Summary: The Road to Innovation in Cryptocurrency 6. Create Doge for like to Satoshi Nakamoto opened Pandora's box and released hope and the devil. What is hope? What is a devil? Graham once said: "Stocks are voting machines in the short run, but weighing machines in the long run." In the fourteen years since Bitcoin came ...
The Road to Innovation in Cryptocurrency
6. Create Doge for like to
Satoshi Nakamoto opened Pandora's box and released hope and the devil. What is hope? What is a devil? Graham once said: "Stocks are voting machines in the short run, but weighing machines in the long run." In the fourteen years since Bitcoin came out, the top cryptocurrency projects have stood the test of time, and their currency prices can undoubtedly reflect the value of the project. Analyzing the gains and losses of these projects will be instructive to those still on the road.
6. Create Doge for like to
Doge's logo is a very cute Shiba Inu, and it is also a very popular emoticon. Almost no one on the Internet has not seen it. The biggest out-of-circle application of cryptocurrency is this little Shiba Inu. Dogecoin was born on December 6, 2013, and was co-created by Americans Billy Markus and Jackson Palmer. Dogecoin has no technological innovation; even "mining" is done with Litecoin and others. The slogan in the early years was "Dig LTC, give Doge," which was just a "giveaway" of Litecoin. However, on the Coinmarketcap website on September 5, 2023, Doge ranked 8th with a market value of US$8.999 billion, while Litecoin had a market value of US$4.6 billion, ranking 15th. Doge has surpassed Litecoin nearly 1 time; it must be doing something right.
The reason is that Dogecoin fills a gap in the market. From the current market point of view, Bitcoin and other cryptocurrencies only meet people's material needs, but Dogecoin is different. It meets people's spiritual needs. It has an excellent cultural background - "tipping culture," a good humanistic background - "charity culture," and a good popularity background - "grassroots culture." There is a name for this type of currency called memecoin. The market understands meme coins as air coins. That is from a material level because it has no practical use. This statement cannot be said to be wrong. However, the main selling point of Dogecoin is spiritual needs, and Dogecoin cannot be measured by the material standards used to measure Bitcoin. From the perspective of air coins, it isn't easy to understand the market value of the Doge. Spiritual activity is intangible; it represents liking, love, pursuit, identity, and belief. Just like Bitcoin tightly intertwines interests, values identities, and beliefs. Bitcoin has spiritual value if there are people who believe in it. The value of their ideas has not been evaluated in the value of Bitcoin. Who would use Bitcoin to "reward"? The spiritual needs were discovered by the founders of Dogecoin, who have a deep ideological understanding of Bitcoin.
Dogecoin originated from Marcus and Palmer's belief in Bitcoin. Their purpose in creating Dogecoin is to popularize the fairness, freedom, voluntariness, immutability, altruism, and a bit rebellious spirit of Bitcoin. They use a cute puppy to represent a spirit that makes people sincerely like it. It can explain why so many celebrities like Dogecoin. In lay terms, it is full of positive energy. It can also explain why Musk likes Dogecoin because spiritual pursuits are high-level, far exceeding material goals. It is the reason why meme coins exist in cryptocurrencies. Just like people who love figurines and pets gather together because of the same hobbies, this gathering and forming a community generates immense traffic value - the group value of people themselves. The gathering is about spiritual value and the ability to act because of the community. That also explains why Litecoin loses to Dogecoin. Because Litecoin has no community value, it only has the material value of "digging, withdrawing, and selling." Faith can form an invisible community. Comparing the faith of Litecoin and Bitcoin, you can clearly understand the power of faith. "Like" represents value recognition, which makes Doge.
Dogecoin has no limit on the total amount of coins issued. Currently, an additional 5.2 billion is issued every year. That is because issuers do not want the skyrocketing price of Dogecoin to damage the spiritual connotation of Bitcoin. In 2019, Palmer tweeted to criticize Musk for leading the trend up. He believed that Musk's rise in Dogecoin was contrary to the spirit of Dogecoin, and he left angrily.
In fact, communities originate from interests, develop from benefits, and finally constitute beliefs. That in itself is a process of value development.
Palmer and Marcus's spiritual state is respectable, but they do not understand Musk. With Musk's influence, as long as he issues a similar coin of the doge breed, the market value will reach U.S. $ 280 billion. Because someone sued Musk, believing that his act for Dogecoin generated a value of US$280 billion. Although Musk is a layman of cryptocurrency and finance, which can be seen only from his naive remarks on cryptocurrency and clumsy Twitter acquisitions, how can a bird know the ambition of a swan? Musk, indeed, has higher pursuits than profit. Musk, like Satoshi Nakamoto, is an "alien," and they have excellent intuition. Maybe Musk has seen the side of Doge that will become immortal. What is spirit? Musk fell in love with Doge at first sight.
