{"id":1285,"date":"2022-11-14T10:36:33","date_gmt":"2022-11-14T10:36:33","guid":{"rendered":"https:\/\/guardarian.com\/blog\/?p=1285"},"modified":"2026-03-13T12:34:16","modified_gmt":"2026-03-13T12:34:16","slug":"inflationary-vs-deflationary-crypto-which-is-better","status":"publish","type":"post","link":"https:\/\/guardarian.com\/blog\/inflationary-vs-deflationary-crypto-which-is-better","title":{"rendered":"Inflationary Vs Deflationary Crypto – Which Is Better?"},"content":{"rendered":"

In the US alone, inflation has reached a 40-year high, with prices skyrocketing faster than wages, causing a lot of people to look for alternative assets to use as inflation hedges. And cryptocurrencies are often said to be such an inflation hedge nowadays.<\/span><\/p>\n

But what many people don\u2019t realize is the fact that Bitcoin itself is also an inflationary asset, and not only that but Ether, the native cryptocurrency of Ethereum, is also considered to be inflationary.<\/span><\/p>\n

In that case though, what is the difference between inflationary and deflationary cryptos, and more importantly, which is better? Let\u2019s find out together:<\/span><\/p>\n

What does inflation mean?<\/b><\/span><\/h2>\n

The term \u201cinflation\u201d simply refers to the rate of increase in prices over a certain period of time. It is in itself just a broad measure which calculates the overall price or cost of living increase in a country.<\/span><\/p>\n

In its lowest form, inflation is not that bad – it encourages people to spend which in turn stimulates economic growth.<\/span><\/p>\n

\"Inflationary
Inflation rates in the US and UK 1989-2022<\/figcaption><\/figure>\n

But if wages can\u2019t keep up with inflation, the masses can end up suffering exponentially as they can\u2019t afford to spend money as much as they used to.<\/span><\/p>\n

The US Federal Reserve is currently fighting to keep the inflation of fiat currencies around the 2% mark, but this does not apply to cryptocurrencies since they are decentralized.<\/span><\/p>\n

What is an Inflationary Cryptocurrency?<\/b><\/span><\/h2>\n

An inflationary cryptocurrency is one that has an increasing number of tokens in its circulation.\u00a0<\/span><\/p>\n

In order to introduce new tokens on the market, these are mined by crypto miners, (like Bitcoin), or issued through staking validators (like Ethereum). And the reason for inflation in cryptocurrency is the same as with FIAT – to encourage participation.<\/span><\/p>\n

\"Bitcoin
Bitcoin’s inflation rate<\/figcaption><\/figure>\n

Many cryptocurrencies have fixed issuances, for example the Bitcoin protocol decreases the issuance of new coins at a fixed rate, as once the cap of 21 million bitcoins is mined, the minting will stop altogether.<\/span><\/p>\n

On the other hand, Dogecoin has an unlimited supply of tokens, which means that new tokens can be produced infinitely. If the supply of Dogecoin outpaces the demand for it, the value of the currency will decrease over time.<\/span><\/p>\n

Examples of Inflationary Cryptocurrencies:<\/b><\/span><\/h2>\n

Many popular cryptos are inflationary in nature. Here are just some examples of these:<\/span><\/p>\n