DOGE Crypto Profile
The rise of meme stocks followed by the rise of meme cryptos. The first ones will fall but the cryptos might keep going! As Elon Musk says, Fate loves Irony.
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We all know crypto is going through a crazy ride right now but Dogecoin is a special one, born out of boredom and as a joke, has become the sixth biggest crypto by market capitalization today!
As Elon Musk was filmed saying verbatim: “fate loves irony, the most entertaining outcome is the most.. like it will be the most ironic outcome is that the currency that was invented as a joke. In fact becomes the real currency”
The joke is worth today almost 50 billion dollars and many people have stopped laughing. Traditional investors are putting their Bloomberg terminal aside for a sec and opening Reddit accounts. So lets go over Dogecoin a bit.
👉You just want to see some Dogecoin memes? They are at the bottom. Go ahead, I wont take it personally 😑
The Dogecoin Story
Dogecoin is based on the popular "doge" Internet meme that became popular in 2013. The meme consists of a picture of a Shiba Inu dog with overlaid multicolored texts representing a kind of internal monologue, is deliberately written in poor or dog English.
In 2013, an Adobe software engineer called Jackson Palmer purchased the domain dogecoin.com and added an image of the coin logo (a coin with the face of the then famous dog meme) and some text around it.
Billy Markus, an IBM software engineer, saw the website and contacted Palmer and started efforts to develop the currency. Markus created the protocol based on existing cryptocurrencies, specifically Litecoin. The Dogecoin uses script technology in their proof-of-work algorithm.
Proof of work (PoW) is a form of cryptographic zero-knowledge proof in which one party (the prover) proves to others (the verifiers) that a certain amount of computational effort has been expended for some purpose. Verifiers can subsequently confirm this expenditure with minimal effort on their part.
And because they use script, Dogecoin cannot be mined with the same equipment as Bitcoin.
Launching in December 2013, after just 30 days, the domain had attracted over a million visitors. From the beginning, the Dogecoin was community centric, as explained by Markus, "The original intent was a parody of all the 'serious' clone coins that were trying so hard to differentiate themselves, but all seemed the same. Dogecoin was just another clone coin, but instead of taking itself seriously, it was just Dogecoin."
To the Moon or not?
As its been said, the value of Dogecoin comes from its meme status. The perfect example that not all coins are created equal.
Bitcoin has a 21 million coin hard cap, meaning that that’s the maximum of bitcoins that there will ever be. Some people love that, especially for the scarcity bump in value. But Dogecoin doesn’t have a maximum, there already are 129 billion Dogecoins and the supply increases by about 5 billion a year which sounds like a lot but in theory, it reliefs the inflationary pressure of the coin (A big debate among crypto enthusiasts). More about money supply theory here.
The price as of today is 0.35 dollars and trade volume in the last 24h has been over 70 billion dollars. But why? Nobody can say for sure but there has been a few ambassadors pushing it but specially two major players:
Elon Musk has been a big supporter of Dogecoin and has repeatedly mention Doge in his tweets to his 50 million followers and making the news with it. He tweeted “Dogecoin is the people’s crypto”
Mark Cuban and his NBA team the Dallas Mavericks is holding onto any Dogecoin that the team's fans spend on tickets and merch.
Hundreds of stores are opening starting to accept crypto every week, and sense Dogecoin is now a force with a huge capitalization, its a matter of time that it gets included along with Bitcoin and Ethereum.
To buy or not to buy
With Dogecoin is anybody’s guess but if it manages to hold this trend, value and platforms like Coinbase and Etoro start making steps towards making them available, I would be very happy to buy and hold for a bit. Emphasis in the “for a bit”.
Dogecoin is a risky investment because its crypto and has very high volatility. And it’s a very risky investment for one extra reason:
10 wallets own +45% of the supply, so this means that as soon as one decides to cash out, they have the power to delude the value by expanding the circulating amount of Doge. Here is the Dogecoin Rich list.
So tread carefully because it promises to be a wild ride and there are no guarantees it’ll have a good ending.
Yes! The internet is a weird place.
Until next time!
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Disclaimer: All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. You are solely responsible for making your own investment decisions. In any case, transparency is paramount so my portfolio can be viewed here.