- The zero interest rate lower bound could be an even more serious problem for Bitcoin than for existing currencies.
- Bitcoin is designed to combat deflation by using smaller and smaller denominations.
- From a finance point of view, what is most interesting about Bitcoin is that it is perhaps the first currency to be designed with a strong deflationary bias.
- In paper currencies, if I lose a currency note, somebody else probably finds it, and so the note remains in circulation.
- While most fiat currencies end up printing notes in higher and higher denominations to combat inflation, Bitcoin is designed to combat deflation by using smaller and smaller denominations like milli bitcoins and micro bitcoins all the way down to the smallest unit named the Satoshi which is equivalent to 10 nano bitcoins.
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@Saimanbobbypins: “The Indian Economist: The Mantra of a Futuristic Economy: Think Small?…”
The effects of Bitcoin makes the author ponder over the future of money and the long lasting consequences of various innovations in currency.
The Mantra of a Futuristic Economy: Think Small?