Musk tweeted another photo of a Shiba Inu wearing a Twitter t-shirt, contributing to Dogecoin DOGE 0.30%’s latest price hike. His move also evoked memories of how the billionaire’s past posts sparked a wild rise in Dogecoin.
What is Musk’s intention to repeatedly set off the waves of Dogecoin, intentionally or unintentionally? Some say it’s just a joke, some say it’s a scam with high risk. Let’s take a look with you today.
Started with a joke
Dogecoin was born as a joke at the end of 2013. Two engineers, Jackson Palmer and Billy Markus, took the code of Bitcoin BTC 0.85% and changed it to create DogeCoin. Its original intention was just a spoof. Unexpectedly, this move aroused a great response from netizens, and quickly became the birth of Dogecoin.
The first inspiration came from a Shiba Inu, whose real name is Kabosu, from Japan. The owner is a kindergarten teacher, Sato, who often shares Kabosu’s daily life on the Internet. What will you have for dinner today on February 13, 2010? In the article, Sato shared photos of Kabosu’s life. In one of the photos, Kabosu crossed his hands, smiled proudly, and his expression was too human. It was the expression on this photo that hit Jackson Palmer.
Billy Markus, an IBM engineer who has been working on cryptocurrencies, has always wanted to create a cryptocurrency that people can use widely, not just for investment.
Billy contacted Jackson. Although Jackson did not respond immediately, Billy started to build Dogecoin. He copied the Bitcoin source code word for word. Although most of the code he did not understand, he made some simple modifications:
- Change the word of Bitcoin to Doge and mine to dig
- Change the number of coins from 23 million to 100 billion, and greatly reduce the difficulty of digging
- Change the font to a lively and interesting anime font (comic sans)
It is rumored that the whole process only took about 3 hours. During a lunch break, Billy and Jackson officially launched Dogecoin. It can be said that Jackson created Dogecoin.com, the official portal of Dogecoin, and then Billy developed the first 4 versions of Dogecoin on his own.
Two weeks after its birth, Dogecoin surpassed Bitcoin in daily transaction volume. Less than a month after its birth, the website traffic exceeded 1 million! Later, in Taiwan, it became popular again with a piece of “I always recommend breaking up with the question about relationships”.
In 2014, Billy and Jackson successively withdrew from the development of Dogecoin. The reason is unknown. It is speculated that Dogecoin may be worthless at that time, because even the founder himself said when interviewed: “We think this is doomed to die. a big joke”, as if they didn’t have any left in their hands.
Later the new Dogecoin core development team was formed, which consisted of a core maintainer team, supported by more than 40 contributors over the years, who have been developing and maintaining Dogecoin ever since.
However, compared with the value investors of Bitcoin in the circle, Dogecoin is a bit of a slap in the face, because it was worthless in the first few years, and later it was sitting on a market value of tens of billions of dollars. Maybe something has value in itself, but gold needs time to shine?
The opportunity is that Dogecoin has gradually become the reward currency of Reddit, a famous online forum in the United States. Because it is cheap, it is favored by a large number of netizens and celebrities, and it can be regarded as the first practical scenario for benchmarking.
At that time, a Reddit netizen wrote a tipping robot. When a netizen shared great content, they could praise the robot through tips and send 5 Dogecoins to the author to express their gratitude.
At that time, each Dogecoin was worth about $0.0005. Although the value was not much, it was more important to have a sense of honor. Some people even said: “A tip for 5 Dogecoins is better than receiving 2 cents ($0.02) ) is more enjoyable.”
Despite its origins as a joke, the low price coupled with the advantages of being easy to buy makes it easier for those interested in cryptocurrencies to get involved. As a result Dogecoin’s users expanded rapidly, increasing its value as a cryptocurrency. The infrastructure of cryptocurrencies, mining pools, and trading services were also born at the same time. And Dogecoin quickly developed a large and passionate cryptocurrency community doing some great causes and philanthropy.
