}
a study of DogecoināāāStuart
Dogecoin is a virtual currency that was introduced as a joke on December 8, 2013. It was intended to be a satirical approach to the cryptocurrency community. The coin is named after the Shiba Inu dog breed, an internet meme that became popular in 2013. The Dogecoin blockchain is based on Litecoin, an open-source cryptocurrency that was released in 2011. Dogecoin is often used as a tipping system on Reddit, Twitch, Twitter, and YouTube. Since its inception, hundreds of millions of Dogecoin have been transferred among the community. Itās hard to find a more generous group than the Dogecoin community.
Dogecoin is a peer-to-peer currency, which makes it different from fiat currency. This means that a transaction is done by a user directly, without going through any third party, like a bank or a payment processor.
Tokenomics
Dogecoin tokenomics are relatively simple, but the big takeaway is that itās inflationary, and the selling power is funneled to the miners. Thereās a massive amount of tokens and thatās not changing anytime soon. This is probably Dogecoinās most significant problem.
dogechain.info
Every minute there are 10,000 Dogecoin minted and sent to the miners as rewards. $DOGE price = $0.40 (as of writing)
This means every minute there is $4000 worth of selling power attributed to miners every minute. At the current price, this equates to $2,102,400,000 / year worth of selling power minted for miners. (minting $DOGE = selling power)
Because the block rewards are a static number (10,000) means that $DOGE price increases are directly correlational with the amount of selling power attributed to miners.
This should be of large concern to any investor who cares about a safe place to store value. Because once you strip away the functionality of $DOGE, which is the ability to transact value peer to peer, you are left with a place to store value.
Is DOGE a good place to store value?
Due to the tokenomics specifically, I would say no. Allocating 10000 DOGE every minute to a small selection of miners provides them with <2b dollars worth of selling power to the order books.
DOGE could technically tend to infinity if the miners collectively decide to never sell any of the block rewards. I am unsure of the connections between the specific node operators, but I can only imagine as the price starts increasing, their selling of the minted DOGE would start to decrease. To reduce selling pressure and to further pump the price.
Itās as if DOGE miners are given the ability to control overall selling/buying pressure due to their allocation of DOGE/min.
Regardless of the short-term price fluctuations, the long-term trend of DOGE has to tend to 0 due to the tokenomics and the allocation of selling power attributed to a select few miners. Price increases of <1000% can be seen due to the ceasing of selling DOGE from block rewards allocated to miners in connection with media hype.
Dogecoin is a popular cryptocurrency due to its playful name and branding. It has a large user base on Reddit and Twitter, and this crypto is also used as tips for content creators on various social media platforms. The majority of buyers right now are trying to jump on the bandwagon and snag a piece of the %APY gain! I suggest reading my latest article on FOMO if you are debating about buying some $DOGE!
Are you buying $DOGE or have you bought some?
Thanks for reading :)
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