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

https://github.com/dogecoin/dogecoin/issues/23#issuecomment-33893149

by ck2 • 12 years ago

206 207 12 years ago

ck29• 12 years ago

"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 block

somewhatjustin• 12 years ago

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

kybernetyk2• 12 years ago

My understanding was that Dogecoin doesn't want to become a "serious" currency and the sentiment in the community against the BTC-community is that they take themselves far too serious.

This decision makes sense if Doge intends to stay the "great comment, I give you 10000 doge for that" fun-currency and drive out everybody whose primary intention is financial gain.

aw3c22• 12 years ago

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

uniclaude• 12 years ago

Are you assuming that fixed supply leads to price stability? If so, please expand.

ceejayoz2• 12 years ago

Also, the blockchain might require terabytes after a decade.

Imagine saying "the blockchain might require gigabytes after a decade" in 2004. Here in 2014, you can get 64 GB on something the size of your smallest fingernail for $30-$40. Terabytes after a decade won't matter a bit.

kzrdude2• 12 years ago

You need a corresponding growth in bandwidth, too, otherwise transfer, sync, backup, restore, etc times will only grow.

doyoulikeworms• 12 years ago

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

LoganCale3• 12 years ago

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.

colanderman5• 12 years ago

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!

ck29• 12 years ago

Why would you trade it? You can just mine more as you need it?

You aren't going to sell any goods for it because the value today is likely worth less tomorrow unless you can "cash it out" immediately.

LoganCale3• 12 years ago

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?

pbreit• 12 years ago

It's 5% and declining, perhaps enough to keep up with population growth. Not the horror story you depict.

iSnow• 12 years ago

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.

path4112• 12 years ago

Well on the other hand, this is actually good news for mining because you will always be able to mine. It means that they don't have to worry about incentivising "mining" after all the coins are gone.

mkr-hn4• 12 years ago

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

ck29• 12 years ago

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

mkr-hn4• 12 years ago

This is a risk when you invest in something where a small number of people can fundamentally change it on a whim. Remember Zynga's warning about its dependence on Facebook in its IPO filing?

girvo4• 12 years ago

Well, that's their loss for taking a gamble on it. Not everything is a sure bet, and even those that look like it might turn out not to be :)

merloen• 12 years ago

Oh, but we're laughing at them!

smtddr• 12 years ago

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.

colanderman5• 12 years ago

Hm, kinda wish it was a percentage rather than a fixed amount. Eventually 5 billion will be but a small percentage of the total.

Kudos nonetheless; glad there's finally a digi-coin that might sort of kind of be fungible for real-world wealth.

gus_massa• 12 years ago

Really, 5 billons appear to be a lot, but it will be only a 5% the fist year after the initial mining period is complete. And after 20 years the annual inflation will be only 2.5% if no doge is lost.

[Disclaimer: I’m from Argentina, where a 5% annual inflation would be really nice.]

cocoflunchy• 12 years ago

Lots of good discussion on the reddit thread: http://www.reddit.com/r/dogecoin/comments/1wsg31/dogecoin_wi...

I think this is good news overall.

girvo4• 12 years ago

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 for Doge. It'll keep up the current "tipping culture", discourage hoarding, and encourage us doge to trade and share, til we get to the moon. Such wow. Amaze. :D

ck29• 12 years ago

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?

girvo4• 12 years ago

Who cares! That's the point ;)

Also, "to the moon" is a dogecoin reddit joke, it doesn't mean anything in particular

master_shake• 12 years ago

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, Thereby decreasing the the value of each dogecoin.

Its somewhat similar to the way that the federal reserve pumps money into the market to increase the flow of capital, the dogecoin foundation wants to increase the flow of dogecoin by increasing the supply and access and decreasing the incentive to hoard.

edit the code was already written to be inflationary. The plan was to implement a 100 billion cap in some future version. They scrapped that plan.

fnordfnordfnord4• 12 years ago

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

maxerickson• 12 years ago

It's an important blockchain lesson, that there are no rules, only a combination of concentrated technical leadership and majority sentiment.

