1) Bitcoins do not have a known rate of inflation. The demand to hold units of a currency and the quantity of that currency determine its value together. In the limit, where the quantity of bitcoins in circulation is near the limit, so producing more is very expensive, the demand to hold bitcoins is the primary thing influencing the value of bitcoins.
2) The reason mainstream economists think that the quantity of dollars is important is for business cycle reasons, rather than the divisibility of money. Roughly: prices are sticky, so changes in the demand for money relative to the quantity of money have real effects. more.
1) Bitcoins do not have a known rate of inflation. The demand to hold units of a currency and the quantity of that currency determine its value together. In the limit, where the quantity of bitcoins in circulation is near the limit, so producing more is very expensive, the demand to hold bitcoins is the primary thing influencing the value of bitcoins.
2) The reason mainstream economists think that the quantity of dollars is important is for business cycle reasons, rather than the divisibility of money. Roughly: prices are sticky, so changes in the demand for money relative to the quantity of money have real effects. more.