Why Dogecoin is Crypto’s Most Harmful Joke – Motley Idiot

Advertisements

the Dogecoin (CRYPTO: DOGE) Blockchain is a ghost town when compared to other cryptocurrencies in the top 10 market capitalization. Still, the cryptocurrency is still rising as the broader market moves, including a 70% surge in early August.

With a small handful of investors wielding market-moving power over the entire currency, Dogecoin isn’t a viable long-term investment – and why its pumps are based on little more than hot air.

Hardly anyone uses Dogecoin

The Dogecoin blockchain recorded just over 23,000 daily transactions on August 9 based on the latest data available. That’s only a fraction of the 1.2 million transactions that went on ether (CRYPTO: ETH), and the around 200,000 recorded on Bitcoin (CRYPTO: BTC).

A Shiba-Inu dog.

The noble Shiba Inu, mascot of Dogecoin. Image source: Getty Images.

Even cryptocurrencies with a market capitalization of less than a third of Dogecoin regularly see more transactions. Bitcoin cash (CRYPTO: BCH) and Litecoin (CRYPTO: LTC) – although both have recently been ousted from the top 10 in market capitalization – recorded 83,000 and 133,000 transactions, respectively, on August 8th.

Why is the price of Dogecoin increasing despite such a narrow user base? The answer lies in its largely unequal ownership.

Whales control the blockchain

Dogecoin has one of the most one-sided asset distributions in the crypto space, with only one address making up 28% of all Dogecoins. Only eleven addresses hold 46% of the coins in circulation, while only 82 addresses make up over 64% of the total offer.

You can see the influence of these few big hands on the movement of wealth through its blockchain. Users transferred more than $ 5 billion worth of coins through Dogecoin on Aug. 8, compared to just over $ 8 billion with Ethereum. But as mentioned before, Ethereum achieved this with more than 50 times as many users as Dogecoin, which means that the average Doge user is moving a much higher value of coins per transaction.

Cryptocurrency was born out of a desire to eradicate intermediaries such as bankers and governments and give control of one’s finances to the individual. But Dogecoin misses the oft-cited goal of decentralizing the cryptocurrency space, and its concentration carries serious risks for potential investors. Its centralized supply effectively creates a small cabal of gamblers with banking powers of their own – and the ability to dictate the Doge price at will.

A joke currency that is no longer funny

With followers like Elon Musk, Dogecoin unexpectedly became the story of the year in the cryptocurrency space. In doing so, it has gained a reputation as a human-run underdog, like the thousands of individual investors who have come together on social media to pump up GameStop (NYSE: GME).

But the hard data gathered from Dogecoin’s transparent blockchain suggests just the opposite. Dogecoin was created as a joke in 2013 – and by the standards of its own creators, it’s stayed that way to this day. Dogecoin co-creator Billy Markus sold all of his Doge inventory to buy a Honda Civic in 2015. Co-creator Jackson Palmer has since dismissed Dogecoin as well, while calling the entire cryptocurrency space “the worst parts of today’s capitalist system.”

The highly concentrated supply of Dogecoin poses a clear danger to the average investor who could confuse Dogecoin popularity with legitimacy. Cavalier Dogecoin investors might want to look back on the two month period between May and July when the price of the coin fell 78% – one of the biggest slumps in the crypto space at the time.

While that price drop then followed the direction of the broader market, Dogecoin suffered all the more from its extravagance in the previous months as it pumped to 12,000%. What goes up has to come down, and Dogecoin investors have learned the hard way that celebrities (even from the likes of Elon Musk) are not solid investment fundamentals.

Dogecoin has not had an active development team since its creators abandoned it, and almost eight years after it was invented, the coin is still not used in any application. With no long term prospects and no real use case, Dogecoin continues to rise and fall due to the actions of a few wealthy people. If these people decide it is time to sell, the average investor is likely to face heavy losses. Because of this, Dogecoin should be viewed as a very risky, speculative vehicle rather than a viable long-term investment.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.


Share post on

Sonic BTC is reader-supported. When you buy through links on our site, we may earn an affiliate commission.

Begin Your Crypto Investing Journey With 100x Potential Gems: Gnox (GNOX), Shiba Inu (SHIB), And Dogecoin (DOGE) – TechCabal Dogecoin

Begin Your Crypto Investing Journey With 100x Potential Gems: Gnox (GNOX), Shiba Inu (SHIB), And Dogecoin (DOGE) – TechCabal

Who doesn't want that 100X gem? It is one of the reasons most people...

By wpadminsonic164
18.8 Million Dogecoin Bought by Whale with 40 Million XRP – U.Today Dogecoin

18.8 Million Dogecoin Bought by Whale with 40 Million XRP – U.Today

A large BNB whale, "Martian Manhunter," ranked 71st according to WhaleStats and holds 40...

