> Lack of supply leads to a lack of velocity, which leads to a lack of liquidity
How does one define supply with a divisible unit like bitcoin? Arguably, supply does not diminish, rather people use smaller units of bitcoins.
How does one define supply with a divisible unit like bitcoin? Arguably, supply does not diminish, rather people use smaller units of bitcoins.
Tldr; Bitcoin is deflationary because math.
Secondly, at some point, calculations become onerous. Like, if btc is $100k/coin, then normal, every day transactions will need to be in 0.000001 coins. Which is an incredibly annoying unit to work with, it's trivially easy to miss an order of magnitude, i.e., 0.0000001 at a glance, is that a dime, a dollar, or a ten?
Accidentally give a $100 instead of $10 once, and you'll be annoyed, do it twice and you're done using btc.
Further details: http://bitcoinchaser.com/bitcoin-units-and-denominations