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June 28, 2022
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Binance CEO says Dogecoin demonstrates the power of decentralization

It changed the way the cryptocurrency market sees and perceives the value of an asset, regardless of its usefulness or not. The digital asset was only driven by memes and the love of the community. But in less than a year, the asset has become one of the most valuable cryptocurrencies on the market.

The Dogecoin developers have since tried to introduce use cases for the cryptocurrency. Its use as a method of payment has given it a somewhat attractive utility in space. However, that still doesn’t change the fact that, at its core, Dogecoin wasn’t created to do anything but be a joke, and that, says Changpeng Zhao, CEO of Binance, demonstrates the power of decentralization.

people determine the value

Changpeng Zhao attended a session of Q&A with the Associated Press, where he shared his thoughts on the most popular meme coin on the market. For Zhao, he doesn’t understand Dogecoin or how it actually works, but explains that what he thinks about the digital asset doesn’t matter in the grand scheme of things. This is one of the advantages of a decentralized ecosystem.

Dogecoin has fluctuated a lot in the past. However, the meme currency had grown to the point where it was no longer as volatile as it used to be. Also, persevered in the market. Through dips and dips in the market, Dogecoin has resisted. Its success led to the creation of other successful meme coins such as Shiba Inu and Folk Inu. Why are they valuable? Because its value is determined by people.

As Zhao pointed out:

If a large enough number of people in the community value it because it’s cute because they like the meme, then it has value.

The CEO added that an asset only needs someone else who is willing to buy it to have value, and since people are willing to buy meme coins, they are valuable.

For something to have liquidity, it is necessary that a large number of people want to buy or sell. Once you have liquidity, something has value, according to the neutral market. So it’s not for me to judge him.

Is Dogecoin a Bubble?

When asked if the properties listed above for the meme coin qualify it as a bubble, Zhao replied:

To some extent, yes. But it’s not a black and white thing. Dogecoin has been described as a bubble since it started to rise in value earlier in the year. However, Altcoin has maintained the value throughout this time so far, albeit at a lower value.

Binance’s CEO explained that trying to define what a bubble is can be tricky. Assets that dropped more than 80%, such as Bitcoin, are often called bubbles, but Bitcoin bounced back to even higher values ​​after the crash. Zhao also pointed to Amazon’s 90% drop in the early 2000s, but it is now one of the most valuable companies in the world. Most would say it went through a bubble, but CEO Jeff Bezos would disagree, says Zhao.

As for Dogecoin, Zhao pointed out that as long as people understand the risks associated with investing in digital assets, that’s fine.

Source: Bitcoinist

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