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A Cryptocurrency Based On a Dog Meme Is Now Worth Over $1 Billion (vice.com)
Earlier today, the market capitlization of dogecoin, a cryptocurrency based on a meme about a Shiba Inu dog, passed the $1 billion mark for the first time. VICE News reports: Dogecoin was created back in the early days of the cryptocurrency craze. Launched in December 2013 as somewhat of a joke, the meme-inspired coin was dubbed "the internet currency" and designed to promote a sense of community and generosity rather than simply looking to make money. It gained fame during 2014 when it was used to send the Jamaican bobsled team to the Winter Olympics in Sochi and it even sponsored a Nascar team. The currency has been in relative stasis since, and despite no software updates being released in over two years, the cryptocurrency has risen more than 400 percent in the last month -- though one dogecoin is still worth just over 1 cent.
Even Jackson Palmer, one of the founders of the coin, expressed concern about the hyperinflation of dogecoin. "It says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over 2 years has a $1 billion+ market cap," Jackson told Coindesk.
Even Jackson Palmer, one of the founders of the coin, expressed concern about the hyperinflation of dogecoin. "It says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over 2 years has a $1 billion+ market cap," Jackson told Coindesk.
It only works because people have convinced enough other people that it makes sense to invest in it. When that stops being the case it's gone overnight.
The value is completely artificial from start to finish, there's nothing backing it, there's no massive value behind it to stabilize a run. But it exists, and people love new cons.
That's not hyperinflation. Hyperinflation is when the currency loses value so quickly you can't print new bills with high enough numbers in time to keep up. It's the opposite to what is happening here. Dogecoin is inflationary (it doesn't have a coin cap like Bitcoin), but its value per unit growing is the opposite of inflation.
It really bugs me when people mix this up.
Woot! Free money! Oh, wait... that one doesn't happen does it?
You are missing the effect on wage rises - that they become wage drops. This is where the system breaks. If everything is 5% cheaper next year then that includes the value of your labor. Your company is getting 5% less income because the price of its products is dropping. That filters through to you...
But people don't really believe in symmetry - so they refuse wage drops in a deflationary economy. Companies go bust. Banks break. The economy implodes.
Inflation has a soft mode of failure - value leaks out of the system. Deflation has a hard mode of failure - it works up to the point that a systemic shock destroys everything. YMMV.
Slashdot: where don knuth is an idiot because he cant grasp the awesome power of php
Thats what you get living in a third-world police state.
That doesnt happen Australia. or Canada. or the UK.
Move or shut up.
And how many of them have debt because the currency is inflationary? For them, it's better to invest in a house and take on that debt than to have the money sitting around.
Uhhh, considering the average person's "financial intelligence" (there's probably a better term for it that's escaping me right now), I'm pretty sure their level of debt is not a strategic decision. People are in debt because they are careless with spending, don't plan for the future, don't foresee unexpected expenses. And that's WITHOUT having to foresee the effects of decades of deflation on their spending decisions.
When you buy a mortgage, you owe a fixed amount of currency. With inflation, over time your income tends to increase slightly year to year, and over the years the mortgage becomes a smaller and smaller part of your income, making it more and more affordable.
The banks are not morons. They know money is worth less in the future, and their interest rate takes that into account. You're not getting a free ride because your currency is constantly being devalued.
Of course they aren't moron. Of course they figure inflation into it. On the other hand, by comparison, the average person is fairly stupid when it comes to finances. They often can't look 1 or 2 years down the road, much less 10, 20, or 30 years. They can't think about the other things that are going to happen in life, and whether they will continue to be able to afford that payment that seems reasonable today. Having a kid or 2 (possibly by accident), unexpected health complications, having to care for an elderly parent. These are not things most people will take into account when committing to buying a house.
Inflation provides the vast majority of people with a safety net. Without inflation, a decision you make today that seems financially sound might not be such a good idea when you factor in some future unknown expenses. With inflation, the commitment you make today on buying a house isn't such a large factor in 10+ years when that new expense comes up. On the other hand, deflation is the exact opposite. A seemingly financially sound decision today does not remain financially sound 10 years from now even if no new expenses come up. So now, not only does the average person have to prepare for the unexpected, they are required to look 20-30 years down the road and plan for the expected. They have to take 20-30 years of deflation into account and realize what their income is likely to be that far away to decide if they are likely to be able to afford a house. For the vast majority of people, that's asking a hell of a lot.