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Dogecoin Digital Asset Report: Introduction

Dogecoin is one of the most popular cryptocurrencies in the blockchain industry. However, this project was conceived as a joke, i.e. the founders had no goal to compete with anyone.

The cryptocurrency is mainly used to pay tips to content creators on Reddit and Telegram. There are very few companies that target such a narrow segment of the market within the blockchain sphere, but there are many indirect competitors, which can provide the same services as Dogecoin. DOGE can only compete with its rivals in the short-term, but it will not survive in the long run.

It has a large and friendly community that keeps the Dogecoin network alive. However, the lack of a cohesive team and a well-built financing system has led to a situation where the project has every chance of dying. The roadmap and GitHub activity of the team are nonexistent, so this casts serious doubt on its long-term prospects.

This report is the Initiation Report – our first deep dive into the performance and risk/reward factors. The analysis, verdict and accompanying grade reflect our opinion on the long-term value prospects of a given token based on the current state of project development and indicators of future commercial viability – they are not designed to be indicative of short-term trading opportunities.

You can see a full explanation of how our reports are constructed and what they mean at the bottom of this page.’s

Dogecoin is mainly used as an online tipping system consisting of tipping bots. Users can tip with Dogecoin for providing useful content on popular sites like Reddit and Telegram. There are also many such bots on other blockchains, including Bitcoin, Litecoin, Ethereum, Stellar, Ripple, etc.

The tipping bots are quite simple, therefore any team can develop one. There are many bots on Reddit, Twitter, Twitch, Discord, Telegram, etc.

Reddcoin is a social cryptocurrency that was created to enable users to tip content creators in various social networks, and is a direct competitor to Dogecoin. At the moment, its tipping system works on sites like Twitter, Twitch, Justin.TV, and Reddit, but the team intends to expand the number of social networks in the future. While Dogecoin’s team has shown no recent GitHub activity, Reddcoin has gathered a serious team that has been working to create a social cryptocurrency for a wide range of social networks. So, while Dogecoin may have better numbers at the moment, Reddcoin has much better long-term prospects.

Another competitor is Bitcoin Cash, which is a fork of Bitcoin and has its own bot. Its bot was very active according to data published in August 2018 (total value tipped – $8,328, 1 BCH = $109.44), but it seems that the Tippr bot (BCH tip bot) no longer works. Taking into account that the Dogecoin community is much more active, and SoDogeTip is still functioning, Dogecoin will dominate Bitcoin Cash in this area for now.

An indirect competitor to Dogecoin is XRP, which was conceived as a currency for financial institutions. XRP also has a tipping bot called XRPTipBot, which looks much better than SoDogeTip: the total number of tips and the total value tipped are much higher. Since Dogecoin’s team is not working on the project’s development, its prospects are less promising.

Nano is a representative of cryptocurrencies focused on providing payment solutions and also has its own tipping bot. However, NanoTipBot is a very weak competitor to Dogecoin because the total number of tips and the total value tipped are significantly lower than those of SoDogeTip. Since the Dogecoin ecosystem is already established and very active, it is easy to compete with a new currency like Nano.

Dogecoin has better prospects in the short-term than Reddcoin, Bitcoin Cash and Nano due to its large and active user base. Nevertheless, its prospects are not commensurate with the capabilities of XRP.

Tippin bot (Bitcoin), a Chrome and Firefox browser extension that enables tipping on Twitter, can become another threat in the future. Since this bot is based on the Lightning Network, it allows users to send tips very quickly and with almost zero fee. Considering the size of the Bitcoin community, the Tippin bot can become a serious competitor to SoDogeTip.

The NVT value of Dogecoin fluctuates between 0.1 and around 30. Its transactions are valued so low because the project has no long-term prospects.

Dogecoin uses a PoW consensus algorithm, so its network is maintained by a network of distributed nodes. There are 114 active nodes that maintain the Dogecoin network, and there are only 17 pools that are engaged in Dogecoin mining. Dogecoin and Litecoin both use the Scrypt hash algorithm that enabled merged mining between these two coins. Therefore, most Dogecoin mining is a by-product of Litecoin mining.