If the blockchain this happened on was serious business you would probably see mass abandonment.

diego• 12 years ago

Those were the original rules. The title is misleading, people are disappointed because they expected the devs to eliminate the perpetual generation of coins in the original software. The decision was simply to do nothing.

drewblaisdell3• 12 years ago

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.

soup10• 12 years ago

Absolutely, mutual funds and all investments assume some level of risk because to keep it in cash means losing money to inflation. There would be way smaller and more risk averse pool of investment capital if the dollar were deflationary. For example many portfolios whose goal is wealth preservation buy municipal bonds which fund public works projects(and certainly have a non-zero risk of default).

mesozoic• 12 years ago

Traditional economic theory says that inflation discourages hoarding. Inflation forces those with large amounts of capital to put that capital to work through investments to overcome the rate of inflation, or see their wealth decline.

Whether this will hold with dogecoin remains to be seen but is somewhat logical.

pjc50• 12 years ago

Investing in _anything_ productive is the opposite of hoarding. Hardly anyone in an advanced economy hoards large amounts of physical paper money; banks keep it to satisfy customer demand, but would much rather have the money in their central bank deposit account. A couple of central banks in Europe are experimenting with tiny negative rates on these deposit accounts precisely to encourage them to lend it out.

If you _invest_, you're either buying a productive asset, or storing something valuable for a period of time, or giving money to some other business to spend on equipment, employees etc. in the hope of future return.

gone35• 12 years ago

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

fbags• 12 years ago

Mutual funds are an investment. Hoarding is savings.

One is productive, one isn't. That's the key difference.

The difference is even more glaringly obvious if you think about the difference between equity in a productive company, loans to productive organizations, and simply doing nothing.

kolev5• 12 years ago

Obviously not - Apple is hoarding USD like crazy.

anonymoushn• 12 years ago

Much like Bitcoin, the rate of inflation of Dogecoin converges to zero. So maybe it's not a big deal :)

boyter2• 12 years ago

The thing is its actually less inflation then Bitcoin or Litecoin at least for the next few years anyway. See the following (taken from reddit thread) which shows the inflation amount over the next 5 year period.

        Dogecoin Bitcoin Litecoin
  2015	5.26%	 10%	 33.33%
  2016	5% 	 9.09%	 12.5%
  2017	4.76%	 4.1%	 11.11%
  2018	4.54%	 4%	 10%
  2019	4.35%	 3.85%	 9.09%
  2020	4.2%	 3.7%	 4.1%

People need to keep in mind that dogecoin's inflation is set at 10,000 coins per block forever once mined out. As such the inflation amount will reduce each year as more coins exist, unless of course people manage to loose about 5 billion coins a year. The other thing to remember is dogecoin currently has about 5% inflation a week, so anyone dumping it over this news is a bad speculator.

EDIT before someone jumps down my throat I am checking the numbers now and the bitcoin one looks to be slightly off, please take this as close, but not exact please. If you have the exact numbers pass them on and I will update.

epsylon• 12 years ago

anyone dumping it over this news is a bad speculator.

Especially considering that XDG is barely a few months old, that this decision won't impact anything before the whole 100 billion are mined (which is years from now) and that due to the open source nature of the software the decision can be trivially reversed should the community decide otherwise.

blueskin_• 12 years ago

I'm not bothered. I got 'in on the ground floor', and I don't care that it isn't valuable (although yes, I would have been happier if it did become valuable, of course...). I'll probably stop mining at some point soon, but I have the coins, and having a big number is a nice feeling. Plus, it's funny.

saalweachter4• 12 years ago

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%      16.6%
     8      9.1%      14.3%

So while there is an important distinction between Bitcoin's and Dogecoin's inflation rates (Bitcoin's money supply is convergent; Dogecoin's is divergent despite a monotonically decreasing inflation rate), 8 years after their respective epochs, Dogecoin's inflation rate will be 5.2% higher than Bitcoin's. The horrors! The horrors!

ck29• 12 years ago

Hmm. Interesting chart but could you explain how you are calculating inflation?

Dogecoin reward halves every other month until mid 2015

saalweachter4• 12 years ago

Sorry; I was just working off the "5 billion coins a year" title.

