Robinhood’s CEO recently talked about Dogecoin’s potential of becoming the currency of the internet. He made a long thread of tweets talking about the factors that could lead to this. While the doge community and even Elon Musk appreciated the thread, many users didn’t. Some were talking about the Bitcoin lightning network, while others pointed out Robinhood is desperate to promote Doge because of its dependency on the meme coin.
Dogecoin’s potential of becoming the currency of the internet
First off, transaction fees have to be vanishingly small. We’re already there. As of last Nov’s 1.14.5 update, typical transaction fees have been ~$0.003 – which you can experience on @robinhoodapp – compared to the 1-3% network fees that major card networks charge. pic.twitter.com/KHk83nDaek
— Vlad Tenev (@vladtenev) April 14, 2022
Firstly, Vlad talked about the most essential thing for any crypto to become a usable currency: transaction fees. He mentioned that the network fees is very close to zero ($0.003) after the last update back in November 2021. This is great compared to the huge fees of many other tokens.
Secondly, we have the block time, which should be fast enough to make the cryptocurrency usable in real-time. You obviously wouldn’t want to wait for 10 mins at the terminal of a grocery store because the payment takes too long. However, it is also necessary to ensure that it isn’t too fast to prevent “building up too many competing chains and waste excessive amounts of energy establishing consensus.”.Right now, the block time is 1 minute, and the ideal time would be around 10 seconds.
Dogecoin’s current capacity to support 40 transactions per second is also very less compared to the likes of Visa or cryptocurrencies like Solana or Matic. So, there is a need to increase the block size of Dogecoin to 1Gb, and 10 GB later, says Vlad.
He also talked about the issue of the unlimited supply of Doge. Since there is a fixed issuance of 5 billion tokens every year, with time, its effect and the inflation rate decrease. For example, now the supply is around 130 billion, so with a supply of 5 billion, the inflation is less than 4%. In the next 10 years, it will be nearer to 2%.
Dogecoin core devs, I would focus on one thing: coming up with a good process for increasing the block size limit over time. Let me know what you all think!
— Vlad Tenev (@vladtenev) April 14, 2022
So, Vlad’s ultimate take is for Dogecoin devs to focus on increasing its block size. Only then Dogecoin’s potential of becoming the currency of the internet might come to fruition.
The reaction of Twitter users
Like I said above, Robinhood has been extremely dependent on Dogecoin for its revenue and profits. Once the Doge craze subsided, and the price fell from 74 cents to less than 20 cents, the crypto revenue of the platform fell quarter on quarter. Now, many are pointing to the same.
Some users also made fun of him, saying that while Elon has openly said that he likes the meme and so he supports Doge, but Vlad has gone into full fundamentals mode. However, the apt criticism was people pointing out that he could have studied the Bitcoin lightning network instead of writing this thread.
It appears you've spent about 2 hours on this topic.
I recommend spending 2 minutes researching the lightning network and then deleting this embarrassing take.
— Brandon Quittem (@Bquittem) April 14, 2022
The lightning network is all that one could wish for from a cryptocurrency network for wide use. It has lightning-fast transactions speeds, has almost negligible fees, and can support millions to billions of transactions per second. This is possible because the small transactions don’t get lodged on the main network. Instead, they are kept on a side chain between the sender and the receiver.
The adoption of the BTC lighting network has been slow, but Kraken has recently implemented it, and other platforms might as well. So, once that happens, it will kill Doge or any other cryptocurrency that aims to become usable as a currency. It already has the widest adoption, just the implementation of tech is pending.
Dogecoin pumps after Elon’s reaction to the thread
As I was saying …
— Elon Musk (@elonmusk) April 14, 2022
With Elon’s tweet, the price of Dogecoin saw a jump, but like usual, it wasn’t enough to push the price to new levels. A few days back, we saw a jump as well, but the price has fallen back from trendline and fib resistance. It is now trading at $0.143. Unless a significant breakthrough happens for Dogecoin and the crypto markets also stay bullish overall, I don’t see the price making any significant recovery.
It’s terrible because even Shiba Inu has pumped multiple times in the last 1 year. However, Doge has gone cold even with Elon’s backing.
On drawing a fib retracement from a swing high of $0.3392 to a swing low of $0.1310, we can clearly see Doge has been stuck at the bottom channel. And it’s been over 4 months now. The price also fell below the channel once but rose back and retested the 0.236 Fib level but was rejected sharply. Unless we move past this level, Elon’s tweet will only be good enough for some pump and dump.
We might see a major breakthrough for Dogecoin if Twitter takes up on Elon’s offer and he gets a 100% stake in the social media platform. What do you think about Dogecoin’s potential of becoming the currency of the internet? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Robinhood lists 4 new crypto tokens on their platform.
