Who’s Afraid of the Dog(e)?
Surely fear and lack of appetite for risk and reward are not factors that could possibly be associated with the avant-garde nature of cryptocurrency trading?
Vitaly Buterin, known as Vitalik, the Russian-Canadian programmer who co-founded Ethereum is the absolute opposite of any entrepreneur who could possibly find a fear factor in anything he does, let alone be concerned about rival cryptocurrencies and their potential effect on his share of the market.
Although just 27 years old, Mr Buterin is a longstanding genius of the digital asset world, having founded Bitcoin Magazine in 2011 when he was only 17 years old.
Why would such an astute young leader of the world’s ever-increasing emphasis on digital assets be worried about something that was originally started as a joke?
Once again, the internet has given rise to speculation that Dogecoin, founded by computer scientists Billy Markus and Jackson Palmer, who decided to create a payment system as a joke, making fun of the unbelievable amount of speculation that surrounded cryptocurrencies in 2013, is something for Mr Buterin to be concerned about.
It may well be that the new era of extreme focus on the most popular cryptocurrencies is now giving rise to something that physical, central bank-issued fiat currencies have never been part of – rivalry between each other.
Central bank-issued fiat currency has absolutely no reason to rival other central bank-issued currencies. They are national tender, and are tradeable against each other for the purposes of settlement, arbitrage, spread-related gains or for purchasing goods and services internationally.
A huge difference is now being highlighted between the traditional currencies and cryptocurrency, that being cryptocurrency’s status as a product and company in its own right. A consumer good rather than a method of payment. A company to back and a brand to be loyal to, rather than a piece of paper with the President’s face depicted on it to remind its holder that it is no more than just a means to an end.
Cryptocurrency is like Netflix, or Amazon, or your favorite car brand, or your apps on Apple or Android. It is divisive and all-inclusive at the same time. It is a whole new world of brand loyalty and self-empowerment.
There is no such thing as a Pound enthusiast or a Dollar enthusiast, but there is every such thing as a cryptocurrency enthusiast.
This is perhaps why, if the theories in the media are correct, founders of cryptocurrencies fear founders of other cryptocurrencies just like Henry Ford feared Louis Chervolet but did not show it.
The Federal Reserve is not afraid of the Bank of England. It is a totally different dynamic altogther and a totally different market.
Back in 2015, Vitaly Buterin countered claims that Dogecoin could be scaled to a level that it could function as a mainstream form of currency.
This has now come back to the forefront. “As it turns out, there are important and quite subtle technical factors that limit blockchain scaling,” Mr Buterin wrote on a blog post last weekend. “In many cases there are solutions, but even with the solutions there are limits.”
Self-styled cryptocurrency influencer Elon Musk replied on Twitter, claiming that Mr Buterin “fears the Doge”, together with a meme of a Shiba Inu dog mocked up in the style of the poster for the 1975 classic movie Jaws.
There is no other market, be it commodities or currencies, be it indices or raw materials that pits one ‘brand’ against another to this level. Other asset classes are simply not traded or invested in that way, whereas cryptocurrency’s adherence and popularity is completely driven by these popularity-based factors.
The latest Dogecoin endorsement on Monday resulted in an immediate price spurt of around $0.01, though this was relatively modest considering its value has swung between $0.25 and $0.34 over the last 24 hours, and Vitaly Buterin’s Ethereum co-founder Charles Hoskinson last week posted a video offering advice on how to radically upgrade Ethereum, an effort largely targeted at Elon Musk.
The theoretical upgrade that he described was so complex that it would take several years to implement, which perhaps indicates that there is enough stability and community-influenced market movements combined with the massive influx of members of the public and hedge fund billionaires combined who have become interested in cryptocurrency over the past week that cryptocurrency is now at a stage of maturity, in which long-term development plans can now be put in place to shape the trading and investing world of the future.
Democratization of the markets doesn’t come more neatly wrapped than that.