I am just taking the number of new coins created in a year, and dividing it by the number of coins already in the money supply. So if Bitcoin was creating X bitcoins per year for the first four years, the inflation rate for year four was X / 3X = 33%. In year 5, they halved the reward rate, so the inflation rate for year 5 was X/2 / 4X = 12.5%, and for year 6 it was X/2 / (4X + X/2) = 11.1%.

If Dogecoin were minting a constant 5 billion coins per year, then the inflation rate is much simpler: it is always (100/N)%, which is the well-known harmonic series.

Accounting for the initial money supply of 100 billion Dogecoins, it basically just starts further down the harmonic series, and Dogecoin's inflation rate would be 100/(20+X)%, which looks like 5%, 4.8%, 4.5%, 4.3%, 4.2%...

ye4• 12 years ago

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.

skylan_q2• 12 years ago

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 (relatively) fewer coins, increasing the value of the coin. In other words, less dogecoin gets you more stuff so you actually have (price) deflation.

In the US, during the stupidly-named "long depression" of the late 19th century, prices slowly dropped to about 60-65% of what they were at the start of the period while the total supply of money grew. That's because more goods were chasing (relatively) fewer gold-backed dollars. Monetary inflation coupled with price deflation.

saalweachter4• 12 years ago

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?

petrovil3• 12 years ago

I agree. people will prize a capped currency more than an infinite one even if the infinite currency "inflates" less over the next few years than the capped currency. at this point, it seems the only thing doge has over a traditional fiat currency is a cool and cute theme that is sure to be fleeting. the novelty of doge will get stale. I mean really, does anybody really think doge talk or the coin will be cool a couple of years from now? or that it will be serious? in the interim, the masses could send doge much higher only to have grade school "traders" get burned out of lunch money profits or grandmas lose bingo money. a good deal of the doge appeal is its inviting "my first coin" theme. litecoin and other "deflationary" crypto have the incentive to hold because the coin is ultimately capped and the usage and number of holders vastly outpaces the short term rise in coins. doge coin investor dynamics, however, are dependent on an ever expanding pie of unsophisticated crypto neophytes and an up sloping chart. Doge's demographic seems like a race to the bottom from my experience.

higherpurpose• 12 years ago

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.

maaku2• 12 years ago

This isn't a "move" - it's how dogecoin worked from the start. The devs just didn't understand the code they wrote.

lvs• 12 years ago

This is misinformation, Shibes. Mean (random) block reward halves every 100k blocks for the first 600k blocks, after which it will be 10k reward indefinitely. The first halving will happen in less than two weeks, at that point, 50b doge will have been mined.

Within the year, it's estimated that nearly 100b doge will be mined. The block target is 1 block/minute, so it will take about 20 years to reach 200b coin in circulation, assuming no irreversible coin loss.

As such, this is nowhere near the "trolling" and otherwise apocalyptic event that the wolves on HN are claiming. It's actually surprisingly sensible economic policy.

Edit: I'm actually a bit disappointed that HN seems to be having such a hard time figuring out how this works.

hippich• 12 years ago

finally some major alt coin done this :)

One of major complain about bitcoin is the fact of limited supply of coins. I.e. deflationary currency. But as you can see now - this is nothing more then just an agreement between people using bitcoin (or dogecoin)

If majority of dogecoin owners will not like it - they will fork it. Otherwise we will have nice example of inflationary currency.

doodyhead• 12 years ago

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 to bed one of the major concerns raised by many traditional economists about Dogecoin; deflation does seem to encourage hoarding

- As a corollary, inflation encourages spending, the growth engine of every modern economy. Like it or not, it works.

I'm mining as much Dogecoin as a I can and will keep doing so. I think this is great news! To the moon!!

ck29• 12 years ago

I was trying to think of positives to this and the "democratic" concept is also something I hit upon, good point.

I just kinda worry 5 Billion is too much.

Maybe zero to 10k random would be better like the zero to million it started with.

walden423• 12 years ago

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.

atmosx6• 12 years ago

"The free market takes care of all your points [...]"

