Article | AI Finance and Economics Society Yi Wei Chen ChangEditor | Shi JinBorn out of a joke, abandoned by the founder, unlimited distribution Crazy dog coins don't bark, but now more and more people are shouting for their help.On May 8th, Musk once again "endorsed" cryptocurrency Dogcoin on the talk show "Saturday Night Live (SNL)"

Article | AI Finance and Economics Society Yi Wei Chen Chang

Editor | Shi Jin

Born out of a joke, abandoned by the founder, unlimited distribution Crazy dog coins don't bark, but now more and more people are shouting for their help.

On May 8th, Musk once again "endorsed" cryptocurrency Dogcoin on the talk show "Saturday Night Live (SNL)". In addition to claiming to be the "Dogfather" of Dogcoin and mentioning again that "Dogcoin is the future of currency", Musk also generously admitted that dogs are "Hustle" (which can be understood as "money making"), and some media directly understood it as "fraud". After the program, the price of dog coins plummeted in an avalanche, plummeting by over 39%.

On the day before the program, the dog currency rose by 20% daily. The newly born SHIB Chaigou Coin (also known as "dog poop coin"), which belongs to the concept of "dog" and is also known as "dog poop coin", saw its daily growth soar to 400%! Faced with this scene, not only the off-site audience, but also the old chives in the coin circle exclaimed: stunned!

Despite numerous controversies, cryptocurrencies led by Bitcoin have experienced phenomenal frenzies since the beginning of 2020. Entering the first quarter of 2021, Bitcoin briefly rose above $60000, with a total market value of $1200 billion. Musk's dog coins, which carry goods and rely on Reddit and Twitter, are not to be outdone, rising 175 times from $0.004 per coin at the beginning of the year to $0.7 per coin today.

I don't think raising to $1 is a problem at all, "a newcomer to the coin industry who just entered in mid April told AI Finance. In addition to repeatedly 'bringing goods' for Doggie Coin during conversations, he also expressed exclamations such as' I feel 20 years younger since investing in them'.

As Bitcoin is pushed to a new high of $60000, the dog coin, dubbed as the "new rich in the coin industry," is believed to have the potential to take over Bitcoin as the next trend. However, in the context of cryptocurrencies being "surrounded" by relevant departments and major banks, can dog coins with "grassroots attributes" really create a "value myth"?

Dog Coin Becomes Popular: Some People Have Wealth and Freedom, Others Encounter Runaway

Dog coins are on fire.

Despite experiencing a cut in the waist in April, at the behest of Tesla founder Musk, it has intermittently reached historical highs. Although the current "total value" of Dogcoin fluctuates, it does not prevent it from becoming the fourth largest digital currency after Bitcoin, Ethereum, and Coincoin.

Wang Ze, a post-70s generation who achieved wealth freedom through the coin circle (pseudonym), said that in the past few months, he has sold "relatively stable" Bitcoin and Ethereum inland and exchanged them all for dog coins. Although he has experienced losses, he currently "earns 1.7 times".

At the recent Buffett shareholders' meeting, this investment tycoon refused to discuss any topics related to Bitcoin. "Why does Buffett hate Bitcoin so much? Because he cannot control this' decentralized 'thing and become a banker?" Wang Ze believes that cryptocurrency is a new thing that has refreshed his understanding, and the reason why some people criticize it is mostly because he does not understand it.

Not everyone is as lucky as Wang Ze. A senior industry insider who mocks himself as an old leek in the coin industry said that he missed out on this sudden surge in dog coins. Dogcoin initially became popular on Reddit, and my friends in the coin circle around me didn't play that website much. They still looked at more technology, and the technology content of Dogcoin was too low, not the same as Bitcoin or Ethereum

In addition, according to an insider's observation, China's wave of speculators is dominated by the post-90s generation. In the international market, it is no longer tiktok that dominates the list of downloads in Apple's iOS store, but Robin Hood, an American online securities trading platform, which is the force of the trend.

A data disclosed by Robin Hood further confirmed this fact. Due to the popularity of the digital currency market, especially the sharp rise in the prices of Bitcoin, Ethercoin and Doggie Coin, a large number of people were attracted to the market. The company stated that in the first two months of this year, its digital currency trading business increased by 6 million investment users (an average of 3 million new users per month). As a comparison, in 2020, the company added only 200000 new digital currency trading users per month.

Some coin circle players also told AI Financial News that in 2017, they bought 10000 yuan of dog coins and put them on so-called exchanges for buying/selling different currencies. Later, they rose to nearly 1 million yuan, but the platform ran away and did not make any money, instead losing all the principal.

Regarding the player's experience, Wang Ze believes that the sharp rise and fall of Gougou Coin is not a real risk, "the real risk is the exchange running away

Blockchain practitioner Zhou Zheng (pseudonym) told AI Finance News, "The one who runs away may not be an exchange at all, but a platform for pyramid schemes and pig killing. You give them the money to play in their pool, but in reality, you haven't even entered the real trading world

Shanzhai coins have turned over, and Musk is the "first hero"

Under the madness, everyone is curious about a question: why did dog coins become popular?

Many industry insiders believe that Musk's driving force is the main reason.

Looking back at the past and present lives of Dog Coin, it is not difficult to find that the Dog Coin, born in 2013, has a strong grassroots attribute. That year, the market value of Bitcoin skyrocketed on a roller coaster, with individual prices rising from almost worthless to tens of dollars. At the same time, a Japanese Chaigou avatar unexpectedly became popular and exploded on overseas grassroots Reddit forums.

