Inflation Fallacy

Bitcoin consensus rules create a period of monetary inflation. There is a theory that this causes the money to lose purchasing power. As shown in Inflation Principle, no change in purchasing power is implied by an increase in supply of a market money. The theory is therefore invalid.

The fact that Bitcoin is not price inflationary implies that owners do not “subsidize” mining. The capital consumed by miners is their own (investment), the money created is their own product, and the return on investment (interest) is the increase in demand that they alone provide - offsetting the opportunity cost of deploying their own capital over time.