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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

#111

Post by natrius »

this_user wrote: post #58
LoganCale wrote: post #12

Earlier quoted context omitted.

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'…

Isn't Bitcoin's success as a currency orthogonal from the negative effects it might have on the economy? If individuals think holding Bitcoin is better for them than holding dollars, they will do it as long as it's legal.

As far as the economic effects, I think we'll be much better at managing a deflationary economy in 2030 than we were in 1930. We have more knowledge, better statistics, and better communication. At its core, the sticky wages problem is a communication problem.

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

#112

Post by ye »

saalweachter wrote: post #106
ye wrote: post #33

Earlier quoted context omitted.

Oh, but you conveniently omitted what happens after. 10, 20, 50 years. The truly important difference is that Bitcoin has an absolute upper limit, but Doge doesn't anymore. It matters. Scarcity is an important factor for holding value. Bitcoin will eventually become deflationary, and sooner than you think due to loss of bitcoins.

In 50 years, the Dogecoin-supply will be increasing at a rate of 1.4%. In 2011, the gold supply increased at a rate of 1.6%. Do you think gold is too inflationary to be used at a store of value?

I actually do feel that gold is too inflationary to store value. Many people simply don't realize at what scale it's being mined and how much of gold there's in the universe (hint: more than enough to build gold toilets for every human on the planet and not even scratch the surface).

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

#113

Post by sirclueless »

mtrimpe wrote: post #99
fnordfnordfnord wrote: post #62

Earlier quoted context omitted.

It's not so bad in theory, at least it counters the deflationary-currencies-are-evil-and-stupid argument. The real worry is that now some entity has been entrusted with the ability to manipulate the value of the currency, and that the entity may violate that trust by later deciding to further inflate the currency.

You would need a ~50% consensus (measured in compute power) to push through these manipulations though. Never thought I'd find myself calling a distributed cryptocurrency surprisingly democractic...

Does anyone have a good explanation as to why this is supposed to be hard to achieve? What incentive do miners in the distant future have against inflating a cryptocurrency?

For example, take Bitcoin after the cap has been reached and mining bitcoins only gives fees. If 50% of miners cooperate to make blocks worth real bitcoins again, they will suddenly start raking in more profit. They will be devaluing everyone's stores of bitcoins to do it, but people who hold bitcoins have no say in it, only computing power does. If we assume that miners will be the main owners of bitcoins for all eternity then they will probably never agree to this, but if there are a lot of miners with very little in reserve then why wouldn't they accept devaluing bitcoins a little bit to get more per block mined?

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

#114

Post by doyoulikeworms »

ck2 wrote: post #2

"ummjackson" has appeared on HN before so perhaps they will comment here as to how dogecoin could ever exceed 1000 satoshi with this decision. That is several new coins for every active person on the internet, every year. Also, the blockchain might require terabytes after a decade. ps. if you do show up, please clarify if it is going to be a zero to 10k reward which is a different situation, or actually 10k fixed per…

Fixed at 10k per block, says he: https://github.com/dogecoin/dogecoin/issues/23#issuecomment-...

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

#115

Post by gone35 »

drewblaisdell wrote: post #70
girvo wrote: post #24

Man, I really feel like those who are upset about this truly wanted it to be "their Bitcoin" -- the cryptocurrency they got on the ground floor for and were hoping would turn out like BTC has. And to be fair, it sorted started looking that way. But now, as it's been decided to be "inflationary" (like the USD currently), they feel that the party is over. And I get it. That sucks. Personally, I think it's a great thing…

> discourage hoarding Is there compelling evidence that inflation discourages hoarding? I don't think anyone would agree that USD-centric societies discourage hoarding, unless you think something like investing in mutual funds doesn't fit the term.

I don't think anyone would agree that USD-centric societies discourage hoarding.

No offense, but I think it would be wise to familiarize yourself with the basics of a subject before forming high-confidence blanket opinions about it like that. (The same applies to your other comment about why anyone would think an inflationary economic policy would be desirable at all.)

