Coin supply
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I was just wondering about this (from wiki): The Dogecoin network was originally intended to produce 100 billion Dogecoins, but later, it was announced that the Dogecoin network would produce infinite Dogecoins.
As far as I understand, this was in the original code. It was rather a misconception (at first) that it would halt at 100 billion.
However if that’s not the case, what’s stopping Bitcoin or other cryptos from adding such an inflationary feature?
Is that possible? If so; how and why?
If not; what’s preventing it from happening?
I can’t seem to find a good answer and I feel it’s something I should know.
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Technically it is possible to change the number of coins mined in total.
Only economical reasons can prevent coins to be produced without limit.
At a given market capture, the capture will not increase anymore, and every coin produced will bring the value of the coins down a bit.
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Thanks for the swift reply!
So it’s really a false-positive to claim a coin will only have xx amount ever. I guess technically nothing is impossible. Just surprised I haven’t seen much from the anti-crypto crowd using it as an argument.
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It would require a hard fork. The majority of the network would have to switch to accept. What’s scary is that it could be a hidden update (if ppl don’t check the source) riding on a fake security threat.
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That’s not very nice.
There would probably be a place for some sort of independent panel that checks these kind of stuff in the future. “Codebusters†who you can call upon.
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However if that’s not the case, what’s stopping Bitcoin or other cryptos from adding such an inflationary feature?
Is that possible? If so; how and why?
If not; what’s preventing it from happening?
As you are wondering about this, I happen to wonder about something that could be tightly related with your issue.
If we stick to the fixed final coin amount I’d like to know what will happen when the mining rewards will equal energy costs for the mining farms. I mean, there will surely be a time when halving after halving together with sky-rocketing diffs will hinder the mining process and the rewards won’t be enough for paying back the bills. Transaction fees in the blocks are ridicule and will never sustain the miners profitability (IMHO).
Here we get the two problems together: will some sort of new incentive for the miners coincide with an increase in the total number of coins?
Other scenarios I may think about:
- Miner with negative profits will flee from the net and the diff will lower. They will come back and flee again… After some iterations, an equilibrium point is reached where the miners have minimum profits and the net keeps going.
- Mega-mining farms will start covering fees under the threat of a network shut down. And “real” transaction fees will be needed even for small transactions.
What do you all think about this? Do you have any interesting lecture?
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The system can’t, NOT self balance as long as there is any interest in the currency. This is because the difficulty is set in terms of speed of solutions are being found which is more or lesss tied to the network hash rate (and there by in terms of watt-hours of processing power).
So if everyone stops mining cause the payout for a block based on transactions is too small, the difficulty pulls back… eventually becoming so easy to solve that 1 guy with a cpu miner can do it in a minute. In short the only way for the sytem to fail is if no one wants to mine at all, which means the currency is utterly dead.
Of course when the network hash rate gets low enough 51% attacks become a real problem too. so that would really be the point where you might consider the currency teattering on death. but consider this: if you have 10,000,000 feather coins, it’s in your interest to mine feather coin to keep the currency alive to protect you holdings. if the currency isn’t worth it for you to do that, then once again its probably dead already.
