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What does Elon Musk mean by saying that he likes the flat inflation idea of $DOGE ? Let’s dive behind the scene together!
Every minute 10k new dogecoins are generated, so this is the inflation, it is flat since it is a fix number. Elon in a response to Shibetoshi Nakamoto, the creator of dogecoin said he likes this idea and sees that as a feature not a bug. But what’s good about it?
First let’s see how long does it take to double the number of dogecoins with this approach. Currently we have more than 400B dogecoins. Every year there will be around 5B new dogecoins, so it takes 80 years to double the number of dogecoins. $DOGE value in worst case will be halved in 80 years. What about dollar? How many years does it take to halve its value? It actually is 20 years in average over the past century!
And guess what how long does it take for doge to be one forth? Correct more than 300 years, we are way passed!
So actually dollar is 2^4=16 times more inflated than doge in 100 years and 30k times worse in ~300 years!
But why this inflation is good, and does it really halve its value in 80 years?
To enable the community actively working on the project you should give them rewards. After all it is a dogecoin not $BTC , so miners and community, me and you, should earn something. This inflation goes to the pocket of active community (indirectly) and the miners and keeps it alive.
On the other hand, unlike dollar, the inflation is not decided by a decision of a president at any moment in time, it is fixed and it is extremely difficult to change it. Moreover more dogecoin in the circulation, more negligible this little amount.
The value won’t be really halved in 80 years. Since it still didn’t reach its full potential. Only after it reaches all the potential, then we can discuss whether the value is getting halved or not.
What do you think? Is flat inflation, or inclined inflation a brilliant idea or a bug?
Every minute 10k new dogecoins are generated, so this is the inflation, it is flat since it is a fix number. Elon in a response to Shibetoshi Nakamoto, the creator of dogecoin said he likes this idea and sees that as a feature not a bug. But what’s good about it?
First let’s see how long does it take to double the number of dogecoins with this approach. Currently we have more than 400B dogecoins. Every year there will be around 5B new dogecoins, so it takes 80 years to double the number of dogecoins. $DOGE value in worst case will be halved in 80 years. What about dollar? How many years does it take to halve its value? It actually is 20 years in average over the past century!
And guess what how long does it take for doge to be one forth? Correct more than 300 years, we are way passed!
So actually dollar is 2^4=16 times more inflated than doge in 100 years and 30k times worse in ~300 years!
But why this inflation is good, and does it really halve its value in 80 years?
To enable the community actively working on the project you should give them rewards. After all it is a dogecoin not $BTC , so miners and community, me and you, should earn something. This inflation goes to the pocket of active community (indirectly) and the miners and keeps it alive.
On the other hand, unlike dollar, the inflation is not decided by a decision of a president at any moment in time, it is fixed and it is extremely difficult to change it. Moreover more dogecoin in the circulation, more negligible this little amount.
The value won’t be really halved in 80 years. Since it still didn’t reach its full potential. Only after it reaches all the potential, then we can discuss whether the value is getting halved or not.
What do you think? Is flat inflation, or inclined inflation a brilliant idea or a bug?
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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