Dogecoin Circulation to Grow by Five Billion Annually

The developers of popular bitcoin alternative Dogecoin would allow the digital currency circulation to grow by five billion coins each year, in contrast to most digital currencies that are designed to be deflationary.

Some Dogecoin enthusiasts were disappointed with the move, and they opined that such inflation would ultimately make the coins worthless.

Jackson Palmer, the creator of Dogecoin, said the developer team would keep the Dogecoin codebase as it is, allowing some limited inflation.

"Based on everyone's feedback, we've decided to leave the Dogecoin code base as it was originally released and not implement a change," Palmer wrote 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."

Some enthusiasts were upset at the decision to avoid a hard cap for the digital currency.

"Thanks for killing the profitability of the currency. Now it's going to be worthless in a couple of years and never reach the value of bitcoin or even anywhere close," wrote MadCold on Github.

Inflation or Deflation?

Meanwhile, some other hailed the decision.

"Fantastic decision. Now it has a realistic chance of becoming a usable currency instead of some bizarre speculative asset for early adopting hoarders. 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 wrote on Github.

The decision is expected to give Dogecoin a better chance of being used and transacted in the long term, according to experts.

Most of the digital currencies designed so far are deflationary, meaning there is a limit on the number of coins that will ever be come into existence. The developers of popular digital currency bitcoin designed it in such a way that there will not be any more bitcoins come into existence after 2040.

Such a deflationary design of digital currency generally encourages hoarding, as people consider it more as commodity and expect higher and higher prices over time. There were reports that 64% of all bitcoins have never been spent.