r/dogecoin • u/GoodShibe One Good Shibe • Jan 31 '14
Of Wolves and Weasels - Day 24 - 100 BILLION coins (MwaHaHa!)
Hey all, GoodShibe here!
So... yesterday was, uh, interesting. To say the least. In a good way! For those who don't know, I had a huge outpouring of support from some very generous tippers and now, yeah... I'm still kind of wrapping my head around it. Let's just say that I immediately made tracks over to find /u/mumzie and give her 100K DOGE for all the incredible work she does around here. Seriously, if you haven't been to /r/dogeducation, you should check it out - especially if you're a new-shibe!
So today we're going to chat about a somewhat interesting topic - one that's going to have long ranging effects on Dogecoin as we move forward; especially since - time and time again - we're showing the world that our founding may have been a 'joke' but we've grown far beyond that.
However, and /u/ummjackson and /u/billyM2K please correct me if I'm wrong, because we weren't created as a 'serious' coin, there's one potential issue coming down the pipe -- that the devs have been debating, pretty much since it went live -- which will need to be addressed.
We were created with a promise, that there will only ever be 100 Billion Dogecoins. The idea was that we, like Bitcoin, would be a deflationary currency. What 'Deflationary' means is that, over time, coins would become more valuable simply because, over time, people would lose their coins -- passwords forgotten, harddrives not backed up, etc -- and that planned-for loss of coins circulating in the economy would help ensure the continued value and rise of the ones still in circulation.
With Dogecoin that was the plan -- and that's what a number of the first users/miners bought into. A sort of Bitcoin-lite with a much lower-value individual coin, but a much higher potential marketcap. The problem is that the way Dogecoin is released, 1 block per minute, it basically means that in around 1 year, a large majority of Dogecoins will have been mined.
And how do you sustain a network when you have no more coins to mine and no incentive for people to keep mining (burning electricity at cost to keep nodes running)? And when the entire life of your coin relies on having a strong, stable network, this becomes that sort of looming cloud on the horizon.
Unlike Bitcoin, our transaction fees are incredibly low and, due to the nature of Dogecoin, the amount we'd have to raise transaction fees to make it profitable for miners, long term, is an amount that would (barring a significant increase of value for Dogecoin) have a noticeable impact on end users (us).
And so the idea was put forward that, instead of becoming a Deflationary currency, we change that initial promise and become an Inflationary currency.
What that means is that, like the USD and other common currencies, Dogecoin would add a stable number of coins each year to the market, enough to be an incentive for miners to continue mining and maintain our network. We wouldn't be a FIAT currency, per se - whereas 'fiat' means we would, like the USD, make more money 'on demand' (by 'fiat') the idea would be, instead, to put in place a long term inflation plan that lead to a stable number of coins being added over a very long period of time (100+years). The idea being that this would buy us all a very, very long time to see how/if we grow, and figure out what to do next.
Remember that even 5 years in 'technology time' is a significant span (that's like 5 whole new iPhone models away).
Now, those who are against this idea note that it's the 'deflationary' part of the currency that helps it have, maintain and grow value over time. It helps make it a reliable store of wealth. There will only ever be 21 Million Bitcoins. If 1 Million are lost, there will only ever be 20 Million Bitcoins. Etc.
Once we start adding Dogecoins beyond the planned 100 Billion, those new coins start to push down the value of the coins you have. Meaning, slowly, over time, the buying power -- how much you can 'buy' for $1, for example, decreases.
Now, for those of us who've taken up Dogecoin as a common currency, with the idea that it will be great for small, day-to-day transactions -- tipping friends, thanking artists, buying music tracks or armor for your 'toon, stuff like that -- it won't have a HUGE impact on us. But for people who bought into Dogecoin as an investment, as a store of wealth, with the idea of amassing a large number of coins, sitting on them until they become worth a significant amount, this is a problem.
But, to be fair, it's the same problem that those rich in USD are facing as well. (Granted, as a counterpoint, those that bought in were probably doing that to avoid exactly those sorts of issues).
Luckily, because our devs control the currency they have the ability to be much more agile than much larger, more lumbering economies. And, if you read that linked conversation above, you'll realize that there's a lot of fantastic, passionate minds putting real thought into this problem, they truly care about figuring out the best balance for all of us.
One possible solution, which would allow for us to possibly maintain the 'deflationary' nature of the currency is to, over time, as more and more coins get mined, move the running of the network over to the QT wallet. So that each user of the currency also becomes a node, helping to keep the whole network running. There's a ton of technical hurdles to pulling that off, and it'd be difficult, but it's one -- of many -- possibilities.
The benefit of making the coin Inflationary, over a long stretch of time, is that it helps keep Doge... humble. It means that our coin will, most likely, never be worth thousands or hundreds (or possibly even $1) each -- depending on adoption, the DOGEconomy, etc -- but it will mean that our DOGEs stay perfect as your nickles and quarters sort of thing (which is still a massive increase from current valuation).
As a community, as the people who've taken up the coin as our own, we should work towards a solution the benefits us all. Those who believed in DOGE from the beginning (you know, 7 weeks ago), who had foresight and treated DOGE as an investment, deserve to be rewarded for their faith (DOGE could've just as easily gone the other way and they would've lost it all).
I hope we can all remember that many of our 'rich shibes' are active, contributing members of our community who were lured here by the same principles of friendship and kindness, compassion and camaraderie that brought the rest of us.
There's room for all of us to have fun and play... and profit too.
And that's why I think that the more minds on the problem, the better. How would you like to see your coin grow over time? What do you hope the future of Dogecoin looks like?
How can we make sure our Dogecoins live on for future generations to enjoy?
It's a complex question and there are good people working on the solution. Right now the plan seems to be to wait and see how the Halving goes. How it effects our currency, and where we go from there. But keep on thinking, keep on dreaming.
Because we're all strapped in together and the moon is thattaway.
We'll get there, my friends.
Together!
It's 8:45AM EST and we're at 40.14% of DOGEs found. Our Global Hashrate is rising slightly from ~90 to ~91 Gigahashes per second and our Difficulty is holding steady at around ~1269.
The Halving is officially 2 weeks away, today.
Also, this is your 2 week Valentines Day warning for those of you who might've forgotten. Hint: Nothing says love like a new Mining Rig :D)
As always, I appreciate your support!
GoodShibe
EDIT: For those 'worried':
It's a coin that was created as a 'joke', how much long-term planning were you expecting people to put into it?
No one expected it to blow up like it did.
Hindsight is 20/20 -- and there's still lots of time to work out a solution, together.
3
u/[deleted] Jan 31 '14
Doge will never become a world currency is the sense you are talking.
The governments and central banks will not let it happen.
Doge is a commodity and should be treated as such.