When Jackson Palmer developed Dogecoin and released the crypto asset on 6 December 2013, he definitely did not expect a possible Mars coloniser to speak about it on the social media site.
Quick forwards to 2021, and Dogecoin spiked more than 800 percent in a flash, sparking confusion and forcing popular media outlets to finally take notice of the cryptocurrency. That was DOGE’s story this year, the most famous meme-coin in the world.
At the time of writing, Dogecoin was a top-15 currency with a market cap of $6.77 billion. The fact that it is above the likes of existing projects like DASH, AAVE and Monero speaks volumes. Still, is it really designed to last, or is it headed for irrelevance again?
Dogecoin, Elon Musk, and his latest concern
Musk was very outspoken about Dogecoin. In reality, the influence of Tesla’s CEO is such that every time he tweeted positively to his 47+ million Twitter followers, the market pace of crypto-assets has increased.
Recently, however, Musk was in the news after raising significant and reasonable questions regarding whale concentration.
As noted in the latest CoinMetrics survey, DOGE is heavily concentrated amongst a few addresses, with the top 1% currently owning 94.2% of the supply. In reality, the top 100 addresses hold 68.1% of the total supply. For the background, the top 100 addresses in Bitcoin carry 13.7% of the availability.
Today, the problems with Dogecoin go deeper than just its concentration narrative, and there are several explanations why the crypto asset should not be considered a significant digital asset.
What’s the policy?
Although the initial supply of DOGE was intended to be $100 billion, it was later changed to an infinite supply. The upside to such a move is that the market for DOGE will remain constant, but the drawback is that prices should remain low. Yet a low-priced currency reported a rise of 800 per cent on the charts. That highlights its second concern.
Any crypto whose price can be controlled by tweets or a group (all eyes on the WSB) might not be considered trustworthy. Such uncertainty has pushed people away from crypto before, but Dogecoin gives it a whole new definition, and it has also attracted profit-hungry individuals to shift.
Do its security and technology stack up?
Dogecoin’s code has a number of similarities with Bitcoin’s script, although it should be remembered that it was the now-obsolete Luckycoin fork, which itself was the Litecoin fork. In that regard, while it does not really have a void, its inflationary supply has several factors to account for. First of all, the faster blocks come at the disadvantage of a large number of orphaned blocks that do not add to the history of the transaction.
Second, Dogecoin does not have a set core development team. Most of its developers are all core developers who have been mostly active in other ventures, most of them coming together because of the degree of activity recently experienced by the crypto asset.
At last, the hashrate of Dogecoin was around 300 terahash at the time of publishing. For contrast, Bitcoin was 161 exahash, which is 161,000,000 tera hashes. Ergo, it’s probably fair to assume that a 51% attack would be a child’s play if the network ever became incredibly valuable (which it will not).
Dogecoin will survive, but will remain a joke
Public interest in the open ledger industry is undeniable, and the latest WallStreetBets episode offered all investors a fresh perspective on beating or duping the framework. While many are actually campaigning for Dogecoin to hit $1, something that will happen honestly if the stars align, it will never be taken seriously. Then again, it was never meant to be, was it?
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