For example, in 2014 the Dogecoin community raised 26.5 million Dogecoins (worth about $30,000 at the time) to support the Jamaican bobsled team to the Sochi Winter Olympics. In March 2014, the Dogecoin community raised over 40 million Dogecoins (worth about $30,000 at the time) to help build clean water wells in Kenya. The Dogecoin Foundation also partnered with popular YouTube bloggers Mr Beast and Mark Rober for the TeamSeas initiative, which raised $30 million for ocean trash removal. To this day, the official website of Dogecoin still has related introductions.
Dogecoin also has a very unique concept. If Bitcoin is a rebellion against the traditional financial system, then it is a rebellion against Bitcoin. One of its main characteristics, which is completely opposite to Bitcoin, is that Bitcoin has a fixed total amount and does not For additional issuance, DOGE is an initial 100 billion, with an unlimited additional issuance of 5% per year, that is, 5 billion Dogecoins are issued every year, with an unlimited supply.
Another attraction of Dogecoin is its low entry fee. A Bitcoin is worth tens of thousands of dollars, and even the bear market is beyond the reach of ordinary people, while a Dogecoin is worth less than US$1, and the transaction fee is relatively low, which is attractive to investors with limited funds. force.
In addition, with the increasing popularity of Dogecoin, more and more trading platforms have also announced that they can buy, sell or host Dogecoin.
Dogecoin was originally only used as a reward on the famous American online forum Reddit, and later Dogecoin developed into a charity. Dogecoin can then be exchanged for other cryptocurrencies for investment on multiple exchanges. It is worth mentioning that there are already 1400+ stores around the world accepting customers to pay in Dogecoin, and even Musk has announced that it will accept Dogecoin to pay for the SpaceX moon landing mission.
Up to now, Dogecoin has jumped to the seventh largest cryptocurrency in the world, but who would have thought that the inspiration came from a photo of a Shiba Inu Kabosu that appeared on the Internet in 2010!
Price jumps
Investing in Dogecoin is very risky, because its price will change dramatically due to market sentiment, it may rise sharply in a short period of time, or it may plummet, which is highly speculative.
In particular, Musk’s words and deeds have a great impact on the price of Dogecoin. At the beginning of last year, he posted a series of posts on Twitter in support of Dogecoin, which caused its price to soar hundreds of times. Claims that Dogecoin is a scam sent the price of Dogecoin plummeting. Here, we will also take you to review several violent fluctuations of Dogecoin.
1.2017 cryptocurrency boom
Around March 10, 2017, the first major infusion of Dogecoin poured into the crypto market following a massive increase in retail investment, which boosted the prices of all altcoins. In a span of 70 days, the “funny” cryptocurrency rose more than 1890% from $0.00021 to a peak of $0.0042. This shattered the previous all-time high of $0.0021 and sent the market cap soaring by $423 million. Soon after, Dogecoin plunged 75% in a two-week market correction, which in turn affected all cryptocurrencies.
2.Bitcoin breaks $19,783, boosts Dogecoin
By November 2017, there was another strong buying momentum in the cryptocurrency market, with massive trading volumes propelling Bitcoin to a high of $19,783. The global market value of cryptocurrencies has reached a staggering $830 billion, which in turn has led to the parabolic growth of small-cap projects such as Dogecoin.
On January 7, 2018, Dogecoin broke above $0.02, 380% above its previous high. Its current market cap is $1.6 billion. However, this rally was very short-lived, with the price dropping more than 70% in 8 days, back to $0.0047.
3. The crypto market bounces back
On April 14, 2018, just before the entire market entered the crypto winter and fell to its previous lows, the vast majority of crypto projects saw a brief recovery. In three days, Dogecoin rose 103% from $0.0020 to $0.0041. In contrast, Bitcoin has only gained 40% in the same month. But it didn’t take long for Dogecoin’s market cap to drop by more than half from its all-time high.
4.Ethereum ETH 1.56%/Dogecoin bridge test
In September 2018, the first major rally of Dogecoin largely uncorrelated to the rest of the crypto market, the systematic testing of the Dogecoin/Ethereum bridge was completed.
