What is up with Dogecoin?
Let’s talk about Dogecoin. We’ve had a lot of requests to discuss it since it has been in the news a lot, stirring up the online world with a sudden spike in price and a subsequent roller coaster of ups and downs. It’s known as the plucky little crypto that could, the gateway for the regular person to get into cryptocurrency without having to mortgage the house to get one or two Bitcoins. Or is it? Let’s dive into the doge pound.
Started back in 2013, the meme currency chiefly differentiated itself from Bitcoin right off the bat by using a different, less resource intensive encryption method, which meant that it became much faster and cheaper to mine it as well as transfer it. That also resulted in a lot more of them becoming available in a short period of time. Which in turn made it easier to manipulate. Elon Musk provided the perfect example when he tweeted out his support of Dogecoin, causing that massive spike in its perceived value we mentioned earlier. It went from a fraction of a cent to $0.46 practically overnight. If someone had put down a mere hundred dollars a month before, they suddenly found themselves with a lot of money available to them.
Yet, is it a currency? If you recall from our discussion on Bitcoin and whether it is a currency, one of the things that makes it so is whether or not it has fees associated with transferring it. Bitcoin has massive fees to do anything with it and while Doge has few fees, they still exist. It also is a centralized coin that has no real cap. It started with one but it was reached so quickly that they just pumped out five times that cap without thinking twice.
It also has had its trade restricted by well-known trading apps like Robinhood. The story is that Doge was trading at such a high volume, it caused a system failure. Taking that explanation at face value it still sucks. It means that Robinhood’s code can’t handle a popularly traded stock or coin. It’s an indictment of the way they run their business. It’s as though they never thought to stress test their system. Normally that wouldn’t be such a big deal but it’s one of the most popular ways to buy and sell crypto of all kinds, including Dogecoin.
How do you navigate all of this? All too often, people are constantly reacting. Whether it’s a tweet from Musk or Tom Brady adding laser eyes to his profile pic (this happened and the price of Bitcoin spiked. No joke). This reactive behavior is what is causing the price of Doge, Bitcoin and others to fluctuate so much. No one is really looking for and getting solid data about what is happening right now. Actually happening, not what a random tweet asserts is happening. It isn’t hard to imagine how regular people are getting hurt here as they sell when they should hold and buy when they should wait. Not just regular people either, but funds and even professional investors can get sucked in when they are too greedy.
That’s why TARTLE is such an advocate for getting hard, first person data to make decisions with. Instead of reacting, it’s possible to get a read on what is going on by actually talking directly to people. When a fund does that, they are making decisions not based on the latest tweet but on what real people are planning and perceiving. That is a much better approach than just following whatever pied piper comes along. If enough people can grasp this concept, perhaps the general behavior will change and people will look to fundamentals again instead of just memes and bring some stability back to the market.
What’s your crypto worth? Sign up for the TARTLE Marketplace through this link here.
It’s known as the plucky little crypto that could, the gateway for the regular person to get into cryptocurrency without having to mortgage the house to get one or two Bitcoins.
Alexander McCaig (00:08):
Woof, woof, woof.
Jason Rigby (00:11):
There we go.
Alexander McCaig (00:11):
Let's talk about the fun and friendly internet-
Jason Rigby (00:14):
Where's our woo, woo?
Alexander McCaig (00:15):
I just played it. You missed it.
Jason Rigby (00:16):
Oh, I missed it.
Alexander McCaig (00:16):
You didn't have your headphone.
Jason Rigby (00:18):
Ah, that's my favorite part.
Alexander McCaig (00:19):
You missed the [dij 00:00:20]. And speaking of the dij, we're going to talk about the Doge.
Jason Rigby (00:25):
The Doge. We've had several requests to talk about Dogecoin, so here we go.
Alexander McCaig (00:28):
The fun and friendly internet currency.
Jason Rigby (00:30):
And Robinhood. We're going to get into that. [crosstalk 00:00:33].
Alexander McCaig (00:33):
Yeah, so first we're going to start off. So Doge, Dogecoin. Dogecoin started in 2013. No. Dogecoin started in 2013. It was an offshoot of Bitcoin, right? So you had the regular blockchain, which uses... There's an encryption method called SHA-256, creates a thing like a hex, a bunch of letters and numbers. And there's a process to moving those back and forth with the key that actually says, "Okay, I've translated it. And so now I know the information that was stored within that." The metadata has been exposed. Yes, this was [inaudible 00:01:08]. Two people agreed on it. And then, it's written to the chain, blah, blah, blah. There's your ledger. Now, that uses a thing called SHA-256.
