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Dogecoin, The Meme Cryptocurrency: An Overview

by Aryan
Dogecoin

Dogecoin is a digital currency similar to Bitcoin and Ethereum, but it’s not the same as that of famous coins. Dogecoin was named after when the first meme was made, at least partially, as a joke comment for crypto nerds. Despite its uncommon origin tale, Dogecoin has soared in prominence in 2021, and as of this article, it is the fifth biggest crypto by market cap.

Dogecoin, What Does It Stand For?

Dogecoin was founded in late 2013 by software developers Billy Marcus and Jackson Palmer, and Palmer created the cryptocurrency’s icon by misspelling the term “doge” to represent a Shiba Inu puppy, which was a common meme at the moment. “Doge was starting to mock Bitcoin,” Pat White, CEO of Bitwave, said; in the early years of Dogecoin, a group of supporters organized promotional campaigns to raise awareness of the cryptocurrency, such as raising funds to take the Jamaican Bobsleigh squad to the 2014 Olympics or funding a NASCAR racer.

Dogecoin acquired a cult following in early 2021 on Reddit’s WallStreetBets chat forum, the primary catalyst for the GameStop incident in January—where supporters vowed to boost its price “to the stars”. Dogecoin is no longer a joke, as its popularity has skyrocketed, increasing by over 5,000 percent in 2021; even Tesla CEO Elon Musk is one of its supporters, describing Dogecoin as his favorite cryptocurrencies. Musk has dubbed Dogecoin the “people’s cryptocurrency” and claimed that an actual Dogecoin coin would be planted on the moon.

Working

Dogecoin is a cryptocurrency that, like Bitcoin and Ethereum, is based on blockchains- Blockchain is a decentralized digital database that records all transactions produced to use decentralized virtual money transparently and safely. The Dogecoin blockchain database, which is regularly modified for any transactions in the network, is carried by all investors in an equal edition. Dogecoin’s blockchain network, including those of other cryptocurrencies, employs encryption to ensure the security of all transactions.

Miners are people who use machines to solve complicated formulae to manage payments and document them on the Cryptocurrency blockchain—a method known as “proof of work.” Miners get extra Dogecoin in return for making payments and maintaining the blockchain database, which they will either keep or offer on the free market.

You could use Dogecoin to make transfers and investments, but it isn’t a perfect cash store. There is no maximum limit on the amount of Dogecoins that can be mined, making the cryptocurrency extremely inflation-indexed through nature. The blockchain compensates miners for their efforts by generating tons of potential Dogecoins each day, making unsustainable price increases in Dogecoin challenging to sustain over time.

There is also little reason to keep Dogecoin for the medium-haul because there’s no maximum cap on the amount of Dogecoins that will live. Thousands of new Dogecoins are launched into the exchanges every single day. Because of the platform’s lifetime limit on the amount of money that could make Bitcoin’s price continues to expand.

“Doge would be more like DASH or Bitcoin Cash than Bitcoin,” White said, “where the ultimate target is a purchasing currency.” Dogecoin’s per-coin worth has traditionally been relatively poor, hovering about $0.003 for much of 2020, meaning people were far more inclined to give these back. “Users on social media sites such as Reddit, Twitter, Facebook, and others will use Dogecoin to credit, or “tip,” one another and for sharing content,” according to Gray. The increases in Dogecoin that occurred in 2021 could not be sustainable. It is to be seen how the cryptocurrency tradition of tipped and donation would survive.

Is Dogecoin a Good Investment: Find Out

Those who purchased Dogecoin at the beginning of 2021 were paid handsomely. White is still hesitant to buy Dogecoin, particularly as an acquisition. The continuous influx of new coins into the market has held the coin’s worth under slight decline strain.

In comparison to other significant cryptocurrencies, White also cautioned that Dogecoin poses additional security concerns. “It hasn’t been subjected to the same degree of encryption and code inspection as Bitcoin or Ethereum. Plus, since there isn’t much of a mining culture around Doge, the risk of a mining-level assault is much higher than it is with anything like Bitcoin.” 

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