About this Statement
Bitbuy Technologies Inc. (“Bitbuy” or “we”) believes that our users should understand the crypto assets that they are able to trade using our crypto trading platform (the “Platform”). One of the crypto assets we offer on the Platform is Dogecoin (“DOGE”). We created this summary to help you understand the basics of DOGE as well as some of the risks involved in trading it. While we tried to describe the key features of DOGE here, this summary isn’t meant to tell you everything you’d want to know before investing in it. You should also do your own research on DOGE to make sure you are comfortable investing in it.
Description of DOGE
Jackson Palmer, a marketer, and Billy Markus, a software developer, created DOGE in 2013. DOGE was intended to be a joke or parody of the crypto asset industry, which is evident in the fact that it was inspired by a popular meme based off of an image of a Shibu Inu dog. The Dogecoin network (the “Dogecoin Network”) was created quickly and without much effort. The code underlying the Dogecoin Network was essentially copied from the code underlying the Luckycoin network, which was itself a fork of the Litecoin network. While Jackson Palmer left the project in 2015, Billy Markus continues to remain involved with the Doge Network.
Like Litecoin (“LTC”), DOGE is focused on handling simpler online transactions than Bitcoin (“BTC”). Whereas BTC is more suited for use as a high-security store of value (like gold) and making large international transfers, DOGE was designed for small online purchases and to make payments to friends.
DOGE also shares many similarities with BTC. Both rely on underlying networks which have associated blockchains, utilize “private keys” and “wallets” to enable transfers and track ownership, facilitate the creation of new supply via “mining”, include software source code that governs the cryptographic operations that verify and secure transactions and allow participants in the network to modify the open-source software and persuade other users and miners to adopt the proposed modification.
Despite these similarities, DOGE has considerably lower transaction fees and faster transaction speeds than BTC. DOGE facilitates faster payments and lower transaction fees by tweaking the way blocks work on its network. Where transactions are confirmed on the BTC network by the addition of new blocks, which are added to the blockchain every ten minutes, DOGE blocks are added to the blockchain every minute, meaning that DOGE confirmations happen ten times faster than BTC confirmations. DOGE’s transaction fees are also much cheaper than BTC transaction fees. Since its launch, DOGE has seen average transaction fees that are only a fraction of what you would have to pay using BTC – often lower than a cent. In addition, whereas BTC has a capped supply, DOGE is an inflationary crypto asset, meaning that there is no limit on the amount of new DOGE that can be minted. Over time, the inflationary model could disincentivize miners from securing the Dogecoin Network. As a result, its mining process was integrated with the Litecoin network’s in 2014, which means that anyone mining LTC can also mine DOGE without additional work.
Risks
Like other crypto assets, there are some general risks associated with investing in DOGE. We describe many of these general risks in the risk statement we publish on our website, including risks relating to: (i) volatility; (ii) access, loss or theft, (iii) control of processing power; (iv) settlement of transactions on crypto asset networks; (v) momentum pricing; (vi) private keys; (vii) internet disruptions; (viii) faulty code; (ix) network development and support; (x) regulatory risk; (xi) network forks; (xii) air drops; (xiii) voting rights; (xiv) cybersecurity incidents and other systems and technology problems; and (xv) unforeseeable risks. We also point out some risks that are specific to DOGE below. While we tried to describe the key risks associated with DOGE here and in our risk statement, these aren’t all of the risks associated with trading in DOGE. You should also do your own research on DOGE to make sure you are comfortable investing in it.
Concentration of DOGE Holdings
The largest DOGE addresses hold a very large portion of the DOGE currently outstanding. Market volatility may result when large holders of DOGE decide to sell significant amounts of their DOGE positions.
Relative Lack of Synced Nodes
When compared to the Bitcoin network, the Dogecoin Network has significantly fewer nodes (i.e., computers) synced within five blocks of the chain’s tip. Less nodes being synced to the blockchain’s tip makes it in more difficult for new nodes to connect to the network, which results in less decentralization and has the potential to undermine the permissionless nature of the Dogecoin Network.
Volatility Based on Public Sentiment
DOGE has seen extreme fluctuations in value related to public statements from celebrities and other public individuals. Most notably, statements from Tesla founder Elon Musk have caused the price of DOGE to rise and fall in a manner largely unrelated to its functionality. DOGE is likely at a greater risk of volatility than other crypto assets due to this history.
How Bitbuy Decides to List Crypto Assets
Bitbuy reviews crypto assets before making them available for trading on the Platform. In making our decision to list a new crypto asset, we consider publicly-available information about the crypto asset, including (among other things) its creation, design, governance, usage, supply, demand, maturity, utility, liquidity, material technical risks and legal and regulatory risks.
To date, we have only made crypto assets available for trading on the Platform which have significant supply, demand and liquidity. In our experience, crypto assets with these qualities tend to also satisfy the other criteria we evaluate as part of our review. That being said, our review process is fulsome and flexible, and we don’t prioritize any one factor over another. You should review the risk statement published on our website for more information about our procedures for determining whether to make a crypto asset available for trading on the Platform.
Regulatory Information
Bitbuy is offering crypto contracts to purchase and sell DOGE in reliance on a prospectus exemption contained in the exemptive relief decision Re Bitbuy Technologies Inc. dated November 30th, 2021. The statutory rights of action for damages and the right of rescission in section 130.1 of the Securities Act (Ontario) and similar legislation in the other provinces and territories of Canada would not apply in respect of a misrepresentation in this Statement.
No Canadian securities regulatory authority has expressed an opinion about DOGE, including an opinion that DOGE is not itself a security and/or derivative.