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Are scammers invading Dogecoin again, The Outline

Are scammers invading Dogecoin again, The Outline

The whimsical joke currency and its trusting community have attracted predators te the past.

Wolves te doges’ clothing

Are scammers invading Dogecoin again?

The whimsical joke currency and its trusting community have attracted predators te the past.

Dogecoin, a cryptocurrency that commenced spil a gag based on an internet meme about Shiba Inus, made headlines this weekend when its market capitalization shortly spiked to $Two billion. That’s up from just $24 million at the beginning of 2018. Again, this is for a currency that wasgoed created spil a joke which, according to its creator, hasn’t bot updated te two years.

Albeit the bubble seems to have bot punctured for now — the market cap has fallen to $1.6 billion spil of this writing — fear and uncertainty has spread via the Dogecoin community, which primarily lives on a subreddit where all posts show up ter Comic Sans.

“I don’t make price predictions, but I hope anyone buying into Dogecoin at thesis prices is aware that the vast majority of its value comes from market manipulators and speculation, not actual use spil a currency,” said Ben Doernberg, a former houtvezelplaat member of the Dogecoin Foundation, ter an email.

Dogecoin co-founder Jackson Palmer, who embarked the project te 2013 spil a riff on the media madness about cryptocurrencies like Bitcoin, also voiced misgivings about the currency’s rising value. It is “totally possible that price manipulation is taking place, spil the markets are unregulated and anyone can tapkast into an exchange API and wreak havoc,” he told The Outline. For example, bad actors could write a script to trade back and forward with themselves on an exchange with zero or no transaction fees and drive up the price.

If the price of Dogecoin is being manipulated by a bad actor, it wouldn’t be the very first time. Te its early years, Dogecoin wasgoed whimsical and powered by goodwill: You’d use it to send micro tips to people you liked on Twitter, for example. It attracted an unusually positive online community that used the cryptocurrency to raise funds for odd-yet-wholesome causes including around $30,000 to help bring Jamaica’s two-man bobsled team to the Sochi Winter Olympics te 2014.

But ter 2014, shortly after the bobsled fundraiser, an investigation found that a pseudonymous hedge fund manager wasgoed likely making large trades with himself te order to drive up the currency’s price before selling off his holdings at a profit — a budge that rankled longtime ventilatoren.

Cryptocurrency markets are relatively petite, which makes it lighter for bad actors to influence. Even te Bitcoin, the den facto cryptocurrency, just 1,000 people reportedly own 40 procent of the market. When thesis “whales” budge or liquidate funds, it can send the entire market into a spin — and te the little-regulated world of digital currency, it’s often legal for them to coordinate large trades. It’s not clear how many people own Dogecoin, but with just 100,000 subscribers on Reddit, the pool is likely even shallower than Bitcoin.

Te 2015, a cryptocurrency exchange funded by the community evaporated, along with its founder and what wasgoed then worth inbetween $Two million and $Four million te Dogecoin. Most community investors didn’t lose a fortune, but many felt burned by the act of bad faith. It wasgoed a betrayal of the scene’s cozy aesthetic, and a sign that no space is safe from the greedy temptations of the financial world. “Because the Dogecoin community wasgoed based so wholly on generosity, wij were like sheep to the slaughter,” a pseudonymous user said of the incident.

“Bitcoin has this well-earned paranoia about strangers on the internet, but Doge, the meme, is this hopeful, optimistic worldview,” Doernberg told Motherboard te 2015. “It turns out, that’s very attractive to predators.”

After those scrapes, Dogecoin largely fell out of the headlines until its price began to spike recently — however there are still some stores that accept it, and it does have a few volunteer developers who keep abreast of security issues. But now, with an overall value that’s edged out many serious crypto contenders, the community is reckoning with what that influx of value and attention means for its future. The Dogecoin subreddit is still brimming with positive memes, but ter one popular thread this week, community members gathered to discuss ways to keep the toneel clean and friendly. “The problem is, spil the value goes up, wij’re going to attract people into this sub who don’t care about the personality and culture,” wrote one user.

“I have a lotsbestemming of faith ter the Dogecoin Core development team to keep the software stable and secure,” Palmer told CoinDesk, “but I think it says a lotsbestemming about the state of the cryptocurrency space ter general that a currency with a dog on it which hasn’t released a software update ter overheen Two years has a [billion dollar] market cap.”

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