Anticipating some comments about how this is fine and market value is whatever people decide it is.
Is that really the world you want to live in?
Think about the other side of the coin: if the market is undervaluing something truly important in the long term like fighting climate change, do we really want to throw our hands up and say “them’s the rules, let the market be”?
"Investing" in Dogecoin is gambling, and I don't have a fundamental problem with legal gambling, so... I'm not sure what "we" are supposed to do about this.
As far as the market value, it's obviously nonsense because once a substantial number of people started to convert back to fiat, there would probably be a panic and the price would plummet.
I don't think they'll happen unless a government adopts one and there's no incentive for that.
Most developed nations treat them like a security (investment) which makes them useless for daily transactions. You're supposed to track capital gains and losses. Throw in something the the wash rule the US has and you can see how it becomes impossible to use them as a currency without getting into tax trouble.
Heck, I think the IRS even expects people to declare gains when they mine a coin. I'm not American though, so I've never really looked into it. I don't have any crypto either, so...
While I don't disagree with your statement, I feel the need to nitpick (because I see it said often these days). Speculative investment is fundamentally very different from gambling. In gambling, you know the real odds of the game, you know the payout odds of the game, you can deduce on average how often you'll win/lose, and more importantly, you pay and lose your payment for every turn of the game. With speculative investing these dynamics do not exist. It is risk taking in the same way that gambling is, but aside the fact that they're both risk taking, speculative investing is in no way like gambling.
Your second paragraph basically distils down supply and demand, aggregate risk appetite in a market, and market cycles.
Like should we be going out and voting for people who aren't incompetent leaders? That's not an option because by and large the people who want to be elected are puppets or sociopath. What do you suggest?
It's the other way around, Doge being worth more than Ford and Twitter is just the billionth datapoint which tells you this is the world we live in.
If you somehow managed to miss all the others, this one is your opportunity to surrender to this fact. You got to take your opinion, blindfold it, load it in a truck and put a couple of bullets in the back of its head.
Accept that your opinion is worth nothing it and start betting on people's opinions.
There's plenty of things I don't like about the world I live in, but this particular one requires a bit of perspective.
The way market cap is calculated can be misleading. It takes the price of the last sale and multiplies it by every object. There's no reason to think that the second one would sell for the same amount, especially for an object with artificial scarcity like a cryptocurrency. (It's true for a company as well, but to a far lesser degree.)
That's not to say that this isn't really dumb. Cryptocurrencies aren't even really artificially scarce: the whole joke of Dogecoin is that you can just make them up on the spot as a gag. The fact that a ton of energy is being wasted on all of this makes the joke rather unfunny.
As for what to do about it... I'd rather not throw my hands up about it, but I will say that it's not simple to fix.
Who decides what is "important"? Who decides what is "over/undervalued"? What do you recommend, a new government agency to ensure that all people investing are investing in "properly" valued securities/coins/etc.? You say the coin is overvalued, however the average person obviously disagrees - this is the point and purpose of a free market. Supply and demand.
If you don't want to invest in something, don't. You shouldn't (and likely don't want) some other person or entity deciding what is best for you/family, so perhaps we should stop freaking out about things and/or telling other people how to live/spend/etc...
Also, what does climate change have to do with any of this? Attempting to use climate change, or the latest hot topic from FB, Twitter, etc. to then try to change everyone else's opinion (like you solved the puzzle of life, and not simply stumbled on something that is trending) is tiring and a bit ridiculous. NOTHING in life is this simple, including the market. I would say the markets are heavily pinned to sentiment, or more simply put how the majority of people feel about it.
Absolutely, "let the market be", and this is the choice people are making when they invest in something. People usually don't invest in X and say "okay, now rewrite the rules of the world for me because I think X is not the best place for money. I don't care about anyone else, people who invested in X need to immediately re-prioritize because I feel Y is more important than X and everyone else needs to think the same as well" Isn't this fascism? Is this really the world we want to live in?
You make your opinion on the market "heard" by taking part (investing) or not taking part (not investing), it's literally that simple.
If you want to invest in climate change, go for it - no one is saying not to, but on the flip side, you are inferring that everyone should NOT invest in DOGE so more money can go to climate change? I don't quite understand what the point here is.
> Who decides what is "important"? Who decides what is "over/undervalued"? What do you recommend, a new government agency to ensure that all people investing are investing in "properly" valued securities/coins/etc.? You say the coin is overvalued, however the average person obviously disagrees - this is the point and purpose of a free market. Supply and demand.
You can't live in a Tulip. Lol.
I don't think it's a huge stretch to say that a company that makes cars is worth more than a company that wastes electricity and compute resources.
And what's doubly ironic is that it's arguably more useful as actual currency than more serious efforts like Bitcoin, given the faster transactions, bigger money supply, and lack of a hard cap (meaning said money supply can continue to grow indefinitely, giving it some chance of keeping up with global economic growth).
Still not perfect, though; proof-of-work seems like a dead end to me for a globally-useful currency, given the high energy costs (scrypt might help here, but IMO it's just postponing the inevitable). Proof-of-stake (or something else not dependent on burning so much energy on solving math problems over and over again ad infinitum) seems like the next step.
Proof of stake is the dead end. You do not want large holding players to controlling the emission of a coin. They will corrupt it. The only way is fair emission by public mining. It is a good thing that energy is used over and over again. One should not be able to leverage their holdings to control the future of the coin.
You own the timevalue from an UTXO create date until now, the future timevalue is owned by others when you move it.