The distribution of computing power indicates the presence of centralization in the Dogecoin network, which can reduce its security and increase its vulnerability to attacks.

Another factor that indicates the centralization of the project is the wealth distribution. The table below shows that the top-10 wallets own 35.79% of all tokens, and top-100 – 60.67%. This is also an indicator of centralization of Dogecoin, however, the main holders of tokens are ordinary holders and exchanges.

Dogecoin exhibits a much higher degree of centralization among ordinary holders than its competitors.

The development of the Dogecoin project depends on the Dogecoin Foundation team and the community of freelancers. The main purpose of the Foundation is to facilitate the use of Dogecoin through promotional and charitable endeavors. The organization is a non-profit and consists of 5 directors: Felix von Drigalski, Jens Wiechers, Josh Mohland, Debbie Ballard, Patrick Lodder. Developers are Max Keller, Ross Nicoll, and Patrick Lodder.

Therefore, the future of the project depends on the Dogecoin community. For instance, Oscar Guindzberg partners with CoinFabrik to develop the Dogethereum bridge, which enables to move coins from Dogecoin to Ethereum and back. Ismael Bejarano, Catalina Juarros, and Pablo Yabo from CoinFabrik are working alongside Oscar Guindzberg, and they presented the second stage of the project on September 5, 2018. The full project is available here and a presentation of the product – here.

The next big project for Dogecoin is DogePal. Developed by Tom, big Dogecoin fan and volunteer, with a team of around 5-10 people, they built a social media presence on Twitter, Discord, Facebook and Reddit, created the official website, designed the logo, etc. DogePal is a system that allows people to pay each other in DOGE, using email addresses. It also has an anonymous tipping feature, and its users can create customized invoices. In addition, DogePal platform can be used for advertising purposes. The current number of users is 708. Overall, this project can increase the Dogecoin’s adoption level.

Besides utilizing Dogecoin as a tipping platform, users can also use the cryptocurrency to pay for goods and services. The team built a merchant network of about 52 merchants by 2015, but it has not grown since. A merchant network of this size is too small to compete with other cryptocurrencies.

Dogecoin has built a large and friendly community that loves the project. Therefore, it is easy for it to compete with other projects in its narrow market segment. However, the absence of a strong team and the presence of centralization will negatively affect further growth of the project.

DOGE is the native currency of the Dogecoin blockchain, which is used as a means of payment.

Reward – miners receive 10,000 DOGE for block creation, which is a good incentive for miners to maintain the Dogecoin blockchain.

Fees – Dogecoin has a fixed transaction fee of 1 Doge per 1Kb of data. This is too low for a transaction fee to be a good incentive mechanism for miners. Therefore, the team decided to set up a constant block reward to be sure that nodes will maintain the network in the long-term. On one hand, it is good that transaction fees are very low, because users are more interested in using DOGE for daily payment. On the other hand, the Dogecoin blockchain may be vulnerable to DDoS attacks.

Statistical analysis shows that Dogecoin provides lower transaction fees that are more stable over time. Dogecoin is more competitive than Bitcoin Cash and Reddcoin, but it is not able to compete with Ripple and Nano (zero-fees).

Speculation – DOGE is traded on many of the popular crypto-exchanges.

Payment – One of the uses of the payment utility is fundraising. For example, the Dogecoin community helped raise $50,000 for Jamaican Bobsled Team to go to the Sochi Winter Olympics; $30,000 for World Water Day; $55,000 to sponsor NASCAR driver Josh Wise. After collecting funds for Jamaican Bobsled Team, the DOGE price spiked to its 2nd peak on January 21, 2014. This means that such fundraising programs only strengthen the value of DOGE and increase worldwide adoption.

The mining profitability in the Dogecoin network amounts to $0.1671/day for 1 Ghash/sec. Meaning, miners receive a high enough reward for their work to maintain the Dogecoin blockchain.

However, the inflationary model adversely affects the value of the DOGE, depreciating it over time. While the competitors have fixed supply that appreciates the coins value, Dogecoin’s yearly inflation is one of the highest. From this point of view, Dogecoin is less competitive in the market and is less attractive for users.

