No, the missing part is the actual fraud.
Bernie Madoff for example literally lied about assets under management. Dogecoin is just a digitally scarce ledger, with all there is to know about it publicly and clearly available.
It's not fraudulent, just silly--it was built as a joke after all.
The overwhelming majority of the liquidity and price action is driven by Tether which of course is backed by thin air. This fake money is used to pump up the price to drive in real money which can then be used to pay off the earlier investors. Taken in isolation no part of the system individually forms a classical Ponzi scheme. However, put the pieces together and it start to look awfully suspicious.
> The overwhelming majority of the liquidity and price action is driven by Tether which of course is backed by thin air.
Would you please elaborate on the connection between Doge and Tether?
I can get Doge without ever using Tether. Not that I have any Doge.
That's not really how the financial system works. Money enters circulation when someone takes out a loan. It leaves circulation when that loan is repaid. It is low interest rates that cause an increase in asset values.
> Would you please elaborate on the connection between Doge and Tether?
Tether is 65% of the liquidity in the entire crypto space. Check out the chart for Bitcoin, I think it's even higher for alts but the DOGE coinlib chart isn't right today. [1]
> I can get Doge without ever using Tether. Not that I have any Doge.
That's my point, USDT is printed - unbacked - pushing the price of Doge up, which drives retail enthusiasm, and retailers then purchase Doge with real dollars.
There's other schemes too, I mean, at one point in 2017 99% of all of the world's Litecoin trading volume was two bots at Coinbase trading back and forth between eachother. [2]
[1] https://coinlib.io/coin/BTC/Bitcoin
[2] https://www.complianceweek.com/regulatory-enforcement/cftc-f...
But unlike me and my credit lines, the US Gov has no credit limit. It's akin to printing, since it takes out new loans to service its current debts and operational expenses.
The FED is mandated to purchase US bonds.
I do think you make a good point about Tether artificially inflating the price, but I do see that as Tether's issue. Not that it won't tank crypto prices, just that it's not Doge that's fraudulent.
I think that's partially true. For the most part debt isn't held at the Fed, and in steady state the Fed unwinds their balance sheet over time. They hold $4.5T - a lot by any measure - but not out of the $28T total outstanding. The majority of that is held domestically by US entities. The next major holder is Japan.
The Fed isn't mandated to purchase bonds, per se, they have the ability to should circumstances necessitate. Their mandate is to maximize employment in the United States and to maintain a low, predictable rate of inflation. They have this tool in their chest to achieve these goals.
The US government has "no credit limit" in the same way your Amex charge card has "no credit limit." It's limited in how much it can borrow by its ability to service debt and also its ability to find new holders of its debt. That's not limited per se, but it's certainly not unlimited either.
After all a loss in confidence would lead to buyers demanding higher interest rates which could be catastrophic.
And, it has nearly been reached quite a few times causing fun things like furloughs and government shutdowns of various degrees.
Doge is a joke, and that’s not a secret.
It attracts pump and dumb schemes, but it’s not a Ponzi scheme, those are very different things.
You know, I'm not sure its so crazy to disregard that part if you're a regulator. Wouldn't scams just use this as cover? "Oh it's a joke, but people are making real money off of it. wink wink. It's silly but it's going up and up!"
I’m not saying they have been lied to, but it definitely wouldn’t surprise me if they have?