A Cryptocurrency Based on a Dog Meme is Now Worth Over $1 Billion
“It says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over 2 years has a $1B+ market cap."
This article originally appeared on VICE News.
The 2018 cryptocurrency craziness is already in full swing.
On Friday, the market capitalization of dogecoin, a cryptocurrency based on a meme about a Shiba Inu dog, passed the $1 billion USD mark for the first time.
About 24 hours earlier, the creator of another cryptocurrency called ripple, which many experts claim has no intrinsic value, briefly became America’s fifth-wealthiest person, surpassing Facebook founder Mark Zuckerberg.
The rapid spike in the price of bitcoin throughout 2017 — going from $1,000 USD to a high of $20,000 USD — has led many to call the current craze a bubble, and the latest price rises will do little to calm such worries.
Dogecoin was created back in the early days of the cryptocurrency craze. Launched in December 2013 as somewhat of a joke, the meme-inspired coin was dubbed “the internet currency” and designed to promote a sense of community and generosity rather than simply looking to make money.
The currency has been in relative stasis since, and despite no software updates being released in over two years, the cryptocurrency has risen more than 400 percent in the last month — though one dogecoin is still worth just over 1 cent.
Even Jackson Palmer, one of the founders of the coin, expressed concern about the hyperinflation of dogecoin. “It says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over 2 years has a $1B+ market cap,” Jackson told Coindesk.
A RIPPLE IN THE FORCE
But dogecoin’s gains are dwarfed by ripple, a peer-to-peer payment system that has seen the price of its token rise by a staggering 30,000 percent in the last year.
Now the world’s second most valuable cryptocurrency, ripple has a market capitalization of over $125 billion USD. It was founded in 2012, but unlike bitcoin, all the tokens were premined, with the majority of its tokens held by those in charge — including co-founder and former CEO Chris Larsen.
Thanks to the insane price spike of recent months, Larsen was briefly worth more than $59 billion USD on Thursday, according to figures from Forbes, putting him ahead of Zuckerberg as the fifth-richest person in the US.
A lot of smaller investors, many who may have missed out on the huge bitcoin gains last year, are now buying up ripple tokens hoping to become crypto millionaires or even billionaires.
The problem is that ripple tokens — known as XRP — have little to no value, because the underlying ripple technology, which banks are testing for international transactions, doesn’t need to use those tokens in order to work.
The company Ripple claims that many banks and financial institutions are looking to use its token and therefore the valuation is accurate, but to date just a single Mexican money-transfer business has officially announced it will be using the token.