Why Not To Buy Dogecoin?

You should not buy Dogecoin because it has no supply cap (inflationary), does not offer staking reward, has no institutional support, is not actively developed, and only a handful of stores accept it.

Unlimited Supply:

Dogecoin’s block time is 1 minute. Each minute the Doge network rewards a miner 10,000 coins. At this rate, there are 5.256 billion coins added to the blockchain each year.

There’s a misconception that the US government prints money out of thin air. It’s not true. The US government sells bonds and other instruments to raise money (debt). The government also pays those debts with interest. On the contrary, Dogecoin creates currency out of thin air. 

We buy shares of a company in the hope that the company would do good business. If its revenue increases, its share price will also rise due to increased demand. Even if the company goes bankrupt, there are physical assets that can be liquidated for shareholders. It could be real estate, software technology, or user base. 

On the other hand, Dogecoin has no asset. Its blockchain is also not unique. It’s a fork of Litecoin, which is a fork of Bitcoin. Dogecoin does nothing that another blockchain can’t replicate.

Limited Use Case:

Dogecoin was started in 2013, whereas Ethereum started in 2015. Still, Dogecoin’s use case is minimal. A lot of retailers and shop owners accept Bitcoin and Ether. However, it’s tough to find a retail shop that accepts Dogecoin. What’s the point of a currency if no one takes it. 

Dogecoin Has No Staking Reward:

We can earn by staking our cryptos on various blockchain such as Cardano (ADA), Polkadot (DOT), Cosmos (ATOM), Ethereum (ETH), Kusama (KSM), etc. Typically the staking reward varies between 3% to 13%. 

On these networks, if someone wants to become a miner, they have to put a certain amount of cryptos as collateral. Sometimes, a miner is unable to gather enough money (cryptocurrency) of their own as collateral. In that case, crypto holders can join in to help the miner reach its collateral goal. As a result, when the miner earns block rewards and transaction fees, they share the profit with those who supported the miner with collateral.  

Staking helps to increase investment. Staking is similar to business investment. You help someone to do business with your capital. If the company turns a profit, you get a share of that profit. If the business goes under, you share a loss. No one worries about the inflation of Polkadot or Ethereum. It’s primarily because of the staking reward that Ethereum or Polkadot gives away. 

On the contrary, Dogecoin is not only inflationary; it does not have a staking mechanism. All the newly minted coins directly go to miners, which in turn devalues Dogecoin.

Other inflationary cryptocurrency tackles the inflation through Proof-of-Stake method. Whereas, Doge is Proof-of-Work crypto with unlimited supply for eternity. 

No Institutional Support:

According to the US Federal Reserve, the top 1% controls $36 trillion wealth or 31% of US wealth. The top 10% rich controls 70% of the wealth ($80 trillion). In contrast, the bottom 50% of people control 2% ($2.36 trillion) of US wealth. 

It’s the rich people, hedge funds, and institutions that move the market. Even a few years ago, Bitcoin had only a few billion dollars market cap. However, recently its market cap passed over 1 trillion because of institutional investment. Goldman Sachs, Tesla, JPMorgan, and various other companies have bought Bitcoin in billions of dollars.  

It does not matter how much money retail investors invest in Dogecoin; its price would never go up unless institutional money flows into Doge. 

The mentality — Dogecoin was started as a joke and should be treated as such — is prevalent. Unless this narrative changes, no one would take Doge seriously. For example, even though Elon Musk is very vocal about Dogecoin, Tesla bought $1.5 billion worth of Bitcoin instead of Dogecoin. Even Elon Musk can’t change his board members’ minds regarding Doge. 

Not Fast Enough:

If we compare Bitcoin and Dogecoin transaction speed, the Dogecoin network is 10x faster than Bitcoin. Bitcoin’s block time is 10 minutes, whereas Doge’s block time is 1 minute. 

However, this 1 minute is not fast enough. Credit and Debit cards take seconds for transaction confirmation, whereas 1 minute is not acceptable if we intend to use Doge at retail stores such as Walmart, Gas stations, coffee shops, Burger King, etc. 

Limited Development:

Bitcoin, Ethereum, Polkadot, Cardano, and other popular blockchains are actively being developed and maintained by a large developer community. Whereas, Dogecoin has no developer support. The original developers — Billy Markus and Jackson Palmer — left a long time ago. Only a handful of developers are working part-time for this blockchain. 

Dogecoin Does Not Solve Any Problem:

Dogecoin has no staking reward, is not fast enough; 5 billion coins are minted each year and have no institutional backing. Dogecoin does nothing that can’t be done using fiat currency — the US dollar. 

Why would I convert my Bitcoin or USD to Dogecoin if it is not superior to other cryptocurrencies? You should buy Dogecoin only if you can answer this question satisfactorily. Otherwise, please don’t purchase Doge.

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