Dogecoin’s rapid growth compared to the Ponzi scheme; other ‘big lies’ like Bernie Madoff?
Dogecoin – On April 14, 2021, Bernie Madoff, the mastermind of the largest Ponzi scheme in human history, died at 82 in an American prison while serving a 150-year prison sentence. He was accused “not only of bloodless crimes committed in the paper but of large numbers,” according to a U.S. Regional Judge who gave him maximum time in prison by state prosecutors who requested it.
Surprisingly, at the same time, in a different part of the same continent, a strange robber was launched at Dogecoin, a money-based digital meme-based financial expert and analyst worldwide.
A short background, however, in Madoff’s Ponzi scheme requires attention. The “big lie” is the way Madoff himself described the corporate asset’s handling arm a day before government prosecutors arrested him. Pretending to be trading security, using his “unique” strategy of choosing a winning bet, Madoff promised his investors a firm return on their investment. Investors have received regular returns for a surprisingly long time. However, the refund was not received.
They were lying. Older investors are paid for investments made by new investors. This arrangement will only continue until new investors grow faster to cover the growing financial costs. The ingenuity in Madoff was his ability to make a fake return on all recession in the 1990s, the 1998 financial crisis, and September 2001. The financial crisis of 2008, however, was too sharp for Madoff to “handle.” Older investors pulled out, new ones dried up, and banks stopped lending. Finally, the plan was unveiled, revealing an estimated loss of USD 65 Billion.
Now, what connects Madoff to cryptocurrencies?
Cryptocurrencies are digital currencies issued by any central administrator and depend on financial users for their verification. Verification is recorded on Blockchain, which is available for everyone to see. As money is still distributed, no geopolitics is involved. Since the transaction is publicly available, using fraudulent transactions is very difficult. Moreover, since the entire system is encrypted using cryptographic principles, trading is secure.
Most importantly, they are easily converted to USD at the moment. Many “critical” cryptocurrencies, such as Bitcoin, are limited in number, protecting against inflation. Cryptocurrencies have been a favorite of fin-tech viewers since 2013. We are currently at the center of a digital currency with prices for all types of digital shooting on the roof.
One such cryptocurrency born in 2013 was Dogecoin who had an unfamiliar face with the Japanese dog Shiba Inu, a viral meme that same year. Developed by two software engineers as a fun trial, Dogecoin reached the 85 Bn USD currency market during the initial week of May 2021. That is almost identical to the Indian e-commerce market. And where is the market value based? Nothing more than a few barking.
In three accounts, the rapid growth of cryptocurrency is similar to the Ponzi scheme:
- People invest in these because they expect good returns—no known source of revenue for investment.
- The noise returns that early investors found an account for new investors expecting continued growth.
- While cryptocurrency is regarded as the future of financial and international banking (Defi), none of that has happened yet.
However, digital currency managers will not generate any revenue available to these funds. Bitcoin advocates, however, are making claims about the natural value of a digital currency by using the amount of work it takes to earn bitcoin. While disputing this claim is a complete article, let’s examine how Dogecoin moves towards other cryptocurrencies.
Dogecoin is a currency, the largest of which is held by a small number of wallets. Top 10-11 wallets are close to 50% of Dogecoin. That makes it a precarious and unstable market, even within an already risky cryptocurrency business. One owner’s desire for one good day can bring the value of Dogecoin back to the ground. Moreover, Dogecoin’s release is not limited to Bitcoin, which is set at 21 million characters. Statistically, you can dig up as many Dogecoins as you like, making the underlying reason for the demand for bitcoin non-existent in Dogecoin.
Dogecoin also has small mines in the mines, making it vulnerable to fraud. Significant and widespread mining pools make it difficult for scammers to attempt fraudulent installations in a series of simultaneous blocks worldwide. Some critics say Dogecoin is changing. Consistency is one of the start-up principles of cryptocurrencies that make Blockchain protected from conflicting changes. The thickness provides stability to the coin because the rules are set and do not change. Dogecoin, if unchanged, is at risk of wildlife fluctuations if the majority decide to change currency.
The dog at Dogecoin was a joke. However, unless the significant economies decide to adopt cryptocurrencies in a big way into standard monetary policies, the strategy will continue to play into the pockets of millions of investors who want a quick return. So while early investors are feeding on young people, it may be unreasonable to expect exposure to “other big lies” in the future.
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