Because velocity is defined as GRPD/money = Products Sold * Prices / money
It is the definition of velocity, and if proves nothing. It defines velocity.
For the prices to increase when more money is created, you need constant velocity.
It’s like you use the speed formula : speed = distance / time ; redorder it : distance = speed × time
And then you say that for giving someone double the time, he makes double the distance. No, he can also go twice as slow - that is, make the exact same distance.
Only when you define “money inflation” as “money supply increase”, which you did not. If you don’t precise, then inflation is the price increase.
Yes but no at the same time.
Central banks don’t control the supply.
Public banks can also create money . can , not must.
What central banks don’t control either, is the purchases.
In your velocity definition you can consider a 2.5% yearly increase in product sold. According to your formula this means a 2.5 deflation …
Central banks have other tools to reach the target inflation and in the end, creating money is the least effective.
You don’t understand it either. You have a dogma and try to interpret reality in a way that fits your dogma.
You can’t look at only the theoretical benefits of something and claim that’s all one should consider. That’s delusional.
So first, the claim “invest in cryptocurrencies to get rich fast” is a ponzi. Just like many other “invest to get rich”, if you tell people to invest instead of investing yourself, that means there is no benefit in investing unless you make other people invest too. This is important because the other claims need to hold even when nobody “invests” in ponzi for its benefits.
What happens when people don’t invest for benefits ? Then, the miners that can achieve the best performance/power can dictate the price of validating transaction, removing all the miners with a worse benefit. It means that running a mining farm for most people will be at a mathematical loss. So yes, people can still do that for the lulz, but the point is : there will be a concentration of computing power into a few companies. Which makes the decentralized ledger prone to N+1 attacks. Also note that you don’t need to have 50% of the park to make a n+1 attack, the propagation protocol allows for much less than that.
Then, the claim that it’s an “immutable ledger”. There is no such a thing, soft forking happens a lot . While soft forks are usually not malicious, this is a possible approach using N+1 attack.
What’s more, security holes exist. Hard fork are made specifically to invalidate transactions that were malicious using a hole. AFAIK there as not yet been a security hole abused, though hard fork made for fixing happened. This does not mean there won’t be one, actually with complex systems the probability for a security hole abuse increases with time. Since the ledger must have consistency, genuine transactions will also be removed - or fix transactions will be forged.
There are other approaches that point at flaws, including power usage, but the gist is : there is a difference between theory and reality.