Dogecoin, the ponzi “joke” can annihilate public trust in Crypto

Image by @atrashatella

USD is on the cheap now man, it’s just one dollar! Sure, the government is printing a ton, but look how many institutions are packing their bags. Sheldon Tusk is gonna bring it up in “The Very Late Show” this Sunday, to the Mars baby! #USDto1K!

Hold your fire, this is not coming from Peter Schiff, I’m a crypto maximalist like any other rational person :) Hear me out first.

Doge used to be a community of very cool people with all the good intentions, they raised money to pay back fellow Doge investors who lost their coins in a hack, done lots of charity, spread good vibes all over social media in the stressful days of crypto, and a lot more! Also, the coin wasn’t just a meme, it had a purpose, it was the perfect gift to send to a loved one without robbing a bank, and you’d be able to send thousands! It wouldn’t double in value with every small BTC/ETH green candle, it was our trusty gooooood boy! Oh, and seeing the face of a cute Shiba everytime you’re reading on crypto, what more Doge could possibly do to brighten us up?

Drumroll… until the devil entered the building!

Doge on tradingview, image credit @ryanmatta

The wolves, of the street that‘s a wall, now walk among us. These guys, they’re no fun, if they’re in something, they’re only in it for the money, at whatever cost. They buy in milions, but they also coordinate and sell at the peak, and short the asset on the way down, robbing us of our “dumb money”.

They are the big money, but against the popular belief, they may not be the smartest. Predatory? Sure. Smart? Let’s dive deeper.

Dogecoin is a ponzi scheme

It’s true, I’ll get into the why. But it’s not necessarily a bad thing. Dollar is a ponzi scheme:

A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Wikipedia

I give you a dollar, you give me lemons in exchange. Some time later you come back and give me a dollar and want lemons. But lemons are now more expensive! I give you 80% of the same lemons you gave me earlier. The 20% that I keep is my profit. You’re the most recent investor, I’m the earlier investor.

During inflation, everything is a ponzi scheme. You’d know if you’ve tried to buy a house recently. Stocks, real estate, good ol dollar, every single transaction is a ponzi scheme. Thankfully, we have control over the inflation, or at least we have the delusion of control!

There was an era that the economy abided by the so called “Gold Standard” rule, that seemed to work, but we’re way passed that time. We do have Bitcoin though, it’s mathematically proven to adhere to the Gold Standard.

Generally, we have 3 types of assets now in the crypto space:

  1. Capped: there’s a fixed amount of coins to be ever mined. E.g. Bitcoin
  2. Inflationary: there’s no cap, more coins are printed (to be mined) at random or according to a formula. E.g. XRP, Dogecoin
  3. Smart Contracts and platforms: varying rules on the cap, the focus here is binding a contract enforced by the blockchain. E.g. ETH, FIL
  • Some Smart Contract platforms (like ETH2.0) are transitioning to Deflationary tokens (they like to call it ultrasound money). Meaning in the future, there will be less of the token in circulation than now.

The takeaway point here is, an inflationary token will remain a ponzi scheme “by design”, regardless of the real world economy, unless its underlying code is changed. And again, this is not a bad thing, we don’t always want roaring prices, we may actually want the opposite if we want to use a coin as a currency! Price appreciation is good for a store of value, but we can do without it for our everyday currency. Evident by our precious dollar!

Current Dogecoin price action can give us another 2018

There is no malintent or anything inherently evil in crypto. It’s like every other tool in history. We can stab someone with a knife or we can peel an apple. Our choice. There’s a trove of technical breakthroughs with blockchain technologies, waiting. Half the apps in our phones can be powered by blockchain in a few years. Lots of money to be made, mutual wins for both suppliers and consumers. We’re talking legit economic growth, unbound by bulshit policies. It’s important that we don’t fuck this up and delay it another 10 years.

Big money players definitely can and probably will pull a Bernie Madoff on us. That’s not smart, it’s shortsighted greed.

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Keyvan is co-founder and CEO at Functionland, an open-source startup working on the intersection of Blockchain and AI

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Keyvan M. Sadeghi

Keyvan M. Sadeghi

Keyvan is co-founder and CEO at Functionland, an open-source startup working on the intersection of Blockchain and AI

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