4 ms·

It will encourage tipping (giving it away in large numbers), not real trading. As mentioned elsewhere, why sell goods for it if the value will keep dropping?

colanderman 13y ago
why sell goods for it if the value will keep dropping? You know the USD is inflationary, right? I don't see people having had a problem selling goods in the US since 1970. You don't sell goods to get money to hold on to for the rest of your life. You sell goods so you can, with the profit, immediately purchase other goods that you need (either to live or to invest in).
- ck2 13y ago
  Does the USD lose 5% value each year? FIVE percent. Think about that. I am hoping it is a zero to 10k block reward which would change all this. But looking at the code I think it is 10k fixed.
  - colanderman 13y ago
    More like 2-4%: http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ http://www.usinflationcalculator.com/inflation/historical-in... I'll grant 5% is a tad high, but it's the right order of magnitude.
    - _delirium 13y ago
      > it's the right order of magnitude Probably even closer when you consider that cryptocoins suffer much more "loss" than USD does. People lose wallets, get hard drives wiped, etc., which are deflationary events that partly counter any built-in monetary inflation. Whereas losses of USD due to things like setting bills on fire or losing them in a lake amount to a miniscule portion of total USD outstanding. Imo it's even plausible that Dogecoin's current loss rate is >5%, in which case the currency would still be deflationary even with the new coins being added.
    - aestra 13y ago
      >Whereas losses of USD due to things like setting bills on fire or losing them in a lake amount to a miniscule portion of total USD outstanding. The Bureau of Engraving and Printing redeems partially destroyed or badly damaged currency as a free public service. Every year the U.S. Treasury handles approximately 30,000 claims and redeems mutilated currency valued at over $30 million. http://www.moneyfactory.gov/uscurrency/damagedcurrency.html http://www.moneyfactory.gov/uscurrency/damagedcurrency.html
      - judk 13y ago
        When banks sit on money and refuse to make loans, or people stuff dollars under the mattress, that has a short-term deflationary effect, for as long as the money is locked up.
      - mcguire 13y ago
        You need >50% of a bill for them to redeem it, though.
  - furyofantares 13y ago
    Bitcoin went from 10.7M to 12.3M in the last year. That's 15%. But of course it deflated quite a lot in that time due to rising demand. Doge will add 5% to the total supply in the first year, but that will be less every year -- it's a fixed number, not a fixed percent, assuming the title of the your OP is correct. (Not sure about this.) Of course, that doesn't account for lost coins. Given how doge is used, I am sure a lot of the new coins will actually be replacing lost coins.
  - aestra 13y ago
    On average about 3% a year. That's the "rule" I was always taught anyways. some years it has been over double 5% a year. http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ http://www.usinflationcalculator.com/inflation/historical-in... We have been lucky to have low inflation for the last several years. My mom was trying to establish her adult life during the double digit inflation of the late 70s early 80s and talks about how hard it was and how high the interest rates were.
  - zephjc 13y ago
    5% is pretty steep. The rate's been relatively low for the last couple years. In 2007, it went over 4%. http://usinflation.org/us-inflation-rate/ http://usinflation.org/us-inflation-rate/
  - path411 13y ago
    It's only 5% the first year. Since it's a flat amount, the % of the inflation would reduce every year.
girvo 13y ago
Uh, that's, like... How actual money works? /shrugs
this_user 13y ago
Why would you buy any goods if the value ouf your "currency" keeps going up? BTC is DOA because of its inherently deflationary properties. There will never be a consistently expanding BTC economy as hoarding makes more sense than actually spending it. The people who like BTC for having a fixed cap on the amount of coins in existence are probably the same people who would like the gold standard back, because they don't understand the economic consequences.
- notahacker 13y ago
  Or because they have ASICs and a vault full of gold bars...
- natrius 13y ago
  Isn't Bitcoin's success as a currency orthogonal from the negative effects it might have on the economy? If individuals think holding Bitcoin is better for them than holding dollars, they will do it as long as it's legal. As far as the economic effects, I think we'll be much better at managing a deflationary economy in 2030 than we were in 1930. We have more knowledge, better statistics, and better communication. At its core, the sticky wages problem is a communication problem.
  - mcguire 13y ago
    Holding Bitcoin does not make it available for capital investment. In this forum, I would expect that to be a significant issue.
    - natrius 13y ago
      In a world where Bitcoin has already been adopted by the masses, holding Bitcoin would make almost as little sense as holding dollars does today. Sure, its value will go up, but not as much as investing money in companies that make more money would.

