Details for proposed Dogecoin block schedule

During the weekend one of Dogecoin‘s developers raised the possibility of changing the cryptocurrency’s block schedule. Both the changes and possible consequences have already been covered previously, yet some unclarity remains on how this would change the block schedule exactly. To examine this in detail, first consider the current schedule below (inflation rates have been annualized):

Current Block Schedule

Proposal

The suggested change was limited to the following statement “instead of waiting for a halving, I intend on implementing a taper-down system, whereby the value of Doge blocks will decrease by 5k every month” and “we will then settle on a final point of 5k (rather than 10k)”. To turn this into a detailed schedule, it is required to make several assumptions.

To start, it is not mentioned when the change would become effective. With only a little over a month to go until the next halving, it is assumed that the start date would be equal to the date of the next halving. It is also not clear how many blocks will be between each block reward decrease. Given that this will happen “every month”, this number is assumed to be 45,000 (this roughly fits in one month). The previous parameters translate to the following block schedule:

Proposed Block Schedule

It should be noted that all future dates are still estimates. As stated before, it can be seen how the changes would cause a prolonged state of hyperinflation, before causing the coin to enter a deflationary state once the final reward schedule is reached. In any case, the change would mark the most radical change to Dogecoin’s (or any cryptcurrency’s) foundations in current history. Although it should be stressed that for now it remains nothing more than a proposal.

  • Howard

    Thanks for laying out the math on this one. Makes it easier to conceptualize just how many more coins there actually would be

    • Dogeconomist

      I think this is crucial if the community gets to decide. Note that I also saw a supply of 200 billion being mentioned, although it wasn’t accompanied by a different plan. Not sure if the dev miscalculated or should provide some further explanation on this. I went with the original suggestion.

  • koen

    OK… I’m not an economist, but wouldn’t this enourmous increase of coins mean that the value per coin will drop significantly? Doesn’t the developer (and community) want the coin to increase value??!
    I am not a fan of the 1 doge = 1 doge deal, myself. I want to see this coin increase in value and we what it will do on the internet. Reading about this change in the chain is worrying and doesn’t give me hope at all for the coin ever rising again…

    Really hope someone can shine some light on this for me…. Cheers

    • Dogeconomist

      You are absolutely right, it would massively dilute the value per coin. That is why the final schedule is at 5k instead of 10k, to offer some compensation.

      Note that Dogecoin was originally set up for long term stability. The creator wanted the price to stay steady to make the coin more like a real currency. This was done for sustainability (economically deflationary models like Bitcoin’s make less sense).

      The value per coin has actually been stable for a while. The only problem now is that block rewards half, without a value increase to compensate. Less reward for miners is resulting in a low hashrate, threatening the coin’s security.

      • Koen

        Isn’t this the number one thing NOT to do with a coin? Doesn’t EVERYONE want the coin to increase in value? If we look at the history of the coin there has only been one REAL spike where the coin went to aroun 0.0020. Now we are at a value almost 5 times lower than that and it hasn’t seen much upward trend since April (and that wasn’t even a big upward trend). What are the chances of the coin increasing value if this plan is put through? Many investors (me too, probably…. Although I’m a small time investor…) will pull out and leave the coin for what it is. We used to be at a $90 million market cap… what happened and how can we get back? And in what time frame…?
        Hope someone can give me some peace of mind on this…

        • Well, if (and I stress IF) this plan would become reality the chances of the coin increasing in value on the near term would be about zero (unless there would suddenly be a huge demand for DOGE). But even without this plan put in place, note that the current inflation rate is still very high – 137% annualized. This is the main reason why the value keeps dropping. You should read this article on deflation, it explains some balances that affect value (inflation is just the opposite direction). If you blow up the supply, everything else remaining the same, the only thing that can go up is prices (which means falling value).

          By the way, there are some reasons why not everyone wants a deflationary (value increasing) currency. Value increases reduce monetary velocity and also raise volatility (people prefer a stable store of value). But nobody wants hyperinflation either.

          • Koen

            Thanks for the explaination…! Going to think hard about staying with the Shibes, switching or pulling out all together…. Thanks again! Really enjoy reading your articles, by the way! Cheers!