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Mark Cuban's Theory of Doge
Over the past week, Dogecoin got philosophical.
Mark Cuban, Dogecoin’s other Texas-based billionaire booster, took to Twitter to theorize about what makes Doge tick.
Meanwhile, The Dogecoin Foundation announced its comeback by unveiling a team of crypto heavyweights and releasing its Dogecoin Manifesto.
Let’s zoom out and take a 42,069 foot view of Dogecoin.
Mark Cuban's Theory of Doge
Last Thursday, Dallas Mavericks owner Mark Cuban announced that the Mavericks planned to give a discount to buyers who paid in Doge.
On Friday, Cuban's Doge advocacy intensified when CNBC published an article quoting him saying that Doge has the best use case among cryptos to be a medium of exchange, a claim that received Elon's endorsement.
Then, over the weekend, Cuban leapt into Twitter's discursive war zone to defend his claim against skeptics.
Taken collectively, Cuban's tweets constitute a theory of how Dogecoin can succeed as a global medium of exchange.
1. Spend or HODL
For most of its existence, cryptocurrency has remained a niche pursuit because the technology and economic theory behind it are complicated.
Doge doesn't require people to grasp the nuances of blockchain cryptography or Austrian economics. It simply digitizes the US dollar and rebrands it with Shiba Inu meme.
To use Doge, people need only grasp the concepts of spending and saving.
The existing fiat system already requires people to spend and save. Even if they've never dabbled in crypto before, most people already have the requisite experience for using Dogecoin.
Doge functions as a kind of crypto-on-training-wheels for the masses. There is immense power in its simplicity.
2. Community First
Most successful cryptocurrencies survive because they bring some new technological innovation to the table
From a technical perspective, Doge offers little that is new. Doge is a essentially a fork of Litecoin, itself a fork of Bitcoin.
Doge's innovation is its community, which stands out among cryptocurrencies for being fun, laid-back, and inclusive.
To succeed as a global medium of exchange, Doge will have to attract more people. While other cryptos may see communal bonding as an afterthought, it is essential for Doge to thrive.
The main way the Doge community speaks to itself is through memes, a communication technology as old as humanity itself.
If primitive man were brought to the present, there is little doubt about which crypto community he would join.
Doge's #DoOnlyGoodEveryday ethos and meme-inspired esprit de corps ensures that new Dogecoiners will have a positive experience from the jump.
3. The People's Champ
Bitcoin is the original cryptocurrency, which gives it a "first-mover" advantage over competitors as a digital store of value.
Similarly, Doge is out to an early lead as the top payments crypto.
When the Mavericks' online store started accepting crypto, 95% of its crypto sales were in Doge.
Part of the beauty of crypto is its freedom.
People, not governments or banks, get to decide what kind of money they use. No one can force individuals to use one crypto instead of another.
When enough people collectively decide to transact in Doge, businesses will face the choice to either join the Doge economy or get left behind.
Maxis can argue all they want about the technical merits of their preferred crypto. As long as Doge is the People's Champ, it will continue to be a force to be reckoned with.
A common criticism of Dogecoin is that it has an "infinite supply" because 5 billion new coins are minted each year, leading to concerns about inflation.
This criticism lacks nuance. Dogecoin's tokenomics follow a soft deflationary model that makes it perfect for transactions.
As the total number of existing coins increases over time, newly minted coins represent a progressively smaller share of total coins.
In other words, while the number of Dogecoins will keep increasing, Dogecoin's rate of inflation decreases every year.
As adoption grows, the market should easily soak up five billion new coins each year.
Dogecoin's predetermined, transparent model gives it an advantage over its competitors.
There is no limit to the number of dollars that can be printed. It depends entirely on the whims of politicians and central banks.
Bitcoin's supply, meanwhile, has a hard cap: there will only ever be 21 million Bitcoin, which makes it "deflationary to a fault."
According to Cuban, Bitcoin's hard cap gives early adopters and large holders a disproportionate level of control, allowing them to replicate some of the manipulations of the existing fiat system.
Bitcoin's extreme scarcity also incentivizes saving, potentially to the point of hoarding. There is no reason to spend Bitcoins if it's so rare.
The annual addition of new Dogecoins encourages spending and makes up for lost coins.
As is often the case with Doge, what first looks like a weakness turns out to be a strength.
5. Free the Doge
The final piece of the puzzle for Dogecoin is access: people need to be able to buy and spend Doge easily.
Robinhood offers a relatively straightforward way to buy Doge, but users aren't yet able to move it off the platform.
Even with Robinhood coins locked away, there is a hoard of #DogeArmy soldiers champing at the bit to use their coins.
Small businesses have been meeting some of this demand by accepting Doge for payments. Payment processors like BitPay and Coinbase Commerce are also bridging the gap.
Still, Dogecoin is waiting for a major corporate champion. Tesla and AMC are leading contenders. Who will bite first?
No one knows when the first corporate domino will fall, but the results are sure to be explosive.
Much Foundation, Such Manifesto
On Monday, The Dogecoin Foundation announced it was making a comeback.
The non-profit foundation was founded in 2014, but has fell inactive until recently.
Its current mission is to provide support for Dogecoin's Core Developers so they can work full-time on the project.
It's also looking to help grassroots projects that use Dogecoin and defend the Dogecoin trademark from fraud and abuse.
The foundation is planning to open its headquarters in Liechtenstein, a small, crypto-friendly European country.
As part of its announcement, the foundation's board released a manifesto stating its core values.
In May, Elon tweeted he was working with Dogecoin's developers to improve transaction efficiency.
Three months later, Dogecoin's development team looks like a powerhouse with an increasingly secure future.
The foundation isn't playing around. It also boasts an all-star cast of advisors, including Elon associate Jared Birchall and Ethereum founder Vitalik Buterin.
The cryptoverse is filled with hype and noise, but the Dogecoin Foundation's re-emergence is pure signal that Doge isn't going anywhere.
Big Doge Theory
Doge is a multi-faceted community effort to reinvent the world's money that is both simple and profound.
With passionate supporters, logical tokenomics, and killer memes, things continue to line up beautifully for the digital dog dollar.
The Dogecoin Foundation's re-emergence is a sign that Doge is prepping for the long haul by supporting its developers and other grassroots projects.
Finally, Mark Cuban's continued support is another major piece of the dog-money puzzle as Dogecoin gains legitimacy across the world.
As long as its community keeps thinking big, Dogecoin looks unstoppable.
Dogey Treats: News Bites
Robinhood's Q2 earnings report showed that Dogecoin accounted for 62% of its crypto revenue, up from 34% in Q1. CEO Vlad Tenev said there are plans to offer interest on crypto, but did not give specific details on when wallets will be released.
Tesla revealed the Dojo supercomputer at its AI day. Earlier this year, Elon tweeted "Dojo for Doge."
Watford FC of the Premier League has added a Dogecoin to their jerseys.
Bots, Inc. is a blockchain company that is facilitating sales of used Teslas payable in Dogecoin.
A Dogecoin pop-up event is taking place in NYC's Central Park in September.
Walmart is hiring a digital currency lead, leading to speculation they will accept Dogecoin.
United Wholesale Mortgage, the second largest mortgage lender in the US, is planning to accept Bitcoin and other cryptocurrencies by the end of the year.
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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. 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.
Disclosure: I currently own some Dogecoin, Bitcoin, and Ethereum. At the time of publication, Dogecoin is around $0.32 per coin.