The team built the token economics in such a way to incentivize users and miners to use DOGE. But weak use cases and inflation reduces the value of DOGE, and can lead to the collapse of the ecosystem.

The Dogecoin team is made up entirely of volunteers.

Billy Markus – is the Co-Founder of Dogecoin. He co-founded Dogecoin in December 2013. Billy Markus is a creator of original Dogecoin code. Currently, he works as a software engineer at IBM and tweets using the handle Shibetoshi Nakamoto.

Jackson Palmer – is the Co-Founder of Dogecoin. He co-founded Dogecoin in December 2013 and left the team in 2015. Jackson Palmer graduated from the University of Newcastle with BA in Marketing. He has 10+ years of experience in marketing and management. Currently, Jackson Palmer holds a position of Director of Product Management at Adobe.

The Dogecoin Foundation, a Colorado non-profit corporation, was founded on July 1, 2014. The main purpose of the company is to facilitate the use of Dogecoin through promotional and charitable endeavors. However, the team is not active at the moment: the latest updates were posted on Twitter on February 18, 2018, and on July 20, 2015 on the official website. The lack of activity of the team significantly reduces the competitiveness of the project. So, Dogecoin continues to exist due only to the passion of the Dogecoin community.

The negative factor that influenced Jackson Palmer’s decision to leave the project was the activity of a scammer in the Dogecoin ecosystem. The name of the scammer is Ryan Kennedy, also known as Alex Green, who raised $750,000 for the development of an exchange called Moolah. Then he declared bankruptcy and disappeared. After that, “Palmer became disturbed by the commercialization of his joke currency and announced he was leaving Dogecoin behind, as he promised he would if people started taking his joke too seriously”. After Jackson Palmer left the project, the team became inactive as well.

Overall, the team activity is absent, i.e., it is not going to develop the project further. Therefore, the long-term prospects of Dogecoin look very poor.

Dogecoin is a fork of Litecoin with improved parameters: block time, throughput capacity, confirmation time.

The team is not working on the development of the project, and the lack of GitHub activity confirms that.

While Dogecoin has less throughput capacity than Ripple and Nano, it has almost the same scalability as Reddcoin and Bitcoin Cash.

Since Dogecoin did not implement any special innovations, it can compete only with ordinary blockchains like Bitcoin Cash and Reddcoin. However, more active and advanced blockchains will likely dominate Dogecoin in the long run.

The Dogecoin Foundation published the roadmap on September 17, 2014, which is only 50% completed. No activity is observed after July 20, 2015.

Despite the fact that the roadmap is very short and simple, the team did not complete it. This shows the lack of a serious attitude to the project.

Website

Develop website for information and communication: completed

Develop support and member access options: in progress.

Communications

Find members willing to help with communication: postponed.

Establish a PR team: interim team set-up, until membership is opened.

Open Membership

Establishing a small set of procedures and policies for membership: completed.

Membership sign-up via website: in progress.

Legal/Compliance

Bylaws: completed

Continue talks with UltraPro with regard to the Trademark situation: completed

Develop election methodology and requirements: in progress

A possible catalyst for the project in this year could be the full launch of Dogethereum Bridge.

Still, the Dogecoin Foundation has no actual development roadmap and has not been publishing regular updates since 2015. Therefore, it is impossible to talk about any long-term prospects.

DOGE coin is in the top-27 coins by market capitalization and it is in the top-47 coins by trading volume (24H).

The first time DOGE reached its peak was immediately after its listing on December 19, 2013, when it grew to $0.001512, a 3x increase. The price adjusted following that, but soon DOGE reached its second peak on January 21, 2014 ($0.002335), while the entire market was falling. At first, this growth was caused by the signing of a new partnership with GoCoin in September 2014, but the main driver of price growth was the fact that on January 19, 2014, the Dogecoin community and foundation raised $50,000 for the Jamaican Bobsled Team to help it to go to the Sochi Winter Olympics. As a result, DOGE reached the second place by market capitalization, overtaking Litecoin and Ripple. The following two fundraising initiatives led to a weak price strengthening from March 22 to March 25, 2014.

