<p>Inflation is newly mined coins added to circulating supply. When block rewards become zero and transaction fees are the only incentives for miners, there won't be any new coins added to circulating supply.</p>
<p>According to <a href="https://www.viewbase.com/inflation" rel="nofollow noreferrer">https://www.viewbase.com/inflation</a> (In last 24 hours):</p>
<p>1031 BTC mined</p>
<p>Circulating Supply of Bitcoin is 18,504,668 BTC</p>
<p>% of newly mined coins(24h) is 0.006%</p>
<p><strong>Annualized inflation rate is 2.03%</strong></p>

CC BY-SA 4.0
2021-04-01T14:50:31.370Z
So, inflation means the addition of new coins and it has nothing to do with inflation of transaction fees?
Aviral Srivastava
CC BY-SA 4.0
2021-04-01T14:53:44.040Z
The "inflation free" means inflation of supply, not inflation of price
hedgedandlevered
CC BY-SA 4.0
2021-04-01T15:02:37.873Z
Transaction fees does not change supply. Alice has 0.25 BTC in wallet with some UTXOs and wants to send 0.1 BTC to Bob. Alice creates a transaction with 0.1 BTC as one output having address shared by Bob, another output with some change if required and a small fee(0.0001 BTC). This fee is not added by creating new coins. It's deducted from bitcoin Alice hold in wallet. Every block mined includes block reward (half in every 4 years) and fees for transactions added in block.
user119042
CC BY-SA 4.0
2021-04-02T00:47:25.740Z
@AviralSrivastava There exist two somewhat related but very different concepts: monetary inflation and price inflation. Monetary inflation refers to the amount of currency in circulation increasing, while price inflation refers to the value of goods/services expressed in currency units increasing. The paper you are referring to is talking about monetary inflation; it's hard to predict what Bitcoin's price will be in the future.
Pieter Wuille
CC BY-SA 4.0
2021-04-10T14:02:31.590Z
This answer could be improved by incorporating the answers to the follow-up questions from the comments into the answer post.
Murch
CC BY-SA 4.0
2021-04-01T14:07:20.453Z
2021-04-01T14:50:00.153Z
2021-04-01T14:50:00.153Z
user119042
<p>In the <a href="https://bitcoin.org/bitcoin.pdf" rel="nofollow noreferrer">research paper</a>, the author(s) mention(s) the following:</p>
<blockquote>
<p>Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.</p>
</blockquote>
<p>What does this mean?
I understand that once the 21M Bitcoins are minted, the incentive will only be to earn transaction fees.
I do not understand the part of fees being inflation-free.</p>

<money-supply><inflation>
How will Bitcoin be inflation free?
Aviral Srivastava
# How will Bitcoin be inflation free?

(Asked by: username_0 on 2021-04-01)

In the [research paper](https://bitcoin.org/bitcoin.pdf), the author(s) mention(s) the following:

> Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.

What does this mean?
I understand that once the 21M Bitcoins are minted, the incentive will only be to earn transaction fees.
I do not understand the part of fees being inflation-free.

**Tags:** money-supply, inflation


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## 1 answers

### Answer by username_1 on 2021-04-01. Score: 2 | Accepted answer

Inflation is newly mined coins added to circulating supply. When block rewards become zero and transaction fees are the only incentives for miners, there won't be any new coins added to circulating supply.

According to <https://www.viewbase.com/inflation> (In last 24 hours):

1031 BTC mined

Circulating Supply of Bitcoin is 18,504,668 BTC

% of newly mined coins(24h) is 0.006%

**Annualized inflation rate is 2.03%**

> **Comments:**
> **username_0**: So, inflation means the addition of new coins and it has nothing to do with inflation of transaction fees?  
> **username_2**: The "inflation free" means inflation of supply, not inflation of price  
> **username_1**: Transaction fees does not change supply. Alice has 0.25 BTC in wallet with some UTXOs and wants to send 0.1 BTC to Bob. Alice creates a transaction with 0.1 BTC as one output having address shared by Bob, another output with some change if required and a small fee(0.0001 BTC). This fee is not added by creating new coins. It's deducted from bitcoin Alice hold in wallet. Every block mined includes block reward (half in every 4 years) and fees for transactions added in block.  
> **username_3**: @username_0 There exist two somewhat related but very different concepts: monetary inflation and price inflation. Monetary inflation refers to the amount of currency in circulation increasing, while price inflation refers to the value of goods/services expressed in currency units increasing. The paper you are referring to is talking about monetary inflation; it's hard to predict what Bitcoin's price will be in the future.  
> **username_4**: This answer could be improved by incorporating the answers to the follow-up questions from the comments into the answer post.  

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