A large-scale private speculation incident, along with a doge emoji without any sense of conflict, was noticed by an IBM software engineer who pulled on a colleague from Adobe next door to counterfeit a cryptocurrency with a doge avatar. As ecological support, the two "founders" also purchased the domain name of dogecoin.com to benchmark Bitcoin's official website bitcoin.com. Thinking of the mysterious founder of Bitcoin, Satoshi Nakamoto, software engineers have even changed their Twitter name to the copycat Shibetoshi Nakaoto.

The turning point occurred in Musk, who claimed to be the "godfather of dog coins". Since last year, he has reposted content related to Dogcoin multiple times on Twitter, starting in a semi joking way. Since 2021, Musk has been vigorously shouting on Twitter: "We don't need to become billionaires to have Dogcoin", "Dogcoin is the virtual currency of the people", "I didn't drink too much, I didn't feel down, I only have Dogcoin in my heart"

On April 1st, Musk announced that he would use a rocket to send a dog coin to the moon, and since then, the price of dog coins has skyrocketed, initiating a rampage mode. On May 7th, Musk forwarded a video titled 'Musk claims that Dogcoin may become the future of cryptocurrencies'. Shortly after, he tweeted' Cryptocurrencies have great prospects, but please be cautious when investing. '

Shi Yi, the blockchain entrepreneur, said that in addition to Mask, celebrities from all walks of life, such as Mark Cuban, the owner of the NBA billionaire in the United States, Snoop Dogg, the rapper in the United States, and so on, have also supported the dog coin, expanding the consensus foundation of the masses, which has made the dog coin come out of the circle quickly.

Musk's support for dog coins must have a reason behind it. Zhou Zheng stated that from recyclable rockets to new energy vehicles, from super high-speed rail solar photovoltaic, Musk's layout is all around colonizing Mars, and Dogcoin is no exception. It is part of building the Martian ecosystem.

Some argue that, unlike cryptocurrencies born for the purpose of cutting leeks, the birth of dog coins was used to mock the speculative sentiment of coin holders. But with the high enthusiasm of Reddit villagers for Doge avatars and the need to become rich, within half a month of its establishment, Dogcoin became the seventh largest virtual currency in the world at that time with a market value of $8 million.

HashEraCapital founder Ulan, who focuses on crypto asset investment, believes that DOGE is a special group of retail investors, YOLO (YouonlyLiveOnce), selected as a target in the coin circle. The YOLO movement is a counter attack by retail investors on large funds, choosing a target that is difficult to value or even worthless, and crazily going long. DOGE is such a target, currently still in a state of weightlessness and excitement

With the skyrocketing trend of dog coins, new currencies related to animals such as dog poop coins, Akita dog coins, and pet coins have emerged one after another. Some netizens jokingly say, 'Dog coin roars at the sky dog, excrement coin excrement is really fragrant'.

Will dog coins continue to rise?

When it comes to the biggest difference between Dogcoin and Bitcoin, Shi Yi believes that it is "the difference between the number of issues and the purchasing group". Bitcoin, as its price has reached tens of thousands of yuan, directly limits its buyers to high-end groups such as Wall Street tycoons.

The Bitcoin white paper shows that it set a total of 21 million coins at the time of its issuance, and is expected to mine the last one in 2140 years. It also has a production halving mechanism, with production halved every four years. After 33 halving periods, the mining output of each block will reach 0.58 cong, less than the minimum unit of one cong. Therefore, some people believe that the soaring value of Bitcoin lies in its "scarcity".

However, dog coins, which have also experienced a surge, do not seem to be scarce. Musk positioned dog coins as "the currency of the people". According to regulations, there is no limit on the issuance of dog coins, with a total of 129 billion coins worldwide as of April. In the midst of a surge but still soaring, even the founder expressed confusion - in fact, this software engineer who had already resigned from IBM sold all his dog coins and bought a second-hand Honda Civic as early as 2015.

Wei Lan told AI Finance and Economics News Agency that, compared with this bull market, the price foam of dog coin will definitely burst one day. But this collapse should be temporary, not the complete destruction of DOGE. On the contrary, I believe that DODE, due to its characteristics, should surpass many cryptocurrencies. "Blue Blue further explained that this characteristic is" inherently useless, cheap, and completely decentralized.

He believes that in the next bull market, DOGE will still be active. Of course, participating in DOGE has no reference object, which is a bit silly and gambling, so it is important not to participate heavily

Zhou Zheng wants to advise investors that everything has its ups and downs, why do we have to dive into it when it's high? If you must invest, you must study hard and do your homework well, including the principles of Bitcoin, US regulation, etc., and invest within your own knowledge and risk tolerance. He takes Zhang Kun, who is popular on the internet, as an example. His fund products accumulate to make money, but the ikun group makes little or no money, precisely because most people buy them when their net worth is high.

It is worth mentioning that in recent years, whether it is limited edition Bitcoin, Ethereum centered on the peer-to-peer cryptocurrency platform DeFi, as well as dog coins and dog poop coins that come out of thin air, have become prohibited trading objects for major domestic banks. On May 7th, CITIC Bank announced the "blocking" of Bitcoin, prohibiting accounts from being used for Bitcoin transactions, and having the right to suspend and cancel related accounts upon discovery. Since 2014, 13 banks including China Merchants Bank, Huaxia Bank, China Construction Bank, Bank of China, and Everbright Bank have also issued similar announcements for a long time.

(Wang Ze, Zhou Zheng, and Shi Yi are all pseudonyms in the text)

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