In this article, we will first explain why Cryptocurrency has value. Then we will show you why Dogecoin is not worthless.
Some people believe Cryptocurrency is worthless, and some people sincerely believe in blockchain technology and its application cryptocurrency. For example, in a CNBC interview, Warren Buffet said that crypto, such as Bitcoin, is rat poison. Charlie Munger said it’s a scam, and Bill Gates said if there were an easy way to short sell Bitcoin, he would do it.
Cryptocurrency is new in the technology world. Therefore many don’t understand it.
Warren Buffet says that he doesn’t understand technology. That’s why he never invested in any technological companies such as Apple, Microsoft, or Amazon.
On the other hand, Bill Gates hates open-source software. He says open-source software is cancer. When he was CEO of Microsoft, he waged war against open-source software.
When the iPhone came out, everyone laughed at Apple. BlackBerry and Microsoft publicly made fun of the iPhone. But when they saw the iPhone becoming very popular, everyone tried to make their mobile OS and phone. Except for Google, everyone failed miserably.
Those who say Cryptocurrency is worthless point out a few things:
- Crypto is intangible.
- It’s not a product itself.
- Its value only goes up if others buy into it.
They argue only stocks, gold, and other metals are worth buying.
If you analyze, you will find that shares, gold, or crypto are all the same. There’s no difference between them.
We know that the stock market does not generate money. Money only rotates hands on the share market. If you bought a company’s share at $20 and the share price goes up to $45, you can sell your stake for a $25 profit. However, if the company goes bankrupt and the share price goes to $0, you will lose all of your $20 investment in that company.
Share prices of a company only go up if people believe that the company would grow in the future. A company’s share prices would go down if people believe that the company does not have future prospects. The whole stock market runs on speculation.
If you profit from the stock market, then someone is losing money. If you lost money, then someone else took profit. The only difference is who made better decisions and future predictions.
Similar to Diamonds. Diamonds are not that rare. Its price is artificially inflated. There was a time when no one cared about Diamond rings. Now, due to a shift in social mentality, a Diamond ring is a must for every wedding.
In short, everything has value because we believe those have value. If you have a 1 dollar bill, you can buy using it in the US. It doesn’t matter whether it’s a new bill or a 5-year-old bill. However, we are confident no one cares about Zimbabwean currency in the US.
So, let’s examine why Bitcoin has value, then we will explore why Dogecoin is not worthless.
Why does Bitcoin have value?
Bitcoin has value because people believe it has value.
Since its inception, Bitcoin’s price is going up. It has a supply cap of 21 million. It’s the first application of blockchain technology and the most popular Cryptocurrency. Moreover, it has the largest following in the crypto community. It’s why Bitcoin has value.
Bitcoins Inherent Problems:
When Bitcoin started, the primary goal was to make it the de facto currency of the world. Instead of USD, we will use Bitcoin to purchase anything worldwide. However, the mentality has shifted over the years.
As Bitcoin has limited supply and everyone wants one, its price is going wild. As a result, people now see it as an investment vehicle, not as a future currency. People now want to use Bitcoin to grow their assets. This mentality encourages hoarding. People would buy Bitcoin and hold onto it for a few years until the price goes up. As a result, it creates more scarcity. Therefore, Bitcoin now encourages hoarding, not spending.
It’s estimated that 20% of Bitcoin has already been lost forever due to abandoned computers, lost passwords, computer crash, lost pc, etc. After 10 to 15 years later, more coins would get lost. There’s no way we can replace those Bitcoins.
Bitcoin miners around the world process Bitcoin’s transaction. These are powerful computers. Individuals around the world spent hundreds of thousands of dollars to build these computers. So, what is their profit?
These miners earn money from the Bitcoin network in two ways. They earn a fee from every Bitcoin transaction, and miners get rewards in Bitcoin for successfully adding transactional blocks in the Bitcoin network. However, the Bitcoin reward for adding blocks decreases as the total number of Bitcoins reaches 21 million. It will become zero after 21 million. So, when rewards get to zero, how miners would earn money. At that time, their only revenue source would be transaction fees.
Here’s the fun part. As we previously stated, most people, including institutional investors, hoard Bitcoin. So, in a few years, the total number of transactions may go down. As a result, miners would not earn from mining blocks, neither would they earn enough from transaction fees. They only could be profitable if the transaction fee skyrockets. It’s an issue that will soon become apparent.
There’s another issue. Bitcoin transactions are slow. It takes a minimum of 10 minutes to complete a transaction.
And here comes Dogecoin that solves these problems.
Why could Dogecoin be a future currency?
Dogecoin was started as a joke. It was created to mock cryptocurrencies. It’s why many early crypto adopters hate this coin.
There are many criticisms of Dogecoin. People call it scam coin, meme coin, shit coin, inflationary, no value, etc.
Let’s examine Dogecoin.
Bitcoin has the largest community in the world. Do you know which coin has the second-largest community? It’s Dogecoin. Many people fail to realize that community drives technology and products.
Many do not like Doge because it’s inflationary. They want a limited supply of coins so that their initial investment skyrocket and become millionaires, similar to Bitcoin. For them, limited supply crypto is the gateway to become millionaires. Dogecoin is the contrary crypto. It has fixed 5 Billion supply per year. Therefore, according to them, its price will never go up; they can’t become rich quickly; hence they hate Dogecoin.
But this inflation reduces every year. Here is a chart that shows the inflation rate of Dogecoin.
From the above table, we can see that Dogecoin inflation reduces every year. After a few decades, it inherently will become deflationary.
Because of the inflation, Dogecoin encourages spending. We see people invest their fiat money to grow it. Because people know if they keep their money in a bank account, it’s a loss project. Because of these USD investments, our economy grows. Similarly, Dogecoin will encourage spending and spur economic growth, unlike other cryptos. Therefore, Doge has a higher probability of becoming mainstream than other cryptocurrencies.
Furthermore, Dogecoin transaction time is 10x faster than Bitcoin. Its transaction fees are also far lower.
Moreover, the Dogecoin network rewards 5 Billion coins per year to miners. As a result, there are always incentives to keep the Dogecoin network running. It also reduces transaction fees.
Bitcoin is a reserve currency, whereas Dogecoin is a transactional currency.
There are two types of Cryptocurrency.
- One is decentralized, such as Bitcoin, Dogecoin.
- Another one is centralized, such as XRP.
The problem with centralized XRP is that a single entity controls everything. Therefore, fraudulent activities are common. For example, the parent company of XRP created fake digital coins and sold them to raise billions of dollars for its CEO and executives. So, centralized crypto is a big no-no. As a result, decentralized fast crypto, such as Dogecoin has a higher probability of becoming mainstream.
People also criticize Doge saying that it has no value because no one accepts it. However, it’s a backward mentality. It has a limited use case now that does not mean no one would accept it in the future too. Every day new merchants are accepting Dogecoin as a payment method. As the awareness spreads, more businesses would take it as a payment method.
After Bitcoin became popular, hundreds of crypto came into existence only to make its creators rich. Dogecoin came into existence to mock this mentality. As a result, over the years, most of the coins vanished, but Dogecoin prevailed. It’s genius, and it’s simple.
Those who say Dogecoin is worthless say it because they want to be rich overnight.
Dogecoin has all the potential to become a viable and sustainable cryptocurrency. No way it’s worthless crypto.