Dogecoin offers the misinform the concept that we should always take bitcoin and different cryptocurrencies terribly critically.
Whereas crypto evangelists would possibly need everybody to purchase into the notion that bitcoin goes to take over from the greenback in the future, and that all of us want to carry a few of it as a way to shield ourselves from the evil central bankers who need to inflate away the worth of our cash, the truth is that their arguments are largely only a self-interested try to spice up the value of cryptocurrencies.
Very similar to a pyramid scheme, those that bought in early on bitcoin have an enormous monetary incentive to attract in others by any means needed. However whereas getting wealthy is clearly the principle motivating issue – and a few folks have certainly managed to turn out to be extremely wealthy from crypto – it isn’t the one one.
Shopping for into crypto must be thought of akin to playing and, like playing, folks get into it not simply because they may earn money, but in addition as a result of it’s entertaining. It’s no coincidence that cryptocurrencies and “meme-stocks” have surged in a 12 months through which a lot of the world has been locked up indoors.
It’s the results of what Bloomberg columnist Matt Levine has known as the “boredom markets speculation”.
Crypto buying and selling is usually extra accessible than playing, notably in locations the place betting is closely regulated, comparable to within the US. It permits patrons to really feel like they’re in some form of tribe.
And whereas the “LOL” issue may not be thought of a conventional metric for figuring out the worth of an asset, that doesn’t imply it shouldn’t be: clearly, the extent to which it’s enjoyable to purchase into one thing has an affect on how a lot it’s purchased, and nowhere can that be seen extra clearly than in dogecoin.
The joke-coin makes a mockery of the concept that crypto investing must be thought of a critical pursuit. Its very existence undermines the notion that bitcoin derives worth from its shortage.
Whereas bitcoin’s complete provide will finally be capped at 21 million, as written into its unique supply code, there isn’t any restrict to the variety of copycat cryptocurrencies that compete with it – there are actually nearly 10,000, and dogecoin itself has no arduous provide cap.
Dogecoin’s success makes simply as a lot sense as the remainder of the crypto market – folks purchase into these cash as a result of doing so is thrilling, it offers them one thing to do and focus on with their associates, and naturally as a result of it could possibly enable them to make a fast buck.
However maybe it could possibly additionally enable us to cease taking the crypto mission fairly so critically. Whereas we’re at it, we’d do the identical with the inventory market.