One Doge is the same as one Doge. At least, that’s what many in the Dogecoin community claim, with the goal of making the DOGE-(DOGE-USD) USD’s mix of stable inflation and high price volatility amusing.
Dogecoin stands out among the ‘non-Bitcoins,’ also known as altcoins, in a cryptocurrency world currently dominated mostly by Bitcoin (BTC-USD), for various reasons:
1. It has a number of high-profile observers and followers, including Elon Musk, the self-proclaimed “former CEO of Dogecoin,” who appears to use it to criticize Bitcoin and cryptocurrencies in general.
2. It is one of the most established cryptocurrencies, having been launched in December 2013.
3. Its price is particularly remarkable because one Dogecoin is, and has always been, worth so little that even a casual user can amass a sizable fortune (at least in Dogecoin terms). A Dogecoin unit has recently lingered near its all-time highs of between 5 and 6 cents, but it has been worth barely a penny for much of its lifetime.
fraction of a cent, for years even staying consistently as low as $0.001 to $0.002 per unit. This has also meant it has seen extraordinary price volatility even as its nominal price still seems “low” – if one entered Dogecoin at $0.006 and sold around $0.06 that is an over 100x return rate.
4. There is no predetermined maximum supply, and neither the market nor a central issuing node/organization manage the inflation rate. Instead, Dogecoin started with a maximum supply of 100 billion Dogecoins, which was achieved in 2015, after which it started a set inflation rate of 5.25 billion Dogecoins per year, resulting in a proportionately declining inflation rate over time. There are now roughly 128 billion Dogecoins in circulation, implying a yearly inflation rate of little more than 4%.
5. It was created with a lot of levity in mind, and it still is. When Dogecoin first appeared, it essentially immortalized the famous “Doge” Internet meme of a Shiba Inu dog in the form of the then-burgeoning cryptocurrency world, resulting in a plethora of jokes and humor that projected a brighter tone than most cryptocurrencies, which maintain a generally serious public image.
Even though Dogecoin began as a joke and continues to be such, it has actual monetary and technological applications. Dogecoin transfers are quick, inexpensive, and precise (due to the minute value of a Dogecoin). Many prominent crypto-exchanges, like as Kraken and Binance, support it, and it’s also available on the famous Robinhood stock trading app, but not in wallet or transferrable form. Despite the fact that it is not for sale, Coinbase nonetheless provides a wallet for it.
Dogecoin’s price has risen at an unusually fast rate in recent weeks, almost surpassing that of Bitcoin. This, I believe, is due to a mix of another surge in “cryptocurrency interest” akin to late 2017/early 2018, which is expected to finish in a similar fashion, and certain remarks by Tesla CEO Elon Musk, which have fueled interest in Dogecoin despite his recent assertion that he owns none.
While I’m not convinced that Dogecoin’s present price is sustainable, and I believe that price volatility will remain a significant component of this niche cryptocurrency, I appreciate Dogecoin because its financial and technical characteristics make it a fascinating crypto-currency for future usage. While it may not become the money of an Elon Musk-run Mars, it does allow for precise, rapid, and inexpensive payments in a manner that Bitcoin does not. Retail adoption may be more likely than for other of the more technical cryptocurrencies since it is ‘fun’ and easy to promote and access.
Furthermore, because of its fixed inflation rate, new Dogecoins will always be created and mining will continue, at least under the current system – this is what allows a cryptocurrency to grow and expand with its user base and, for the most part, solves a scalability problem that Bitcoin has yet to solve. Dogecoin is also able to reduce the chance of becoming lost in the altcoin abyss of forgotten cryptos by partially piggybacking on the popular Litecoin mining.
Finally, despite its volatility, the fact that it is still linked to itself distinguishes it as a ‘currency’ above stablecoins that use cryptocurrencies’ technical features without the fiat-to-crypto price swap.
In conclusion, I like Dogecoin as a true cryptocurrency with the potential for widespread adoption in the future. I could see myself paying for a cup of coffee with Dogecoin in the future, but not in Bitcoin (unless I wanted to pay a $5 transaction fee on a $3 coffee and wait 10 to 20 minutes for it to process). Dogecoin’s price volatility is likely to continue until it achieves mainstream adoption, but I believe it’s a cryptocurrency worth keeping an eye on.