In addition, the increase in the price of DOGE had fundamental reasons in February and September 2014. After that, the DOGE price essentially follows the trend of the entire market, which is quite understandable. Most likely this is due to the fact that Jackson Palmer left the team in 2015. After that, GitHub became inactive, and the team stopped actively working on the project’s development. Therefore, the DOGE price change is mainly speculative and depends on the behavior of the entire market at the moment.

DOGE is mainly traded against USDT (36.24%), BTC (30.60%), QC (29.07%), and ETH (3.14%). Its volume is represented by the Coinsbit (50.03% of DOGE/BTC volume) and HitBTC (57.54% of DOGE / USDT volume), but these exchanges do not seem particularly reputable, as it appears that trades are often done by bots instead of actual traders, on some exchanges. Consequently, the real trading volumes and the liquidity of the coin may be lower. Unfortunately, Dogecoin does not have the financial resources to apply for listing on top exchanges.

Dogecoin has lower trading volumes compared to Ripple and Bitcoin Cash. Overall, the dynamics of trading volumes among all project are almost the same. It confirms one more time that Dogecoin depends on the entire market. It is well traced starting from 2017.

Another clear indicator that Dogecoin basically follows market behavior is its figure of 30-day volatility. However, DOGE is less volatile than its competitors at the moment. This is attractive for regular users.

In the short-term Dogecoin has a neutral outlook, with buyers and sellers currently locked in a fierce battle for control of the DOGE / USD pair around its key 200-period moving average on the four-hour time frame.

The four-hour time frame also shows a valid bearish head and shoulders pattern and a valid bullish inverted head and shoulders pattern, which is adding to the near-term uncertainty surrounding the pair.

The bullish scenario would take the cryptocurrency towards its December 2018 trading high, while the bearish scenario would see the DOGE / USD pair falling to a fresh yearly low.

DOGE / USD H4 Chart                                                                                (Source: TradingView)

The Stochastic Indicator on the four-hour time frame is currently bullish, although it is trading close to overbought conditions. The MACD indicator is currently neutral on the four-hour time frame with the indicator generating no clear trading signals.

Traders should note that an even larger bullish inverted head and shoulders pattern will start to take shape if a bullish breakout occurs towards the December 2018 trading high.

Dogecoin remains bearish over the medium-term, with the cryptocurrency currently trading below the neckline of a large head and shoulders pattern on the daily time frame.

Furthermore, the cryptocurrency is trading well below its trend defining 200-day moving average. The DOGE / USD pair’s key 100-day moving average currently offering the strongest form of technical resistance on any moves higher.

The MACD and Stochastic indicators are also showing sizeable amounts of bullish price divergence on the daily time frame, which started to form around November of last year.

DOGE / USD Daily Chart                                                                                                           (Source: TradingView)

The Stochastic Indicator on the daily time frame is attempting to recover higher, with a bullish line crossover in its early stages. Traders should also note the bullish divergence that is present on the indicator from November last year. The MACD indicator remains neutral and is currently failing to generate a clear trading signal. Similarly, the MACD indicator is also showing bullish price divergence from November 2018.

Traders should continue to monitor daily price closes below the neckline of the head and shoulders pattern; any sustained price closes above the neckline of the pattern may be a sign of a potential bullish reversal.

The long-term outlook for Dogecoin is bearish, with a large head and shoulders pattern clearly visible on the weekly time frame. The cryptocurrency is also trading well below its key 100-week moving average.

Traders should note that the weekly time frame shows bullish MACD divergence spanning back to December last year, which could be a potential sign that we may at some stage see an upside recovery back towards the best trading levels of December 2018.

DOGE / USD Weekly Chart                                                                                                       (Source: TradingView)

The RSI indicator is bearish on the weekly time frame, although the indicator is currently flatlining and generating no clear trading signal. The MACD indicator is currently bearish on the weekly time frame, despite a correction higher in the MACD histogram, which has been trending higher while the cryptocurrency has been trading sideways.

