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Dogecoin-meme coin?Is it worth the hype?


 Dogecoin seems to be defying gravity  .Breaking new all time highs and leaving crypto veterans like myself scratching our heads constantly asking ourselves the fundamental question is doge really going to the moon or is it flying too close to the sun? Now it's a question or she here has been badgering me about for months and if this is a question that you've been asking yourself recently. Then my article today will be answering exactly that. I'll be taking an in-depth look at Dogecoin and explaining exactly what it is and how it functions. I'll also be analyzing its market trends and breaking down some of the most important factors that appear to be powering it forward. Yes, I will. Finally, I'll be letting you folks know where I think Doge is headed. Oh, and I promise to be as impartial as I can.Oh and , of course. How silly of me. I am not a financial advisor. I am an educator and a blogger Now, clearly this means that nothing in this article can be considered investment or financial advice. With that out of the way, we would like to welcome all the new viewers to the channel today. And if you're wondering whether we were barking mad, well, you must be new to the cryptolibrarynow. My name is "Mr.Crypt" Alrighty, that's enough fluff. Let's unpack this. 

What is dogecoin?

So what the hell is this infamous Internet meme that Musk can't stop tweeting about? Well, it was a cryptocurrency that was started as a joke. Really. No joke. A cryptocurrency in the top ten of market caps that was launched for fun. It was founded by two engineers called Billy Marcus and Jackson Palmer. Marcus worked at IBM and Palmer at Adobe, neither of which had any experience in crypto. In fact, Marcus taught himself how to develop a coin using a guide he found online. The year was 2013 and at the time there was a meme of a Shiba Inu looking quizzically into a camera. According to this article in Business Insider, the original intent of the project was to be a quote parody of all the serious clone coins that were trying so hard to differentiate themselves. But all seem the same. So. Doge coin was the self deprecating example of a clone coin trying to be the next bit coin and on the 6th of December 2013 the first block was mined. On the technical side, Dogecoin is based on a proof of work cryptocurrency called Lucky Coin,this was actually a fork of Litecoin, which is why Dogecoin can be merged mined with Litecoin and more on that in a bit. I know much random. But that's not as random as the original block reward structure. Block rewards could be anywhere from one doge per block all the way U to 1,000,000 doge per block. Pretty crazy. Now I should also point out that there was no pre mine of Dogecoin. Yep, the founders mined it at the same time as the new miners and kept very little of the doge,of themselves, that just shows you how much they thought of dogecoin as a joke and less than a year after founding dogecoin, Marcus left the project and handed all Dev work to Palmer. Oh quick point on that random block reward, it turns out that it was not as random as they initially thought, and some Dogecoin miners were able to find a way around it and disproportionately meant high value blocks. When this was found out in 2014, it was posted on the Dogecoin subreddit. The developers then decided that they would remove the randomness component altogether, and the block reward was fixed at 10,000 Doge per block. Since a Dogecoin block is mined every minute, this meant. They supply growth of 5.2 billion doge. Therefore, with the current supply of $129 billion, this implies an annual inflation rate of about 4%.So unlike Bitcoin, which has a cap supply, Dogecoin will have an inflation rate that will approach zero overtime. That's an important point to get across. When it comes to network efficiency, Dogecoin can handle around 30 transactions per second, which implies a transaction time of about 5 to 10 minutes. The average transaction fee is about 1 cent. Now this is faster and cheaper than Bitcoin, mainly because the block times are one minute as compared to 10 minutes for Bitcoin. Although this is faster and cheaper than Bitcoin, it is a lot less efficient than most other blockchains out there. It is, after all, still a proof of work chain. When it comes to security, it has the backing of lightcoin miners. This is because as a fork of Litecoin, it uses the script mining algorithm. Through Dogecoins auxiliary, proof of work upgrade in 2014, Litecoin miners can also earn Doge block rewards while mining LTC. So you have greater hash power securing the network that you would not have had were Dogecoin using a unique consensus mechanism. OK, so that's a rough overview of the tech behind Dogecoin, not the most complicated out there, but then again, it is a meme coin. Having said that though, are there really any actual use cases for doge? 

