If Dogecoin Is A Joke, Why Is Elon Musk Pumping This Meme Cryptocurrency?

Big Hit Entertainment, now HYBE is heavily investing in Artificial Intelligence and strategic collaborations disrupting the entertainment industry. Valuethemarkets.com, Digitonic Ltd are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above. While it’s always going to be tempting to buy something very cheap, on the chance it will turn into a 100-bagger, that’s a sure-fire way to lose your shirt. To sensibly invest in cryptocurrency, it seems sticking with the more widely recognised, such as Bitcoin and Ethereum, is the safest route to success. It’s too easy to get caught up in the excitement and energy of a community group, particularly when the promise of great riches appears to be in reach.

Who gets the money when you buy Bitcoin?

So most of your money go to the person that sells you bitcoins minus exchange fees (anywhere from 0.1% to 0.5%). It goes through the blockchain. For someone to have bitcoin that means he can sell and when you buy from him it goes to him.

In blockchains, data is arranged in ‘blocks’, and each new block contains a reference to the previous one, creating a chain. As a result, the process of generating new blocks gets more complicated as the chain gets longer. Predictably, cryptocurrency exchanges argue more regulation of the sector would “stifle” a “ground-breaking industry” – but regulation is surely what is needed to protect financially naive consumers.

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There exists an on-going debate as to whether Bitcoin is a currency or a commodity. In 2015 the US Commodity Futures Trading Commission cryptocurrency bitcoin officially designated Bitcoin as a commodity, yet Bitcoin doesn’t neatly fit into either category and instead may be a mix of both.

In which country bitcoin is legal?

Cryptocurrencies and exchanges are legal in Australia. In 2017, the government had specifically stated that Bitcoin should be treated as property, and was subject to capital gains tax. United Kingdom: The government of this country has a favourable stance towards Bitcoin.

This means Dogecoin transactions are timed quicker and being less popular than Bitcoin, it’s also cheaper to use. However, the big reason it can’t ever beat Bitcoin is because of its infinite supply. Bitcoin is a deflationary currency that can only ever have a maximum supply of 21 million bitcoins. But Dogecoin is an inflationary currency, which means more are being produced constantly and therefore it’s not rare. Cryptocurrency is much less regulated than equities so although the price volatility is insane, some people actually feel safer putting their money in a joke coin than in the public markets. Internet subcommunities in places like Reddit and Discord go a long way to pumping these crypto coins and then when celebrities jump in it adds fuel to the fire.

Bitcoin Cash

But it has been observed that the schedule of mining of the last Bitcoin is not to happen anytime before reaching the year 2140. This scarcity is the basis that drives the rise in the value of a currency, as can be observed in other valuable metals similar to gold. The approach used for the supply of bitcoin is diverse from that used for the supply of any other fiat currency in the market.

why is bitcoin valuable

In January, the total market cap of cryptocurrencies was more than $800bn. Now it stands at $200bn, a loss of three-quarters its original value, yet still people like my Facebook connection are risking their savings by investing in it. Furthermore, investment in gold ensures that you have wealth accumulated that is free of taxation, with a guaranteed legacy you can take forward with you.

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One can lose a Bitcoin-only if they lose their public or private key to their wallet. Still, Bitcoin is not going to be lost, and its existence will still be there in the records maintained on the Blockchain cryptocurrency news network. On the launch of Bitcoin in the year 2009, the developer of Bitcoin stipulated a cap in the protocol that the supply of this cryptocurrency will be limited to several 21million.

why is bitcoin valuable

For what started as a futuristic concept around 12 years ago has rapidly come a long way. Bitcoin and Ethereum own the lion’s share, but there are many more coins making waves in the crypto markets. Some of these will no doubt go the distance while the majority fall by the wayside. Some of the more popular cryptocurrencies include Bitcoin Cash, Bitcoin Gold, Ethereum, Litecoin, and Ripple. Bitcoin was the first cryptocurrency, it is the best known, the most widely held, and with about 60% of total cryptocurrency market cap 2, the most valuable. There are thousands of digital currencies in the marketplace, of which over 700 have a market capitalization exceeding $20 million, as of mid-March 2021. No person or agency is in charge of Bitcoin or in making sure that Bitcoin maintains its value, liquidity or works as a means of payment.

These delusional crystal ball wishes get picked up by the crypto Twitterati and shared far and wide. (Plus the equivalents of the Daily Mail and the Sun in crypto propaganda – it isn’t news). A major Tesla investor predicts the price to between $50,000 and $500,000 in the next five years. A former Goldman Sachs hedge fund manager – Raoul Pal – predicts a price of $1M within five years. And of course, a former Facebook executive couldn’t miss getting in on the hype-train with their prediction of $1M bitcoin price. If institutions can’t quickly move a few thousand bitcoin around without worrying about causing market movements, then what good is it?