Traders should note that a smaller head and shoulders pattern may be starting to take shape inside the larger head and shoulders pattern.

DogeCoin has reached a critical juncture in the short-term, with a strong directional breakout in the cryptocurrency drawing near.

Traders should continue to view the cryptocurrency as bearish over both the medium and long-term time frame as the DOGE / USD pair trades well below all key moving averages and also below the neckline of a head and shoulders pattern on the daily time frame.

If sellers start to lose bearish momentum, traders should be mindful of the sizable pockets of bullish MACD price divergence on both the daily and weekly time frames.

Moreover, this project has several shortcomings that greatly reduce its competitiveness: a weak team, an inflationary model, a lack of a roadmap, innovations and financial resources. These factors indicate that the Dogecoin blockchain will not be able to compete with other projects in the long-term.

The only thing that makes Dogecoin alive is its friendly and large community. Still, it can only maintain short-term competitiveness of the project.

Due to the risks associated with the project, Dogecoin is graded D.

We consider a D Grade to mean the consistent failure to deliver on promises with no verifiable signs of progress, leading to significant degree of uncertainty. Underlying tech is unproven. Token price is very susceptible to adverse market conditions and exhibits persistent volatility with low level of liquidity, resulting in substantially high level of risk.Additional InformationDogecoin Website Digital Asset Evaluation & Report (DARE) Methodology Introduction To The Framework

The Digital Asset Report and Evaluation (DARE) is a standardized, dynamic approach to evaluating blockchain-based projects and identifying value in the associated crypto-assets.

The report is the result of an exhaustive research and analysis process based on seven fundamental factors. Based on a weighted grading of these seven project fundamentals, a verdict and letter grade conclude each report, which is followed up with periodic updates, released over a quarterly basis.

The analysis, verdict and accompanying grade reflect our opinion on the long-term value prospects of a given token based on the current state of project development and indicators of future commercial viability.

The state of product development and indicators of commercial viability derive from an analysis of seven principle project fundamentals – market opportunity, ecosystem structure, token economics, core team, underlying technology, and roadmap progress.

The underlying methodology involves both quantitative and qualitative analysis to ensure that we produce the most accurate picture possible at the time we conduct our evaluation.

As a publication focused on assessing the long-term value and associated risks of a token project, we do not encourage the use of DARE as a short-term buy/sell indicator and this report does not represent financial advice.

The Initiation Report

Our first look at a token or cryptocurrency employs the Initiation report as a vehicle for delivery. Initiation reports provide readers a comprehensive analysis of the project fundamentals and draws hard conclusions from our assessment.

The details of the Initiation report include a project summary, project introduction, presentation and analysis of seven key project fundamentals, concluding with a grade and final verdict derived from our weighted evaluation system.

The Update Report

Each initiated token or cryptocurrency will undergo a sequential reevaluation, with Update reports presenting the latest, most relevant analysis on a quarterly basis. The content contained in the update report is confined to analysis of changes in project fundamentals that influence the long-term value prospects of the token or cryptocurrency.

Updated project grades and verdicts are provided based on a reassessment of the seven factors underlying our methodology.

Grades assigned to tokens or cryptocurrencies in Update reports can reflect a change in our opinion of the project or provide a reaffirmation of the Initiation report.

Methodology

We consider the project-asset paradigm from seven key angles: market opportunity, ecosystem structure, token economics, core team, underlying technology, and roadmap progress.

The evaluation examines the current state of the project, how it relates to the initially stated goals, and provides an analysis of each fundamental to approximate an accurate outlook for the future.

These factors are all, in some way, codependent, so they are analyzed both individually and in the context of the overall scope and progress of the project. The evaluation process utilizes a proprietary scoring system comprised of weighted variables based on the follow project fundamentals.

Market Opportunity

It is important to examine the market opportunity of each blockchain project to determine the prospects for future growth. The market opportunity(s) of a given project are assessed according to the addressable target market size and competitive advantages, if any, held by the project.

The addressable market size is a reflection of the potential number of consumers and valuation of the target industry of the project.

