Altcoin inflation has been a major drag on prices!steemCreated with Sketch.

in #crypto5 years ago

Altcoins have been getting absolutely crushed for much of 2019

However, bitcoin has been performing very well.

Why is that?

Well, it has been happening for several reasons mostly pertaining to demand, but there are also some issues on the supply side as well.

Bitcoin currently has an inflation rate of less than 4% per year and that is going drop to under 2% after this next block reward halving.

By comparison, check out some of the altcoin inflation numbers (pay Special attention to the Zcash and XRP numbers):

(Source: https://twitter.com/krugermacro/status/1172594623098871809)

Zcash and XRP are both over 27% inflation rates annually.

Pretty tough to compete with bitcoin when you are inflating by 7x as much, soon to be 14x as much annually!

Where does steem stand?

Steem is considered to have a fairly high inflation rate as well, though not nearly on the level of Zcash or XRP.

Here is a table of Steem's inflation rate:

Year Supply Inflation New Supply
2016 250,000,000 9.50% 23,750,000
2017 273,750,000 9.08% 24,854,398
2018 298,604,398 8.66% 25,854,554
2019 324,458,952 8.24% 26,727,942
2020 351,186,894 7.82% 27,452,027
2021 378,638,921 7.40% 28,004,740
2022 406,643,661 6.98% 28,364,989
2023 435,008,650 6.55% 28,513,181
2024 463,521,832 6.13% 28,431,762
2025 491,953,593 5.71% 28,105,742
2026 520,059,335 5.29% 27,523,204
2027 547,582,539 4.87% 26,675,768
2028 574,258,308 4.45% 25,558,997
2029 599,817,304 4.03% 24,172,733
2030 623,990,038 3.61% 22,521,348
2031 646,511,386 3.19% 20,613,886
2032 667,125,272 2.77% 18,464,106
2033 685,589,378 2.35% 16,090,399
2034 701,679,777 1.93% 13,515,587
2035 715,195,364 1.51% 10,766,608
2036 725,961,973 1.08% 7,874,074
2037 733,836,047 0.95% 6,971,442

Not bad, and getting better!

The current inflation rate is around 8% per year for steem, and that drops by roughly .5% every year until it stops at .95% in 2037 and stays at that level forever.

Eventually steem may be considered a "low inflation coin", but we are not at those levels yet and won't be for some time.

The good news is that much of the inflation is locked up in SP, so the amount of new steem actually hitting the exchanges is rather low.

Looking forward to the days when steem will be considered a low inflation coin!

Stay informed my friends.

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Just as it is pointless to hold government backed currency when it is hyperinflating, its useless to hold, for any length, a crypto that dilutes like say Zcash. Can't really spend it, a fool to hodl it, so....trade pumps and dumps or just best stay the hell away from it.

Or short it... if you can find a way. :)

Very useful post, thanks a lot

Good post. I had not idea Zcash and Ripple had such huge inflation rates. Glad to see Steem's rate goes down as the years go by.

I wish the starting point was smaller, but oh well. I would love for steem to be in 2% range right now and decreasing every year. :)

Our US tax id number is 95-4604782

WoW 😮 ! We have to share this. Even if I have been there for 2 years, I thought it was higher.
Are daily rewards taken into account in this rate ?
Thanks

Yep. That is the majority of the inflation. The total inflation for the network is roughly 8% currently. Including reward pool, witness pay, SP interest, and the DAO funding.

Thank you for this complementary answer. I still can’t believe it is so « low » Seeing all the rewards I always thought it was higher 😂

Yes, the daily rewards are part of the inflation rate.

This was good info to read. I keep seeing things that make me feel good about buying more steem. I like this place and will just keep growing my SP

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Nice. Remember me when you are a whale :)

Unfortunately, the actual STEEM inflation rate is about 20%-ish if you take the inflation caused by SBD (Steem Dollars) conversions into account. Therefore it would be better to stop the SBD peg and to halt the printing of SBD entirely, since SBD adds little to no value to Steem, but adds unnecessary complexity and inflation.

steeminflation2019.png

SBD hasn't been pegged to $1 ever since the debt limit of 10% was breached, which was months ago. Your graph is likely significantly off. The inflation will be higher than expected during those times when sbd can return more steem than it "should" and lower when it doesn't. Which should help cancel out each other over the long run.

Yes, that's true in a bull market SBD printing helps lower the inflation of STEEM, but unfortunately we have more and longer bear markets than bull markets 😂

17 more years to go! Then the steem might have become a coin with a value greater than that of bitcoin.

Haha not sure about that, but I would love for us to jump ahead and cut that inflation down long before then!

Nice pust i had not idea Zcash And Ripple had such huge inflation rates.
Can't really spend it, a fool to hodl it, so....trade pumps and dumps or just best stay the hell away from it.,,,,,,( hello steemit frined,i am new steemit uasjer,,,)

Yep. No reason to hold something that is increasing in supply so quickly.

Does steem have a limited supply or it will keep growing

It keeps on growing at .95% indefinitely.

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