3.1. Limited Supply with Zero Inflation

A limited supply is a fundamental element in creating a deflationary economic system. It is precisely the restricted availability of Bitcoin that earned it the status of a store of value, leading to its nickname: “digital gold.” While a limited supply alone does not make an asset fully deflationary, it remains a critical parameter in constructing a deflationary system.

For this reason, the total supply of DeflationCoin is limited to 20,999,999 coins, with no additional issuance possible. The smaller supply compared to Bitcoin makes each coin inherently more valuable.

Most crypto projects with a market capitalization exceeding tens of billions of dollars are empty shells lack limited emission. Their creators, due to a lack of foresight, made the mistake of developing assets within an inflationary economic system. Ethereum, Solana, Tron, Doge - do not limit supply of their tokens, and, in fact, are not much different from fiat currencies in terms of the inflation parameter. Ethereum, Solana, and Tron include minor deflationary mechanisms embedded in transaction fees. However, against the backdrop of unlimited issuance required to pay validators, these mechanisms lose practical significance and become ineffective.

While these projects position their technologies as foundational, their real-world application in the daily lives of ordinary citizens remains rare. The "technological" branding of such projects is often nothing more than a marketing ploy aimed at attracting capital from naïve investors. In practice, these projects lack a true deflationary model, limited supply, and fail to orient their products toward mass adoption beyond the crypto industry, which diminishes their real value and limits growth potential.

This critique applies partially to Bitcoin as well. While Bitcoin does have a limited supply and a minor deflationary aspect caused by the loss of wallet access by some users, this deflation is a random occurrence rather than the result of a deliberate economic model. Moreover, Bitcoin lacks an internal economy capable of driving sustainable demand for its coins. For this reason, it cannot be considered the leader among cryptocurrencies in terms of coin value or a reliable tool for long-term capital preservation.

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Inflation negatively impacts government bonds worldwide, reducing their real returns and diminishing their appeal to investors. Considering that the global government bond market exceeds $130 trillion, the devaluation of these assets due to inflation creates significant pressure on the global economy.

Unlike bonds, Bitcoin benefits from inflation, which has contributed to its continued value growth. However, if Bitcoin had been designed from the outset with a well-thought-out deflationary model and an internal economy, its market capitalization could have reached far more impressive heights.