This bridge is considered a new update that will allow for interoperability between the two blockchains. The announcement rekindled community support for the project, and the price of Dogecoin jumped 173% in 48 hours. However, it was later learned that due to the collapse in the price of Ethereum, there was not enough funds to continue developing the bridge, so the update was put on hold. Since then, no one has mentioned whether the bridge between Dogecoin and Ethereum will continue. Dogecoin price also recovered.
5. Popularity on TikTok
In mid-2020, a viral video on Tiktok caused a chain reaction, triggering a sharp rise in the price of Dogecoin A TikTok netizen launched a challenge called #DogecoinTikTok#, encouraging netizens on the platform to buy Dogecoin and put it The price is raised to $1 each. Some netizens calculated that if all 800 million TikTok users spent $25 on Dogecoin, then when Dogecoin rose to $1, each of them would earn $10,000. There is no doubt that the hype of TikTok netizens has pushed up the price of Dogecoin. As the hype intensified, Dogecoin was trading at more than 2.5 times what it was a few weeks ago. Then it gradually fell back.
6 .WallStreetBets madness, Musk tweets
On January 11, 2021, traditional financial markets were severely disrupted by a subreddit forum called WallStreetBets (aka WSB). These amateur stock investors decided to band together against traditional financial institutions and launched stocks that major hedge funds such as GameStop, BlackBerry, AMC, Nokia and Bed Bath & Beyond were betting on devaluation.
On Jan. 28, the WSB stock market mania spread to Dogecoin and fueled a sharp rally in the cryptocurrency. In less than two days, Dogecoin surged to a new all-time high of $0.087 on Binance, an increase of 1,100%. The pump was driven in part by several tweets, among them Musk.
But then Musk said in an interview that Dogecoin was a scam, and the price plummeted…
7.Musk’s tweet
On April Fool’s Day, April 1, 2021, Musk said he would use SpaceX to bring a Dogecoin to the moon.
As soon as the news came out, Dogecoin rose in a straight line, rising 15% on the day. Since then, Dogecoin has started a rapid rise mode: after breaking through US$0.1 on April 14, it immediately hit an all-time high price of US$0.43 on April 19, and the currency price soared 336% in just one week. Its total market capitalization hit $50 billion on April 20, surpassing that of Ford Motor, according to CoinMarketCap.
On May 5, the price of Dogecoin rose sharply again, exceeding $0.68 during the session, and the 24-hour increase once exceeded 50%, setting a new record high. As of May, the market value at that time was about $88 billion, making it the fourth largest cryptocurrency at the time after BTC, ETH and BNB. Afterwards, its price fell as the popularity of the tweets declined.
8. Musk buys Twitter
Dogecoin saw a parabolic surge last week, during which it has climbed from around $0.06 to nearly $0.15, a percentage gain that far outpaces Bitcoin’s performance.
The immediate reason for this was the $44 billion acquisition of Twitter by Musk, a longtime backer of Dogecoin.
Looking back, since its birth, the price of Dogecoin has soared from less than US$0.0001 in 2013 to US$0.74 in May 2021, rising hundreds of times, and then plummeting. The price of Dogecoin is extremely volatile, so it is not suitable for investors who are looking for stable returns.
To sum up, Musk is indeed a key figure in Dogecoin. It can be seen that between 2017 and 2020, although there has been an increase, the overall fluctuations are not large. Since Musk’s intervention in 2021, Dogecoin has started a roller coaster-like price trend. If dogs are man’s best friend, then for the famous Dogecoin, the best friend must be Musk.
Issues that cannot be ignored
In the huge market of more than 5000 cryptocurrencies, Dogecoin is a special existence, and we know that the birth of Dogecoin is completely a black humor. It just originated from Billy and Jackson’s copycat of Bitcoin in 2013, and then accidentally exploded. But I didn’t expect it to become such a behemoth because of the price. If the price rise and fall is a major point of view of Dogecoin, and it is a dominant point of view, then these existing problems may give you a more comprehensive and clear understanding of Dogecoin.
