Deflation

What does deflation mean?

A contraction in the monetary supply of an economy. Traditionally this has taken place when a currency’s demand collapses, however it is a natural property of bitcoin.

This deflation in Bitcoin makes it so that the purchasing power of the cryptocurrency naturally increases over time, and is different from price deflation, which is a decrease in the general price level of goods and services in an economy.

Price deflation can be a side effect of deflation, but this is not always the case.