As the cryptocurrency market languishes in the summer doldrums, Elon Musk once again made a push for greater Dogecoin adoption. The eccentric billionaire’s fascination with the aging meme coin continues to confound veteran crypto-investors – with diminishing returns insofar as buoying the value of the coin itself. While Musk’s tweets once catapulted DOGE to all-time highs, his insistence on DOGE becoming a global, feasible international currency has put off those with actual blockchain knowledge.
Musk envisions a world where Dogecoin competes directly with the likes of VISA, even going so far as to suggest several upgrades that could bring about this scenario. Meanwhile, one of the largest DOGE investors bailed – causing a considerable crash that left the coin trading 20% lower for the week. The same investor chose to sink his money into a Tiger King meme coin instead. Musk faces a severe uphill battle if he wants to establish Dogecoin as a truly digital currency contender, in part due to DOGE’s tokenomics – which the creator never intended to support a real use case.
Dogecoin’s Critical Drawbacks
Hyper-Inflation all but ensures that Dogecoin cannot maintain any price for a prolonged period. The Dogecoin blockchain produces a completed block about once every minute. Each block rewards 10,000 DOGE – resulting in over 14 million DOGE entering circulation every day. At a value of even $0.10, that’s 1.4 million USD in supposed value entering the market each day. That degree of hyper-inflation makes it nearly impossible to sustain a price over time.
Further, active development on the Dogecoin blockchain stopped several years ago. The development team recently began working on DOGE once more, in supposed direct contact with Elon Musk. While they may be able to mitigate some of the technical problems associated with DOGE, it is unlikely that they would remove the core aspects – including hyper-inflation and proof-of-work.
What Makes BTC and ETH More Valuable Than DOGE?
Dogecoin is a forked version of several early cryptocurrencies – all of which closely mimicked Bitcoin’s original blockchain. In contrast to DOGE’s haphazard codebase, Bitcoin recalibrates periodically – halving the incoming supply from miners. These events often cause a delayed boost in BTC value. Bitcoin also possesses a theoretical max supply – although, at current mining rates, it would not reach that maximum until the next century.
Ethereum offers an entire development infrastructure, powering the vast majority of decentralized applications and tokens within the cryptocurrency industry. The advent of smart contracts helped create the altcoin sector as it exists today. Both Bitcoin and Ethereum bring true value to investors – where Dogecoin depends almost entirely on sustained hype. The hype that seems to be waning over time.