April 20, 2021: Every $DOGE Has Its Day
Why Dogecoin dominance is both laughable and plausible
Curve has launched on Polygon! We’ll discuss this tomorrow. For today, we roll with our kaffeeklatsch about $DOGE that we’d already prepared for the special day.
Holy Daze
I have to confess, our family did not celebrate the 4/20 holiday growing up. Perhaps your family assembled around the proverbial tree to recite from the My Morning Jacket hymnal and take turns hiding each other’s soap. In our family it passed unmentioned each year.
It seems, though, 4/20 is a holiday that’s gained universal acceptance in the intervening years. Perhaps it happened sometime around when dispensaries moved from “illegal” to “essential" in the eyes of the government. I’m not hip enough to comment on any cultural trends.
Within cryptocurrency as well, no team has embraced this high holiday tighter than the active $DOGE community. For a while, I’d felt I could safely ignore both.
Although I’ve been in cryptocurrency for over half of its existence and ended up with at least dustbags worth of most altcoins, I’d always steered clear of Dogecoin. I could talk myself into holding a trace amount of, say, Cardano… just in case! Yet somehow Doge is where I put up an invisible fence. I knew enough to confidently declare it worthless.
How High?
My mental model on this subject has now been proven wrong multiple times over. As $DOGE continues rising, now the fifth largest coin, I’d just scoffed. I’d reinvent elaborate reasons why I’m right and why the market is irrational.
Recently I looked at myself in the mirror… ZOMG, have I become a nocoiner?!? I’m donning the hideous visage of a Nassim Taleb or a Peter Schiff - witnessing reality with my own eyes and forswearing its very existence.
This past week I caved and picked up a small bag of $DOGE. Partly because I didn’t want to miss out on any spectacular #Doge420 boom or bust (or most likely, anticlimax).
But more importantly, when I step back and consider it rationally, I can see a straight line path towards it becoming the universal currency. I mean this quite literally — it objectively seems more straightforward to get universal Dogecoin acceptance than universal Bitcoin acceptance.
Today, if the world’s richest entrepreneurs want to sell some shake to each other, how would they do it?
Musk and Cuban can’t agree on Bitcoin or Ethereum. Their common language is $DOGE. A functional payment rails between the richest people on the planet has to be worth something, right?
When I’ve had conversations with “normies” over the past several months about cryptocurrency — specifically among people my age or younger, a very clear trend has emerged.
Nobody bought Bitcoin — too expensive, too late…
Few held Ethereum… too complicated.
Yet five separate people confessed to owning a little Dogecoin and enjoying its recent rally. There appears to be a generational effect at play, and I’m on the wrong side of it.
Into the Weeds
Subtract out the Etherea — EVM-like systems building a supercomputer, and what are the use cases of the non-smart contract cryptocurrencies that remain? Largely it’s just speculation about its capability as a store of value, medium of transfer, etc. Is there any particular argument that Bitcoin is clearly superior to Dogecoin in this regard?
Functionally, Bitcoin and Doge are almost the exact same technology (Dogecoin forked from Litecoin, itself a fork of Bitcoin). Both have a predictable supply. Yet only one would be useful if I need to transact with both Zoomers and billionaires. Only one is presently useful for micro-transactions without some Lightning Network garbage.
One is coated of a decade of FUD about money laundering, black markets, terrorism, et al. The other is cute and fun and embraces memes.
If somebody wired a terror cell several million worth of Dogecoin, the federal prosecutors would probably be too busy laughing to press charges. All the same, please, please, please don’t try this experiment at home, kids.
A generational split is already clear within the cryptocurrency space. Is your profile picture laser eyes, or a couch? Millenials remember life without the internet, while Zoomers only know YouTube. Dogecoin is a currency perfectly compatible for a generation that communicates exclusively by meme.
Bitcoiners tried in vain to convince the Wall Street Bets crowd to join forces after Gamestop. Yet the WSB community largely snubbed BTC for $Doge. WSB is a generational phenomenon, one willing to move vast fortunes to stick it to the establishment just for the lul’z. To this generation, I could see where BTC looks more like the establishment than the rebellion.
Paranoia
It feels so nice and cozy owning bitcoin. It’s created a useful mental model I can embrace because it’s continued proving itself right so many times over the years. But it’s also just as important to continuously test your own assumptions. While Bitcoin feels so safe and secure, it’s objectively quite precarious.
As it turns out, it’s relatively easy to overthrow the world economy. It only took Bitcoin a decade to eat the world, and doing so using technology that feels downright clunky today. If Bitcoin proved it’s trivial to upend the global financial system, then Bitcoin’s proven its time at the top will itself be short-lived. Per the Lindy Effect, it’s necessarily finite, not infinite. What’s next? Why not $DOGE?
All this being said, I still think it’s more likely we see $ETH or even $CRV flippen $BTC before $DOGE does. And while I see a path for $DOGE becoming the predominant currency, it’s more something I can rationalize away than expect.
Until there’s a Curve pool for Dogecoin, I won’t consider it a real currency. This doesn’t appear to be in the roadmap per the governance forum. If I lived in freer jurisdictions it looks like I could get 5% interest on Binance, but otherwise the DeFi offerings around Dogecoin remain fairly primitive.
Nonetheless, we don’t live in a world where we can comfortably rest on our laurels. If you’re not actively investing to stay ahead of the next trends, you're at risk of seeing your fortune vanish in, well, a puff of smoke.
For more info, check our live market data at https://curvemarketcap.com/ or our subscribe to our daily newsletter at https://curve.substack.com/. Nothing in our newsletter can be construed as financial advice. Author is a Curve maximalist, also owns some BTC, ETH, ADA, and now DOGE.