01 Apr '13, 3pm

Bitcoin Is Now Seeing Massive Hyperdeflation That Could Devastate Its Economy

Bitcoin Is Now Seeing Massive Hyperdeflation That Could Devastate Its Economy

The price of a bitcoin -- the uber-buzzy digital currency -- is surging. A few weeks ago it was at $40. This morning the price of a Bitcoin hit $100. It's now over $104, as this pretty chart from Clarkmoody.com shows . Clarkmoody.com All of this is stoking an incredible amount of interest in the currency. The media is obsessed. Businessweek recently wondered whether Bitcoin was the last safehaven . But there's a downside to this. The Bitcoin economy is now in a terrible state of hyperdeflation. You know what Hyperinflation is, it's when prices surge. Hyperdeflation is when prices violently collapse. So a few weeks ago, a pizza might have cost you one Bitcoin. Today it might only cost you a fifth of a Bitcoin, which sounds great, but then if you're looking at the above chart, why would you spend anything? Why would you buy a pizza (or pot or anything else) when tomorrow you...

Full article: http://www.businessinsider.com/bitcoin-hyperdeflation-2013-4

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