What Is Dogecoin?

DogeCoin is a cryptocurrency, like Bitcoin or Ethereum, invented by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system that is instant, fun, and without bank fees.

DogeCoin features the face of the Shiba Inu dog, from the "Doge" meme, as its logo. It was introduced on December 6, 2013, and quickly developed its online community. Although it was created as a joke for crypto enthusiasts and took its name from a meme, it exploded in popularity in 2021, becoming the fifth largest cryptocurrency with a market capitalization of approx. 50 billion USD.

How and when did it all start?

DogeCoin was created by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer, who set out to create a digital currency that could reach a wider demographic than Bitcoin.

In addition, they wanted to distance it from the controversial history of other currencies. DogeCoin was officially launched on December 6, 2013.

On December 19, 2013, the meme currency increased by almost 300% in value in 72 hours, rising from $0.00026 to $0.00095, with a volume of billions of DogeCoin per day.

This growth occurred at a time when Bitcoin and many other cryptocurrencies were devaluing after China decided to ban Chinese banks from investing in the Bitcoin economy.

Three days later, DogeCoin experienced its first major decline, dropping 80%.

On December 25, 2013, the first major theft occurred when millions of coins were stolen during a hack on the online platform Dogewallet. This hacking incident prompted tweets about DogeCoin, making it the most mentioned altcoin on Twitter at the time, even though it was a negative event. To help those affected, the DogeCoin community started an initiative called "SaveDogemas". About a month later, enough money was donated to cover all the stolen coins.

In January 2014, DogeCoin's trading volume briefly surpassed that of Bitcoin and all other cryptocurrencies. However, its market capitalization has lagged substantially behind Bitcoin.

DogeCoin lost some of its fun in 2015 as the crypto community in general started to get more serious.

The first sign that all was not well with the DogeCoin community was the departure of Jackson Palmer, who said a "toxic community" had grown up around the coin and the money it produced.

During 2017, and until the beginning of 2018, the DogeCoin cryptocurrency reached a peak of 0.017 USD, on January 7, 2018, placing its total market capitalization at almost 2 billion USD.

In July 2020, the price of DogeCoin increased following a TikTok trend aimed at getting the price of the cryptocurrency to $1.

In January - February 2021, DogeCoin increased by more than 800%, reaching a price of 0.07-0.08 USD, following encouragement from celebrities such as Musk, Snoop Dogg, and Gene Simmons on Twitter.

In April 2021, its price first touched $0.10, before reaching an all-time high of $0.45 on April 16, with a volume of nearly $70 billion traded in the last 24 hours. At the time, DogeCoin's market capitalization was approaching $50 billion, making it the fifth most-valued cryptocurrency.

DogeCoin - predictions for the year 2021 (Image source: stormgain.com)

Dogecoin vs. Bitcoin

Bitcoin and DogeCoin have one thing in common: both are based on blockchain technology, an ingenious data storage system that is extremely transparent and secure.

In simple terms, all transactions that take place in the Bitcoin (or DogeCoin) network are incorporated into batches called blocks. Miners use powerful computers to validate these blocks through a process that involves solving a complex math problem. Once the problem is solved, the miner wins cryptocurrency and the validated block is added to the blockchain.

Moreover, since all nodes must be in consensus, it is practically impossible to attack the blockchain network or falsify information. One person would have to control 51% of the computing power in the network to achieve this and that is beyond unrealistic.

DogeCoin has some significant differences compared to Bitcoin. First, it is faster and easier for miners to complete the mathematical equations that finalize and record transactions, making Dogecoin somewhat more efficient for processing payments.

On the other hand, DogeCoin is currently infinite. This means that miners can continue to solve blocks and earn new DogeCoin forever. By comparison, Bitcoin is limited to 21 million coins, of which 18.7 million already exist. This is because, for every 210,000 blocks, the profit for solving a block is reduced by half. In other words, at some point in the future, the reward will be effectively zero. And after this time, Bitcoin miners will only earn from transaction fees.

How do I buy DogeCoin?

You can buy DogeCoin from a cryptocurrency exchange such as Binance or Kraken. To be able to buy it, it is necessary to set up an account and deposit a certain amount of money. Then, you can buy and exchange cryptocurrencies, including DogeCoin.

As with other cryptocurrencies, after you have bought DogeCoin, it is best to move your investment to a crypto wallet.

Virtual wallets have many forms, from online services to applications on mobile devices or even on a physical hard disk. Secure your wallet with a private password, as it offers an additional level of protection against hackers.

Is it a good investment?

Since there is no limit to the number of cryptocurrencies and millions of new DogeCoins are released into the markets every day, there is very little incentive to hold the cryptocurrency for the long term.

Bitcoin continues to grow in value due to the number of coins that can be created.

Historically, the value of DogeCoin has been very low, around $0.003 for most of 2020, so people have not been very attracted to it as a long-term investment.

The DogeCoin gains that have been seen in 2021 may not be sustainable in the medium to long term. It remains to be seen if the cryptocurrency hoarding culture will continue.

DogeCoin - Elon Musk's favorite cryptocurrency

DogeCoin - Elon Musk's favorite cryptocurrency (Image source: thetab.com)

Elon Musk's tweets are as cryptic and unpredictable as the man himself.

An example is the latest version of the CEO of Tesla and SpaceX. Sharing a photo of Spanish painter and sculptor Joan Miro's artwork, the tech billionaire wrote: "Doge barking at the moon." Musk's post was an ode to the cryptocurrency DogeCoin, which has been one of the favorite topics of discussion on social networks for some time, especially thanks to the billionaire's constant tweets.

DogeCoin saw a 68% jump.

Elon Musk is one of the most ardent supporters of DogeCoin. On February 4, 2021, he wrote: "Dogecoin is the people's crypto."

The simple tweet in favor of the digital currency increased its value by 75%. The tech billionaire followed this up with another tweet that read: "If major Dogecoin holders sell most of their coins, it will get my full support. Too much concentration is the only real issue IMO", "I will pay actual $ if they just void their accounts", he added.

Considering that Musk's tweets have had a considerable impact on the fate of DogeCoin, all eyes are on what will happen next in the world of digital currency.

Finally

In conclusion, the DogeCoin cryptocurrency was created as a joke for the crypto world, but with good intentions and with the desire to bring some improvements to this new world.

Unfortunately, I don't think it managed to bring improvements or anything innovative in the crypto world and it seems to be just a cryptocurrency like many of the more than 9000 on the market at the moment. The infinite number of DogeCoin and the fact that it can be very easily influenced by posts on social media platforms gives great mistrust among investors.

In the medium and long term, I don't see it in the top 10 cryptocurrencies, but as everything you can read here is not financial advice or a prompt to make a choice when it comes to investments, everyone can act according to their convictions.

How much does a DogeCoin cost?

On June 1, 2022, the value of the meme coin was $0.082315.

How do I buy DogeCoin?

Like any other cryptocurrency, DogeCoin is bought on digital currency exchanges. You can buy from Binance, eToro, or Kraken.