Dogecoin 2021 Revisited
THIS is How Elon's Vision is Becoming Reality
In 2021, Elon Musk unleashed a one-of-a-kind tweet-storm in which he painted his vision for Dogecoin becoming the future currency of Earth.
Since then, Dogecoin has made amazing progress, evolving from a frisky upstart to a dangerous contender in the dog-eat-dog world of currencies.
As we come up on the three years anniversary of Elon’s tweets, let’s take a look at how Dogecoin has progressed towards realizing his vision, and where it still has room to grow.
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In May 2021, Elon tweeted that he was working with Dogecoin developers to improve transaction efficiency.
Two days later, he specified his vision to make Dogecoin faster and cheaper, writing, “Ideally, Doge speeds up block time 10X, increases block size 10X & drops fee 100X. Then it wins hands down.”
In August 2021, Doge devs released their Dogecoin Core 1.14.4 update, which lowered fees by a factor of 100.
A year later, devs released another update, Dogecoin Core 1.14.6, which further reduced fees and increased network security.
As a result of the upgrades, transacting with Dogecoin typically costs a tiny fraction of a Doge, or much less than a penny.
As for Elon’s other two criteria, block size and block time remain the same as they were two years ago.
Doge is still one of the fastest cryptocurrencies and, unlike Bitcoin, it hasn’t suffered transaction backlogs due to insufficient block size.
These changes may become urgent when Doge gets really big, but for now they don’t appear imminent.
In February 2021, Elon identified a major barrier to Dogecoin becoming the Internet’s currency: a few entities controlled too much Dogecoin.
In crypto slang, we call these holders “whales.” They are notable because they have the ability to dictate price movements.
To solve the issue of concentration, Elon issued an ultimatum to whales: sell most of your coins, or he would consider creating his own coin.
He added that he would pay whales to get rid of their coins.
At the time, Dogecoin was worth six cents, with a market cap hovering around $10B. If Elon wanted to buy all the Dogecoin in the world, he could’ve done so without taking a big hit to his net worth, if any at all.
So why did he give whales an ultimatum?
Most likely, he wanted whales out of the market so they couldn’t use their holdings to manipulate price.
If ownership of Dogecoin is decentralized—with large numbers of small retail holders each owning a tiny share of the network—than any one entity can’t create price volatility.
Price stability is an important feature of any currency: people don’t want their cash to be volatile. This is the reason many Argentine citizens keep their wealth in dollars rather than pesos.
Interestingly, none of the anonymous Dogecoin whales ever responded to Elon’s post, at least in public. To this day, it remains an open question who Elon was even talking about.
It’s also a mystery whether the whales ever actually divested themselves of their Doge, or if Elon ever paid any whales to void their coins. Elon hasn’t spoken on the matter since his posts, but of course he has continued to support Dogecoin.
There are a few methods for determining the current concentration of Dogecoin, but they’re not perfect.
One service tracks the concentration of top Dogecoin wallets. In February 2021, wallet who owned 10 million or more Dogecoin controlled 28% of the supply. Today, they hold 23%. By this metric Dogecoin ownership has become slight more diluted.
Complicating this picture is that some of the top wallets are owned by exchanges, which can in fact represent the holdings of many small retail investors rather than individual whales.
It’s also possible for a single entity to distribute their Dogecoins across several small wallets, making it appear as if ownership is more decentralized than it actually is.
In the end, its hard to know exactly how Elon is measuring the concentration of Dogecoin.
Maybe he has some AI-powered tool for measuring true concentration that he isn’t telling us about.
Or maybe he has a specific Wall Street whale in mind he wanted to boot out of the Doge game. Of course, all this is speculation.
What do you think: will Elon address the issue of concentration again?
III. One coin to rule them all
Perhaps the most intriguing of Elon’s 2021 Dogecoin tweets was a Lord of the Rings meme likening the ring to Bitcoin, while casting Frodo as “the underdoge.”
In a follow-up tweet to the meme, he wrote, “Doge is underestimated,” suggesting that, like Frodo, Dogecoin might one day meet its unlikely destiny and turn the world upside down.
The meme captures something factually true about crypto: the entire market take cues from Bitcoin. If orange coin rises, so does everything else. If it goes down, other cryptos go down even more. It has always been this way.
But Elon’s comment hinted that it might not always be so, opening the possibility that Dogecoin might one day break free from the power of Bitcoin, as Frodo relinquished the ring.
The crypto kingdom is still under Bitcoin’s sway for now. But if Doge ever breaks free from Bitcoin’s leash—look out!
IV. Doge stays fun
Most of crypto talk on social media focuses on two things: price movement and news.
When number goes up, these are fun topics. But when things turn negative, there aren’t many reasons to pay attention to the cryptoverse.
Dogecoin is the exception. In a February 2021 tweet, Elon declared Doge is “the most fun crypto!”
In another post, he was asked why he chose Doge over other cryptocurrencies. He explained, “Doge has dogs & memes,” he explained, “whereas the others do not.”
Dogecoin’s memes are more than just an ornament: they function as a shield against doubt, fear, and other crypto uncertainty.
This superpower was captured in a March 2021 Elon meme post where he depicted Doge’s “meme shield” as a protective talisman against negativity.
So long as the memes are flowing in the Doge community, people will have a reason to stick around, no matter which direction price is moving.
More than anything else, Dogecoin has fulfilled this part of Elon’s vision. Today, despite suffering a precipitous 90% price drop from May 2021 all time highs, optimism is as strong as ever among the DogeArmy.
Dogecoin’s fun is its function. If history is a guide, that won’t change anytime soon.
Dogey Treats: News Bites
Fabrice Calmels and MyDoge’s Alex Lewis published a video podcast going deep on all things Dogecoin.
Geometric Energy Corps announced a series of interviews with CEO Samuel Reid in the leadup to the DOGE-1 lunar satellite launch.
Coinbase is spearheading a consortium of crypto companies donating $78M to pro-innovation US political candidates in 2024.
Read why the economics of the Optimus robot could make Tesla the most valuable company ever.
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Disclaimer: This is not financial advice and I am not a financial advisor. The article above references an opinion for entertainment purposes only and it is not investment advice. Always assume that the author of the article is actively trading and that the opinions expressed may be biased towards the author’s holdings. Do your own research and consult with a licensed financial adviser before making any investment decision. Do not treat any opinion expressed in this newsletter as a specific inducement to make a particular investment. Content, news, research, tools, and securities symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or cryptocurrency or to engage in any particular investment strategy. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, are not guaranteed for accuracy or completeness, do not reflect actual investment results and are not guarantees of future results. All investments involve risk, losses may exceed the principal invested, and the past performance of a security, industry, sector, market, cryptocurrency, or financial product does not guarantee future results or returns. Dogecoin is a speculative and highly volatile asset susceptible to pump-and-dump schemes.
At the time of publication, Dogecoin is around $0.09 per coin.