Why is this coin pumping up recently? I thought it was a joke coin with unlimited inflation.
Here I explain what unlimited inflation means in practice.
https://bitcointalk.org/index.php?topic=2306444.msg27070100#msg27070100In short, to compare Dogecoin with a more valuable currency with limited inflation we must use the Megadoge (1 million doges) because its basic unit is very small.
Summarizing:
Value:
1 BTC = $14,650
1 MÐ = $8,500
Current supply:
BTC = 16,769,287
MÐ = 112,537
Rich address with 1-10:
BTC = 556,563
MÐ = 7,184
New supply for the next 5 years:
BTC = 3,000,000 (estimate)
MÐ = 25,000
Total supply the next 1000 years:
BTC = 21,000,000
MÐ = 5,000,000 (estimate)
Do you still think that unlimited inflation is a problem?
Great write-up! I compared emission stats across a few coins a bit over a year ago - and Doge is actually rather conservative with its emission.
https://bitcointalk.org/index.php?topic=1698862.msg17036346#msg17036346It's amazing that people keep repeating the line about Doge inflation being negative without knowing what they are talking about.
Of course that inflation has negative impact. Doge 5% per year is 5 billions of DOGE every year. By today price it is 3000 BTC or 40 millions dollars.So you have to find new investors who will be willing to invest 3000 BTC yearly just not to allow new minted coins to push price down.Because DOGE was not developped by years,no marketing,no any practical use,it is very difficult task.
Also DOGE has problem it has mined far too quick.Massive supply makes tremendous pressure on price and 5% of inflation in these circumstances is too big.No serious investor will like that,so money goes to more developped coins with strong developping and marketing teams.These are reasons why DOGE is just quick pump/dump coin like many others.
40 million USD (yearly DOGE inflation) is less than today's daily volume. Meanwhile this year's growth in the market cap is 3600%, meaning that the increase in adoption of the currency and resulting demand from that is thousands of times greater than the daily supply increase was able to meet. How is having 5% emission in any way a negative compared to 0% during this time? Are people seriously arguing for wanting to make just a tiny bit more than the X36 increase in one year? I don't think so - it is just an imbecilic argument that anti-Doges use to attempt to destroy the coin. Now if we are talking about the years to come, the growth in new users may drop off after a while, but it's probably going to take at least a few years until it drops off to below the level of inflation, and even in that case, there is still a decrease in supply from lost coins (likely more than 2% a year) and a decrease in prices from economic growth (2%), while by that time the percent of emission would only be around 3%! The best coins have around 1-3% yearly inflation, and yet only in the Doge section there is a constant shrieking about "muh inflation".
As for the initial release of many coins quickly (100 billion in the first year), I totally agree with you, it was done way too fast and seemingly recklessly, with the only goal of pumping and dumping it all onto a passive market. But it's been 4 years since then and a lot of the DOGE has been bought up, so I don't see any issues with it in the context of today's Dogecoin. It's really quite ironic that when they were generating the "endless infinite supply Dogecoin", which is a metaphor for the initial low hash rate 1 million, 500K, etc, Doge blocks, there was nothing said about it except hype, and after everything was sold, all sorts of trolls come out of the woodwork to talk about the "Doge inflation problem". Anyway, it seems that most of these initial coins were circulated through the market, passing through many hands, and so it's not an issue any longer. Also, it is much better for a coin to be mined like this (with an excessive supply at the beginning) than to be created within a centralized system by the decision of some person or committee (e.g., Ripple), which is not open to the whole market. A lot of these "developed coins with ... strong marketing teams" that you are referring to are probably just Ethereum tokens that can be created at will in any amount without being openly/fairly mined by anyone in the world, and it can be argued that they are not even real cryptocurrencies. Doge on the other hand has stayed true to the spirit of Satoshi's Bitcoin and so it remains as an excellent choice for any crypto investor.
The complexity of production of coins strongly grew.
Power of network grew in tens of times in a year.
Production is less than 5 percent on the protocol (about 4.5) now. This figure decreases every year. Therefore inflation very small will also be will decrease. More than 25 percent of coins are lost from turnover today.
In my opinion there are enough arguments for trolls.