Do you have any real-world example of free market taking care of anything substantial? Because from my experience it's a fairy tail: Either you need to the state to jump in and make some decisions or you have big players killing the market whatever decision they make (market-wise good or bad).

maaku2• 12 years ago

"uniquely distinguish"? Know your history. This is the founding principle of Freicoin:

http://freico.in/

oafitupa5• 12 years ago

Dogecoiners will try to stay afloat with whatever "feature" they can come up with, even if it's the result of a bug.

gatehouse• 12 years ago

On the point of "democracy" ... my understanding of Cryptocoins in general is that a miner's majority of 50%+1 could effectively take control of the block chain if such a group were organized

EDIT: What I'm trying to say is that "they" could reverse the decision if they wanted to.

lettergram• 12 years ago

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.

gwern• 12 years ago

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...

michaelt• 12 years ago

How are settings like this updated? Is it like the blockchain fork, where the settings are hardcoded into the client, so the longest chain uses whatever settings are in the client most popular with miners?

For example, if someone with a lot of resources wanted to adjust the inflation settings for bitcoin, how would they go about it?

muyuu• 12 years ago

That was the original plan. Nothing has changed.

It's a small constant creation that will converge towards 0% inflation over time, and will stabilize with coins lost and destroyed.

Great idea IMO.

Glyptodon• 12 years ago

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.

philwelch• 12 years ago

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.

judk2• 12 years ago

That would require destroying coins during a recession.

natrius7• 12 years ago

In a world with competing currencies, people will choose currencies they can understand. A dynamic currency fails this test.

monochr• 12 years ago

Thank you for warning me about this. I am now going to sell my dollars for gold and potatoes to avoid using something I don't understand.

wyager• 12 years ago

This could easily be manipulated.

aninhumer2• 12 years ago

I've been thinking a lot about this, but the problem you run up against is that it's difficult to distinguish real economic activity from one person shuffling money around, and similarly, it's easy to hide activity by keeping a private ledger. That said, it's possible the inertia of the real market would stop anyone manipulating inflation in this way. I'd really like to see an experiment on these lines.

wmf3• 12 years ago

One thing that cannot be hidden is the current difficulty.

aw3c22• 12 years ago

That's great!

Anything that drives away people who want to "invest" in DOGE for dollar exchange is a good thing.

greyman2• 12 years ago

Why is it a good thing?

known• 12 years ago

Unless https://en.m.wikipedia.org/wiki/Information_asymmetry#Advers... is implemented in the protocol, I'd not invest.

Eliezer• 12 years ago

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

VMG• 12 years ago

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/

drewblaisdell3• 12 years ago

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.

kevinpet2• 12 years ago

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.

zanny2• 12 years ago

This is actually the principle reason I invest in bitcoin - I imagine that (at a very consecrative rate, because it requires a super majority of consensus to bring about a protocol upgrade) it will integrate features from other cryptocurrencies that can be proven valuable. And I don't mean things like scrypt - the status quo of bitcoin like their sha1 hashes. And they don't want proof of stake because they buy expensive mining hardware to get the cash outs from doing work.

But they might (probably, actually) inflate the money base a lot further down the line, and never let it actually cap at the 21 million btc Satoshi advertised.

yxhuvud• 12 years ago

Better, but still not good.

5 billion a year will be noticable in the short run, but in the long run, the inflation per anno will approach 0.

smileysteve• 12 years ago

Agreed. They should consider making it 5% (which is initially $5b)

baddox• 12 years ago

Where "better" means "more in line with mainstream economic ideas on monetary policy." Of course, the goal of Bitcoin was not to adopt the mainstream economic ideas on monetary policy, so this definition of "better" probably isn't appropriate.

Houshalter• 12 years ago

That's very debatable and even if true, would only matter if dogecoin became a mainstream currency, which it certainly isn't. At best it just means a continuous transfer of wealth from coin owners to miners for doing nothing other than wasting electricity on cpu cycles.

grinnbearit• 12 years ago

FTFY "... their trolling better represents economic policy than Bitcoin"

A money is a refrigerator for productivity, not an abstraction over goods and services.

lexcorvus• 12 years ago

Monetary dilutionists (i.e., basically all legitimate economists, and thus almost all armchair economists well) and hard-money advocates (i.e., basically all legitimate thinkers pre-1920 or so) each accuse the other of practicing pseudoscience, or at least pseudoeconomics. The cool thing about cryptocurrencies like Bitcoin and Dogecoin is they finally offer people a way to put their money (so to speak) where their mouth is.

