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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

#61

Post by IgorPartola »

So the thing that's interesting to me is that now you can actually diversify your altcoin holdings and while the value of any one coin can go up or down, the market value you are holding can actually be fairly stable. For example, as Dogecoin loses value as a result of this inflation, you will likely be able to switch to a different coin starting with a new blockchain. In fact, I wonder if the solution to all this is some type of "metacoin" that would represent the averaged out value of various coins.

For example, I used to mine scrypt-based coins, then have them automatically traded for BTC via http://www.middlecoin.com/. It's an interesting concept as I would not be able to mine BTC directly on any hardware I own, but I can mine a small amount of scrpyt-based coins. Perhaps the idea of holding value the same way can be introduced. Sort of like a mutual fund of coins. And a coin industry index (Standard & Bits?)

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

#62

Post by fnordfnordfnord »

master_shake wrote: post #43
ck2 wrote: post #35

Earlier quoted context omitted.

Does "to the moon" mean $1 per coin? If so, how is dogecoin going to create five billion USD per year via coin buyers to pay for its inflation? Unless it means something else and I am missing the point?

yes my friend, you are misunderstanding the exchange rate. There are currently ~40 million "dogecoins" floating around the internet. All the dogecoins combined are presently worth $55 million USD. Therefore each dogecoin is worth $.0014 USD. Before this announcement, there were only ever going to be 100 billion dogecoin in existence. Now they just decided that they want a 5 billion doge inflation rate per annum, Ther…

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.

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

#63

Post by aw3c2 »

somewhatjustin wrote: post #3
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…

I don't see how they plan on keeping any sort of stable price with this inflation.

1 DOGE will be 1 DOGE for eternity. If that is not 100% stable then I don't know what is.

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

#64

Post by VMG »

Eliezer wrote: post #59

The really amusing part is that their trolling represents better economic policy than Bitcoin.

Better for the collective, maybe, but removing selfish incentives for hoarding and mining Alt-coin will lead to low adoption and depreciation. Same problem with Peercoin: http://www.peercoin.net/

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

#65

Post by fnordfnordfnord »

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…

It agree that might turn out very well, but people have a right to be upset when the rules are changed mid-game.

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

#66

Post by drewblaisdell »

Eliezer wrote: post #59

The really amusing part is that their trolling represents better economic policy than Bitcoin.

I'm sure you'll get voted up because the HN crowd loves to hate things, but I'm honestly curious why anyone would think this is objectively a better economic policy.

Regardless of the inflation vs. deflation debate, the same exact thing could happen in bitcoin if it is what the community wants.

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

#67

Post by philwelch »

Glyptodon wrote: post #52

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 informatio…

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.

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

#68

Post by saalweachter »

skylan_q wrote: post #49
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.

You must be speaking strictly in terms of monetary deflation. I could see dogecoin being deflationary as well, but in a "price deflation" sense. Dogecoin could also become deflationary. If 6 billion dogecoins worth of value is created in a year and only 5 billion coins to match that increase in value, the economic value of goods created surpases that of the coins created. As a result, you have more goods chasing (rel…

I would also point out that Dogecoin's stated purpose in this move is to stabilize the currency at 100 billion coins. They believe that 5 billion coins fall out of circulation each year; therefore they intend to mint 5 billion new coins to keep the money supply constant at 100 billion coins.

Therefore the Dogecoin money supply after 2015 will be constant: the number of coins in circulation will remain approximately 100 billion, and the value will only increase or decrease as the demand for the currency moves.

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

#69

Post by norswap »

Am I the only one puzzled by the fact that the title sounds like something has changed when the linked status says:

"Thanks for contributing to this discussion. Based on everyone’s feedback, we’ve decided to leave the Dogecoin code base as it was originally released, and not implement a change."

Which means that in fact, nothing has changed and it was always like this.

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

#70

Post by drewblaisdell »

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.

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