Meme is changing the logic of investment: Why is Dogecoin that was once used as a joke valuable?


There may also be the possibility of collective beliefs surpassing “fundamentals.” Changes have already arrived.

Original Title: “Community Coin Representative DOGE: Meme Is Influencing Investment Logic 丨 Witnessing”
Written by: Blocklike Collection and Editing Room

More digital currency enthusiasts are looking at Dogecoin from a new perspective.

The Dogecoin community has always been a lot of fun. On March 2, Elon Musk’s new tweet once again pointed to the Internet celebrity currency Dogecoin. In the picture, “Meme” acts as a shield to protect Dogecoin.

Meme is changing the investment logic: Why is Dogecoin that was once used as a joke valuable?

Since the end of January, the price of Dogecoin has fluctuated sharply. Just as sudden as the previous surges in history, on January 29, Dogecoin’s intraday increase reached 800%. In the next few days, the market value of DOGE even surpassed LTC in the short term. CoinMetrics data speculates that almost all buyers driving this rise came from Robinhood, a US stock trading platform known as the “retail home base.”

Regarding Dogecoin, Musk has continued to tweet, which has caused a lot of follow suit. In the crypto community, this “Shiba Inu” pattern has aroused the community’s creative enthusiasm, and emojis, videos, and animated pictures continue to spread.

In any case, this cryptocurrency with its own Meme concept has ushered in batches of followers.

The US financial blog portal ZeroHedge said in a tweet last week that it was reported that the US Securities and Exchange Commission (SEC) would investigate Tesla CEO Musk for tweets about Dogecoin. And Musk responded calmly: “I hope they will do this, it will be great.”

Since the SEC’s qualitative DOGE is still blurred, and Dogecoin has already been “returned to the community,” this may make it somewhat impossible for the SEC to conduct market manipulation investigations on DOGE.

It is still unknown when the SEC investigation will arrive, but the Dogecoin community has already taken action, and many Dogecoin supporters are accelerating the discovery of new opportunities for “community coins”.

Meme is changing the investment logic: Why is Dogecoin that was once used as a joke valuable?

“Everyone is a volunteer”

Faced with a large amount of attention at the end of last year, the Dogecoin community has recently moved more frequently.

On the one hand, the “Dogecoin community” has become a broad community. Since the founding team has already announced its dissolution, from 2014 to 2019, the development of the Dogecoin mainnet was almost entirely carried out by the community, like a typical project “pushed” by the community. In this wave of enthusiasm, more people have spontaneously joined the Dogecoin community and developed or innovated based on this.

On the other hand, the Dogecoin community developers released a new version of Dogecoin Core 1.14.3. In the new version, the node synchronization speed can be improved and the expiration time of the default memory pool can be reduced. Whenever a block is sent to another node, an expensive integrity check needs to be performed. This update has deleted the execution, which can improve the upload speed of the DOGE node.

Peng Song, the former founder of Dogecoin’s Chinese community, said that recently, Doggou volunteers are pushing forward more things, including DEX, cross-chain transactions, DOGE repurchase, etc.

Meme is changing the investment logic: Why is Dogecoin that was once used as a joke valuable?

On February 20th, in ClubHouse’s live broadcast room, Bao Erye said that he would start raising a 100 million Dogecoin fund for the development and governance of the Dogecoin community.

More digital currency enthusiasts are looking at Dogecoin from a new perspective. The same is true for institutions.

On March 1, Bitcoin ATM operator CoinFlip announced its support for DOGE. After that, U.S. residents will be able to purchase Dogecoin at ATMs in 45 states. The CEO of CoinFlip said that the reason is that the token has recently been adopted on a large scale.

There are many reasons to pay attention to Dogecoin: some people want to hold Dogecoin for profit, some are because Musk has mentioned it many times in tweets, and some are just because it is interesting. Looking back at the data for the past three months, Dogecoin’s increase has reached 1352.88%.

Meme currency is evolving

Dogecoin never lacks stories.

Meme is changing the investment logic: Why is Dogecoin that was once used as a joke valuable?

Meme is a concept proposed by Dawkins, the author of “The Selfish Gene”. It refers to the concept of culture that can be spread, reproduced and replicated. It echoes the concept of “gene”. Meme also undertakes the concept of “replication and reproduction.” responsibility.

Meme exists widely in various cultures, and Dogecoin is undoubtedly a “MemeCoin” recognized by the crypto community. Dogecoin officially defines it as an “interesting and friendly network currency”. Its issuance volume is as high as 100 billion, and an additional 5% is issued every year, which makes Dogecoin’s value always relatively low (supplementary). The long-term vitality of Dogecoin is closely related to community communication.