IgorPartola• 12 years ago

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?)

norswap• 12 years ago

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.

LoganCale3• 12 years ago

It was advertised as being capped and it turned out they hadn't coded a cap into it. If you read the entire thread, the developers appear to just realize this as well after the issue is reported. They then later decide to keep it as it is, which is a change to what was advertised.

Nursie2• 12 years ago

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.

greyman2• 12 years ago

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.

oafitupa5• 12 years ago

What do you mean "liquid"? I hear this a lot from Americans, who don't understand the concept of decimals and units based on powers of ten.

bogs_carut2• 12 years ago

I'm fairly certain that the kind of Americans who frequent HN can perform trivial arithmetic.

kolev5• 12 years ago

Hoarding and speculation is killing Bitcoin. I initially discounted Dogecoin, but it seems that smart people are behind it and the whole thing radiates a lot more positive energy than the greed radiating from Bitcoin.

themgt• 12 years ago

Seems like one of the major unasked questions - what sort of monetary policy will work best for cryptocurrency. And what will be the decision process for that policy. The technoanarchists have conspicuously elided this question.

kevinpet2• 12 years ago

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.

atmosx6• 12 years ago

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).

Nursie2• 12 years ago

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

Why the hell should anyone want to invest in a currency anyway? It's a medium of exchange!

3pt14159• 12 years ago

Bitcoin is spelled without capitalizing the C - it makes the comment look uninformed.

kolev5• 12 years ago

Greed beats reason any day of the week.

wcummings• 12 years ago

I'm curious how they're going to deal with dust/a very large blockchain

fleshweasel• 12 years ago

My serious business cryptocurrency names it after a silly internet picture

rafeed• 12 years ago

I can't help but LOL at anyone who thought this was going to be the next Bitcoin and were going to "get rich" with this.

Seems smart to keep more doge in play, but it'll also kill a lot of the interest in it as well from the people who were buying to "get in" on it. Funny every time.

fizx• 12 years ago

5B/year is an odd choice, because the rate of inflation starts very high, but will asymptotically approach zero over time. This doesn't seem well thought out.

edmccard• 12 years ago

Will this tend to discourage dogecoin market manipulation like that discussed here about a week ago:

https://news.ycombinator.com/item?id=7126153

mrjaeger• 12 years ago

So why doesn't Bitcoin do this as well? Just their core philosophy that deflation is not an inherently bad thing? This seems like a great move and will attract a lot of people who believe in traditional economics. Now if only I could buy Doges from my Coinbase account...

dgacmu• 12 years ago

This entire debate is a great example of how people don't understand math or the idea of inflation. A constant rate of new coins trickling into the currency creates a rate of inflation that decreases over time until it reaches equilibrium with the coins exiting the system. The devs have, intentionally or unintentionally, created a coin whose quantity will become roughly fixed (at a number they can't predict exactly), instead of one that where the supply will diminish over time due to loss (as in Bitcoin).

Perhaps I should know better than to expect reason when it comes to greed, however.

oafitupa5• 12 years ago

Unintentionally. It was a bug, but now dogecoiners are claiming it was designed that way by geniuses, like they always do.

pavel_lishin• 12 years ago

Cool. Thanks for killing the profitability of the currency. Now it's going to be worthless in a couple of years and never reach the value of BitCoin or even anywhere close.

I don't think that's what currencies are for.

patrickg_zill• 12 years ago

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.

hmhrex• 12 years ago

Yup. There goes my 5 bucks.

naveen99• 12 years ago

dogecoin is an interesting dual to bitcoin for experimenting with money. Microtransactions are relatively unregulated / ignored by the tax collectors of the world. Small gifts / capital gains under some quantitiy are usually not reportable. Even children buy and sell baseball cards, comic books, marbles etc... I could imagine children using dogecoin or fedoracoin / TIPS. Are they going to enforce AML / KYC on transacations worth 0.015 cents through a tipbot ?

beedogs• 12 years ago

And as soon as this news broke, DOGE/BTC went down to .00000154 from a high of .00000185.

rajacombinator• 12 years ago

this has interesting implications for BTC. selling mine soon ...

jeffool• 12 years ago

Any interest in the thought of Bitcoin (currently) as only 30% currency, and 70% commodity?

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

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