The coin is known for being kind of a joke, bump and dump schemes and for it?s PR manager Elon Musk. But what is the seriousness of DOGE?
First the cons: For a Crypto it is way centralized, as one wallet holds 27% of the available currency and the top 20 addresses holds 50% of the Market.
For being so cheap the Market can be easily manipulated by a few people with some influence on social media, and even an individual with impressive influence and reach: When Musk said that Doge was “the people?s crypto” prices spiked by 40% in one hour. He had already praised the coin in April 2019, causing a similar effect.
That?s why from time to time we see a massive wave of shill towards Doge, causing a high in the prices; therefore making useful idiots buy the coin, what is followed by the dump.
So is Doge centralized, volatile and easily manipulated?
Lets take a look into the pros.
Some folks have already argued that those huge wallets are only for cold storage and therefore no individual really owns them. If that?s the case, the centralization problem is solved, but we can?t be shure by now.
Doge?s price volatility tends to be decreased by it?s inflationary nature, the coin is designed to increase its suply at a set rate wich is 5 billion per year. But it will not cotinue to grow ad aeternum because there is a pratical limit, allowing us to calculate it?s inflation over time. The suply rate for every decade is of 50 billion, but the inflation rate is +5% per year as shown in the graphic below.
(Source: https://investorplace.com/2021/02/dogecoin-has-an-inflationary-supply-trait-making-it-ideal-as-a-cryptocurrency/)
There are 128 billion coins in the market right now, that makes the growth for the next decade at 3% - 4% per year. After that it treds to slow down at 2% - 3%, therefore the inflation rate will trend down.
(Source: https://investorplace.com/2021/02/dogecoin-has-an-inflationary-supply-trait-making-it-ideal-as-a-cryptocurrency/)
If we can predict Doge?s growth and inflation it?s easyer to use it as an actual currrency, what partially solves the volatility problem; making the bump and dump schemes way harder.
All things considered, Doge has a great potential of being a largely used and stable coin at the long term. For now i will buy it and hold, while ignoring all the shilling and stonks boys.