colanderman 13y ago

why sell goods for it if the value will keep dropping? You know the USD is inflationary, right? I don't see people having had a problem selling goods in the US since 1970. You don't sell goods to get money to hold on to for the rest of your life. You sell goods so you can, with the profit, immediately purchase other goods that you need (either to live or to invest in).

ck2 13y ago
Does the USD lose 5% value each year? FIVE percent. Think about that. I am hoping it is a zero to 10k block reward which would change all this. But looking at the code I think it is 10k fixed.
- colanderman 13y ago
  More like 2-4%: http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ http://www.usinflationcalculator.com/inflation/historical-in... I'll grant 5% is a tad high, but it's the right order of magnitude.
  - _delirium 13y ago
    > it's the right order of magnitude Probably even closer when you consider that cryptocoins suffer much more "loss" than USD does. People lose wallets, get hard drives wiped, etc., which are deflationary events that partly counter any built-in monetary inflation. Whereas losses of USD due to things like setting bills on fire or losing them in a lake amount to a miniscule portion of total USD outstanding. Imo it's even plausible that Dogecoin's current loss rate is >5%, in which case the currency would still be deflationary even with the new coins being added.
  - aestra 13y ago
    >Whereas losses of USD due to things like setting bills on fire or losing them in a lake amount to a miniscule portion of total USD outstanding. The Bureau of Engraving and Printing redeems partially destroyed or badly damaged currency as a free public service. Every year the U.S. Treasury handles approximately 30,000 claims and redeems mutilated currency valued at over $30 million. http://www.moneyfactory.gov/uscurrency/damagedcurrency.html http://www.moneyfactory.gov/uscurrency/damagedcurrency.html
    - judk 13y ago
      When banks sit on money and refuse to make loans, or people stuff dollars under the mattress, that has a short-term deflationary effect, for as long as the money is locked up.
    - mcguire 13y ago
      You need >50% of a bill for them to redeem it, though.
- furyofantares 13y ago
  Bitcoin went from 10.7M to 12.3M in the last year. That's 15%. But of course it deflated quite a lot in that time due to rising demand. Doge will add 5% to the total supply in the first year, but that will be less every year -- it's a fixed number, not a fixed percent, assuming the title of the your OP is correct. (Not sure about this.) Of course, that doesn't account for lost coins. Given how doge is used, I am sure a lot of the new coins will actually be replacing lost coins.
- aestra 13y ago
  On average about 3% a year. That's the "rule" I was always taught anyways. some years it has been over double 5% a year. http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ http://www.usinflationcalculator.com/inflation/historical-in... We have been lucky to have low inflation for the last several years. My mom was trying to establish her adult life during the double digit inflation of the late 70s early 80s and talks about how hard it was and how high the interest rates were.
- zephjc 13y ago
  5% is pretty steep. The rate's been relatively low for the last couple years. In 2007, it went over 4%. http://usinflation.org/us-inflation-rate/ http://usinflation.org/us-inflation-rate/
- path411 13y ago
  It's only 5% the first year. Since it's a flat amount, the % of the inflation would reduce every year.

girvo 13y ago

Uh, that's, like... How actual money works? /shrugs

this_user 13y ago

Why would you buy any goods if the value ouf your "currency" keeps going up? BTC is DOA because of its inherently deflationary properties. There will never be a consistently expanding BTC economy as hoarding makes more sense than actually spending it. The people who like BTC for having a fixed cap on the amount of coins in existence are probably the same people who would like the gold standard back, because they don't understand the economic consequences.

notahacker 13y ago
Or because they have ASICs and a vault full of gold bars...
natrius 13y ago
Isn't Bitcoin's success as a currency orthogonal from the negative effects it might have on the economy? If individuals think holding Bitcoin is better for them than holding dollars, they will do it as long as it's legal. As far as the economic effects, I think we'll be much better at managing a deflationary economy in 2030 than we were in 1930. We have more knowledge, better statistics, and better communication. At its core, the sticky wages problem is a communication problem.
- mcguire 13y ago
  Holding Bitcoin does not make it available for capital investment. In this forum, I would expect that to be a significant issue.
  - natrius 13y ago
    In a world where Bitcoin has already been adopted by the masses, holding Bitcoin would make almost as little sense as holding dollars does today. Sure, its value will go up, but not as much as investing money in companies that make more money would.