What does Elon Musk mean by saying that he likes the flat inflation idea of $DOGE?

5 days ago 17

What does Elon Musk mean by saying that he likes the flat inflation idea of $DOGE? Let’s dive behind the scenes together!

Why Dogecoin’s Inflation Is a Feature, Not a Bug

Every minute, 10,000 new Dogecoins are generated, which leads to a flat inflation rate because this is a fixed number. Elon Musk, in response to Shibetoshi Nakamoto (the creator of Dogecoin), mentioned that he sees this as a feature, not a bug. But what makes it beneficial?

Understanding Dogecoin’s Inflation

Let’s examine how long it would take to double the number of Dogecoins with this fixed inflation rate. Currently, there are over 400 billion Dogecoins in circulation. With around 500 million new Dogecoins added each year, it would take approximately 80 years to double the total supply. In the worst-case scenario, this means the value of $DOGE could be halved over 80 years.

Comparing Dogecoin to the Dollar

How does this compare to the dollar? Over the past century, the value of the dollar has halved approximately every 20 years.

Now, consider how long it would take for Dogecoin’s value to be reduced to a quarter of its current value. The answer is more than 300 years!

So, in 100 years, the dollar is 16 times more inflated than Dogecoin, and in around 300 years, it’s 30,000 times worse.

The Benefits of Dogecoin’s Fixed Inflation

But why is this inflation rate good, and will it really halve Dogecoin’s value in 80 years?

Community Rewards

To keep the community actively involved in the project, there must be incentives. Since Dogecoin isn’t Bitcoin, miners and the community (including you and me) should earn rewards. This fixed inflation rate indirectly benefits the active community and miners, keeping the network alive and thriving.

Stability and Predictability

Unlike the dollar, Dogecoin’s inflation rate isn’t subject to sudden changes by governmental decisions. It’s fixed and incredibly challenging to alter. As more Dogecoins enter circulation, the impact of this fixed inflation diminishes.

Future Value of Dogecoin

The value of Dogecoin won’t necessarily be halved in 80 years, as it hasn’t yet reached its full potential. Only when it achieves its full potential can we accurately discuss whether its value will halve or not.

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So, what do you think? Is flat inflation or inclined inflation a brilliant idea or a bug? Let’s discuss! 😊

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