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Although Bitcoin has yet to replace day-to-day currency, it’s slowly being adopted as an accepted form of payment for a wide range of goods and services. Although it’s still considered a niche payment method, it’s now possible to use Bitcoins to pay for almost anything grocery shopping, housing, subscription TV, restaurant bills, and even education why is bitcoin valuable through online seminars. The popularity of Bitcoin means today the market cap is sat at just over $254 billion, or 187 billion – which gives it a higher market cap than the British Pound. Over the next few years, Bitcoin would see steady, albeit slow, growth, eventually reaching a market cap of $1 million by 2010, valued at $0.50 BTC.

In the year to 9 December 2020, the US dollar value of Bitcoin – and therefore the quantity of goods that can be bought with Bitcoin – changed by an average of 2.22% per day. The price of Bitcoin has risen considerably in that time and advocates often argue that the cryptocurrency is a good store of value because its price will continue to rise over time.

why is bitcoin valuable

In effect, Bitcoin goes back to the roots of all money and commodities, worth only how much someone is willing to pay for it. The exchange of Bitcoins is essentially a bartering process between a seller and a buyer trying to find a common ground. The current dollar price of one Bitcoin is calculated by the average of these transactions across the various exchanges. Establishing value is a fairly difficult task when you are dealing with a cryptocurrency. Traditional currencies derive their value from being the only accepted legal tender currently circulating within an economy to engage in commerce in the UK, you need to deal in pounds sterling. Likewise, commodities are often based on their industrial value, or, in the case of gold, their properties and desirability. As we’ve already seen, its function as a currency is massively overstated, and is rudimentary at best.

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Today’s markets for trading bitcoin are so disorganised and dysfunctional that they are primarily used to arbitrage against each other by and for speculators. Bitcoin may be lacking fundamental characteristics of a Ponzi scheme, but there are plenty of similarities. The endless pumping of bitcoin on Twitter and all manner of other social media is much the same as those operating in a Ponzi scheme.

Musk wasn’t the only big player to join the “Doge Army”, rapper Snoop Dog and Kiss frontman Gene Simmons jumped in too. As there can be seen the availability of generation of more and more bitcoins, this has encouraged the mining community. It is anticipated that these can keep on changing as the limit of 21 million will be approaching.

  • The upcominggovernment media code demands that Facebook and Google agree direct fees with news producers, or instead accept a price decided from an official arbitrator.
  • Sometimes they’ll include recommendations for other related newsletters or services we offer.
  • It delivered him plenty of headlines and press which, in terms of earned media value ROI, is pretty good if he didn’t achieve anything else.
  • People can send Bitcoins to your digital wallet, and you can send Bitcoins to other people.
  • Some 47 per cent of people surveyed by the Financial Conduct Authority in a report published in July said they had never used cryptocurrency for anything, with £260 bought on average largely ‘as a gamble that could make or lose money’.
  • potify revealed that the amount of people listening to podcasts has soared by 1,5000pc in three years and expects the trend to continue upward.

The steep climb in the price since mid-October means the cryptocurrency has risen 87 per cent in value earlier this week compared to last year, with the total value of the 18.5million coins in circulation now $243billion. Of course, our lives will inevitably become ever-more fuelled by technology, particularly our financial lives. As such, cryptocurrencies such as Bitcoin, as well as other FinTech solutions, will play an ever more prominent role. Moreover, global https://leecow.com/a-basic-guide-to-cryptocurrency/ client interest in Bitcoin and other digital currencies has soared over the past month alone. There has been a 25% month-on-month rise in enquiries for deVere’s crypto exchange app, deVere Crypto. This is mainly down to the fact that the coronavirus crisis has led to a collective focusing of minds on the need to adapt and become accustomed to a so-called new normal. The coronavirus pandemic has dramatically accelerated the demand and need for digital currencies.

You have a better chance of using goats as a means of payment in a Starbucks than you do using Bitcoin. For most people, Bitcoin is valuable because they can trade it for normal currency which they can actually use, and if this ability was suddenly removed, Bitcoin’s value would evaporate overnight. The rise Bitcoin of Bitcoin’s value can only really be attributed to the techno-mysticism that Krugman talks about; we don’t understand it, but we’re told that it’s innovative and that it can only go up. It’s essentially just hype – collective excitement that outpaces people’s understanding of what’s actually going on.