Bitcoin has a lot of believers and has had massive returns, but Bitcoin has got nothing on Dogecoin.
If you wanted to design a perfect currency for the farce that our financial system has become, you couldn’t do better than Dogecoin. It was created as a joke, it has no real value, but investors are feverishly gobbling it up as if it was the greatest investment that any of us have ever seen. A lot of people talk about the “Bitcoin bubble”, but Bitcoin is only up about 600 percent over the last 12 months. Dogecoin is up about 18,000 percent over the past year even though there is no restriction on how many Dogecoins can eventually be created. There is absolutely no reason why any rational investor should be putting a single red cent into Dogecoin, and yet it just keeps going up. In fact, at one point this week Dogecoin had a total market value “of almost $42 billion”…
Initially started as a joke in 2013, dogecoin is now the sixth-largest digital coin with a total market value of almost $42 billion, according to CoinGecko. It takes its name and branding from the “Doge” meme, which depicts a Shiba Inu dog alongside nonsensical phrases in multicolored text.
It is hard for me to believe that “investors” are being so incredibly stupid.
Dogecoin’s price soared 20% in 24 hours after Elon Musk and Mark Cuban both made tweets supporting the meme-inspired cryptocurrency. Its price rose by a whopping 400% in seven days.
So what? Dogecoin is different from Bitcoin in a very specific way.
unlike Bitcoin, Dogecoin miners can keep creating more tokens forever and ever…
Originally, Dogecoin had a hard limit of 100 billion tokens, similar to Bitcoin’s cap of 21 million tokens. However, the developers changed their plans in 2014, eliminating the supply constraints. In other words, as long as miners continue to build the blockchain, more Dogecoin will continue to wink into existence.
In fact, each time a block is verified, the miner receives a fixed reward of 10,000 Dogecoin tokens. Unless the code is rewritten, this will go on forever.
That’s a critical flaw.
“A critical flaw”?
That is quite an understatement.
Cryptocurrencies have nothing backing them, and therefore have no store of value.
But at least Bitcoin has a limited number. Dogecoin doesn't even have limits.
Which makes Dogecoin $42 Billion of Dutch Tulips.