Jason Rigby (01:13):
Not Heath Ledger.
Alexander McCaig (01:14):
No, not Heath Ledger. It takes time and resources to decrypt something, because you're essentially moving pieces back and forth, right? The code has to go in there. And it's constantly running an algorithm to decrypt this with the key. Now, the difference that happened here is that Dogecoin adopted one of the fundamental changes in encryption when Litecoin came out, and uses the thing called [ESCRYPT 00:01:42]. ESCRYPT is a less resource-intensive encryption/decryption method that goes on for the coin itself. So you have SHA-256, which requires resources in time, maybe seven or eight minutes to decrypt it or write it to the chain for the block. And then, you have the ESCRYPT, which Litecoin was the fundamental base, which takes around two and a half to three minutes.
Alexander McCaig (02:11):
So I have a difference of five minutes of processing time, essentially, where I'm saving on energy. It's more economically efficient for me to mine this block to essentially say, "Oh, this, in fact, happened to process it because of the ESCRYPT encryption algorithm that Litecoin was using." So Dogecoin's like, "Well, why don't we just use something that's more efficient? And then also at the same time, let's whip it up." And as essentially this internet subculture is out here based on memes, which we know has a lot of pull on society right now, memes. Let's use the Doge, the Shiba Inu, place it on here, and this will be this fun and friendly internet currency. And then of course, who's big into memes? Ye old pied piper, Elon Musk, right?
Jason Rigby (02:54):
Mm-hmm (affirmative).
Alexander McCaig (02:55):
Calling everybody out. Come out of the city, come follow me. And he says, "Well, Dogecoin, that thing's going to the moon." And the second he starts talking about it, saying he owns it, you need to buy it, all this stuff of that nature. This thing shoots up in its value. Now people want to put it on exchanges.
Jason Rigby (03:10):
Yeah, I think it's 46 cents or something like that. [crosstalk 00:03:11].
Alexander McCaig (03:11):
Yeah, it's on crypto.com right now.
Jason Rigby (03:13):
Yeah.
Alexander McCaig (03:13):
Right? So everybody wants to trade this thing. It's almost like every time there's an ICO, right? It's like an IPO. It's going to bump for a bit, because all the guys want to make their money real quick. They want to shove off the liability, and put it onto the public, and have them eat up all the liability. And they get paid cash in return.
Jason Rigby (03:32):
What's also interesting, yesterday Musk came out on Twitter and said, "Because of the amount of energy it takes, they won't be accepting Bitcoin for Tesla." So then, Bitcoin drops 15%, so.
Alexander McCaig (03:43):
Yeah.
Jason Rigby (03:44):
He says stuff, like Saturday Night Live, he came out, him and his wife were on Saturday Night Live with Miley Cyrus. And then, he mentions Dogecoin, and things pop. What people are concerned about... And this is where I would want to know. If they are all assets, which we talked about that last podcast, which you need to understand, now the cryptocurrency an asset. Can you talk about it if you own it and manipulate the price, and then purchase on the... Could Elon Musk-
Alexander McCaig (04:09):
Oh, you talking-
Jason Rigby (04:10):
Like yesterday, he did. And he knocked Bitcoin down 15%. Buy on the dip.
Alexander McCaig (04:14):
Yep.
Jason Rigby (04:14):
That he created.
Alexander McCaig (04:15):
Those are blackout dates for people in corporations.
Jason Rigby (04:18):
Yes.
Alexander McCaig (04:19):
So if you're a corporation that has public shares, and you know there's going to be a big change coming out, you're restricted from doing any trading.
Jason Rigby (04:24):
Yes.
Alexander McCaig (04:26):
So-
Jason Rigby (04:27):
That's not happening right now, yeah.
Alexander McCaig (04:29):
It doesn't have that right now, right?
Jason Rigby (04:30):
Yeah. And I know then, Tom Brady the other day... Because now on Twitter, you can change your profile picture to have laser eyes.
Alexander McCaig (04:35):
Yeah.
