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Dogecoin decides to allow annual inflation of 5 billion coins each year, forever

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Re: Dogecoin decides to allow annual inflation of 5 billion coins each year, forever

#51

Post by smtddr »

ck2 wrote: post #11
mkr-hn wrote: post #6

What I like about doegcoin is that everyone realizes it's a joke and has fun with it.

There are a great many people spending a whole lot on power and hardware who probably aren't laughing so much at the joke.

That's because those people... ARE the joke!

But seriously, Dogecoin was a way-out-there bet. You can't be upset if it doesn't work out. Also, I've seen enough "devastating-end-of-the-world" news on cryptos that make the price tank only to come right back up a month or 2 later. Maybe this'll be reversed after the price tanks & difficulty drops. I'm keeping my doge miners going... You never know. But I'm fully prepared to find out it was all for naught. Easier for me to say since I don't spend anything to mine them. My job gives me limited but free access to cloud servers.

Re: Dogecoin decides to allow annual inflation of 5 billion coins each year, forever

#52

Post by Glyptodon »

I'm surprised that there isn't a cryptocurrency that uses much more complex rules to determine the number of coins mined in each subsequent block.

It seems like the blockchain could be used to evaluate the health of currency's ecosystem in a way similar to taking a look at the system monitor or result or cat/proc/loadavg on your desktop. Heck, the blockchain could even be used to store 'extra' system state information with every block, like current exchange rates with other currencies, which would then be used to determine the reward for the next block.

I guess all I'm saying is that I'm surprised there's not a version of bitcoin with an algorithmic 'central bank' type of function, rather than a very straightforward 'inflationary' or 'deflationary' algorithm.

Re: Dogecoin decides to allow annual inflation of 5 billion coins each year, forever

#53

Post by higherpurpose »

saalweachter wrote: post #25

Oh god, they really are master trolls. The hilarious thing to note here is that -- over the short term -- this is barely different than Bitcoin's inflation rate. Bitcoin halves its inflation rate every 4 years, but 4 years is a long time in internet time. Here, let's lay them out side by side: INFLATION RATE BY YEAR YEAR BITCOIN DOGECOIN 1 inf% inf% 2 100% 100% 3 50% 50% 4 33.3% 33.3% 5 12.5% 25% 6 11.1% 20% 7 10% 16…

Assuming this move doesn't completely kill the interest in Dogecoin, and that Dogecoin continues to thrive after this, then I doubt there will be any sort of "inflation effect".

Yes, in theory both Bitcoin and Dogecoin should have inflation until they reach their maximum number of coins, with or without any sort of "built-in" inflation rate. In practice, however, they are both highly deflationary, because they haven't reached their maximum ballpark cap market, which means the demand for them will make its value be highly deflationary, much more than this 5 percent per year figure.

Re: Dogecoin decides to allow annual inflation of 5 billion coins each year, forever

#55

Post by gwern »

lettergram wrote: post #41

If they can add inflation they can take it away... and on another note, inflation (or at least lack of deflation) will increase spending of that currency. In other words, it would help Dogecoins be used more, as opposed to hoarding like bitcoins.

> If they can add inflation they can take it away...

The longer a coin runs, the harder it gets. And if I'm reading this bug report correctly, it's not that they're 'adding inflation', it's that they're declining to change an erroneous setting and maintaining the status quo. The more clients that come out, the more that setting will get locked in...

Re: Dogecoin decides to allow annual inflation of 5 billion coins each year, forever

#56

Post by aestra »

colanderman wrote: post #37
ck2 wrote: post #23

Earlier quoted context omitted.

Does the USD lose 5% value each year? FIVE percent. Think about that. I am hoping it is a zero to 10k block reward which would change all this. But looking at the code I think it is 10k fixed.

More like 2-4%: http://www.usinflationcalculator.com/inflation/historical-in... I'll grant 5% is a tad high, but it's the right order of magnitude.

>Whereas losses of USD due to things like setting bills on fire or losing them in a lake amount to a miniscule portion of total USD outstanding.

The Bureau of Engraving and Printing redeems partially destroyed or badly damaged currency as a free public service.

Every year the U.S. Treasury handles approximately 30,000 claims and redeems mutilated currency valued at over $30 million.

http://www.moneyfactory.gov/uscurrency/damagedcurrency.html

Re: Dogecoin decides to allow annual inflation of 5 billion coins each year, forever

#58

Post by this_user »

LoganCale wrote: post #12
colanderman wrote: post #7

Earlier quoted context omitted.

to drive away investors and people looking to profit. Holy shit, you mean it's a currency that will encourage trading rather than hoarding? The horror!

It will encourage tipping (giving it away in large numbers), not real trading. As mentioned elsewhere, why sell goods for it if the value will keep dropping?

Why would you buy any goods if the value ouf your "currency" keeps going up? BTC is DOA because of its inherently deflationary properties. There will never be a consistently expanding BTC economy as hoarding makes more sense than actually spending it.

The people who like BTC for having a fixed cap on the amount of coins in existence are probably the same people who would like the gold standard back, because they don't understand the economic consequences.

Re: Dogecoin decides to allow annual inflation of 5 billion coins each year, forever

#60

Post by walden42 »

doodyhead wrote: post #30

This is the one feature that will uniquely distinguish Dogecoin from other cryptocurrencies: - It makes the currency much more democratic -- missed the first few months of mining? jump in any time you like and still reap the benefits! - It neatly circumvents the issue of lost coins -- Bitcoins will keep dwindling over time and there will be no way to keep a consistent number of coins in circulation - Inflation puts t…

The free market takes care of all your points, except the first one, which isn't a big deal, really.

- Lost coins? Analysis can make good estimations of how many coins are lost. The market price will adjust.

- Yes, it puts down concerns from people who believe that inflation is necessary, that is true. Whether deflation is bad is another story, and again, the market takes care of it. If value of the currency goes up over time ("encouraging hoarding"), then the reverse also holds true: merchants lower pricing to encourage spending because they'd rather have bitcoins/litecoins/whatevercoins than the alternatives.

- Same as above. The deflationary aspect has been discussed extensively already, so there's no need to go much further. Here are some nice responses: http://bitcoin.stackexchange.com/questions/66/will-deflation...

Now, as to whether this decision was good or bad, I think it's fairly neutral. If the currency was capped, then I'd say there wouldn't be much to distinguish it from litecoin or bitcoin. This just seems like a way to add a new-ish aspect to it. I'm all for experimenting with multiple currencies, multiple ways of doing things, and I'm interested in seeing what'll happen. Perhaps 10 billion dogecoin will eventually become irrelevant because its value will be too low (akin to spending a ton of resources to mine a few pennies). Or maybe not. I'm rooting for all cryptocurrencies in general nontheless.

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