Grave pronouncements are circulating amid the recent surge in interest in dogecoin. As the meme-currency rallies, hitting a recent high above 70 cents, some people see the retail-led, celebrity-endorsed in-joke as a potential harbinger for greater government involvement in crypto as a whole. The joke has gotten serious.

Dogecoin is the best-performing digital asset over the past year. Worth less than 1 cent at the start of 2020, dogecoin has become one of the most valuable crypto networks. It has a market cap of $77 billion, making it worth more than Lloyds Banking Group, as Galaxy Digital noted in a recent Dogecoin report. If U.S. investors put all three of their pandemic relief stimulus checks in DOGE, as they came in, they’d be sitting pretty on nearly half a million dollars.

“I don't think people realize yet how badly this Dogecoin thing is going to end. Going to be a disaster of epic proportions and a lot of people that don't know any better are going to get hurt,” Jeff Vandroux, accountant developer of the KeyKeeper Bitcoin IRA, said on Twitter. “It's also going to offer up on a silver platter an excuse for more [government] monitoring.”

There are technical concerns worth taking seriously about dogecoin. Although fairly distributed with about 2,000 active nodes, less than a quarter are fully synced (or broadcasting the most up-to-date history of the blockchain). Some active nodes are missing more than half the blockchain’s transaction history.

Further, it can be incredibly hard to spin up a DOGE node. Galaxy, a well-capitalized digital merchant bank that is planning a U.S. listing, had trouble running Dogecoin core. The network’s one minute block times mean most nodes experience latency, Galaxy found. This makes the network less secure and harder to transact on.

That said, the most apocalyptic fears are overblown. Although vulnerable to 51% attacks, the Dogecoin network is relatively secure. A fork-of-a-fork-of-a-fork-of-Litecoin, Dogecoin is also merge-mined with its forbear, meaning it shares network security with Charlie Lee’s brainchild. And while there hasn’t been active Dogecoin development since 2017, its lead maintainer, Ross Nicoll, is committed to keeping the “currency operational.”

But dogecoin is more of a social phenomenon than a technical one. Launched as a parody of bitcoin and a multitude of copycats, DOGE is paraded as being the “people’s crypto.” That’s what Mark Cuban says as he enables the masses to buy overpriced Mavs merch with DOGE.

In this sense, dogecoin has very real associations with the day-traders’ populist revolt of GameStop. Bloq Chairman Matthew Roszak said yesterday on CoinDesk TV that dogecoin is “a primitive” for what could happen when a band of “like-minded” people realize their collective power.

GameStop made some sundry folk very rich, tanked a hedge fund and enriched several of its Wall Street peers. It also led to congressional hearings on obscure financial mechanisms like “payment for order flow” and t+2 settlement. Changes to both are likely, for better or worse.

Vandroux, the CPA, isn’t alone in thinking what’s happening with dogecoin could end badly. Coin Center’s Neeraj Agrawal thinks widespread losses could increase the heat on the entire cryptocurrency industry. Others have raised similar concerns.

It’s not out of the question that greater market surveillance or “consumer protections” may result from this irrational exuberance.

Despite its technical weaknesses, popular brokerages Robinhood and WeBull are letting people day-trade the coin, while crypto natives like Gemini recently listed it, saying it’s “no joke.” Should they be howled out of town for making money on trading fees? Should they be held responsible for coming government interference? Who is going to take dogecoin out back to make like Old Yeller for the sake of the industry?

Treasury Secretary Janet Yellen told the Wall Street Journal recently: “I frankly don't think we have the framework in the United States” to deal with a host of money laundering, terrorist financing and consumer risk protection that crypto raises. Surveillance is coming one way or another. Man, it's already here.

Is DOGE being made into a scapegoat?