Over the last year, cryptocurrencies have gained a lot of attention. They’ve created millionaires, and more and more companies are accepting them as a form of payment. Mark Cuban said they would accept Dogecoin as payment for tickets and merchandise sales and have sold more the 122k Doge in merchandise.
With over 9000 different cryptocurrencies currently in circulation and anyone has the ability to create their own cryptocurrency, it’s really going to come down to adoptability. Which cryptocurrencies are people going to accept more than others?
A concept in marketing called the Diffusion of Innovation shows what it takes for something to go from being a novel idea to being accepted as normal.
As of April 21st, only about 14% of people in the United States own cryptocurrency, so we’re still in the early adopters’ stage. In terms of fiat currencies circulating in the world, it was valued at $36.8 trillion. And cryptocurrencies as a whole are valued at $2.226 trillion, so there is a lot of room to grow. What helps cryptocurrencies like bitcoin stay around since 2008 is that no one has been able to hack the system to create more cryptocurrencies or falsify a transaction with its blockchain ledger. Back in 2013, Billy Markus and Jackson Palmer created Dogecoin as a joke. They used the open-source software for Litecoin to create their own cryptocurrency and placed a Shiba Inu dog as the mascot. There is no cap on the number of digital coins created with Dogecoin, unlike Bitcoin, which is capped at 21 million coins. What has helped Dogecoin stay on top of mind when choosing to invest in a cryptocurrency is that it has had a following on Reddit. Then on Dec 20th, 2020, the self-proclaimed Dogefather himself, Elon Musk, first tweeted about Dogecoin. |
This one tweet caused the price of Dogecoin to increase by 20% in one day.
History is filled with things that started as a joke, then became real. Back in 1811, after Napoleon defeated the Netherlands, he forced the Dutch to get surnames so it would be easier to draft them into his armies and tax them. The Dutch didn’t think this would stick around, so they adopted silly surnames like the following:
- Borst (breast)
- Naaktgeboren (Born naked)
- Poepjes (Little shit)
- Piest (to urinate)
- Rotmensen (Rotten people)
- Suikerbuik (Sugarbelly)
- Spring in ‘t Veld (Jump in the Field)
- Schooier (Beggar)
- Scheefnek (Crooked-neck)
- Uiekruier (Onion-crier)
- Uittenbroek (out of his pants)
- Zeldenthuis (Rarely at home)
- Zondervan (without a surname)
- De Groot (The Great, The Large One)
- Den Beste (The Best)
- Paardebek (Horses mouth)
- Zonderkop (without a head)
- Vroegindeweij (early in the field)
- Uyttewiliigen (out of the willows)
- Kaasenbrood (Cheese and bread)
Today these are common last names that you can find in the Netherlands. When something sticks around for long enough and enough people participate, it becomes standard and fully adopted.
Is Dogecoin going to be around 10, 20, 50, or 100 years from now? I have no clue, and only time will reveal the truth.
In a recent podcast episode, James Altucher talked about cryptocurrencies and compared computer stocks in the 1980s. Suppose you would have put $1000 into 100 different companies. Ninety-five companies would have gone bankrupt, but the remaining five companies would be worth $4 million today. But if we look at the rate of return over 40 years, this would only be 9.66%. Investing in the S&P 500 would have generated an 8.74% return or 11.83% if we include dividends.
Not sure what the future will hold for Dogecoin and cryptocurrencies in general, but whatever choice you make, make sure you know the deal before you accept the deal.
*Please do your own research before you make any changes with your financial portfolio or consult a professional like myself*
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