Dogecoin Deflation

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Dogecoin Deflation

Dogecoin Deflation

It has been much argued whether the Dogecoin would be a deflationary currency or an inflationary one. Lately, its creator, Jackson Palmer, mentioned the development team is seeking to keep the same code as it is now. This means the coin will be in limited inflation mode.

Many altcoins are deflationary and a hard cap is placed on the volume of coins that will ever exist. Let us understand with a couple of examples. The number of bitcoins will not increase after 2040. Litecoin is following the same deflationary policy. However, one drawback noticed in deflation is that it encourages hoarding as the value will increase with time. Recent research reveals that 64 percent of the bitcoins have not been spent any time.

The Dogecoin code will remain unchanged and to focus on the 100 billion coins cap in circulation. Following the fulfillment of the cap, rewards of 10k will continue on each block. As an aftermath, a balance of mining and circulation could be maintained.

Following the message of Palmer, many Dogecoin holders expressed being upset as with time each unit of the currency will lose value. It will never be able to reach the level of bitcoin value.

However, many have been impressed with the decision arguing Dogecoin could become a usable currency and not a bizarre speculative asset. Some economists believe the currency now has a better chance of usability in the long run.

Dogecoin was created as a joke to a payment system by Jackson Palmer and Bily Markus. It was released in December 2013 featuring a dog's face. It is a meme coin and has its own online community. Its market capitalization was about $85 billion in 2021.

The transaction process of Dogecoin is more convenient compared to Bitcoin and it is based on a Scrypt algorithm. It takes just a minute to confirm a transaction while bitcoin takes about 10 minutes.

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