Deflationary Monetary Policy


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Winston
Winston
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Scott J
Scott J
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This is cryptocurrencies killer app: being deflationary stores of value in an increasingly inflationary world. 


mausarm
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So, do you think a deflationary coin is a good thing for the IoT in the long run?
IrishOnTinder
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Perhaps the biggest fear regarding deflation concerns debt and interest. When you have deflation, the actual value (in terms of purchasing power) of debt increases over time, even with 0% interest on the debt. I don't think loans are going to play such a big role with IoT/IOTA when compared to fiat and banks for instance. It's going to be a new kind of economy so your guess is as good as mine. Personally I think IOTA being deflationary is a good thing because it encourages early adoption which in turn should lead to a better future at least. Everyone knows IOTA isn't inflationary so even if there would be some type of IoT lending activity with it, deflation shouldn't come as a surprise to anyone (risks are known). Because IOTA is deflationary, most of the developers are happy to receive their salary in IOTA which is a good thing as well in my mind.

The fact that currently the value of IOTA is pegged to inlationary currencies complicates things a bit though (there will be minor inflation of BTC supply too for a century or so). Still, I think it's a good thing there is a fixed supply of IOTA.

Scott J
Scott J
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mausarm - 27 Nov 2017
So, do you think a deflationary coin is a good thing for the IoT in the long run?

Yes, it is a fine thing. The max supply can be increased in the future if needed without having an inflationary effect on current holders. For example, by adding a 0 to the end of everyone's balance. 
GO

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