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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.
I will just remind our younger readers of the dotcom boom, where tech stocks were seen as the new big thing and pumped up a bubble that eventually crashed. You can tell the top of this by looking at a tech company that was registered on the NASDAQ called NETJ.COM,
This had all the right words in the name, "net", "J" (for Java, hot at the time) and ".com" but its description of what the company did was:
and this raised several $110 million in IPO funding from ordinary investors when it floated.
So a dog coin cryptocurrency "worth" $1bn... just same shit, different day.
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...
Yes, all these people hyping deflationary currencies miss this. And they miss the next important consequence of that. Most people have more debt than they do savings. Deflation is good for you if you have lots of savings, but not lots of debt. Most people owe $100k or more on a mortgage, but have only a few $k (if that) in savings. Deflation is a benefit for your meager savings, but is a huge hindrance for your much more sizable debt.
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. This is great because if you buy something you can afford, you can generally count on being able to afford it until it's paid off (job loss and severe employment cut being the exception, but that will hold true for deflation also, so lets not consider that). But with deflation, it's the opposite. You get your mortgage, and the payment amount stays the same, but every year your income drops slightly, and thus every year your mortgage payment becomes a bigger and bigger portion of your income. A mortgage that is affordable when you buy it will one day become unaffordable for you.
I don't think that's what people intend, but that is the natural consequence of a deflationary currency.
1) So?
2) Anyone can follow your transactions, not just the bank guys
3) Counterparty risk lies with the buyer. No fraud protection
Fiat money is hardly a scam. Central banks can and do manipulate the value of money, and generally they do so to keep inflation at healthy levels. They do not always succeed, but in general the value of your money is pretty stable when it's managed by a decent central bank.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
Such grammar nazi. Much passion. Wow.
#DeleteFacebook
Maybe you should take a look at wage increases vs. inflation for the past 70 years or so.
In the current system, it 'appears' as if your wage is going up, but it is in fact shrinking.
But in a system built on lies... who wants to hear the truth?
You are actually wrong. It is not shrinking. Over the long run it in increasing very slightly. Over the last few decades it has mostly been stagnant. Any (slight) decrease is only in the shorter term. When we are talking about mortgage affordability we are generally talking about 30 year spans.
https://fred.stlouisfed.org/se...
But you completely miss the point of my post. Yes inflation adjusted income only changes slightly over time (which is to be expected...cost of all good adjusts to what people are making, otherwise we'd all be living in mansions and driving ferraris). But look at that graphs above and notice the slope of that nominal income line. Now realize that the slope of your nominal mortgage payment over 30 years is zero. Your mortgage payment stays the same every year, while your income grows and grows. Even if that larger income doesn't give you more buying power, it makes your large mortgage debt easier and easier to afford every year.
Now try switching to a deflationary currency. To do that, you just flip the graph upside down. Your real (inflation adjusted) income/buying power stays more or less flat over time, but your nominal income would be sloping down. Buy your mortgage payment would stay flat, and every year get just a little more difficult to afford.