Development is stagnant, and the code has not been updated for a long time
Few people know that the blockchain development of Dogecoin was more sporadic than other blockchain projects before Musk launched Dogecoin. In previous years, its basic code maintenance was almost stagnant. The last major development on Dogecoin dates back to November 8, 2019, and between November 10, 2015 and February 4, 2018, there were no updates to the project code. As recently as last month, news broke that the Dogecoin development team is currently working on two major releases, core updates 1.14.7 and 1.21, which should not be implemented yet.
Almost no ecology, limited application scenarios
In addition to being out of the circle as a tipping medium on Reddit before, Dogecoin as a payment method is currently not widely used. According to some reports, perhaps only 1,300 businesses will accept Dogecoin as a payment method by 2021, a modest achievement that took eight years. Right now, around 40,000 transactions are made daily on the Dogecoin blockchain, which is less than a fraction of the daily number of transactions made by Visa and Mastercard.
Meme alone may not be sustainable
And whether Dogecoin, as a value carrier, can undertake value exchange on a long-term scale, the answer is obviously uncertain. Although it is undeniable that Dogecoin has allowed many investors to achieve jaw-dropping gains, the fact is also obvious that in a short period of time, it has become extremely popular, relying on the endorsement and platform effect of a few celebrities, and there is obvious idol worship. , but without any real value to back it up. In other words, it’s full of invisible bubbles.
Barry Silbert, CEO of Digital Currency Group, shared his thoughts on Dogecoin and its market cap. Silbert mentioned that despite DOGE’s potential, the cryptocurrency isn’t worth tens of billions of dollars in market cap. This can’t help but lead to thinking, is the core value of cryptocurrency only in consensus?
Severe fluctuations and obvious market risks in an irrational state
Looking at the essence through the phenomenon, the price of Dogecoin is completely driven by hype, ignorance of facts and misinformation, with short ups and downs cycles and violent fluctuations.
Although rising and falling are the basic attributes of investment, and skyrocketing and plummeting are the basic attributes of crypto investment, but from the above, we can see that Dogecoin’s rise and fall is the encryption of crypto assets, and the rise and fall are all dependent on market sentiment. And Memecoin is particularly affected by good news in the market. In the long run, it’s hard to see long-term investment value without strong fundamentals and real-world use cases to sustain. It is not a good choice for ordinary investors who want to make steady profits.
Musk faces class action lawsuit over Dogecoin
A Dogecoin investor is suing Musk for $258 billion, accusing him of running a pyramid scheme known as pyramid schemes to support Dogecoin. It is reported that the accuser, named Keith Johnson, accused Musk and his Tesla and SpaceX of racketeering in his indictment in federal court in Manhattan, New York, saying that Musk and his company first went around Promoting the sale of Dogecoin, driving up the price of Dogecoin, and then letting it crash, profiting from it. Some currency bulls even formed a group to stop Elon from tweeting. At the same time, SpaceX, the space exploration technology company founded by Musk, has also been in turmoil. Some SpaceX employees sent a letter to management publicly condemning Musk’s actions and suggesting that the company should be separated from Musk’s personal brand.
Summary
Of course, there were many imitations of Bitcoin before, and many of them, like DogeCoin, just copied and pasted the code, and then changed it, and now most of them are dead. Dogecoin can last for a long time. I have to say that as the most loyal friend of human beings, one of the main reasons may be that this Shiba Inu dog head is really too cute.
In addition, coupled with the community attributes derived from the dog’s own Meme culture, coupled with the characteristics of short transaction time, low price and more groundedness, the audience is wider, and there is the boosting effect of celebrity Musk, so as to give the dog Coins bring different global liquidity.
Now that Musk has acquired Twitter, many Dogecoin investors also have high hopes for Musk. Previously, Twitter supported users to tip creators with bitcoin and ether, but did not issue a cryptocurrency wallet product. Some industry insiders said that the surge of Dogecoin may be related to market speculation that Musk will develop an encrypted wallet on Twitter, and they hope that Musk can integrate Dogecoin into the development of Twitter in some form.
