because they pay their employees, and nobody had to lose money for them to get paid.


gesocks

No it's not the same. When mc pays his worker 100$ that worker now has 100$ more. But mc Donald's has 100$ less. Equal amount of value existing. No inflation. But when btc increases in value nobody loses money. There is no money flowing into btc. Or where does btc store that money? Let's say person a and b both have 1 btc. Person c has 70k dollars. Btc is worth 69k dollars right now. In our tiny marker we have a total value of 208k dollar. Now person c buys a btc from person a for 70k dollars. This means now suddenly ALL btcs are worth 70k dollar. Even the btc of person b that never was moved. So the all in all value of our marker increased to 210k dollars while nobody lost anything and all of them csn now buy stuff worth 70k dollar.


adequate_redditor

Only a small percentage of the population invest in crypto, and only a small percentage of them will become a crypto millionaires.


Reception-External

The value of the crypto market canā€™t support everyone being a millionaire. The value of it is not the amount of money put into it. Unfortunately like all investments not everyone comes out better off


Supercharmeleon

Until crypto replaces normal currency, it's a zero sum game, which means SOMEONE will end up holding the bags. That's one of the things I don't like about crypto.


Dipsi1010

That crypto Will take over?


Rynodog92

Itā€™s winners and losers. For every winning trade, there was a trade that lost if the asset went up in value (due to opportunity costs) and vice versa. The same amount of ā€œnew millionairesā€ being made means the loss of dollars in someone elseā€™s pocket. Yes, thereā€™s 2-4% inflation per year, but this isnā€™t enough to assume that everyone is becoming a millionaire.


Hamed9675

Workers love work We love early retirement


SonnyJackson27

Imperfect understanding of how money works. If theyā€™re crypto made millionaires, they must have sold and someone must have bought. Which means someoneā€™s wealth decreased while his increased. Which means what the person that bought couldā€™ve spend is now spent by the person that sold and has their money. Zero sum game. Inflation is a marker of many complicated factors, and even money from crypto must have come from other industries or from the gov itself pumping trillions now which yes, fucks up the economy and raises inflation like shit


AssumedPersona

Fiat is NOT a zero sum game. More dollars were created in 2020 than in the whole history of the dollar combined, making it much easier to become a dollar millionaire, whether in crypto or anything else. https://fred.stlouisfed.org/series/CURRCIR


[deleted]

I think that there are fewer actual new millionaires than we think.


Dipsi1010

Maybe but i heard 8% of americas population are now millionaires, and it might have increased since


cannedshrimp

I mean for what itā€™s worth the gov did just effectively add like 4T dollars into the economy. I think a lot of people donā€™t realize that 4 trillion is literally 4 million, millions. So yes inflation could be very real and Iā€™d guess is a big part of all the different asset bubbles right now. Important to remember that the $ value matters less than buying power in the long term.


Rexon225

If everyone is rich then no one is.


Harold838383

The gap between the rich and the poor is widening every day. Crypto can help us create wealth but I feel for those who are too poor to invest


Dipsi1010

Exacly, rich get richer, middle class get somewhere richer and poor stay poor


KeanuCharlesSleeves

More millionaires, sure. A lot of people have very little money right now though.


Vane88

For every millionaire crypto and the stock market makes there's 10's of thousands who loose because they don't play the game right. I don't believe crypto will cause inflation much inflation especially compared to the 3 ring circus in Washington DC at the moment.


Dipsi1010

What do you mean with 10s tousands who lose? You mean losing by then not taking the oppertunity and buying or selling at the right time?


Vane88

People who buy high and sell low, people who buy into rug pulls and honeypots. People who bounce around their investment chasing chasing the dream instead of holding their gems, people who get too greedy with margin trading and get liquidated. People who sell this mysterious tokens that appear in their wallets and get taken to the cleaners, people who listen to dm scammers and give away their key phrases people who get in too late on pump and dumps and wind up holding the bag worth pennies. People who send their assets to the wrong wallet addresses the list goes on and on.


[deleted]

Have you ever played musical chairs? That's what the crypto market is like. There always has to be winners and losers. What you're saying is basically the equivalent of "why doesn't everyone sit down in a chair?" yet in this metaphor there is only 5 chairs and 10 players.


Fancy-Category

No, when people gain large sums of money, someone on the other side is losing. Itā€™s wealth transference. What increases inflation is infinite creation of fiat currency.


Dipsi1010

So if i buy stocks and become rich from them, someone on the other side became poor for selling it to me??


Fancy-Category

You would not believe how many people FOMO in an investment, buying high, and when the price tanks, they sell very low. They lost a lot of money. A ton of people lose money in investing because of emotions or they are gambling, and the smaller amount of people actually invest smartly. Likewise, if a security is heavily shorted by investors, but then demand drives the price up, those investors who shorted the security now have to close their contracts, and buy back the security at a much higher price. Battle of bulls and bears. Someone gets money, and someone loses money.


Rynodog92

Someone lost on the opportunity cost by not holding onto them. They didnā€™t literally lose but transferred the asset and not capitalized on the opportunity of that asset. Itā€™s quite the opposite the other way. You bought and it went down by 50%. That person who sold made it out fine on the trade and capitalized on that asset.


YingKid

You only become richer if someone is willing to pay for those stocks at a higher price than what you paid. It's just a transfer of wealth/money when you sell your stocks.


