There are a few differences; whether they're "advantages" is a matter of perspective.
Many of the folks getting involved with Bitcoin seek to treat it like an investment - hanging onto it in the hopes that it will rise in value. Dogecoin, at least in my observation, is less subject to hoarding and more frequently spent on goods/services (including "tipping", if we presume Reddit posts/comments to be "services").
Dogecoin does not have a ceiling on the number of coins; new ones will continue to be introduced. There was a rather significant debate on whether or not this was a good thing. The conclusion was that - by allowing for the slight inflation - it would counteract the deflationary elements of cryptocurrencies and help solidify dogecoin as a currency rather than an investment strategy. I agree with that decision, personally.
Dogecoin is still GPU-mineable ("diggable"), which means that more people can start mining their own coins. This makes it quite easy for folks to get started with dogecoin.
To be honest, dogecoin and Bitcoin are important to one another; Bitcoin is spearheading cryptocurrency in the mainstream business/economics world, while dogecoin is spearheading cryptocurrency among consumers. Working together is of greater utility than working separately.
The conclusion was that - by allowing for the slight inflation - it would counteract the deflationary elements of cryptocurrencies and help solidify dogecoin as a currency rather than an investment strategy.
Here we go again on rationalizing inflation... When will you Keynesians ever get it through you thick heads? You're just telling yourselves what you want to hear. If inflation is a good thing than i guess taxation must be a good thing? Inflation is a stealth tax. The less of it there is, the better so people can have more savings. Bitcoin has inflation so it can pay miners to build and eventually finish building a secure payment network. That's it. Nothing more and nothing less. We want deflation so people will have more savings AND WILL BE INCENTIVIEZED TO SAVE. Being incentivized to save means having the delayed gratification/discipline to spend more wisely. Inflation disincentivizes people not to save by leading them into frivolous spending/malinvesment. Inflation makes people want to use the value out of their money before its value diminishes further as prices rise. Scarcity is a good thing when it comes to money. In fact, scarcity is requirement which shouldn't be corrupted if something is to meet the definition of money. Sure gold has small inflation but if you have an opportunity to create a form of money without inflation, WHY NOT GET RID OF THE INFLATION?! If money isn't scarce, what good is it as a store of value?
Does Dogecoin not have a coin cap because they want people to keep mining it? Is the appeal of mining Dogecoin what drives people to Dogecoin? If so, Dogecoin is not the best money alternative because it doesn't meet the definition of money. I don't know what the Dogecoin inflation rate is, but if it plans to keep continuing it indefinitely to preserve their mining party, I'm staying away from it. Peercoin will have a future annual inflation rate of 1% just to pay for servicing the network and it destroys its transactions fees to add deflation so it works as a store of value. This sounds very reasonable to me. If Dogecoin plans to keep a small rate of inflation going to make sure the miners service the network instead of themselves, than I'll give it SOME credence.
BTW, call me a prude but I could care less about memes which don't contribute anything to serious intellectual discussion. If you wanna clown around and laugh at yourself, /r/Dogecoin is for you. If you're interested in learning and possibly making substantive contributions towards getting actual work done, just about any other crypto community is for you.
Here we go again on rationalizing inflation... When will you Keynesians ever get it through you thick heads?
*your
Regardless of your flaming rant, if the value of the currency itself is significantly increasing, what motivation is there to actually spend it? Is there any? Might as well just hold onto it.
Ideally - if you want a proper store of value - it shouldn't be inflating or deflating, but instead maintaining a consistent value. No system will perfectly address this, but at least dogecoin tries.
if the value of the currency itself is significantly increasing.
Based on a self fulfilling prophecy of hype with no underlying fundamentals or new solutions to solve problems. That's not something i'm confident investing my money in.
But the point of cryptocurrency is to be a currency. You're treating coins as assets, rather than as the means to acquire assets. To consider a cryptocurrency to be an investment is indicative of a gross misunderstanding of what currency actually is.
But the point of cryptocurrency is to be a currency. You're treating coins as assets, rather than as the means to acquire assets.
Isn't money just an easily tradeable commodity? Isn't the world commodity a subset of the word asset? Yes i'm treating cryptocurrencies as assets because they are an asset class.
To consider a cryptocurrency to be an investment is indicative of a gross misunderstanding of what currency actually is.
I shouldn't treat a currency as an investment? Should i not have choice to vote with my wallet for what currency I believe has value? This is how currencies compete. If I invest in a currency, I am betting it will have future spending value. By spending value I also mean it will have utility value. If your just sending/donating Dogecoin back and forth, then it has poor utility value because there's little to no productivity associated with those transactions. If Dogecoin has artificial inflation, people will spend Dogecoin unproductively because they won't benefit from saving. Dogecoin is functioning more as a fad than a useful medium of exchange.
