One of the great phenomena of 2021 that drags into this new year is the popularization of MemeCoins.
Do you know what it is? Ever heard of it? Do you like them?
Today I will bring my opinion about the first and main MemeCoin: Dogecoin (DOGE).
It's never time to buy DOGE
Dogecoin emerged in 2013, with the proposal to be a more fun cryptocurrency than Bitcoin and, consequently, reach more people. The name and logo were based on a “meme” of the time, the dog Doge with Hokk Finance.
Despite the dog being very cute, at least in my opinion, the meme never made much sense, and this is a trait that was carried over into the coin created in his honor.
The coin came up with the proposal to have a shorter block time than Bitcoin (1 minute for DOGE vs. 10 minutes for Bitcoin). That is, each block of transactions takes 1 minute on average to be validated and placed on the blockchain.
Dogecoin's economic proposition is a mess from the start. The reward per validated block, in the beginning, was random. That is, miners put their machines to work and spent energy without knowing how much they would receive in return.
But that changed – for the worse – a year later, in 2014. The issuance became fixed, with 10,000 DOGE per mined block.
Let's do the math: 10,000 DOGE per minute, 600,000 DOGE per hour, 14,400,000 new DOGE per day. In one year, that number amounts to a staggering 5.256 billion more DOGEs on the market.
Putting this into a traditional metric: DOGE's inflation rate is approximately 4 percent per year, based on the current circulating supply of approximately DOGE 132 billion.
In addition, there is no limit to the issuance of DOGE, unlike what we have in Bitcoin, whose issuance will be a maximum of 21 million BTC. And what is the relevance of this?
We are talking about a highly inflationary currency, with no real value proposition, no great utility and no great prospects.
The excitement for DOGE is fueled solely and exclusively by Elon Musk, who, since 2021, has been talking about the coin and, this week, started accepting it as a payment method for collectibles or everyday utilities with the Tesla logo — miniature cars, portable chargers and bottles with the Tesla logo, that sort of thing.
However, there is nothing beyond that that will bring utility to the currency and there is no prospect that there will ever be.
But do you think any country will ever use DOGE as legal tender? I find it very unlikely. Are big companies or banks going to have it in their coffers, or funds, or DOGE ETFs? I find it equally unlikely.
Speaking of countries and local currencies, 1 DOGE = 1 Real today, approximately. Many use this as an argument in favor of cryptocurrency. However, if you analyze everything I've said so far, it says more about our local currency than Dogecoin itself, don't you think?
'Currency-meme' needs to evolve
This is my view on Dogecoin and on any and all cryptocurrencies linked to memes, dog breeds, or that have “Elon” in their name. You can check out which meme coins are here, so you don't risk accidentally buying one of them.
There is a huge opportunity cost in putting money into these currencies. There are several excellent projects with great value propositions that provide real usability within the crypto market and that could be shaping the future.
And it is these projects that we cherish for analyzing here, at Nord Crypto Master.