A Little Story About Inflation - An Excerpt From Bitcoin: The Honest Money

When I was a teenager, I delivered newspapers. I earned 10 German marks (DM) per hour. That was enough money to buy 33 scoops of ice cream, since a single scoop only cost 30 cents, or pfennig, as they were back then.

Fast forward to 2025: today, a teenager delivering newspapers earns at most €12 per hour. However, a scoop of ice cream now costs a hefty €1.50, and sometimes more than €2 in the big cities. This means that for every hour of newspaper delivery, you can afford at best a mere eight scoops of ice cream, but it’s often less than that.

The working time of a newspaper boy or girl has been significantly devalued in Germany over the last forty years. An hour’s work now yields only six to eight scoops of ice cream, compared with the 33 scoops it originally earned in the 1980s. That’s a loss of around 80%.

If I had put my 10 DM in a drawer, found them forty years later, and exchanged them for €5, I’d only get about two to three scoops of ice cream—a loss of over 90%.

This concerns inflation and its redistributive effects. It’s not only saved money that’s devalued; it’s also the time that’s spent earning that money—or to be more precise, earning a fixed basket of goods. As money loses value, so does the actual time we spent earning it. On average, we receive far less in real goods for the work we do.

Inflation, the continual devaluation of money, is a huge problem. The global money supply (M2) is estimated at around $120 trillion (see Figure 4). Even at an inflation rate of 4% (and the global rate is likely higher), the M2of approximately $120 trillion implies that $4.8 trillion in purchasing power is destroyed each year. That’s more than the entire gross national product of Germany. Inflation affects billions of people. Almost everyone, in fact. And the less you earn, the more you are dispossessed by inflation. The vast majority of people, which I estimate at around 90% of all citizens, have no way to avoid the devaluation of money. They lose out as their savings are devalued, and their wages fail to keep pace with rising inflation.

Major historical upheavals and revolutions have very often been preceded by inflation, for example, the French Revolution. Currency devaluation also played a significant role in the collapse of the Western Roman Empire in AD476, some one thousand years before the collapse of the Eastern Roman Empire. Therefore, inflation also represents a serious threat to democratic societies today.

The amount of bitcoin will not increase in the long term. There will never be more than 21 million bitcoin, and no one will ever be able to change that. At this point in early 2026, there are already 19.9 million bitcoin, a good 95% of the set amount. This means that any remaining expansion (or new issuance) of bitcoin will amount to just under 5%; not in the next year, but over approximately one hundred fifteen years. Around the year 2140, 100% of all bitcoin will have been mined, and there will simply not be any more. This means that the share of money you hold in bitcoin will not be devalued against a basket of goods over a decade or even a century. Your share won’t be diluted. Bitcoin does not inflate; when measured in bitcoin, goods actually become cheaper over time. So the money you exchange for bitcoin today will buy you at least as many scoops of ice cream in ten years as it does now—and probably more. A lot more. This is the fundamental essence of bitcoin.

Discover more in Bitcoin: The Honest Money!
This excerpt is just the beginning. Dive deeper into how inflation devalues your money, your savings, and your time in Bitcoin: The Honest Money by Alex von Frankenberg, Ph.D. The paperback is available now.

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