As everyone, or at least some of you know, Doge was stated to have a finite number of coins at release, one hundred billion to be exact. It took a while, but people eventually discovered the source code was set to taper down block rewards until they hit X number of units, and continue there until infinity, possibly through coding error, but nobody really knows. This results in Doge having a 5% annual inflation. The inside story at Dogecoin is supposedly the block times will be changed to around Litecoin levels, and this annual inflation will also be changed to 2.5%.
How does this relate to Quark? Most people are aware that Quark's distribution model was vastly different than Bitcoin and Litecoin. Bitcoin stops giving out block rewards and relies on transaction fees alone somewhere around the year 2140. Quark seems to have accelerated this model by over 100 years and released basically all of their coins already, but with an annual 0.5% inflation for block rewards. As you've probably noticed, there has recently been an enormous push by Quarkcoin bagholders on the forum to tell you how great the currency is, and to try and get you to buy it. This is not a random coincidence, it's a desperate last stand. Quark is currently in a state where it's value isn't that high in comparison to things like Bitcoin, and it's block rewards for mining it are almost non-existent. It either has to go to the moon within a short time span, fail, or possibly rely on some kind of real time check pointing for security..
There are many variables to how crypto works, and many of these issues were already forecast by design of Bitcoin. Bitcoin gives the world decades to develop a robust economy around the crypto unit before transaction fees actually need to do anything to incentivize miners. Quark gives the world basically zero time to build a crypto infrastructure, and just dumps 250 million Quark on your face. Anyone examining these facts can come to the conclusion that Quark is not a valid distribution model for a PoW coin, and you can see why there are so many complaints of it being a pump and dump scam.
The dead, American politican, Ted Stevens, does a good job of explaining it:
http://www.youtube.com/watch?v=_cZC67wXUTs
Now that we've covered why Quark is screwed, and why people like Freetrade are either high on bath salts, or just flat out scam artists telling you it's a good buy, let's move on to Doge. And by the way, I refuse to believe that Freetrade doesn't know these issues exist. He's a coin dev himself focused entirely on CPU coins and probably mined Quark with a botnet and is trying to pump a coin he owns stake in.
So, back to Dogecoin. Doge distribution is more front loaded than BTC, but not nearly as front loaded as Quark. Doge inflation is also higher than Quark, but this is where it gets interesting. Due to the many ways coins can be lost in Crypto, I refer to it as hyper deflationary in nature. Most people are familiar with stories about people losing hundreds of thousands of dollars on a laptop somehow, but that's just a small aspect of it.
What happens when BTC has more penetration in society? Coins will be rendered unspendable staggeringly often. Rich people crashing their Lamborghinis or yachts into a parked car and having their private keys stored on USB stick going up in a fireball will happen on a daily basis. I call this, "The Paul Walker Effect". If BTC was more widespread at the moment, he probably would have taken out at least $10,000 in BTC with him. Anyone with a few million in the bank is going to be carrying that amount around just in case they need to buy a $500 pair of sunglasses.
You don't need to be famous to lose massive amounts of BTC in a kamikaze, fireball attack though. Plenty of normal businessmen will be carrying around unsecured private keys with no backup and drop it in a toilet or other misfortune. What about when a Tsunami hits Japan? How much BTC do you think will be lost in one of those? What about when a computer illiterate person dies, who for some reason owns BTC, which is then inherited by their computer illiterate relatives? What about when a Russian criminal (redundant term) steals millions of BTC from an exchange and gets himself killed evading police? Welp, those BTC are gone too.
Some people seem to believe that Bitcoin's main strength is it's deflationary aspect. This is not true at all. It's main strength is it's decentralized aspect and the security it brings. You can also notice the deflationary and security aspect are an inverse function of each other as long as you can keep miners distributed. Does it make sense to sacrifice Bitcoin's most important aspect in order to see just how deflationary of a currency you can create?
Most people who know how Bitcoin works will agree the system is deflationary enough to satisfy anyone's needs. Most will also agree that it does have many security issues, especially with end of life block rewards, or relying solely on transaction fees in a PoW system. We're already seeing this with Quark now because it's an outlier, extreme example of how to do things wrong.
The main conclusion someone can draw from all these facts is, PoW block rewards don't have to go to 0 to be deflationary. They can be set to a non-zero number infinitely, solve many block chain security problems in the process, and still maintain a coin that's either deflationary in nature, or sitting at equilibrium at the very least. I believe all PoW coins in the future will be forced to adapt to this model, even if they don't want to for whatever reason.
It's very hard to pinpoint just what percent can be used and still maintain a deflationary model, but when you have to weigh the option of having a coin that's very deflationary, but collapses to worthless, or having a coin that's only slightly deflationary, and very secure, it's pretty obvious what the choice should be. Instead of 0.5% like Quark uses, I would personally say 1% is an extremely safe number to use, and I will be pushing for Vertcoin to try and adapt to this model even though it really won't matter for a long long time.
As for Dogecoin's role in all this, they'll be testing the upper limits of end of life currency supply before you can be labeled as "helicopter Bernankedoge". I'd prefer they used an absolute maximum of 2%, but whatever happens, they'll still be in a far better off position than something like Quark is currently in. Contrary to what the topic might look like, I'm not saying Doge is a good buy, it gets pumped above real market value too much. What I am saying is, Doge as a currency will survive because they're actually rewarding miners to keep the thing up. Even if Doge lost 75% of it's value overnight somehow, a year from now it will still be around, and probably more valuable than it is currently. If a coin like NXT lost 75% of it's value in a flash crash (which probably will happen due to horrendous distribution), you would probably never see the coin again after a week.
- The dread shibe r0ach
Only non-scam artist on the entire forum