Dogecoin was born in December 2013. Based on the Scrypt algorithm, it is deeply rooted in people’s hearts with the expression and image of “Shiba Inu”. On Reddit, a community forum with a huge number of users, Dogecoin has more than 100,000 fans and has already squeezed into the “100,000 Fan Club” that includes Bitcoin, Ethereum, and Litecoin. On Twitter, Dogecoin has 630,000 followers.

Some communities believe that Dogecoin was once treated as a joke, but it ignores the fact that it is precisely because of this “joking” that it has become the interesting, optimistic, and tolerant “core” of Dogecoin.

Meme is changing the investment logic: Why is Dogecoin that was once used as a joke valuable?

In the past month, most mainstream media at home and abroad attributed the increase in Dogecoin to the praise of Musk and other entertainment stars. Because of the huge social influence of these people, the price of Dogecoin has changed significantly. For example, a comic about “Dogecoin on the moon” can increase the price of the coin by 10%. Musk will tweet The introduction changed to “Doge all day, Doge all night”, and the dog responded and rose by more than 21% in 24 hours.

To some extent, this is regarded by the community as the next round of Robinhood’s “retail movement”.

There is a precedent for US stock investors retail investors to choose Dogecoin. The currency information is extremely prone to viral spread in the community.

Previously, in July 2020, Dogecoin also encountered individual investors raising prices, and the reason was that a TikTok user named James Galante posted a short video titled “Make Us All Rich” , This video has attracted a lot of attention through viral spread on social media platforms, and it has promoted the price of Dogecoin to increase by 20% within 24 hours.

On the other hand, Dogecoin is still subject to controversy due to the centralization of branches. According to the data of BitInfoChart, there are mysterious giant whale addresses hoarding a large amount of Dogecoin, the top 10 addresses holding Dogecoin hold 41% of the total coins, and the giant whale hoarding Dogecoin accounts for almost 30% of the total circulation. %. This makes the price of Dogecoin vulnerable to manipulation. Critics claim that the recent surge in Dogecoin is entirely due to speculation rather than fundamental value.

In the past, as most of the participants in transactions were individual retail investors, Dogecoin was used as a barometer of sentiment in the crypto market.

Now Dogecoin is regarded as the core Meme of the community, and the demands of individual investors extend to the blockchain industry, and the investment logic of community-based currencies is changing.

In this way, the “community” attribute is more like a vague concept.

However, Billy Markus, one of the founders of Dogecoin, described this concept more clearly. A few days ago, Billy Markus wrote a letter to all Dogecoin enthusiasts on Reddit. His explanation is: The real value of Dogecoin is not a smash, but the “positive energy” it brings to the world. The existence of joy, kindness, learning, giving, empathy, fun, community, inspiration, creativity, generosity and other factors made him feel that Dogecoin is worthy of existence. If the community embodies these things, it is true value.

Decentralized finance is changing the investment perspective

Some people believe that after the phenomenon of Dogecoin’s popularity, the market has also seen a shift in investment paradigm under the new DeFi scenario.

Behind traditional industries and the Internet industry, investment institutions, funds, or individuals can invest in company stocks or stocks. The rights and interests represented behind stocks or stocks are clear, such as stock dividends, dividend discounts, participation in company decision-making, etc., but in DeFi and In the blockchain industry, the object of investment is Token. Under the innovation of decentralized finance, more data such as the number of Token holdings, transaction volume, transfer amount and frequency, Dapp number, and transaction volume have emerged.

The blockchain industry is extremely innovative, and the dimensions of project valuation data are not yet mature. Practitioners are still exploring how to establish a reasonable valuation theoretical system.

Nowadays, the internal and external factors of the new round of market conditions have undergone tremendous changes in the past. From a macro perspective, they are also facing the unfinished follow-up impact of the global epidemic and the economic impact of countries with downward expectations, whether it is the relative valuation of the traditional fields. Method, discounted cash flow method, PE or VC investment theory, all have deviations in the investment of innovative blockchain projects.

Coindesk reporter Emily Parker recently wrote that Dogecoin is an emotion-driven asset. But recently, such examples abound. Value is created by group emotions and grows under the instigation of social media. The most obvious example is GameStop, where Reddit users have teamed up to raise the price of this heavily shorted stock. The most recent example is the Mars coin. After Elon Musk mentioned Mars on Twitter, the coin rose by more than 1000%.

Collective beliefs are at the core of the crypto community. From this perspective, some collective beliefs may also have the possibility of surpassing “fundamentals.” Some changes have already arrived.

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