Dogecoin, Shiba Inu, and other “meme” coins had a break-out year in cryptocurrency. It was a year that led conservative investors scratching their heads wondering what to make of these “meme coins”.
While they were there scratching their heads, the younger generation of risky investors went all in and made a lot of money doing so. The crypto industry moves so fast that it’s hard to take a break and think about the overall ecosystem.
Due to the anonymity and access to tools at our fingertips, new protocols are being created every day.
Charles Hoskinson, Cardano CEO told his YouTube subscribers his views about meme coins and their implications.
“… we have Dogecoin (DOGE), Shiba Inu (SHIB). They have accumulated technically tens of billions of dollars of value but there’s no real user utility outside of the fact that there’s a social network behind them.
But the adherents of these things will argue that these social networks themselves represent the value and therefore, that’s all you need.
Old school people like me say you have to have real fundamentals, real transactions, real commerce, a potential for user utility, a path to these things and a view of how these things are going to work in the world, change the world.”
He also went on to talk about how artificial returns and expectations taints the industry.
“Every year, we will see thousands of cryptocurrency-related projects launching around the world without end, regardless of economic conditions. It’s also created a distortion about our expectations of return. And many regulatory bodies have warned people about this.
But it is unrealistic if there’s a 100x or something to expect that to happen every single year. It just can’t. Math doesn’t work that way.”
Due diligence is needed
Everyone should do their due diligence when it comes on to cryptocurrency. I totally agree with everything he is saying. At the same time, it is out of our control as the network effects of cryptocurrencies are powerful and hard to curb.
If millions of dollars are being locked into a protocol and raised its total value. Others might want a piece of the pie hoping that it could be another bitcoin. Fear of missing out (FOMO) is more apparent these days as misinformed investors want in on a piece of the action.
Everyone looking to get involved within the crypto space needs to do their due diligence. The scams are seeing a rapid increase over the last year and they will not slow down anytime soon until the party stops.
