Create account

replied 2311d
Sk8eM dUb
You mean source the claim? Velocity increase inflation?

https://seekingalpha.com/article/4045250-velocity-money-mean-u-s-inflation

https://www.investopedia.com/terms/v/velocity.asp
3 / 23
Sk8eM dUb
replied 2311d
Oh yeah - this equation (GDP = V * M) is extremely misleading. When you charge something on your credit card or get a loan the issuer is literally printing money.
replied 2311d
Nominal GDP, not real GDP, with that distinction is is not misleading. There is inflation when the velocity of a currency goes up, even if no more money supply is issued (created:Debt)
Sk8eM dUb
replied 2311d
"should have a higher rate of inflation" - as in, they need to print more money to keep up with demand for the medium of exchange.
replied 2311d
The inflation increases with velocity even if there is no increased supply of money, you can increase the supply without immediate inflation as long as it is not put into circulation.
Sk8eM dUb
replied 2311d
I think about it like Chucky Cheese tokens. There's more demand for the tokens as more kids want to play games. Demand up + fixed supply = price up. Simple as that.
replied 2311d
The supply in that case is the time/space for games, not the tokens themselves. The "game" that people want to play with Crypto is "Increase Purchasing Power" not buying stuff with it.
replied 2311d
I should say, the majority of the people in the crypto space, at least the amount that hold, which determines the price. There are people who have real use and value out of crypto.
replied 2311d
The Global censorship-resistant peer-to-peer aspect of crypto has value for the person that uses it, but that is not what determines the price, it is what gives a human some utility.
Sk8eM dUb
replied 2310d
https://bitinfocharts.com/comparison/sentinusd-price-btc.html#log
replied 2310d
Are you making the argument that the more people use a crypto to transact, the higher the market cap of that crypto will be? (All other things being equal)?
Sk8eM dUb
replied 2310d
I mean it may be that increased transactions are only one sign of that crypto's desirousness so higher price is just a side effect? But this chart doesn't seem to indicate that.
Sk8eM dUb
replied 2310d
I thought that was basically self evident until you suggested it was different. Just because, the more you use it, the more useful it becomes perhaps?
Sk8eM dUb
replied 2310d
We must be getting our definitions crossed somewhere. Explain why purchasing power is directly correlated to "sent in USD" which is the best indicator of velocity I can think of:
Sk8eM dUb
replied 2310d
Here's hoarding inversely correlated to velocity and purchasing power: https://bitinfocharts.com/comparison/top100cap-sentinusd-btc.html#log
Sk8eM dUb
replied 2310d
Looks to me that the trend reversals are happening in the Top100 first(after the initial distribution). If it's true that would mean velocity causes purchasing power.
replied 2310d
The opposite is true, velocity (all other things being equal) reduces the purchasing power (price per BCH) and total market cap.
Sk8eM dUb
replied 2310d
I think that's why things like Tipping Tuesday are so heavily trolled and down voted on reddit, cuz it gets the money moving moving ultimately increasing it's power.
replied 2310d
If the tip makes the persons getting the tip buy and hold BCH then it will have an upward effect on the price, but the price of BCH does not go up by people using it to transact. If ->
replied 2310d
🤖 1 BCH = 440.39$ 📉 -2.37%
Tips = fuel️
replied 2310d
-> it was the case that more transactions/trades meant higher price, we would see a feedback cycle of spend/replace that would make the crypto increase independent of aggregate holding
Sk8eM dUb
replied 2311d
You mis-read that my man- Economies that exhibit a higher velocity of money relative to others tend to be further along in the business cycle and should have a higher rate of inflation
replied 2311d
Then we agree, the more people use BCH the lower the price will be, but that is good thing as the inflation reflects that the utility (Unit of exchange) that BCH has for users.
replied 2311d
Unless I misinterpreted your analogy, I do not think that business cycles applies for crypto the same way as it does for the economies that has expansions/contractions.


About Privacy Terms Stats