Dog coins have garnered a lot of attention in 2021 with the price surge that the most well known dog coin, Dogecoin, has experienced. The unprecedented price surge of a literal joke coin like Dogecoin has led to the emergence of many copycat coins.
These copycat coins have been called “dog coins” by the greater cryptocurrency community because the coins are usually named after a dog breed. Unfortunately, almost all the dog coins have turned out to be rug pulls, which is not too surprising for those that know what to look for in altcoins.
With that in mind, this article will cover the history of dog coins and how they got rugged. We will also discuss some of the problems that dog coins have and why them being rugs is inevitable.
The Original Dog Coin – Dogecoin
Dog coins go back a long time. In fact, Dogecoin (the original dog coin) was released in 2013, which makes it two years older than Ethereum.
Yes, Dogecoin really is that old.
Anyway, Dogecoin was released in 2013 as a joke by Billy Markus and Jackson Palmer, who both worked as software engineers. The project mainly served as a way to poke fun at the hype surrounding Bitcoin’s (at the time) high price of $350 per bitcoin.
The project was released to a lot of fanfare at the end of 2013. People purchased it and the price surged. It actually had a decent amount of use as a cryptocurrency that Redditors used to tip other Redditors on Reddit.
That was about it for the use of Dogecoin.
The price stayed mostly worthless (read: under $0.01) until the tail end of 2017 when the cryptocurrency market experienced a tremendous bull market.
The price subsequently dropped at the end of the 2017 bull market. Dogecoin remained mostly forgotten outside of Reddit until January 2021.
The Rise and Fall of Dogecoin
Dogecoin experienced tremendous growth in January 2021 at the tail end of the Gamestop short squeeze orchestrated by r/WallStreetBets. The short story is that a decentralized effort by anonymous users on Reddit was able to launch the price of Gamestop over 3000% to do a short squeeze.
This led a few users to the idea that decentralization could be used to pump a cryptocurrency. And the sights were set on Dogecoin.
Dogecoin was to be the next target of the internet to pump to astronomical levels.
For reference, the price of Dogecoin before the pump plan was under $0.01.
Within 24 hours the price had risen over 800% to $0.07.
The price surge did not stop with that, though. Celebrities like Elon Musk and Snoop Dogg began promoting Dogecoin on Twitter. Elon Musk even went on Saturday Night Live poking fun at his promotion of Dogecoin.
Sadly, Musk admitted that Dogecoin was a “hustle” and the price of Dogecoin collapsed from its all time high of $0.68 to nearly $0.40 almost instantly. The price has continued to hover around that range to the time of writing, so we cannot say that Dogecoin has completely collapsed.
To summarize, Dogecoin started out as a joke cryptocurrency way back in 2013. No one took it seriously for 7 years. This changed when it was chosen to be the coin that WallStreetBets would pump after realizing that anonymous users on the internet could pump stocks. This pump gained momentum when celebrities like Elon Musk offered their support. And the initial exuberance ended when Musk admitted it was a “hustle” on national TV causing the price to plummet.
The Second Generation of Dog Coins
The popularity of Dogecoin led to opportunistic users launching their own cryptocurrencies modeled after dogs. This, unfortunately, has not worked out so well for investors into these projects. Though it has worked out quite well for those that have created dog coins.
Anyway, it is not even worth mentioning dog coins because they almost never work for a variety of reasons we will cover in a later section.
Just know that there is only one dog coin even worth considering investing in and that is Dogecoin. You should not bother investing any significant amount of money into the other dog coins.
Are All Dog Coins Rugs?
Yes, all dog coins are rugs. They might be long term rugs, but they are most certainly rugs.
We will put it this way – if a coin’s only purpose is to make money, then it is doomed for failure. A cryptocurrency must offer more value than simply making money for it to work out.
Why It Is Impossible for Dog Coins to Work
We will be blunt here. It is impossible for dog coins to work on any level. There are a few reasons for this. All these reasons are true and quite obvious to anyone that has spent a considerable amount of time following cryptocurrency.
- Dog coins don’t offer any value. Most importantly, dog coins do not actually offer any value. They aren’t very decentralized/secure, they have slow transaction speeds, layer 2 protocols cannot be built on them, and they do not have good developer teams. Basically, these coins have nothing going for them other than publicity.
- Recycled jokes aren’t funny. This falls into a broader human psychology topic, but it’s worth mentioning. Dogecoin worked because it was created as an original joke and nothing more. Dog coins attempt to steal that angle, and it falls flat because everyone knows the project is simply a money grab.
- Anonymous founders are a no-no. The other problem we have with dog coins is that they all have anonymous founders. This is alright for some projects (ie. Bitcoin, Monero, etc.), but it is generally a very bad sign when a project has anonymous founders.
Are Dog Coins a Good Investment?
No, dog coins are terrible investments. The only dog coin that is not a total scam is Dogecoin, but even Dogecoin has some problems that make it a poor cryptocurrency investment. With that out of the way, it is still possible to make money with dog coins.
Just do not expect these coins to have any chance of being taken seriously like Bitcoin, Ethereum, or Chainlink. Dogecoin was created as a joke and will most likely remain that way. Though, as we said, it is still possible for the value of it to increase.
That covers it for how the dog coins got rugged. It is basically a case of scammers seeing that Dogecoin became popular and copying the general template of the coin to entice investors that felt they missed out on Dogecoin.
The dog coins are almost all rugs and not worth investing in, even if they do sometimes make money if you get in early enough and sell at the peak. The risk is simply too high for most people to bear.