Jason Rigby (04:36):
And then that means you're a Bitcoin advocate.
Alexander McCaig (04:38):
Yeah.
Jason Rigby (04:38):
Which is like a meme thing.
Alexander McCaig (04:40):
There's a guy on Twitter called Pomp.
Jason Rigby (04:42):
Yes, Pomp. Yeah, yeah, yeah. He has a podcast.
Alexander McCaig (04:44):
He's got the laser eyes with the tornado.
Jason Rigby (04:45):
But Tom Brady just did that. And put his laser eyes on his profile.
Alexander McCaig (04:49):
Yeah, they put-
Jason Rigby (04:49):
So everybody's like, "Oh my God. The G.O.A.T."
Alexander McCaig (04:52):
Yeah.
Jason Rigby (04:53):
Loves Bitcoin, so then [inaudible 00:04:53].
Alexander McCaig (04:53):
Yeah, they put laser eyes on the Doge all the time.
Jason Rigby (04:55):
Yeah.
Alexander McCaig (04:56):
And again, they call it an internet currency. Nothing about it is currency. It has a fee. It is irrevocably tied to fiat currency.
Jason Rigby (05:05):
And there are billions of Dogecoin too?
Alexander McCaig (05:06):
So they started off with a hundred billion.
Jason Rigby (05:08):
Right.
Alexander McCaig (05:09):
That they sent out. They hit that cap in a second.
Jason Rigby (05:12):
Right.
Alexander McCaig (05:12):
And so they instituted another 5 billion. And so the centralized authority...
Jason Rigby (05:17):
Yeah, which is Doge.
Alexander McCaig (05:18):
Just keeps making more of it, right?
Jason Rigby (05:21):
Right. I know they say... We'll get into Robinhood, because Robinhood's kind of the biggest trader for Dogecoin. So they say that Robinhood owns billions of dollars worth of this.
Alexander McCaig (05:32):
Well, yeah. So what happened with Robinhood the other day?
Jason Rigby (05:34):
Well, yeah.
Alexander McCaig (05:35):
So there's so much volatility of trading, volume of trading that was happening on Robinhood. It actually brought down... They had a systems failure, which is, frankly to me, a bullshit excuse. Do not list the thing if you physically can't handle it. If your code's crap, and you're not going to be able handle the volumes, because you haven't done the proper QA testing on this thing. You can run false trading.
Jason Rigby (06:02):
Yeah.
Alexander McCaig (06:03):
Simulated trading. And you can just jack those values up. But apparently, they didn't suspect what was actually going to-
Jason Rigby (06:09):
Anticipate, yeah.
Alexander McCaig (06:10):
Anticipate what was going to happen, right? So it's creating intermittent issues. So what happens when the volume starts to create this weird arbitrage opportunity because a majority of the volume of the trading is going through Robinhood? And people are like, "Oh, you know me." Or do you want to sell it? Who do you go to at that point? Do you go to Robinhood, and said, "I had a sell order in. And your system's broke."
Jason Rigby (06:30):
Well, this is the problem with Robinhood and GameStop, and then, all of these holding companies owning Robinhood. So they're like, are these big boys using these little investors on Robinhood to maximize profits?
Alexander McCaig (06:46):
Of course, they are. And then when something breaks, I mean... You want Robinhood-
Jason Rigby (06:50):
Did it break? The conspiracy theory is, did it break? And if it did break in that timeframe, who did it benefit?
Alexander McCaig (06:57):
Robinhood shows the log.
Jason Rigby (06:58):
Yeah.
Alexander McCaig (06:59):
You know who it benefits? It benefits people that have hedging strategies.
Jason Rigby (07:02):
Yes.
Alexander McCaig (07:02):
It also benefits those who sit outside of the exchange, and trade Doge on something else, or whatever it's linked to, right? Anytime there's volatility at play, somebody has an option on it.
Jason Rigby (07:13):
Yes.
Alexander McCaig (07:15):
In some way, shape, or form, there's a derivative, right?
Jason Rigby (07:17):
People have to realize that, yes.
Alexander McCaig (07:18):
Yeah. No hedge fund goes into the game without countering their own position.
Jason Rigby (07:23):
And just like Google and everywhere else with their algorithms, people do not realize how smart... I mean, you think the guy that's the top mathematician at MIT is going to work for the government? Maybe.
