I think a key factor is that humans don’t actually behave as rational utility-maximizing agents. Most people will treat the value of an asset as being approximately its current market spot price, and only slightly adjust in the direction of what they expect its long-term value to be.
I wouldn’t expect merchants to line up outside your house, but their websites might list prices like “Blueray player -- 3.89 millicoins”.
The price itself doesn’t indicate hyper-deflation. That price could be the product of years of single digit deflation. Hyper-deflation I think can only happen if there is a run on most real goods—where people are literally in a panic to exchange their goods for rapidly decreasing numbers of bitcoins. Otherwise how would it feed on itself the way hyper-inflation does?
Unfortunately I don’t know enough economics to sustain this discussion past this point, so I’m going to refrain from further making things up. I assume you have a good question, and I recommend you put it to someone who can answer it.
I think a key factor is that humans don’t actually behave as rational utility-maximizing agents. Most people will treat the value of an asset as being approximately its current market spot price, and only slightly adjust in the direction of what they expect its long-term value to be.
I wouldn’t expect merchants to line up outside your house, but their websites might list prices like “Blueray player -- 3.89 millicoins”.
The price itself doesn’t indicate hyper-deflation. That price could be the product of years of single digit deflation. Hyper-deflation I think can only happen if there is a run on most real goods—where people are literally in a panic to exchange their goods for rapidly decreasing numbers of bitcoins. Otherwise how would it feed on itself the way hyper-inflation does?
Unfortunately I don’t know enough economics to sustain this discussion past this point, so I’m going to refrain from further making things up. I assume you have a good question, and I recommend you put it to someone who can answer it.