By wpadminsonic164
Filecoin (FIL) and Dogecoin (DOGE) Keep Falling as Chronoly (CRNO) Surges 500% During Pre-Sale – TechCabal Dogecoin

Filecoin (FIL) and Dogecoin (DOGE) Keep Falling as Chronoly (CRNO) Surges 500% During Pre-Sale – TechCabal

The cryptocurrency bear market continues with Bitcoin trading below $21,000 and these are prices...

By wpadminsonic164
Who is Big Eyes (BIG)? The Cat Daring to Take On Dogecoin (DOGE) – The VR Soldier Dogecoin

Who is Big Eyes (BIG)? The Cat Daring to Take On Dogecoin (DOGE) – The VR Soldier

We're familiar with the dogs of Dogecoin (DOGE) other Shiba Inu (SHIB)beloved by the...

By wpadminsonic164
Enormous Eyes (BIG), Dogecoin (DOGE), and ApeCoin (APE) Build an Animal Kingdom of Meme Coins | Bitcoinist.com – Bitcoinist Dogecoin

Enormous Eyes (BIG), Dogecoin (DOGE), and ApeCoin (APE) Build an Animal Kingdom of Meme Coins | Bitcoinist.com – Bitcoinist

The cryptocurrency market is evolving in the most creative and innovative ways. The crypto...

By wpadminsonic164
1.7 Million Dogecoin Shifted Anonymously for Fees Unimaginable for Banks – U.Today Dogecoin

1.7 Million Dogecoin Shifted Anonymously for Fees Unimaginable for Banks – U.Today

Yuri Molkhan Nearly 2 million DOGE have been shifted by anonymous wallets today content...

By wpadminsonic164
Shiba Inu, Dogecoin Accepted for Payment by Food Delivery Company Uber Eats – U.Today Dogecoin

Shiba Inu, Dogecoin Accepted for Payment by Food Delivery Company Uber Eats – U.Today

Shiba Inu and Dogecoin holders can now pay for Uber Eats food deliveries with...

By wpadminsonic164
Dogecoin

Dogecoin, Shiba Inu Look Ready to Retrace – Crypto Briefing

Key takeaways Dogecoin has risen by nearly 47% over the past ten days. Shiba...

By wpadminsonic164

Latest Posts

Begin Your Crypto Investing Journey With 100x Potential Gems: Gnox (GNOX), Shiba Inu (SHIB), And Dogecoin (DOGE) – TechCabal Dogecoin

Begin Your Crypto Investing Journey With 100x Potential Gems: Gnox (GNOX), Shiba Inu (SHIB), And Dogecoin (DOGE) – TechCabal

Who doesn't want that 100X gem? It is one of the reasons most people...

By wpadminsonic164
Cardano testsnet effectively hard forked however here’s a place of concern – AMBCrypto News Cardano

Cardano testsnet effectively hard forked however here’s a place of concern – AMBCrypto News

Input Output Global (IOG) had earlier informed members of the Cardano ecosystem of the...

By wpadminsonic164
Why Market Crash ?🚨 Crypto News Today | Why Crypto Market Going Down Today Videos

Why Market Crash ?🚨 Crypto News Today | Why Crypto Market Going Down Today

Why Market Crash ? Crypto News Today | Why Crypto Market Going Down Today...

By wpadminsonic164
Emily Elizabeth Leaves Massive Chest Hanging In Tiny Polka Dot Bikini – The Blast Polkadot

Emily Elizabeth Leaves Massive Chest Hanging In Tiny Polka Dot Bikini – The Blast

Emily Elizabeth spills out of her bikini once again! The influencer recently delighted her...

By wpadminsonic164
Solid Altcoins to Look Into During the 2022 Bear Market – Neo (NEO), Kusama (KSM) and Mushe Token (XMU) – Cryptopolitan Stellar

Solid Altcoins to Look Into During the 2022 Bear Market – Neo (NEO), Kusama (KSM) and Mushe Token (XMU) – Cryptopolitan

Anyone that has been around the crypto industry long enough is no stranger to...

By wpadminsonic164
São Paulo court freezes records of Binance contact to Brazilian banks – The Brazilian Report Binance

São Paulo court freezes records of Binance contact to Brazilian banks – The Brazilian Report

Jul 04, 2022 16:06 2 min read The top state-level court in São Paulo...

By wpadminsonic164
Cardano Vasil Hard Fork is Now ‘Unavoidable’ after ‘Fruitful’ Testnet – Cryptonews Cardano

Cardano Vasil Hard Fork is Now ‘Unavoidable’ after ‘Fruitful’ Testnet – Cryptonews

Source: Adobe Stock / TANATPON Cardano (ADA)'s long-awaited Vasil upgrade, which aims to improve...

By wpadminsonic164
Bitcoin'un çöküşü, kripto parayı yasallaştıran El Salvador'u nasıl etkileyecek? Videos

Bitcoin'un çöküşü, kripto parayı yasallaştıran El Salvador'u nasıl etkileyecek?

Son dönemde Bitcoin dahil birçok kripto para biriminde sıra dışı değer kaybı yaşanıyor. Kasım...

By wpadminsonic164