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For the past two months, developers and users of Dogecoin, the Shiba-themed altcoin (alternative bitcoin), have been trying to figure out whether it should be an inflationary or deflationary currency. On Saturday, Jackson Palmer, creator of Dogecoin, wrote on Github that the development team would leave the code as it is – with limited inflation.
Most altcoins as designed so far are deflationary. This means that there is a hard cap on the number of coins that will ever exist. Bitcoin, for example, is designed in such a way that bitcoins will no longer exist after 2040. Other variants (Litecoin) have similar setups. However, one of the downsides of deflation is that it essentially encourages hoarding as the currency’s perceived real value increases over time. According to this, academic researchers showed last year that 64 percent of all Bitcoins (PDF) were never issued.
As Palmer wrote, “Based on everyone’s feedback, we have decided to leave the Dogecoin codebase as it was originally released and not make any changes. The goal of the currency is to keep around 100 billion coins in circulation – so after 100 billion Dogecoins are created, the rewards continue at 10,000 per block. This will help keep mining going and stabilize the number of coins in circulation (taking into account lost wallets and various other ways in which coins can be destroyed) at 100 billion. “
Palmer did not immediately respond to Ars’ request for comment.
“Now it’s worthless”
Almost immediately, some Dogecoiners got upset because every single Dogecoin will be worth less over time. “Thank you for destroying the profitability of the currency. Now in a few years it will be worthless and never even come close to the value of Bitcoin,” wrote MadCold on Github. “I’m in for the money only. I bought huge amounts of Dogecoin when the price was cheap in the expectation that it would go up.
So far, it looks like the currency is going up in value. Almost 10c per 1K in the past few hours. Still asking for a reply from @ummjackson for what he’s doing to ruin the Dogecoin currency. “
Nevertheless, others cheered the decision, as did the user Shinekm: “Fantastic decision. Now it has a realistic chance of becoming a usable currency instead of a bizarre speculative asset for early adoptive hoarders. A win for the basic economy. I’m still holding mine like I intended to anyway. I would also like to thank the panic dumpers for distributing wealth at great prices to the incoming newbies.
Inflation is “actually a good thing”
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