Dogecoin is the most popular and quite the most successful meme cryptocurrency out there. In fact, it is so popular we can’t help but constantly ask ourselves if Dogecoin is a good investment.
The answers vary. The coin is most of the time dismissed because it started as a joke.
But how could a joke stand up since 2013 and constantly reemerge?
Well, that’s what we want to explore in this article.
This article does not represent financial advice, and you should always do your own research before taking any decision.
Table of Contents
What is Dogecoin?
The official website tells us that Dogecoin is an open-source, peer-to-peer digital currency favored by Shiba Inus worldwide. Most importantly, a Dogecoin’s value is a Dogecoin.
Back, in 2013 Jackson Palmer purchased a website and photoshopped the Shiba Inu Doge meme over a coin and made the dogecoin.com website. His goal was to create a fictional currency that was meant to mock the market’s greed and the clone coins that kept popping out.
Palmer had never intended to do anything more than a joke; however, American software developer Billy Marcus contacted him to propose turning the joke into a reality.
So, Dogecoin came into existence, having its bases on a fork of Litecoin, called Luckycoin.
If it’s a fork of Litecoin, then Dogecoin is a proof of work coin.
Exactly! Believe it or not, Dogecoin has its own functioning proof of work blockchain with Dogecoin miners, transaction confirmation, and all.
The network supports 30 transactions per second and confirms a transaction in 5-10 minutes at the cost of only one cent.
In order to improve security and miner profitability, in 2014, the meme cryptocurrency adopted merged-mining. Thus, Litecoin miners could become Dogecoin miners without increasing their costs or using additional resources.
In 2018, the Initial supply of 100 billion had been reached, and from that point, each mined block produces 10,000 new Doge, increasing the total supply by 5 billion coins per year.
That may seem like a lot. But considering the tokenomics, the inflation is not that high.
Dogecoin has tokenomics?!
Yes, Dogecoin has tokenomics. If you wondered how many Dogecoins are there, there is over 129.3 billion Doge and the number is growing, with 100% of the total supply in circulation.
The 5 billion Doge minted yearly corresponds to an inflation of 3.87%, which is actually low compared to other inflationary cryptocurrencies. And as the years go by, that percentage will actually get even lower as the new 5 billion Doge will represent a smaller ratio of the total supply.
As a launching method, Dogecoin has gone through a fair launch without any pre-sales or private sales, with every single coin being available to the public.
What is Dogecoin used for?
Over time, Dogecoin has been primarily used for tipping Reddit and Twitter users. But weirdly, this meme coin is listed on most crypto exchanges.
It is also accepted by various vendors. You can use Doge to buy food, drinks, hosting, and other stuff from the internet.
Recently, the electronics retailer Newegg has implemented Dogecoin as a payment method in more than 70 countries.
And of course, besides being a tipping mechanism and a cheap means of exchange, Doge is also a “little extra” Litecoin miners get for securing the Dogecoin blockchain.
Dogecoin in time
Dogecoin started as a mockery in 2013 at Jackson Palmer’s initiative and turned into a real cryptocurrency with the help of Billy Marcus.
In 2014, Litecoin founder Charlee Lee approached the Dogecoin team to propose merged-mining to secure the network.
The cryptocurrency was designed to keep a low value and be approachable to newcomers, but that didn’t stop the team from organizing community funding and sponsor various events.
The foundation and the community sponsored the Jamaican bobsled team and Shiva Keshavan in the 2014 Sochi Winter Olympics.
Another famous sponsorship is the fundraising for NASCAR Sprint Cup Series driver Josh Wise. The community raised $55,000, and the car was nicknamed the “Moonrocket”, featuring a Dogecoin/Reddit-sponsored paint scheme.
In more recent news, it seems like Dogecoin is about to fundraise for NASCAR again as on March 2, 2021, NASCAR Xfinity Series team B. J. McLeod Motorsports announced that the crypto would be sponsoring the #99 car in the Alsco Uniforms 300 at Las Vegas.
But going back to memes, Dogecoin has always received strong support and engagement on Social Media. It was always popular on Reddit and Twitter especially.
Around these platforms, the Doge community has popularized objectives such as “Dogecoin to the moon” and “Dogecoin to $1”.
Elon Musk often tweets about Dogecoin and trolls his followers, driving up pumps. And nowadays, increasingly more TikTok influencers encourage their audience to get into the Dogecoin hype train.
Is Dogecoin a Good Investment?!
Internet users have been talking about Dogecoin going up since it started. There have been various topics encouraging Reddit users to invest in Dogecoin around $25 to get $10,000 when it gets to $1.
Leaving the hype aside, we can see that Dogecoin is going up. But there is a catch.
Doge’s success in 2021 and its resilience over time comes from a combination of social media popularity, meme culture, influencers, and speculation.
The truth is, speculators are winning the most from Dogecoin’s pumps and dumps. And a relatively steady price for this coin is quite improbable, especially considering that more than 50% of the coins are kept in 3 wallets whose identity is unknown.
And if you think of investing in Dogecoin before it gets to $1, you should keep in mind that the coin has a price of $0.26 at a market cap of $33 billion. And considering the inflation, Dogecoin needs a market cap of at least $132 billion to reach $1.
That’s quite a lot to accomplish. However, the cryptocurrency market is a strange place and Dogecoin is already an absurd cryptocurrency that has existed for almost a decade.
We can’t dismiss the possibility of seeing Dogecoin reach $1 through the power of memes and social media. However, speculators are most likely to crush the price afterward.
- Dogecoin is an open-source, peer-to-peer digital currency favored by Shiba Inus worldwide. Most importantly, a Dogecoin’s value is a Dogecoin.
- Dogecoin is a proof of work cryptocurrency based on Luckycoin, a Litecoin fork. Because of that, Litecoin miners can merge-mine Dogecoin alongside Litecoin.
- Dogecoin has a total supply of 129.3 billion Doge with an inflation of almost 4%. It is used for tipping Reddit and Twitter users, buying products and services from various online vendors, and for incentivizing Dogecoin miners.
- In time, Dogecoin has seen several pumps and dumps, but it seems to always come back.
- As an investment, Doge seems to be surrounded by speculation. However, we can’t dismiss the possibility of seeing Dogecoin reach $1 through the power of memes and social media.