Sorry if I sound patronizing, but as it happens the link between inflation and hoarding is one of the few well-established empirical facts in economics [1,2,3] with ample historical evidence both from the well-documented shortage effects of price controls [4], to the well-understood effect of changes in bond yields on the money demand [5], which is the cornerstone mechanism of basic monetary policy.

[1] http://en.wikipedia.org/wiki/Hoarding_(economics)

[2] http://en.wikipedia.org/wiki/Inflation

[3] Milton Friedman once said: "We economists don't know much, but we do know how to create a shortage. If you want to create a shortage of tomatoes, for example, just pass a law that retailers can't sell tomatoes for more than two cents per pound. Instantly you'll have a tomato shortage. It's the same with oil or gas." From http://en.wikipedia.org/wiki/Price_controls.

[4] http://en.wikipedia.org/wiki/Price_controls

[5] http://en.wikipedia.org/wiki/Monetary_policy#Policy_tools

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

#116

Post by shock-value »

natrius wrote: post #105
kevinpet wrote: post #89

Earlier quoted context omitted.

Ideally, the money supply grows at the same rate as the economy. In this case "the economy" is the segment using Dogecoin. If you can't get it right, most people consider it better to have a bit of inflation rather than deflation. This may just be a consequence of people being more used to inflation and able to deal with it. For example, people don't mind prices going up as much as they mind their income going down.

Low, steady inflation is better for an economy than the alternatives humanity has experienced thus far. However, if people had the choice between holding a currency they expected to slowly decrease in value like today's central bank currencies and a currency they expected to slowly increase in value like Bitcoin in a post-adoption world, why would anyone pick the former? Central banks have only had the ability to ste…

You stuck a "however" in between your first two sentences, but doesn't the second one just explain the first? If people are only going to hold Bitcoin and not trade it for goods and services, then it's a poor currency and will not drive economic development.

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

#117

Post by atmosx »

ye wrote: post #112
saalweachter wrote: post #106

Earlier quoted context omitted.

In 50 years, the Dogecoin-supply will be increasing at a rate of 1.4%. In 2011, the gold supply increased at a rate of 1.6%. Do you think gold is too inflationary to be used at a store of value?

I actually do feel that gold is too inflationary to store value. Many people simply don't realize at what scale it's being mined and how much of gold there's in the universe (hint: more than enough to build gold toilets for every human on the planet and not even scratch the surface).

I'm sure you have a financially viable scheme for importing gold from other galaxies far-far away, but you're keeping it for us to figure out, right?

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

#118

Post by atmosx »

kevinpet wrote: post #86

I didn't realize how much people were consciously trying to get in on a bubble. It's like people are offended that the developers are trying to create a viable currency rather than a ponzi scheme.

Sure, people are stupid. I thought programmers were not, but reading large part of HN's crowd statement's about BTC have changed my views on programmers - they are pretty stupid when they don't understand the dynamic of a subject (i.e. basic economics).

However, the problem with inflation is that might turn the currency not interesting: Why would anyone want to buy an inflationary currency?

Sure gold is inflationary now, but might not be tomorrow and sure as hell comparing any virtual currency to gold is naive.

I'm sure BitCoin was marketed as a currency to outsmart the naives and has successfully done that. It was never designed to act as a currency, it was more of an asset from day 1. We just didn't really get that (from day one).

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

#119

Post by ye »

atmosx wrote: post #117
ye wrote: post #112

Earlier quoted context omitted.

I actually do feel that gold is too inflationary to store value. Many people simply don't realize at what scale it's being mined and how much of gold there's in the universe (hint: more than enough to build gold toilets for every human on the planet and not even scratch the surface).

I'm sure you have a financially viable scheme for importing gold from other galaxies far-far away, but you're keeping it for us to figure out, right?

Because gold exists only on our planet and in other galaxies far-far away?
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