Created in 2013 as a satire of Bitcoin... Unlike Bitcoin, infinite mining possible, 'scarcity' low
Certain investor began large-scale accumulation from February 2019... Purchased multiple times matching Musk's birthday numbers
[Asia Economy Reporter Park Byung-hee] The cryptocurrency Dogecoin is once again drawing attention.
This is due to rumors that Elon Musk is under investigation by the U.S. Securities and Exchange Commission (SEC) for manipulating Dogecoin prices. It has not been confirmed whether an actual investigation is underway. Musk responded on Twitter, saying, "I hope the SEC investigates. That would be really cool," implying that he is not under investigation, while the SEC has neither confirmed nor denied the investigation.
Earlier, The Wall Street Journal (WSJ) reported that there is an account owner holding a staggering 28% of the Dogecoin currently circulating in the market, attracting attention. This account owner has been steadily purchasing Dogecoin since February 2019 and currently holds about 3.68 billion Dogecoins.
An interesting point is that the owner of this account has repeatedly purchased Dogecoin in amounts of 28.061971. The number 28.061971 is eye-catching because it resembles Musk's birthday: June 28, 1971.
Of course, Musk probably did not buy Dogecoin according to his birthdate numbers. Rather, it seems more likely that the owner of this account is an admirer of Musk.
Due to the nature of cryptocurrencies, the identity of the owner holding 28% of Dogecoin cannot be known. It could be an individual or an organization. However, this 28% owner can exert tremendous influence on Dogecoin's price. If the owner holding 28% realizes large profits after a price surge, the Dogecoin price could plummet, causing massive losses to other investors.
Musk, a prominent cryptocurrency advocate, pointed out on Twitter that the only real problem with cryptocurrencies is too much concentration. He added that if concentrated accounts could be invalidated, he would practically pay the cost to do so.
Considering this, Musk's reaction that it would be a "cool thing" if the SEC investigates might imply that he supports the need for an investigation into specific accounts holding excessive amounts of cryptocurrency.
The reason Dogecoin attracted media attention earlier this month was that its price rose eightfold. As the representative cryptocurrency Bitcoin hit record highs day after day, Dogecoin's price also soared.
However, the highest price Dogecoin recorded during that surge was 8 cents on the 7th and 8th. When Bitcoin surpassed $50,000 for the first time on the 16th, Dogecoin had already peaked and fallen back to around 5 cents.
The possibility of Dogecoin soaring to astronomical prices like Bitcoin seems low. While Bitcoin has a maximum supply of 21 million coins, making it scarce, Dogecoin can be mined infinitely. In fact, Dogecoin has mostly traded below 1 cent since its creation in 2013. Even during the recent eightfold increase earlier this year, the price only rose from 1 cent to 8 cents.
Dogecoin was created not as a means of transaction but merely as a joke. Dogecoin's co-founder Billy Markus said in an interview with WSJ that Dogecoin was made as a parody of Bitcoin. The term "Doge" is a playful misspelling of "Dog," and the image of Japan's representative dog breed, the Shiba Inu, is often used to symbolize Dogecoin.
Like Bitcoin, Dogecoin can be mined by solving complex mathematical problems. The key difference is that Dogecoin can be mined infinitely, so the price is unlikely to skyrocket astronomically. Through mining, the proportion held by the current owner of 28% can be diluted at any time.
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