The period from late 2013 to mid-2014 can be considered the peak era of the altcoin, coinciding with a surge in attention to cryptocurrency and punctuated by a spike in prices.
It was roughly 15 months ago that Dogecoin prices were going to the moon, peaking near 300 satoshi (each of which was worth roughly 4 times as much as today) and climbing toward the top ranks of market cap. Volumes vastly outpaced those of most other cryptos, the trading metrics reflecting the fundamental euphoria surrounding the most popular coin.
But times have changed. Interest in the coin has waned considerably. Activity within the community has slowed, many of whose members have moved on. There has been little by way of tangible innovation or progress toward mainstream acceptance, particularly when compared with Bitcoin.
Granted, it has continued to retain its mellow, positive and welcoming climate. It hasn’t been hijacked by extremist libertarians or elements hostile to anything not aligned with their fringe ideology. It was even sought for help by its own progenitor, Litecoin, which also struggling, was looking to bolster network security through merged mining. But aside from the odd fundraiser and addition to tipping services, not much has become of Dogecoin.
And the “fundamentals” are well reflected in the markets. In bitcoin terms, Dogecoin is trading near 8-month lows of 44 satoshi, which in dollar terms, represent the lowest valuations since around the time of its launch. Traded volume, consistently exceeding the equivalent of $1 million daily during the months following its peak, has dropped off sharply. Earlier this year, daily totals usually exceeded six figures, but now range between $30,000 and $80,000. Up until recently, it ranked among the top five in daily volume, but now struggles to crack the top ten.
Dogecoin Not Alone
Truth be told, there has been a noticeable stagnation among all altcoins, which have exhibited a similar decline in interest and trading volume this year. So the issue is not with Dogecoin per se. Rather, its failure is found in its inability to rise as king of the alts in the long run.
Fundamentally, Dogecoin’s technology was effectively no more sophisticated than Litecoin’s. The hope was that its cultural attributes- its emergence from a popular meme, a family friendly following and the irony that it was created as a joke- will help it gather momentum and the critical mass for widespread adoption. But as is usually (though not always) the case, these ingredients were insufficient, ultimately susceptible to their own transience.
To take it a step further, some of the arguments can be applied to Bitcoin, the father of all coins. While active development continues and its technology continues to be refined, it is not fulfilling its economic aspirations of becoming a recognized, real-world currency. As pointed out regularly, the vast majority of bitcoin acceptance in commerce is artificial. It is the payment processor (temporarily) accepting bitcoin, the open market effectively functioning as its final destination, and the merchant simply accepting fiat. 2015 has seen a marked shift from interest in the economical properties of Bitcoin to its technology, drawing active participation from tech giants and banks alike.
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Indeed, the theory that Doge’s troubles are no worse than those of the broader industry is supported by the announcement of Jackson Palmer, Dogecoin’s founder, that he is leaving crypto. He tweeted:
Will be taking an extended leave of absence from the toxic (and quite frankly, stagnant) space that is cryptocurrency.
— Jackson Palmer (@ummjackson) April 23, 2015
He suggested that despite the record levels of venture capital flowing into the industry, it is stagnating due to the ideologies of the people it attracts and what he believes is the low quality of startups, telling CoinDesk:
“All in all, the cryptocurrency space increasingly feels like a bunch of white libertarian bros sitting around hoping to get rich and coming up with half-baked, buzzword-filled business ideas which often fail in an effort to try and do so.”
He went on to argue that participants have done little to create a community inclusive to all, citing its apparent support for Kentucky Senator and US Tea Party member Rand Paul.
Worth noting is that the vast majority of responses to his tweet were supportive, wishing him luck and indicating that he will be missed.
While Palmer’s departure and scathing rebuke are symbolically a major blow to Dogecoin, more significantly, they contribute to a growing chorus of questions around the mandate of the crypto industry. This, Dogecoin could not escape, nor could it solve.
So the death of Dogecoin, if it ensues, would take a different form than the likes of Auroracoin, Paycoin or many of the others designed with no concrete purpose. Rather, it would be a fading into the abyss of the sea of coins, a worthwhile experiment into the future of money and payments. And unlike many of the others, there will be more cheerful memories inscribed on its grave, perhaps a source for inspiration for the next experiment.