Even as hundreds of meme currencies are created every day, Dogecoin holds the number one position with the largest capitalisation of over 42 billion. Unlike Bitcoin, the supply of Dogecoin isn’t limited [Image: Shutterstock]
If you are one of those who track the investment space in technology, you must have come across the hot favourite cryptocurrency news and forums that are now raving about meme coins that have become the object of speculation frenzy.
Tesla and SpaceX chief Elon Musk has been the most popular crusader of meme currency Dogecoin. The technocrats’ tweets have contributed to the price volatility of the meme cryptocurrency. The prices of meme cryptocurrency shot up significantly on June 2 when he posted a meme that bears a resemblance to his childhood.
Musk also announced that SpaceX will launch the “DOGE-1 Mission to the Moon” in the first quarter of 2022, with its commercial rocket company accepting the meme-inspired cryptocurrency Dogecoin as payment.
What is meme cryptocurrency?
Dogecoin was created by software engineers Billy Markus and Jackson Palmer in 2013, as a joke payment system that started the era of meme cryptocurrencies. However, to the two engineers’ surprise the coin that was launched to ‘dethrone’ the most popular and valuable cryptocurrency Bitcoin, gained popularity. Reports suggest that over a million unique visitors went to dogecoin.com within the first month of its launch.
Since then several meme currencies have gained traction with a current market capitalisation of over 47 billion, according to Coinmarketcap.in. However, the challenge isn’t just the creation of these coins but the acceptance of the coins as currency, in exchange for services. As the price of these coins increases, theoretically its value and usability increases.
Even as hundreds of meme currencies are created every day, Dogecoin holds the number one position with the largest capitalisation of over 42 billion. Unlike Bitcoin, the supply of Dogecoin isn’t limited.
Meanwhile, with the rapidly increasing crypto craze globally, several people are jumping on the crypto bandwagon. With the growing Dogecoin frenzy, another ambitious coin known as SHIB, self-proclaimed as “dogecoin killer” was created in August 2020 by someone who uses the name Ryoshi. It is modelled after Dogecoin and has a market capitalisation of over Rs 2.7 billion, according to CoinMarketCap, at the time of writing this article.
While both meme currencies have the face of a canine, dogecoin operates on its own blockchain, Shiba Inu is on the Ethereum blockchain.
Miffed Regulators
While the cryptocurrency community and short term speculative investors welcomed the meme currency with open arms, regulators around the world have shown not just displeasure at these speculative options.
The Thai Securities and Exchange Commission banned trading meme-based tokens or fan based tokens along with other digital assets.
In the US, the newly-appointed Securities and Exchange chief Gary Gensler has pointed towards tougher regulations for cryptocurrency. Speaking on the ‘highly volatile and speculative asset class’, Gensler noted the significant growth in the valuation of such assets in the last five years.
In India, while the Supreme Court quashed the central bank’s 2018 circular warning customers against using their services to trade in cryptocurrencies and threatening account suspension in case of non-compliance. Speaking at the 7th edition of the India Economic Conclave in March, the RBI Governor, Shaktikanta Das had said the central bank has flagged some major concerns to the Government about cryptocurrencies.
A similar sentiment was also shared by Bank of England Gov. Andrew Bailey who warned that investors should be prepared to ‘lose all their money.’
What does the future hold?
Although regulators and governments have displayed reluctance in accepting digital assets, it has not deterred the cryptocurrency community from shattering the belief they have in its potential.
What started as a joke has now turned heads in mainstream media with financial experts closely monitoring the trajectory of these tokens. Dogecoin has achieved various feats including fundraising for charities and other notable causes.
The Dogecoin community in 2014, had raised over $36,000 by the second day for the Jamaican Bobsled Team to enter it in the Olympic Winter Games by donating the meme currency. The transaction led to surging the Dogecoin-to-Bitcoin exchange rate to rise by 50 percent within 12 hours.
In the same year, the Dogecoin community crowdfunded 67.8 million Dogecoins (around $55,000 at the time)to sponsor NASCAR Sprint Cup Series driver Josh Wise
While uncertainty looms around cryptocurrency globally, the meme currency still has a long way to go before it is taken seriously especially in comparison to its much stronger counterparts like Bitcoin. However, the meme currency is now too valuable to be laughed off.