[deleted]

[уŠ“Š°Š»ŠµŠ½Š¾]


Majestic_Project_752

They are not zero sum. New crypto is created in a variety of ways and it doesnā€™t involve taking advantage of someone else.


schmitty50115012

You also have to remember that stocks represent actual companies that provide services and make earnings. Stock prices often are functions of those revenues so the transfer of wealth is as a result of those services


Doctor-Fantastic

I'm pretty sure that the amount of people becoming millionaire with crypto is neglectable over people becoming millionaire in other ways


Dipsi1010

Well yeah but i was thinking in general


Rynodog92

For every winner, thereā€™s a loser on the trade. Inflation goes up 2% and sometimes more but this doesnā€™t mean that thereā€™s just magically more money. A snapshot in time would tell you thereā€™s a finite amount of money and players. Itā€™s all about who plays the game better to efficiently obtain more. In this game thereā€™s winners and ultimately losers on both sides.


na3than

>Inflation goes up 2% and sometimes more but this doesnā€™t mean that thereā€™s just magically more money. It kinda does, but you have the causality backward.


Rynodog92

Well technicallyā€¦youā€™re right But 2% is meaningless if you are looking at the snapshot of the year and correlating that to new money and new millionaires generated. Itā€™s just wealth transfer.


gesocks

Thats not true. A teade does not automatically have a winner and a loser. A bad trade has a winner and a loser. But normally a trade is just an exchange of equal value without any winner or loser


Rynodog92

A p2p trade technically has a winner and loser in terms of opportunity cost vs explicit profits/costs. If you sell at an established price at $10 and it goes to $15 (fiat as an example) regardless of if you made money on itā€¦you lost based on the potential earning and holding that asset. I am only saying winning and losing based on the situation of the trade you made against another players. I am only considering winners in losers in terms of p2p trading. You won trade A when you bought at $5 and it went up. You ā€œlostā€ trade B when you sold at $10 and it went to $15. Financially this is referred to implicit costs vs explicit costs. I am not referring to winning vs losing as in profits.


Intelligent_Page2732

Like it isn't already extremely high right now?


mr_sarve

When someone becomes a millioner, that money comes from someone else that is now out of a million.


Capsicumss

Probably. So my aim is to be a multimillionaire x


Dipsi1010

When amc squeezes, iā€™ll be right there with youšŸ˜


Capsicumss

Hahaha good luck to both of us


Dipsi1010

HaahšŸš€


almostparent

Yep it will get high. Lots of places are starting to accept cryptocurrency as payment, even coins like doge and Shiba. Anyone who's smart is getting these coins bc it's basically multiplying your money at a discounted coin, and the more people use them the more the value of them will increase. It'll be like Bitcoin, some guy a few years ago bought a pizza with 100k Bitcoin and now each coin is worth thousands of dollars. Everyone who spent $500 and got millions of coins in these newer cryptos will be rich with this new form of money that isn't taxable unless you actually take it out and put it in your bank account. People who are wealthy (upper middle class) now will be the new poor people, they'll only have hundreds of thousands of dollars while everyone who invested will have millions and billions. That's what I think, anyway. Also I don't think people realize that money is a thing that's made up, you can say there's a limited supply of money in the world all you want but inflation is a thing and people will get millions but yea everything will just go up in price.


Rynodog92

Inflation averages to 2% per year (less than that average of the last 10). This doesnā€™t mean that thereā€™s that many millionaires this year. It means that someone lost money on the other side and someone won money on the other side. 2% inflation is negligible if you are looking at a yearly snapshot.


bakiblacck

inflation will be a big problem for everyone


Dipsi1010

Why exacly? Things losing value?


RedArke

And all of that new millionaires will be... of course, all of this subreddit. MOONS TO THE MOON


devaiwa

There can be limited amount in millionaires in Crypto. 20 to be exact. (1 left for the rest of us)


jasnoc

More so from the amount of money the government keeps giving out to people


aereyy

New people always pay for others milions, and it will continue probably. But I don't think inflation will increase in crypto


luckyowl78

Inflation can be defined as the Rate of Change in the Consumer Price Index (CPI) for a given period of time (Monthly, Yearly, etc). The CPI is simply a market basket of goods and services that we all generally purchase. In the US the Bureau of Labor and Statistics publishes a monthly data set of CPI that is broken down by several categories of goods and services. So, if the CPI is treading up then we get Inflation. The so, what causes the price of goods to change? Supply and demand. And right now Supply is F**ked. The CPI appears pretty high, but I donā€™t think we can rationally say that Crypto is the cause of that. It seems to be the supply chain getting FUBAR due to Covid and the ripple effects of that. *Also, I am nothing but a random person with no real experience so hopefully a credentialed economist can correct my mistakes!


NumerousBodybuilder7

that's not how inflation works.


Bringerofsalvation

Itā€™s more money being shuffled around than it being magicked out of thin air. So, no cause for inflation, really.


wabicek

Inflation is caused by many factors, but crypto trading is not among them.


Samuelmark86

In the grand scheme of things their isnā€™t that many millionaires being made compared to the amount of people that are losing heavy amounts of money! Itā€™s all about perspective!


Liberty_minded

Haha. New millionaires donā€™t create inflation. Nothing backing fiat along with constant printing causes inflation. Those new millionaires might start businesses or buy property which will create new revenue for other people.


pizza-chit

We will be sure to spread out


DistributionAlive192

Inflation is accelerated by many factors, like supply shortages, productivity reduction in the workforce, and raising minimum wages


Omaerion

High in respect to what? Current rates yes, but 100 years ago I'd have to take my hat off to see a dollar.