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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

#131

Post by greyman »

Nursie wrote: post #74

This is actually starting to sound like a far better currency than bitcoin could ever be. You know, a liquid medium of exchange rather than a deflationary libertarian wet dream. All the best ideas are jokes.

I tend to agree with you.

Moreover, there is an issue of keeping the incentive to mine. The theory is, that when a coin is mined, and when it will become popular, there will be a lot of transactions, and the fees will make up a large sum worth mining for. But that's only a theory, it wasn't seen yet. I feel it is much better that miners can still mine their 10k doges per block.

Yet another reason is, that certain amount of coins is being lost forever due to human errors. So the increase will be even less.

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

#132

Post by iSnow »

LoganCale wrote: post #5

This effectively killed my interest in the currency completely. I've stopped mining it. I suspect this may be what they want: to keep it basically worthless so people keep using it to tip people large amounts and have fun with it, and to drive away investors and people looking to profit.

>I suspect this may be what they want: to keep it basically worthless so people keep using it to tip people large amounts and have fun with it, and to drive away investors and people looking to profit.

Right and it is indeed a great sign that this drives out the hoarders. Makes for a much more healthy community.

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

#135

Post by patrickg_zill »

Note that the effect of this inflation, being fixed, lessens each year. After 100 Billion coins, the next year there are 105, for a rate of 5%. The next year, the rate will be 4.76% ; then 4.55, 4.35%, 4.17%, 4.0%, etc. in later years.

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

#136

Post by shock-value »

natrius wrote: post #123
shock-value wrote: post #116

Earlier quoted context omitted.

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.

I don't understand why you think people won't trade Bitcoin for goods and services. I use Bitcoin at every vendor that accepts it, especially if there's a discount involved. It costs me 1% to replace the Bitcoin since my paychecks are in dollars (for now), but it's a much more reasonable policy than holding and never spending. Normal folks won't use Bitcoin until merchants pass some of the savings they get to their c…

> but it's a much more reasonable policy than holding and never spending

It seems to me that what you are doing is actually not "reasonable". If you are assuming that Bitcoin is going to increase in value over time (or at least not decrease), then you should be spending all your dollars first (which are known to decrease in value over time).

The issue of whether merchants can offer discounts based on lower transaction costs would make these crypto-currencies more attractive (if that is the case) but it is not relevant to the discussion of inflation vs. deflation.

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

#137

Post by marvin »

judk wrote: post #90
philwelch wrote: post #67

Earlier quoted context omitted.

Milton Friedman was a monetarist, who believed that the ideal monetary policy was for the currency base to grow in time with real economic growth since this would result in neither inflation nor deflation of prices. If you could deduce economic growth from the blockchain you could make a Friedman coin.

That would require destroying coins during a recession.

Bitcoin/Dogecoin is basically a public ledger. Couldn't the system be set up so that this system of rules did destroy coins during a recession by reducing everybody's balance?

It could probably be gamed very easily by speculators going in and out of the cryptocurrency, but there shouldn't be a technical reason why it can't be done. This is in sharp contrast to traditional currencies: You can't send in the police to confiscate 5% of everyone's dollar bills.

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

#138

Post by reality_czech »

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).

You're right. We should be building bitcoin toilets for every human on the planet instead.

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

#139

Post by natrius »

shock-value wrote: post #136
natrius wrote: post #123

Earlier quoted context omitted.

I don't understand why you think people won't trade Bitcoin for goods and services. I use Bitcoin at every vendor that accepts it, especially if there's a discount involved. It costs me 1% to replace the Bitcoin since my paychecks are in dollars (for now), but it's a much more reasonable policy than holding and never spending. Normal folks won't use Bitcoin until merchants pass some of the savings they get to their c…

> but it's a much more reasonable policy than holding and never spending It seems to me that what you are doing is actually not "reasonable". If you are assuming that Bitcoin is going to increase in value over time (or at least not decrease), then you should be spending all your dollars first (which are known to decrease in value over time). The issue of whether merchants can offer discounts based on lower transactio…

Dollars and Bitcoin are easily interchangeable, so the concept of spending dollars first doesn't make sense to me.

The amount of Bitcoin someone holds is based on their belief in Bitcoin's future success, their wealth, their spending needs that can only be transacted in dollars, and their backup plan in the likely event that Bitcoin becomes worthless. Once you've reached the proper balance for your risk tolerance, whether you spend Bitcoin or dollars is irrelevant, other than the 1% fee to switch between the two. Even if you think Bitcoin will triple in price tomorrow, it still makes sense to spend Bitcoin today because you can easily replace it with Bitcoin purchased at the current price.

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