Dogecoin use cases-:

Well, there is only one really legitimate use case for Dogecoin, and that would be as a medium of exchange. Indeed, while the crypto currency was created as a joke, the underlying incentive was to create one,people could easily send to friends and family as a less threatening version of Bitcoin,and to that end, Dogecoin has indeed been quite effective. For example, did you know that in 2014, doge Community members raised $30,000 to send the Jamaican bobsleigh team to the Winter Olympics? Seems like they must have loved the cool runnings movie as much as I did. Now, of course, fundraising was not always for the luls. Doge community Members also raised 50K in order to help give drinking water to people in developing countries. Then, as things started to pick up with Dogecoin over the past year, there's been an avalanche of merchants who have started to accept those as a method of payment. Now there are some really amazing,things that you can now buy with Dodge, including Dallas Mavericks basketball tickets, a supercar, hotel bookings, electronics, a subscription for classic films, and of course, thousands of other smaller merchants that are looking to ride the Doge wave. Now this use case as a medium of exchange is quite stock standard for most cryptocurrency. It has some value and as such can be used as a peer-to-peer digital cash. Admittedly it has lower transaction costs and fees than Bitcoin, but is still way less efficient than a number of proof of stake chains out there. There are no other use cases. There are no smart contracts, so you can't develop gas like you can on a therium and a host of other smart contract blockchains. Dogecoin also cannot be considered as a store hold of wealth. That's because it has a ridiculously large supply and the inflation schedule is still quite high. That's even without considering the fact that a store hold of wealth has to be highly trusted, I think you'll struggle to find anyone in the crypto community who has long-term faith in the continued robustness of dogecoins code. In fact, the most recent changes that were made happened all the way back in 2019. There has been talk of Dogecoin core devs making some improvements this year, including a faster sync speed, but these are still minor updates in the grand scheme of things. So given that Dogecoin exists as a stock standard proof of work digital. Cash. The only other use case I use see for it is speculation, in other words, to be traded on the market and to make or lose money on those trades and to that end, Doge has been going insane. Its trading volume over the last weekend made it the second most actively traded cryptocurrency. Yeah, you heard that right. It had a higher volume than eth(ETHEREUM) and it's not just on the spot market either. Eager to capitalize on this insane interest in Doge and number of exchanges have started to offer futures products on it. That's right, 100X leverage on a meme coin that is more volatile than the british weather,and I have a feeling that we're probably not even seeing the full extent of this doge trading volume. That's because one of the most active markets for doge is not even an exchange, but a trading a aapYEP. Robin Hood offers those as one of the cryptocurrencies on its app. When users buy doge here. They're not really buying doge, but are trading on its price movement. Hence the trading volume is not captured on sites like "coinmarketcap". To give you an idea of just how crazy the markets for those are on Robin Hood trading volume was so intense that it actually brought down the A a few days ago. Yeah, it overloaded the systems and forced it offline. So it's quite clear that Dodge is a highly speculative asset with insane trading demand. Retail investors are piling into it like nobody's business. But this begs a very important question. Why and why is there all of a sudden this insane demand for doge?

How is dogecoin getting pumped?

  Well, I happen to think that it comes down to four things meme culture, social media. Elon Musk and Robin Hood. Let's start on that first one, shall we? Now we live in an age of means, an era where something as simple as an unfortunate class photo can become synonymous with misfortune. One where mistimed image can exist in the ether for years. There are even instances where memes become memes, meme derivatives for endless laughs. It therefore makes sense that a Shiba Inu meme, like Dogecoin, would take off so well, it's instantly relatable and easy to remember. People will have seen it on the Internet somewhere and will therefore know more about it than most other cryptocurrencies. It's a lot easier to market a meme dog than it is to promote the complex tech involved in,eth2.0 for example simplicity cells. Next up, we have social media. As we know, social media is able to amplify memes and make them go viral. It's the nature of their algorithms where the more engagement there is with a particular topic, the better. It organically performs. Memes feed on themselves and supercharge that engagement. This is even more prevalent on the likes of Tiktok. We're short form content and memes are able to go viral much more easily through traditional social media platforms. It ain't your granddad's Facebook. It's therefore no surprise that some of the biggest trends for Dogecoin have been over on Tiktok. I recall when that happened last year where a user called James G97 posted a video. Encouraging all his followers just to buy $25 of Dogecoin so that when the stock hit $1.00, users would have 10 grand. More recently, there was a Dogecoin trend where users were trying to get doge to $1.00 on the 20th of April 4/20, and I want some of whatever it was they were smoking. Now, jokes aside, is this sort of simple, engaging content mixed with a generally young and inexperienced tick tock user base? That means these vids can get flying pretty quickly. Of course they do sometimes need some help, and that is where cult like figures with massive Twitter followers come in. Yup, Elon Musk is not just content on sending rockets to space, he also wants to send doge to the moon. Elon has been riding the Dogecoin meme like nobody's business. Indeed, you can almost perfectly. Track a price pumps in dose to his tweets about it, and given that it's easy to share a meme on social media and Tiktok, here's simple tweet is amplified and creates a lot of hype. I should you not. A mere tweet of a dog I Elon, can make the doge price pump. That's the combined power of a tweet and an instantly recognizable meme. Of course, this would not really be possible were it not for the fact that these tick Tock users had easy access to a tool to trade doge. This is a course where Robin Hood comes in, there's no doubt that the era of Robin Hood has opened up, trading to a whole new generation of users. Simple fractionalized and Commission free trading. And of course, the main emo of Robin Hood was stock trading, but they've now been offering crypto for quite some time. Moreover, those users on Robin Hood don't have to worry about private keys or offline addresses. All they have to know what to do is to buy the coin and watch it ride. Of course, we then have the secondary effects of this pump as we know, bubbles feed on themselves, as users are convinced that the price rise is confirmation in the underlying investment thesis. The higher that Doge goes, the more attention it grabs and the more media coverage it gets. This then brings in more investors happy to try their hand. on the dodge wheel of fortune.This raises a very important question though. Why are people so keen to pump the price of Doge?