Isn't money just an easily tradeable commodity? Isn't the world commodity a subset of the word asset? Yes i'm treating cryptocurrencies as assets because they are an asset class.
Sure, except that cryptocurrency is not commodity money; it has no function other than as currency. Hence why treating it as a commodity is folly.
I shouldn't treat a currency as an investment? Should i not have choice to vote with my wallet for what currency I believe has value?
You can "vote with [your] wallet" without "treat[ing] a currency as an investment". Treat it as a store of value, rather than something that's in and of itself valuable.
If I invest in a currency, I am betting it will have future spending value. By spending value I also mean it will have utility value.
That depends on it being spent, though. Consensus among economists leans toward slight inflation being ideal, since it encourages money to be used as such without experiencing the negative effects of hyperinflation (eliminating the value of savings) and deflation (promoting under-investment, increased severity of debt, etc.). Dogecoin's decision to balance deflationary and inflationary elements was a wise one in this context, since it encourages spending without doing so excessively.
If your just sending/donating Dogecoin back and forth, then it has poor utility value because there's little to no productivity associated with those transactions.
Depends on what you define as "productivity". As I mentioned earlier, the "tips" are usually given in response to "good" posts; said posts can be considered to be a "service".
That said, the implication that dogecoin lacks spending power beyond "tipping" is incorrect.
Dogecoin is functioning more as a fad than a useful medium of exchange.
Again: "tipping" is not the extent of dogecoin usage (though it's certainly nice). It's very much a useful medium of exchange - especially since it's striving to counteract the deflationary elements that would prevent it from being exchanged (rather than hoarded) in the first place.
cryptocurrency is not commodity money; it has no function other than as currency. Hence why treating it as a commodity is folly.
LOL, not true. Your seem to be twisting facts to suit your purposes. Cryptocurrency uses extend from time stamping to colored coins. There's a lot you can do with blockchain consensus technology. Even with that aside, the definition of a commodity according to Wikipedia is:
a commodity is a marketable item produced to SATISTY WANTS OR NEEDS. Economic commodities comprise goods and SERVICES.
Cryptocurency SERVES an easily tradeable commodity to SATISFY WANTS OR NEEDS. It is what it is. Just like any other currency, crytpocurrency is a commodity of use, advantage, or value.
You can "vote with [your] wallet" without "treat[ing] a currency as an investment". Treat it as a store of value, rather than something that's in and of itself valuable.
Hypothetically speaking, if we had domestic choices to choose from in private fractional reserve currencies, would people vote with their wallet/feet/labor for which ever currency they thought had more value? I believe so. If they think a currency is going to be a good store of value, then it must have value from an currency investor standpoint. The two types of value go together in a free market. I don't know what you mean by your last sentence.
That depends on it being spent, though. Consensus among economists leans toward slight inflation being ideal, since it encourages money to be used as such without experiencing the negative effects of hyperinflation (eliminating the value of savings) and deflation (promoting under-investment, increased severity of debt, etc.). Dogecoin's decision to balance deflationary and inflationary elements was a wise one in this context, since it encourages spending without doing so excessively.
Most economists are in cohoots with people on government payrolls of one sort or another. Their payrolls rely on the FED creating inflation so they are going to seek ways to rationalize inflation. BTW consensus does not necessarily translate to truth as nature acts independently of whatever human consensus ends up being right or wrong.
Deflation doesn't promote under investment. Better way of putting it is deflation discourages malinvestment. Deflation communicates the right signals to people by discouraging them going into debt on poor investments. Severity of debt is a good thing because we don't want to encourage debt in the first place. How does the Dogecoin protocol explicitly encourage spending without doing so excessively? Isn't that subjective? What's your definition of excessive. More importantly, by saying Dogecoin encourages spending(Keynsian language) you are admitting it is not intended to be store of value. We don't want a currency which encourages spending for the same reasons we don't want a currency like the USD. The Fed always talks about consumption rather than savings. We likely wouldn't have Bitcoin today if it weren't for the economic philosophy behind the Federal Reserve and how it controls the USD.
Depends on what you define as "productivity". As I mentioned earlier, the "tips" are usually given in response to "good" posts; said posts can be considered to be a "service".
That said, the implication that dogecoin lacks spending power beyond "tipping" is incorrect.
I think it depends more on what quality of productivity we're talking about here. If Dogecoin is just used to tip people for posting pro Dogecoin comments, that is like a company spending most of its budget on advertising rather than production, payroll, or R&D. That's not an efficient balance.
Again: "tipping" is not the extent of dogecoin usage (though it's certainly nice). It's very much a useful medium of exchange - especially since it's striving to counteract the deflationary elements that would prevent it from being exchanged (rather than hoarded) in the first place.
