CNBC broadcaster Jim Cramer wrote in Twitterthat holders of the “meme” Dogecoin cryptocurrency should be careful. According to Cramer, the altcoin will fall under the supervision of regulators, since it is an unregistered security, reports RBC Crypto.
please be careful with Dogecoin…It is a security. It will be regulated. We will find out how many there are and how many are being created each day to make money for the exchanges.
— Jim Cramer (@jimcramer) January 20, 2022
To Kramer’s publication replied one of the creators of Dogecoin Billy Markus. In his opinion, the TV presenter is not familiar enough with blockchain technology to draw such conclusions.
in terms of “security,” it is a proof of work cryptocurrency so you have to put in work to retrieve the coins from the block, it doesn’t qualify under the howey test. it works the same as bitcoin. in fact, its 99.5% the same code as bitcoin. please educate yourself.
— Shibetoshi Nakamoto (@ BillyM2k) January 20, 2022
Markus recalled that Dogecoin works on the principle of the first cryptocurrency, bitcoin, on the Proof-of-Work algorithm. Also, the “meme” cryptocurrency is not able to pass the Howie test, Markus recalled.
The Howey Test is a test that determines whether certain transactions can be classified as an “investment contract”. If the test is positive, such transactions are subject to the requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934.
At the moment, a high-profile lawsuit continues in the United States over Ripple, which the Securities and Exchange Commission (SEC) at the end of 2020 accused of illegally selling $ 1.3 billion in unregistered securities under the guise of XRP tokens.
At the end of 2021, Dogecoin developers announced that Dogecoin would soon switch to the Proof-of-Stake algorithm. Vitalik Buterin, co-founder of Ethereum, helps the altcoin development team in this.
Proof-of-Work (PoW) is a consensus algorithm that involves performing complex mathematical calculations to ensure the operation of the blockchain and the execution of transactions. In PoW networks, miners perform calculations and receive a reward for this.
Proof-of-Stake (PoS) networks are distinguished by the fact that they do not require complex mathematical calculations and miners to operate. In networks based on PoS, the operability of the blockchain is provided by the holders of digital coins and receive a reward for this. This process is called stacking.
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