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A contraction in the monetary supply of an economy. Traditionally this has taken place when a currency’s demand collapses, however it is a natural property of bitcoin.

This deflation in Bitcoin makes it so that the purchasing power of the cryptocurrency naturally increases over time, and is different from price deflation, which is a decrease in the general price level of goods and services in an economy.

Price deflation can be a side effect of deflation, but this is not always the case.

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