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Add Inflation, Deflation, Coins, Tokens, and Prices

Craig Everett 2026-02-06 20:18:34 +09:00
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# Inflation, Deflation, Coins, Tokens, and Prices
In the context of QPQ's projects we aim to use precise language, as the use in media of the terms above is often deliberately imprecise in the interest of confusing observers or even scoring political points with word play.
- **Inflation**: An increase in the money supply
- **Deflation**: A decrease in the money supply
- **Coin**: In the context of a blockchain, this refers to the underlying currency defined by a blockchain
- **Token**: In the context of a blockchain, this refers to any referential value device
- **Price**: The amount of a resource, usually money and usually denominated in coin, which willing parties are willing to exchange for a good or service
Inflation of the money supply dilutes the value of a currency over time. The time required is a function of both the speed of distributary monetary flows throughout the economy as well as the speed at which perceptions and expectations regarding the value of a given currency propagate. Deflation of the money supply has an opposite effect, subject to similar time factors.
Prices are a related but orthogonal phenomenon to the issues of inflation and deflation.
It is worth restating, that although prices do change in response to money supply being distributed, prices are primarily determined by perception of value, so the simple possibility that money supply could be created or distributed in the future is enough to change prices significantly.