The competitive advantage(s) of the project and closest contenders both within and outside the blockchain space are weighted heavily in the analysis of the market opportunity.

Ecosystem Development

Blockchain projects are highly dependent on network effects. It does not matter if the project is very innovative, if its acceptance in the community and the market is low. This is especially important for network projects that are being built for future dApp development and rely on exponential ecosystem growth for success.

We take a comparative look at variables such as number of active addresses, on chain transactions and number of community supporters to determine the health and potential of the ecosystem.

The number of existing dApps and quality of partnerships are other variables taken into consideration to assess this fundamental.

Of great importance to any ecosystem is the level of decentralization – to establish this, we ascertain the spread of assets, structure of governance and role of validators in the network.

An ideal project will have proven partnerships and active dApps on its network, and a strong community of supporters and developers to foster expansion. The network architecture should also be in line with the target level of decentralization. In its entirety, the evaluation incorporates, but is not limited to:

Examination of the token economics begins with a comparative analysis of the project market cap with respect to its relative position to other projects. Analysis also includes evaluating the role of the token, potential drivers of demand, and other factors that may lead to appreciation in value over time.

Token Economics

Assessment of the token economics primarily incorporates variables such as:

Token Performance

Here we consider price volatility risks associated with underlying asset. Token performance is weighted slightly lower than the other fundamentals because of the more transient and dynamic nature of price movement, volume and liquidity.

We look at the price and volume performance trends of the tokens in the context of the overall market, as well as, individual project dynamics. It is important to note that while volatility reflects risk, it is not necessarily an accurate indicator of the commercial viability of the project or long term value of the token.

The ideal project will have an asset with positive long, medium and short-term price momentum, in addition to strong, steady volume on major exchanges with a low level of vulnerability to price swings. The evaluation incorporates, but is not limited to:

Core Team

The core team takes into consideration the influence of the leaders and central developers on the prospects of a given project.

Team competency and capability are assessed according to an analysis of their credentials and the espoused ambitions of the project. In addition to credentials that are backed up by strong evidence from a demonstrable track record of prior successes in previous business and engineering pursuits, the size and balance of the team are also assessed in relation to the goals and scope of the project.

Moreover, the overall stability and sustained growth of the team are used as indicators of project viability.

Variables which are factored into the core team score include, but are not limited to:

Underlying Technology

Technological development is a central aspect any blockchain-based project. Here we assess the functionality of technology and quality in comparison to competing projects.

The ideal project will have relevant technological solutions, be keeping on track with the stated milestone schedule and be producing quality code. The evaluation incorporates, but is not limited to:

Roadmap Progress

The espoused goals laid out by the team, the initial plan and updated iterations of the roadmap, represent crucial indicators of the ability of the team to deliver on promises in addition to providing a critical metric of commitment to the project.

Timely delivery on milestones is assessed, in addition to upcoming catalysts or windows of opportunity that could prove crucial to the long-term project prospects. Accountability of the team is also taken into consideration through an evaluation of the team’s communications with the community, and is given additional weight when evidence is available to corroborate claims.

Crypto Briefing provides general information about cryptocurrency news, crowdfunded tech startups, and blockchain technology. The information on this website (including any websites or files that may be linked or otherwise accessed through this website) is provided solely as general information to the public. We do not give personalized investment advice or other financial advice.

Decentral Media Inc., the publisher of Crypto Briefing, is not an investment advisor and does not offer or provide investment advice or other financial advice.  Accordingly, nothing on this website constitutes, or should be relied on as, investment advice or financial advice of any kind. Specifically, none of the information on this website constitutes, or should be relied on as, a suggestion, offer, or other solicitation to engage in, or refrain from engaging in, any purchase, sale, or any other any investment-related activity with respect to any ICO, STO, digital asset, or other transaction. Note that the authors of this report may be invested in digital assets that are mentioned here.

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. expressly disclaims any and all responsibility from any loss or damage of any kind whatsoever arising directly or indirectly from reliance on any information on or accessed through this website, any error, omission, or inaccuracy in any such information, or any action or inaction resulting therefrom.

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