Alexander McCaig (07:37):
Yeah.
Jason Rigby (07:37):
But more than likely, he's going to get picked up by a hedge fund.
Alexander McCaig (07:39):
You know why hedge funds do that? Because hedge funds aren't in the game to lose.
Jason Rigby (07:43):
Yes, exactly.
Alexander McCaig (07:44):
They're in the information game. And the question is who can execute the order faster?
Jason Rigby (07:48):
Yeah, and is this information something that we only have?
Alexander McCaig (07:54):
Yeah. Isn't that funny how important data is?
Jason Rigby (07:58):
Yes.
Alexander McCaig (07:58):
Data driving the price. Imagine if you knew ahead of time that everybody was going to be doing this huge Dogecoin rally on Robinhood. Instead, they did sentiment analysis on Twitter with what Elon was saying. And then just everybody floods in. You only get the information after the fact, and then your system breaks, because their system's fundamentally founded on lagging indicators. Congratulations. That's what happens when you try to put out fires all day long.
Jason Rigby (08:22):
So how could Dogecoin, Tesla, these companies, because these are kind of like... When you look at Robinhood, you look at Tesla, you look at Bitcoin, you look at a lot of these blockchain companies, we see the wave of the future.
Alexander McCaig (08:38):
Mm-hmm (affirmative).
Jason Rigby (08:39):
Industrial 4.0, we see that. Tartle's there at the forefront of all this. I want you to explain to people the importance of having accurate first party data.
Alexander McCaig (08:54):
When you have accurate first party data, you could be objective. You can self check your biases, and spare yourself on stupid decisions that waste resources. If I know exactly what's going to happen from the people who are going to do it, how can I make the wrong choice? I know how to act ahead of time. I don't put out fires. I don't wait for the storm to happen, and then prepare. What good does that do for anybody?
Alexander McCaig (09:24):
If I want to understand how a market moves, if I want to understand the demand people have for a specific product or service, you have to go to them directly. Because the supporting function, the fabric of civilization, the fabric of finance, the fabric of economics and politics are people. And if you don't understand their minds and their thoughts, you don't understand anything.
Jason Rigby (09:48):
That makes so much sense. So let's say, I sign up for tartle.co.
Alexander McCaig (09:53):
Yes.
Jason Rigby (09:53):
And we have [T-coin 00:09:56]. And we're fixing to release that. And so that's going to be coming out. It's a reward system.
Alexander McCaig (10:00):
It's a reward system.
Jason Rigby (10:00):
Yeah, and we have to say that. But what are the difference between T-coin and Dogecoin? So people know.
Alexander McCaig (10:10):
Okay, T-coin is a system of chains, sovereignly owned by the individual. The reason so much money is getting pumped out, and it takes so much time to process a block, is because it's all these different nodes that support one single chain. It's like on a highway that's 30 lanes wide, and you're trying to fit all those cars into two lanes. George Washington Bridge problem, every single day. Too much volume going into too little of a surface area. So what if every individual had their own chain and surface area? That's a fundamental difference.
Alexander McCaig (10:55):
Oh, and on top of that, if you remove the aspects of a fee, well then, if I have asynchronous timing, if I have no fees, and the value of this reward is directly tied to human work, now I have a real currency. I have something that truly flows. I have something that's actually matched with the input that's going in. You can put work in all day long in doing day trading. Are you going to get the payout you want? Absolutely not. More than likely, you're going to lose. You don't have the information, and you don't have the processing power to compete. That's just the fundamental fact, right? You can get lucky, but how many times can you flip a penny or a quarter on heads? Only so many times.
Jason Rigby (11:40):
Yes.
Alexander McCaig (11:40):
All right? And then that 0.5 probability multiplied out to whatever n amount of times, it becomes immensely improbable after 11 flips, all right? So why don't we get rid of the ridiculous probabilities, get rid of the time issue, get rid of the centralization issue, and always consistently have the power of this reward back in the hands of the individual. And reward them for their work when they do the work, rather than the hopes of doing the work and getting rewarded later. That's the thing that fundamentally changes the fabric of society.
Speaker 3 (12:19):
Thank you for listening to Tartlecast with your hosts, Alexander McCaig and Jason Rigby. Where humanity steps into the future and source data defines the path. What's your data worth?
