In a digital currency market where most virtual currencies are deflationary, Dogecoin, the Shiba-based cryptocurrency, is acting like the Federal Reserve System and will allow circulation to grow by five billion each year.
Jackson Palmer, the creator of Dogecoin, confirmed that the development team would let the virtual currency codebase remain the same, but would permit limited inflation, reports the International Business Times. Supporters of the announcement say this could very well make Dogecoin usable and establish a stable and viable long-term business model.
“Based on everyone’s feedback, we’ve decided to leave the Dogecoin code base as it was originally released and not implement a change,” wrote Palmer on Github. “The goal for the currency is to keep approximately 100 billion coins in circulation—thus after 100 billion dogecoins are created, rewards will continue at 10k each block. This will help maintain mining and stabilise the number of coins in circulation (considering lost wallets and various other ways coins may be destroyed) at 100 billion.”
Dogecoin users were reportedly upset by this move and have argued that such high inflation and devaluation would make the coin worthless. Essentially, proponents of Dogecoin feel such a measure is going to end potential profitability for Dogecoin and will never meet the same value level as bitcoin.
Others aren’t so quick to criticize the move. Some users make the case that the inflationary shift would make Dogecoin “a usable currency” rather than a speculative asset for those who adopted the digital currency in the early stages.
“A win for basic economics. I’m still holding mine, as I was planning to anyway. I’d also like to thank the panic dumpers for spreading wealth to the incoming newbie shibes at discount prices. Such generosity,” a user stated on Github.
Finance experts say that deflationary digital currency promotes hoarding since most would treat it like a commodity and expect higher values over time. One report found (it appears The Atlantic article may have been removed) that most bitcoins have never been spent.
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