Hi again @brian-rhodes! This is my full response after educating myself more on the issue of 'in-built' inflation of inflation within which exists in both BItcoin and Steem.
Though, implemented in slightly different manners, both Bitcoin and Steem have a an 'in-built' function of inflation that is set with the release of more of it's tokens over time.
The case of inflation for both Bitcoin and Steem, in comparison to the inflation of fiat currencies by central banks is starkly different.
In both cases, the inflationary nature of the coins are implemented with the purpose of the long term advancement of the token itself and with very clearly intention and consensus as to their implementation.
With the transparency of the inflation with a reasonable effect of said inflation, widely available public knowledge, and of exact amounts. This then allows any individual or entity to then accurately calculate and presume a certain value of the token itself.
As such, it would not be classed in the same manner as central bank inflation and not deemed in the same class of theft for the differing factors to these cryptos as the inflation in question :
Is transparent and known from the start, hence can and should be calculated to the overall value of the tokens, and more accurate calculations as to the actually value of the currency is adjusted for.
Has a clear consensus as to why it done in this manner.
Will eventually cease production according to timeline.
As such, it is much more accurate to say that the term 'inflation' would fall short, I'd rather use the term 'currency reserves' as it's existence is clearly stated from the very beginning and can be accounted for as being part of the total sum of tokens in existence from the get go.
In comparison to central banks, whereby there is often no public consensus as to why there is inflation, it was not initially agreed upon to have said inflation at the beginning of the minting of the currency and worse of all can be done at will and spent unbeknownst to the public, whose money is actually being spent nor have a say whether that shoud be allowed.
Leaving the real economy to absorb it's expenditure ony after the fact when it is far too late.
In regards to Bitcoin, it is to my understanding that is created as a naturally deflationary currency, as Satoshi Nakamoto modelled Bitcoin mining very much in the same way Gold mining works.
"natural deflation"... I like that name for it. Yes, there will be natural deflation due to payment mistakes and lost data. Coin creation will eventually get slow enough that it is exceeded by natural deflation and we'll have net deflation.
Those coins can never be recovered, and the total circulation is less. Since the effective circulation is reduced, all the remaining coins are worth slightly more. It's the opposite of when a government prints money and the value of existing money goes down.
If something about the deflationary nature of Bitcoin has changed, I do not know of it. If there is however, I'd very much like to know.
Steem Inflation
Coincidentally, I was just about to delve into understanding the workings of Steems inflation model as it relevant to my next post. I am currently not of full clarity of it's workings and would restrain from giving any opinion on the matter, but I will definitely come back to go through it. Once I have further understood it's working, which will also be part of the subject of my following post.
Would you have any thoughts or comments on this post? I am always looking for honest feedback so that I may grow.
Nonetheless, thank you for dropping by and finishing the long post. It is very much appreciated.
To understand better STEEM, start here, read the report then go down to the comments and you'll find people who keep up with this topic. Before this, STEEM inflation was set at 50% of the original STEEM tokens sold at the ICO - way out of line as was seen after launch. Good luck.
I have actually begun my research on the matter, am I accurate on the fact that after the hard fork, the rate of inflation has since been adjusted to about 9.5% per annum decreasing at 0.5% each year?
Hi again @brian-rhodes! This is my full response after educating myself more on the issue of 'in-built' inflation of inflation within which exists in both BItcoin and Steem.
Though, implemented in slightly different manners, both Bitcoin and Steem have a an 'in-built' function of inflation that is set with the release of more of it's tokens over time.
The case of inflation for both Bitcoin and Steem, in comparison to the inflation of fiat currencies by central banks is starkly different.
In both cases, the inflationary nature of the coins are implemented with the purpose of the long term advancement of the token itself and with very clearly intention and consensus as to their implementation.
With the transparency of the inflation with a reasonable effect of said inflation, widely available public knowledge, and of exact amounts. This then allows any individual or entity to then accurately calculate and presume a certain value of the token itself.
As such, it would not be classed in the same manner as central bank inflation and not deemed in the same class of theft for the differing factors to these cryptos as the inflation in question :
Is transparent and known from the start, hence can and should be calculated to the overall value of the tokens, and more accurate calculations as to the actually value of the currency is adjusted for.
Has a clear consensus as to why it done in this manner.
Will eventually cease production according to timeline.
As such, it is much more accurate to say that the term 'inflation' would fall short, I'd rather use the term 'currency reserves' as it's existence is clearly stated from the very beginning and can be accounted for as being part of the total sum of tokens in existence from the get go.
In comparison to central banks, whereby there is often no public consensus as to why there is inflation, it was not initially agreed upon to have said inflation at the beginning of the minting of the currency and worse of all can be done at will and spent unbeknownst to the public, whose money is actually being spent nor have a say whether that shoud be allowed.
Leaving the real economy to absorb it's expenditure ony after the fact when it is far too late.
In so making it theft.
God Speed Brethren.
Good stuff!
Hello good sir!
In regards to Bitcoin, it is to my understanding that is created as a naturally deflationary currency, as Satoshi Nakamoto modelled Bitcoin mining very much in the same way Gold mining works.
Extrapolating from my previous post : Chronicles of the Father of Blockchain : Satoshi Nakamoto, quoting Satoshi himself from comments he made on the Bitcointalk forum :
If something about the deflationary nature of Bitcoin has changed, I do not know of it. If there is however, I'd very much like to know.
Steem Inflation
Coincidentally, I was just about to delve into understanding the workings of Steems inflation model as it relevant to my next post. I am currently not of full clarity of it's workings and would restrain from giving any opinion on the matter, but I will definitely come back to go through it. Once I have further understood it's working, which will also be part of the subject of my following post.
Would you have any thoughts or comments on this post? I am always looking for honest feedback so that I may grow.
Nonetheless, thank you for dropping by and finishing the long post. It is very much appreciated.
God Speed Brethren.
To understand better STEEM, start here, read the report then go down to the comments and you'll find people who keep up with this topic. Before this, STEEM inflation was set at 50% of the original STEEM tokens sold at the ICO - way out of line as was seen after launch. Good luck.
I do believe you are missing a link good sir.
I have actually begun my research on the matter, am I accurate on the fact that after the hard fork, the rate of inflation has since been adjusted to about 9.5% per annum decreasing at 0.5% each year?
The references I found for this :
STEEM Hardfork Version 0.16.0 Informative Post
What is the inflation rate of STEEM?
I am currently reading the post hardfork Steemit Whitepaper.
It’s an age thing! Ha!
https://steemit.com/steem/@steemitblog/final-review-of-steem-economic-changes
This should be a good place to start. Stay well.
Much thanks! I have found the same article and read the entirety of it!
I have drawn my own conclusion on the matter to your initial question and will reply there as to not get drowned out and invisible to others!