Proof of work is the only thing that works -- in this case DOGE is merge-mined with LTC (using the scrypt algorithm). With doge at these prices, it is twice as profitable to mine LTC as it was last week, so consequently many more miners will switch to Scrypt. DOGE is 'free', in that the energy has already been spent mining the LTC. Doge is a good thing.
> Proof of stake is the dead end. You do not want large holding players to controlling the emission of a coin. They will corrupt it.
This depends on anyone actually having anywhere close to a majority stake in the coin, no? My impression was that various PoS coins largely avoid this some way or another (e.g. Cardano, which will actively avoid "oversaturated" stake pools when deciding which one should create the next block).
He splashed 1.5 billion on BTC - thats hardly modest. Perhaps he holds a small amount of doge but i bet he didnt just risk it blindly on btc. And since crypto is rather unregulated i wouldnt be surprised if he manipulated things a bit to his advantage. Anyways just speculation on my part.
He didn't, Tesla did. They added bitcoin to their asset holdings and it is on their balance sheet. Sure, he has significant control of the financial decisions within the company, but it is a publicly held company and it has a CFO that has to sign on to decisions like this based on what's good for Tesla, not based on what's good for Elon.
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[ 2.6 ms ] story [ 23.7 ms ] threadIs that really the world you want to live in?
Think about the other side of the coin: if the market is undervaluing something truly important in the long term like fighting climate change, do we really want to throw our hands up and say “them’s the rules, let the market be”?
As far as the market value, it's obviously nonsense because once a substantial number of people started to convert back to fiat, there would probably be a panic and the price would plummet.
Most developed nations treat them like a security (investment) which makes them useless for daily transactions. You're supposed to track capital gains and losses. Throw in something the the wash rule the US has and you can see how it becomes impossible to use them as a currency without getting into tax trouble.
Heck, I think the IRS even expects people to declare gains when they mine a coin. I'm not American though, so I've never really looked into it. I don't have any crypto either, so...
I still don't think any will see widespread use anytime soon.
For now, they're (maybe) useful ways to translate to/from USD jn failed economies.
Your second paragraph basically distils down supply and demand, aggregate risk appetite in a market, and market cycles.
It's the other way around, Doge being worth more than Ford and Twitter is just the billionth datapoint which tells you this is the world we live in.
If you somehow managed to miss all the others, this one is your opportunity to surrender to this fact. You got to take your opinion, blindfold it, load it in a truck and put a couple of bullets in the back of its head.
Accept that your opinion is worth nothing it and start betting on people's opinions.
That's how you make money
The way market cap is calculated can be misleading. It takes the price of the last sale and multiplies it by every object. There's no reason to think that the second one would sell for the same amount, especially for an object with artificial scarcity like a cryptocurrency. (It's true for a company as well, but to a far lesser degree.)
That's not to say that this isn't really dumb. Cryptocurrencies aren't even really artificially scarce: the whole joke of Dogecoin is that you can just make them up on the spot as a gag. The fact that a ton of energy is being wasted on all of this makes the joke rather unfunny.
As for what to do about it... I'd rather not throw my hands up about it, but I will say that it's not simple to fix.
It had so little mining at one point that to save it they had to make its mining compatible with LTC so they can take advantage of the hashrate there.
If you don't want to invest in something, don't. You shouldn't (and likely don't want) some other person or entity deciding what is best for you/family, so perhaps we should stop freaking out about things and/or telling other people how to live/spend/etc...
Also, what does climate change have to do with any of this? Attempting to use climate change, or the latest hot topic from FB, Twitter, etc. to then try to change everyone else's opinion (like you solved the puzzle of life, and not simply stumbled on something that is trending) is tiring and a bit ridiculous. NOTHING in life is this simple, including the market. I would say the markets are heavily pinned to sentiment, or more simply put how the majority of people feel about it.
Absolutely, "let the market be", and this is the choice people are making when they invest in something. People usually don't invest in X and say "okay, now rewrite the rules of the world for me because I think X is not the best place for money. I don't care about anyone else, people who invested in X need to immediately re-prioritize because I feel Y is more important than X and everyone else needs to think the same as well" Isn't this fascism? Is this really the world we want to live in?
You make your opinion on the market "heard" by taking part (investing) or not taking part (not investing), it's literally that simple.
If you want to invest in climate change, go for it - no one is saying not to, but on the flip side, you are inferring that everyone should NOT invest in DOGE so more money can go to climate change? I don't quite understand what the point here is.
You can't live in a Tulip. Lol.
I don't think it's a huge stretch to say that a company that makes cars is worth more than a company that wastes electricity and compute resources.
Still not perfect, though; proof-of-work seems like a dead end to me for a globally-useful currency, given the high energy costs (scrypt might help here, but IMO it's just postponing the inevitable). Proof-of-stake (or something else not dependent on burning so much energy on solving math problems over and over again ad infinitum) seems like the next step.
Proof of work is the only thing that works -- in this case DOGE is merge-mined with LTC (using the scrypt algorithm). With doge at these prices, it is twice as profitable to mine LTC as it was last week, so consequently many more miners will switch to Scrypt. DOGE is 'free', in that the energy has already been spent mining the LTC. Doge is a good thing.
This depends on anyone actually having anywhere close to a majority stake in the coin, no? My impression was that various PoS coins largely avoid this some way or another (e.g. Cardano, which will actively avoid "oversaturated" stake pools when deciding which one should create the next block).
Maybe a lot of people will read the news and see Dodgecoin as a great deal.
In this order.
Some will get hurt while he’ll earn tons of FIAT.
Similar to how he memes without direct profit all the time and how he is mining at loss just as a fun home project.