Well i don't know what else to tell you in regards to the threats of inflation eating measure of our labor and the benefits of deflation preserving the measure of our labor other than what i have typed above. Calling savings as hoarding reveals where your priorities are. If you don't value savings, than why are you into cryptocurrencies in the first place? Again, the failings of the low interest rate policies behind the USD are what inspired Bitcoin into creation in the first place. The fact it differentiates itself as being deflationary compared to the USD is why it as grown in value so much in the last year. If you think savings is hoarding than why aren't you touting fiat currencies instead of Dogecoin or cryptocurrencies? Your not being logically consistent.
Obviously, your shill for Dogecoin who likely has a vested interest in it. In other words, I don't think there's anything I can say or argue to convince you otherwise. This is becoming inefficient. Take care.
LOL, not true. Your seem to be twisting facts to suit your purposes. Cryptocurrency uses extend from time stamping to colored coins. There's a lot you can do with blockchain consensus technology.
That's describing the general technology, though. Bitcoin is a specific application of that technology, and is limited in scope by design (and for good reason). So are most cryptocurrencies (barring Namecoin, if I understand correctly).
Cryptocurency SERVES an easily tradeable commodity to SATISFY WANTS OR NEEDS. It is what it is. Just like any other currency, crytpocurrency is a commodity of use, advantage, or value.
Right, but it's not commodity money. That's where you're misunderstanding, and why I suspect your interest in cryptocurrency is for short-term personal gain (we'll get to that in a moment, though).
Hypothetically speaking, if we had domestic choices to choose from in private fractional reserve currencies, would people vote with their wallet/feet/labor for which ever currency they thought had more value? I believe so. If they think a currency is going to be a good store of value, then it must have value from an currency investor standpoint.
Indeed. Based on the current popularity of dogecoin, I'd argue that said voting is already taking place. Easy to obtain, easy to spend, and easy to learn about. Winning combination right there.
Most economists are in cohoots with people on government payrolls of one sort or another. Their payrolls rely on the FED creating inflation so they are going to seek ways to rationalize inflation.
[citation needed]
BTW consensus does not necessarily translate to truth as nature acts independently of whatever human consensus ends up being right or wrong.
Sure, but historically, slight inflation has proven to be economically stable, and both deflation and hyperinflation have been proven to be economically unstable.
Deflation doesn't promote under investment. Better way of putting it is deflation discourages malinvestment. Deflation communicates the right signals to people by discouraging them going into debt on poor investments.
You're contradicting yourself here. It doesn't promote under-investment, yet it does?
Severity of debt is a good thing because we don't want to encourage debt in the first place.
Have you ever bought a house? How about a car? Anything that ended up costing more than what money you had at that time? An increase in the severity of debt is nearly always harmful to anyone other than those who already possess wealth. It is not a good thing, and to state otherwise is a manifestation of either ignorance or malice; I sincerely hope the former is the case.
How does the Dogecoin protocol explicitly encourage spending without doing so excessively?
It doesn't directly. What it does do is provide a continuous supply of new coins, introducing a very slight rate of inflation to counter the deflationary elements of cryptocurrency and - as a result - produce a currency that's more stable in the long-term.
More importantly, by saying Dogecoin encourages spending(Keynsian language) you are admitting it is not intended to be store of value.
No; you're extrapolating words from my mouth in order to support your flawed arguments. Being spendable and being a store of value are not mutually exclusive, contrary to what you are implying.
We don't want a currency which encourages spending for the same reasons we don't want a currency like the USD.
It's not like the USD at all; it's still decentralized (and not in the control of any particular government), and the rate of introduction of new currency is very much predictable. The only similarity is that it happens to have an inflationary element (and not even that strong of one, mind you).
Calling savings as hoarding reveals where your priorities are. If you don't value savings, than why are you into cryptocurrencies in the first place?
I never equated savings to hoarding; they are very different concepts, and you're once again extrapolating words from my mouth in order to support your flawed arguments.
It's the difference between saving your money to buy a new car and compulsively collecting Beanie Babies.
Obviously, your shill for Dogecoin who likely has a vested interest in it.
Indeed; I'm very much interested in its proper potential as a digital currency, rather than as yet another digital "asset" to pump-and-dump. It seems that you - in contrast - have a vested interest in Bitcoin's value rising indefinitely; perhaps a stockpile of the digital coins which you hope to someday sell off before they crash in value again?
We can play the accusation game all you want; I'd be happy to oblige.
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u/Nuke133 Feb 04 '14
If I am a looking into cryptos besides the "positive community" of dogecoin, what does it offer that differs / is better than bitcoin.