Assets, Bitcoin

Is Bitcoin an Inflationary?

Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain.

Bitcoin is unique in that there are a finite number of them: 21 million.

Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.

As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.

NOTE: WARNING: One of the most important things to remember about Bitcoin is that it is not an inflationary currency. Unlike fiat currencies, there is no central bank or government that can control the supply of Bitcoins and increase its money supply. Therefore, it does not have a built-in mechanism for increasing the amount of money in circulation, like an inflationary currency would. Therefore, it is important to understand that investing in Bitcoin carries potential risks since its value is highly volatile and unpredictable.

According to research produced by Cambridge University there were between 2.9 million and 5.

8 million unique users using a cryptocurrency wallet, as of 2017, most of them using bitcoin.

During its 30 months of existence, from January 2009 to January 2011, the first bitcoin protocol and software was developed by Satoshi Nakamoto. Nakamoto created the Bitcoin network and the first units of the bitcoin cryptocurrency, called bitcoins.

Bitcoin is an inflationary currency. There will only ever be 21 million bitcoins in existence. Once all 21 million have been mined, that will be the total supply forever.

This makes Bitcoin unlike fiat currencies which can be inflated at the whim of central banks (such as the US Federal Reserve). While there will always be demand for Bitcoin (as it is useful as both a store of value AND a medium of exchange), there will never be more than 21 million in existence which gives it scarcity value.

Previous ArticleNext Article