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                                                   Bitcoin Articles

                                             Investopedia defined inflation,

                 Inflation is the rate at which the general level of prices for goods and services is

                   rising and, consequently, the purchasing power of currency is falling. Central

                 banks attempt to limit inflation in order to keep the economy running smoothly.

                Conversely, deflation is the decline in the cost of goods and service resulting from

                    contraction of a money supply within an economic environment. Deflation
                    generally causes an increase of the purchasing power of a currency within
                  circulation. According to some economists, excess deflation can cause market

                  actors to horde money. However, inflation tends to be the more troubling and
                                                   nefarious problem.

                  For example, if a currency is Bitcoin Solves Runaway Inflation by Undermining
                 Trusted Third Partiesheavily inflated, and you travel to the local supermarket to

                    buy groceries, you may notice an upswing in the price of bread. This price
                “inflation” could be the result of the grocer arbitrarily altering the price, but more

                  likely it occurred as a result of an inflated currency. In other words, too much
                   printing and distribution of the currency would have devalued its purchasing

                power and caused bread to appear more expensive. In reality, the bread likely has
                had the same value as always, but the decreased value of the circulated currency
                              provided the illusion that the bread was more expensive.
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