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Well, in theory, Bitcoin is deflationary: By holding it it goes up in value, not down, over time. This has its own problems, and it yet remains to be seen if those problems are insurmountable. We shall see. But insofar as Bitcoin is what it is, this means that it doesn't suffer from this specific problem, in theory.

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That theory relies entirely on the supply side. But what about the demand side? Without accounting for both you know nothing about the price of something traded on a market.

What if next year some other cool new "currency" comes along and no one wants your stinkin' bitcoins any longer? Does it matter that supply has a cap? No. It matters as little as the limited supply of paintings created by some forever unknown artist.

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