What type of people invest in doge?

 It's very hard to determine other people's motivations for buying Dogecoin. However, having followed the trends and studied the markets, I can posit a few theories as to the motivations. Some people are genuinely having fun. They love the community and enjoy the memes. They know that dose really is a meme and they treat it as such. They join in on the trends and get involved in the hype. This is the category that I think Elon Musk falls into. He wants to have fun with the memes. Elon is a bit of a meme Lord in general and Dogecoin is but one of his many masterpieces. Another type of doge trader are those that are trying to make money on its pumps. These are the users who know exactly why it pumps. And how to get in front of the trend? They also know that Doge is a joke, but are happy to gamble on it. There are some in this category who have made millions doing so. However, they are well aware that Dogecoin is really just a meme and are cognizant of the risks that they're taking. They're investing in the hope that someone else will come and buy it at a higher price than they bought it. Now there is of course another type of investor that's unaware of these risks. They think that Dogecoin really could become a global currency and overtake Bitcoin. They're trying to make doge the next Bitcoin and feel as if the might of their community is all that is required to do that. I think it has a lot of the same narrative that's being spun by the GameStop investors over on Wall Street bets. The only difference is that there is no one to short squeeze with Doge, and Bitcoin is a decentralized currency. Not a hedge fund. I also happen to think that there are a lot of people in this category that have invested a considerable amount of money in Doge. They're spurred on by stories like this one, where a guy was able to buy a house thanks to his doge investments. Indeed, there are legitimately groups out there with doge millionaires who further feed the narrative that this mythical meme coin is going to help make someone else a millionaire and turn. Now I really hope that people who are buying into this narrative are not investing more than they can afford to lose, and I'm sure their financial advisors would say the same thing. OK, so that's my read of the current situation, just my assumptions and I can't speak for everyone in the crypto space. However, the most important question now comes down to whether Doge can realistically reach $1.00. It has, after all, been defying all reason recently. 

Dogecoin equals 1$?


