Elon Musk defends Dogecoin's inflationary model
Dogecoin co-founder Billy Markus suggested that the community could implement changes to make DOGE deflationary.
Key Takeaways
- Elon Musk supports Dogecoin's inflationary model, stating it's a feature.
- Dogecoin's market value has exceeded Ford, Adidas, and Roblox.
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Elon Musk defended Dogecoin’s inflationary model, stating that its flat inflation is “a feature, not a bug.” His comment came as a response to a recent tweet from Shibetoshi Nakamoto, also known as Billy Markus, who co-created the popular meme coin.
Shibetoshi addressed repeated questions about Dogecoin’s inflation rate by referring to the crypto’s GitHub code, specifically line 146, where the inflation rate is defined. He suggested that those wanting to modify the inflation rate could alter the code and seek community approval.
I think the flat inflation of Dogecoin, which means decreasing percentage inflation, is a feature, not a bug
— Elon Musk (@elonmusk) November 13, 2024
Dogecoin’s inflationary supply model and its utility have drawn much skepticism. Critics argue that the model, which allows for the continuous creation of new coins, could lead to depreciation over time.
However, Musk and others, including investor Mark Cuban, argue that the inflationary nature of Dogecoin does not detract from its value. Instead, it positions DOGE as a more practical digital currency for everyday transactions, as lower prices per coin make it more accessible for average users compared to Bitcoin or Ethereum.
This is exactly why people will buy physical products with doge coin and not with btc and rarely with eth. It’s hard for someone with $100 to get excited about owning a fraction of btc or eth. It’s easy with doge. When it appreciates that makes those items easy 2 buy
— Mark Cuban (@mcuban) April 28, 2021
Musk’s public endorsement of Dogecoin’s inflationary model came after his appointment as co-lead of the Department of Government Efficiency (DOGE) alongside Vivek Ramaswamy in Trump’s administration. The new agency focuses on streamlining federal operations and reducing government spending.
The acronym DOGE humorously references Dogecoin. Following Musk’s latest comment, Dogecoin reached $0.42, its highest mark in three years, CoinGecko data shows.
The token’s value has risen dramatically since Trump won the presidency. It has now overtaken Ripple’s XRP token as the 6th largest crypto in terms of market capitalization.
With a market cap of approximately $60 billion, Dogecoin is now bigger than Ford, Adidas, and Roblox.
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