Problems Presented by Dogecoin
Before Musk did not enter the Dogecoin community, the Dogecoin community was in a state of "anarchy." The author wrote in "The Cryptocurrency Community Has a Long Way to Go" (https://chainless.hk/) and "Invite out Satoshi Nakamoto to Welcome the New World" (https://www.bitpush.news/articles/tag/). The article explained that Satoshi Nakamoto should come out to host the Bitcoin community and discussed the importance of establishing an organized community. The "anarchy" thinking in the cryptocurrency circle has ravaged the Dogecoin community and led to scammers. Is it right to return Dogecoin to its original jungle state? An organized community differs from the "anarchical" community left behind by Satoshi Nakamoto. Still, the latter has become a standard of judgment and an "ancestral system" that cannot be changed. It's ridiculous! Why do humans organize nations? That is going from disorder to order. The country cannot be negated entirely just because the government has problems. As long as Dogecoin's grassroots, charitable, and tip-rewarding nature remains unchanged, an organized community must be better than an unorganized one.
Vitalik of Ethereum entered the Dogecoin Foundation, hoping to replace the current proof of work (POW) with proof of stake (POS), but could not proceed smoothly due to opposition. Veteran Doge community members threatened to fork Dogecoin if they did so. After Ethereum was changed to Proof of Stake, some people used the original Proof of Work to fork Ethereum, but without success. Because Vitalik was right and had the support of the majority, Forking Dogecoin will not succeed. The author is very suspicious that the person who threatened to fork is the interest representative of the mining circle.
It is wrong to change Bitcoin to proof of stake because the rising cost of electricity is the source of Bitcoin's value, so it must stick to proof of work. If Dogecoin continues to use proof of work, the cost will continue to increase, increasing the cost of rewards and donations. In this way, the benefits of the 5.2 billion tokens generated by mining every year are only beneficial to a small number of miners, diluting the rights and interests of most Doge enthusiasts and deviating from the original intention of Dogecoin. If Dogecoin is designed to be non-inflationary like Ethereum and is just a stock currency, this will help realize Musk's wish that Dogecoin becomes the people's payment currency.
Dogecoin has the conditions to become a distributed stablecoin
I introduced the method of turning Ripple into a stablecoin in the fourth article of this series - "Ripple's "Pig" Flying on the Wind" https://chainless.hk/. However, Ripple implements a centralized stablecoin, while Dogecoin implements a decentralized stablecoin. From the graph line, $0.05 is its value center. That's one-twentieth of a U.S. dollar, which also meets the requirements for small change payments and is relatively easy to implement. But it is different from Ripple; the difficulty of its realization lies in the unification of community opinions.
The chart below shows that Dogecoin is a horizontal line until 2021, performing the same as stablecoins. After the disturbance, they fell to the line at $0.06. If there is no interference, it will continue to pull the line. That is a natural stablecoin qualification. Of course, stablecoins need further stabilization mechanisms.
For stablecoins, the author has published a series of articles. I want to let you know that interested readers can look at the author's analysis of the Bitcoin USD standard and the Bitcoin Hong Kong dollar standard (https://www.bitpush.news/). For the specific implementation method, please refer to "Realization of DW20 Decentralized Standard Currency", which will be released on the chainless website https://chainless.hk/ soon.
Prospects for Dogecoin to Become a Stablecoin
Cryptocurrency has come to this day, and the current hype-based approach only applies to the experimental stage of cryptocurrency. It can be used to discover cryptocurrencies' value, examine which currencies are popular, and determine which ledger models are more successful and have any shortcomings.
With the development of cryptocurrency at this stage, there is not much technological innovation under the blockchain framework. The next breakthrough is for commercial applications, and stablecoins are the next cryptocurrency trend. Dogecoin occupies a very favorable position, which is what Musk's intuition told him. He is always one step ahead.
The essence of money is a medium of exchange. Still, the early members of cryptocurrency did not understand that monetary rulers are required as a medium of exchange. Without this step, the cryptocurrency has not been commercialized on a large scale. Musk allows Dogecoin to buy small things on the Tesla website, but why not enable Dogecoin to buy cars? If Dogecoin is a stablecoin, Musk would dare to allow it. Suppose Tesla electric cars can be purchased with Dogecoin. In that case, a blockbuster will undoubtedly be thrown into the legal currency system, and the people will gradually regain their financial discourse power. But neither Musk nor the advisers around him know much about numismatics, and they don't know how to turn Dogecoin into a stablecoin. There is no technology here, just a layer of window paper.
Dogecoin's implementation of a distributed stablecoin could boost the price of Ethereum. Bitcoin + DW20 Ethereum + Dogecoin can both form a decentralized standard currency. That is the modern "gold and silver standard," just like the U.S. dollar, euro, and pound standards in legal currencies. The rise of the cryptocurrency standard will gradually phase out fiat currency, thus realizing the ideal of crypto elites to change society. An honest society will progressively replace the speculative society caused by legal currency, and our children and grandchildren will have a brighter future.