There are a number of factors that determine the price potential of a crypto. One of the most important has to be tokenomics,and when it comes to tokenomics price and market cap are the two most misunderstood, especially when it comes to those new to cryptocurrency. You cannot determine the value of a cryptocurrency based on its price per token. What you have to look at is the price of the token times by the outstanding supply, that is the market cap and this will let you determine exactly how large a cryptocurrency is compared with its peers. Although Dogecoin is worth less than a dollar, it's market cap at the time of this video is already $50 billion. Let's put that into perspective. That's larger than the market cap of Cardano, Polkadot, Spotify and the Ford Motor Corporation. In order for those to reach $1.00, that would give it a market cap of $129 billion. It would be the third most valuable crypto in market cap rankings now. Does that sound like good value to you? You should also consider that doge inflation rate is almost double that of bitcoins. This means that more coins are being added to that supply, which is of course a drag on price. Even ETH, which has protocol inflation, could see that eliminated with the release of the IP559, which could neuteralize that entirely.I should also point out that for a decentralized cryptocurrency, Dogecoin is actually quite centralized. The top wallets hold over 75% of the total doge supply and get this, the richest doge wallet holds almost 30%. Now no one knows who is behind these wallets. It's not the founders as there was no premine and they sold what they might. Irrespective of who it is, they could very easily dump that doge on the market. They are not obligated to hold it, and if they were looking to sell out, they could soon take advantage of the liquidity and price. In fact, this concentrated supply point is something that Elon actually raised himself. He tweeted that Doge will only really get his full support if major Dogecoin holders sell. Now, despite all these factors, I can't tell you with 100% certainty that Doge won't hit $1.00 markets can remain irrational for long periods of time, and all doge needs to increase its price is the constant hype being created on the markets. I also can't entirely rule out the possibility of a Coinbase listing. They are a public company now and they have to keep up their profitability. They will want to compete with the likes of Robin Hood and as we can see, there is insane demand for Doge. Coinbase has listed some pretty average projects in the past, so Dogecoin would not be that much of a stretch. That dogecoin community is also really determined to get Coinbase to list it, and we know they are a large community and we all know the impacts of a Coinbase listing. It invariably always leads to a rally in the price of the coin. So one has to wonder whether this combined with the Community hype could push those to new all time highs. Now, even if Dogecoin were to rally to new all time highs, even if it did reach $1.00, I am still of the view that it's a bubble and it will come crashing down again. It's not a matter of if, but when. And that could have broader implications, not only for the Dogecoin community, but for crypto as a whole. Allow me to explain. 

Dogecoin affect on crypto-:

There is a lot of new and young retail money riding on doge. As I explained earlier, some of these investors do not really know the risks of investing in a mean cryptocurrency. Some people also appear to have over leveraged themselves, and I doubt that they will have invested in a prudent manner so when doge eventually does start to fall, a lot of people are going to lose a lot of money,and this is not just me talking here. There are hundreds of crypto investors and community members that are sounding the alarm about the risks of Dogecoin. Eventually there will come a point when there will no longer be new buyers to sustain the price. Some people will want to take a profit, which will then lead to a fall in price and who knows. How quickly it could fall? Panic selling can be quite strong, and this is especially the case when most of the traders are new retail traders and not the institutions with oceans of capital to tide them over. Yes, there are those who are investing with full knowledge of the risk and I hope that they're managing those risks accordingly. However, there are many others who could be throwing a lot of money at this money that could be life changing in other circumstances. It is also pretty likely that there are people out there taking out debt to buy a meme coin. When this bubble does pop, there are going to be people who lose a lot of money. Younger investors, who will have their perception of cryptocurrencies completely tainted because of a massive loss in their first foray now, apart from those who will be financially impacted by it, there are likely to be regulatory and reputational implications for the entire crypto space. I encourage you to watch this recent video by Charles Hoskinson on Dogecoin. Linked to below, by the way,

Charles Hoskinson on Doge 

In it, the Cardano founder explains what the consequences could be of a doge meltdown. There could be inquiries. There could be hearings and there will most definitely be mainstream fud and clickbait headlines. You know that they are dying for a reason to tarnish crypto and they would love to paint all other crypto with the same brush. I'm also quite wary as to what politicians will try to do here. We know that they love to create regulations and burdens on the crypto sector. We've already come so far to get to where we are and I would hate to see some of these advances being rolled back in the name of consumer protection. SO yes, I do share the same concerns as Charles and I'm sure that there are many others in crypto community who feel the same way.

So is dogecoin worth the hype?

 It's time for a few quick closing thoughts . Those is a really fascinating cryptocurrency. I will admit that I never expected it to. to this level and I have to say that I am impressed despite having some pretty simplistic crypto tech. It has captured the attention of millions of users who otherwise would not have been using crypto. There are also some really strong trends that are sending it higher trends, including its meme value. Elon Musk and Tiktok. Add to that mix the simplicity of Robin Hood and you have the perfect ingredients for sending the price soaring. I also can't stand here and say that the trend won't continue. Parabolic price action can be irrational, and I sure as hell won't be shorting dodge something. The hedge funds who shorted GME learned pretty quickly. But there will come a time when larger holders take profit and this will lead to a collapse in price. It's merely logical. Memes are fun and games, and I do love the shiba trends. The community is cool and dynamic, and I love its enthusiasm. However, many are investing with real money and when they lose it, it won't be a joke.  That's it from me  today folks. But what are your thoughts on Dodge? Is this a fair assessment?fire those comments below.  That's all for today, my fellow hodlers. This guy's gotta fly.

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